Highland Crusader Offshore Partners LP & Ors v Deutsche Bank AG & Anor

A non-exclusive jurisdiction clause does not ordinarily give the selected court priority over another competent court or create a presumption that parallel foreign proceedings are vexatious or oppressive. It normally contemplates that either party may sue elsewhere, unless its particular wording provides otherwise.

An anti-suit injunction remains an exceptional remedy. In an alternative-forum case, the applicant must generally show that England is clearly the natural forum and that justice requires restraint. Parallel proceedings are undesirable but are not, without more, oppressive. Comity requires respect for a foreign court’s reasonable acceptance of jurisdiction, particularly where that court and the dispute have substantial connections.

The parties entered into Global Master Repurchase Agreements governed by English law. Paragraph 17 submitted them to the English courts but expressly preserved the right to bring proceedings in any other competent jurisdiction.

After Deutsche Bank made default claims following unpaid margin calls, Highland commenced proceedings in Texas alleging fraud, misrepresentation, securities-law breaches and related claims. Deutsche Bank then sued in the Commercial Court. Tomlinson J refused Highland an extension of time to challenge English jurisdiction. Burton J joined Deutsche Bank Securities Inc as a claimant and granted an anti-suit injunction requiring Highland to stay the Texas action.

The central issue was whether the non-exclusive English jurisdiction clause and the existence of English proceedings made Highland’s continued Texas action vexatious or oppressive so as to justify an anti-suit injunction.

1. The appeal against the anti-suit injunction was allowed. The injunction granted by Burton J was set aside. The court refused permission to appeal against Tomlinson J’s refusal to extend time for a jurisdiction challenge and against Burton J’s order joining Deutsche Bank Securities Inc as a claimant.

2. The court had personal jurisdiction over Highland and could grant an anti-suit injunction where justice required it. Outside enforcement of an exclusive jurisdiction agreement, however, the applicant generally had to establish that foreign proceedings were or would be vexatious or oppressive. This normally required England to be clearly the more appropriate, or natural, forum and a further conclusion that justice required restraint. Even that was insufficient by itself: comity was an important restraint.

3. A non-exclusive jurisdiction agreement means that the selected forum is an appropriate forum on circumstances foreseeable when the agreement was made. It prevents a party from challenging proceedings properly brought there on ordinary forum non conveniens grounds. It does not make every other competent forum inappropriate, nor does it normally prohibit parallel proceedings.

4. Burton J therefore misdirected himself by treating parallel proceedings in a non-selected forum as presumptively vexatious or oppressive unless justified by unforeseeable or exceptional circumstances. That approach would substantially convert a non-exclusive clause into an exclusive one. The GMRA’s express reservation of a right to sue in another competent jurisdiction strongly negatived that approach.

5. On the facts, England and Texas each had relevant connections. Timing carried little weight. More importantly, the Texas court had accepted the suit of parties with substantial Dallas connections concerning agreements negotiated and executed there. Nothing suggested that its decision violated accepted international principles. Comity required that decision to be respected. There were no exceptional circumstances requiring the English court to restrain the Texas proceedings.

• Court of Appeal (Civil Division): In this judgment, [2009] EWCA Civ 725, allowed Highland’s appeal against the anti-suit injunction and set it aside. It refused permission to appeal against the other two orders.
• Commercial Court: Burton J joined Deutsche Bank Securities Inc as a claimant and granted an anti-suit injunction requiring Highland to procure a stay of the Texas proceedings.
• Commercial Court: Tomlinson J refused Highland an extension of time to apply to challenge the jurisdiction of the English court.