Skype Technologies SA v Joltid Ltd v Kasesalu & Ors

An exclusive jurisdiction clause is construed broadly in accordance with the parties’ commercial purpose. Claims fall within the clause where determination of the parties’ contractual rights is central to the foreign proceedings, even if the foreign claim is framed in tort or copyright and assumes termination of the contract.

Jurisdiction under article 23 of the Judgments Regulation does not automatically require or permit an anti-suit injunction. The injunction remains discretionary. Where parties select a neutral forum for a worldwide agreement, ordinary forum non conveniens considerations carry little weight. A strong reason is required to refuse enforcement, particularly where parallel proceedings cannot be avoided in any event.

Skype Technologies SA sought declarations that Joltid Ltd had not validly terminated a worldwide software licence. Joltid had commenced related copyright proceedings in the United States against Skype Technologies and other parties. Skype Technologies alleged that the US proceedings breached the licence’s exclusive English jurisdiction clause and applied for an anti-suit injunction.

The central issues were whether the US claims fell within the clause and, if so, whether the court should restrain their continuation. The court also considered the effect of article 23 of Council Regulation (EC) No 44/2001 and the relationship between stays of proceedings and anti-suit injunctions.

1. Scope of the clause. The US claims against Skype Technologies fell within clause 19.1. Interpretation was governed by English law. Jurisdiction clauses and arbitration clauses should be interpreted according to the same commercial principles. The clause was to be construed liberally, avoiding fine distinctions between claims pleaded as contractual, copyright or other causes of action. The question whether the licence remained in force was central to the US claims, so it was irrelevant whether that issue was pleaded as a claim or defence.
2. Effect of the Judgments Regulation. Article 23 gave this court exclusive jurisdiction over claims arising under or relating to the licence. Owusu v Jackson [2005] QB 801 supported the conclusion that the court could not stay its own proceedings on discretionary forum non conveniens grounds. It did not decide whether an anti-suit injunction could be granted. The tests for a stay and an anti-suit injunction were not identical. Turner v Grovit [2005] 1 AC 101 and West Tankers Inc v Allianz SpA [2009] 3 WLR 696 concerned proceedings in Regulation States and did not determine the position concerning the United States.
3. Discretionary remedy. An anti-suit injunction is discretionary, but the contractual bargain is the starting point and a strong reason is needed before refusing enforcement. The neutral character of the chosen forum, the worldwide scope of the licence, the likelihood of foreign copyright issues, and the international location of evidence made ordinary forum considerations weak. They had been foreseeable when the parties selected the forum. Damages would also be inadequate.
4. Parallel proceedings and undertakings. The involvement of parties who were not bound by the clause meant that a single forum could not be achieved whichever way the application was decided. The risk of inconsistent decisions therefore was not a strong reason against an injunction. Joltid’s proposed undertakings did not remove the breach or alter the balance.
5. The injunction was granted. Joltid was restrained from pursuing the US proceedings against Skype Technologies and ordered to discontinue them. It was also restrained from commencing or pursuing related proceedings elsewhere, subject to liberty to apply. The burden of showing that particular future proceedings should be permitted lay on Joltid.