Deutsche Bank Ag & Anor v Highland Crusader Offshore Partners Lp & Ors

Where parties choose a contractual non-exclusive jurisdiction, parallel proceedings in a non-contractual forum will ordinarily be vexatious and oppressive if proceedings are also brought in the chosen forum. The court should grant an anti-suit injunction unless exceptional circumstances, unforeseeable when the contract was made, justify the parallel proceedings. The inquiry is not a conventional balance of convenience or forum non conveniens exercise. The first-filed rule does not displace the parties’ contractual choice. The injunction may extend to proceedings against an agent or servant where the claim is, in substance, connected with the contract and seeks relief that is justiciable in the chosen forum.

Deutsche Bank AG brought Commercial Court proceedings against Highland concerning liabilities under three Global Master Repurchase Agreements containing a widely drawn, non-exclusive English jurisdiction clause. Highland had commenced defensive and subsequently expanded proceedings in Texas against Deutsche Bank, Deutsche Bank Securities Inc and an individual alleged to have made misrepresentations.

Deutsche Bank Securities Inc applied to be joined, amendments were sought, and the claimants sought an anti-suit injunction. Highland opposed the applications and relied on the Texas proceedings and the first-filed rule. The court also considered the effect of the jurisdiction clause on claims alleging misrepresentation and on proceedings against agents.

1. Joinder and amendment. Deutsche Bank Securities Inc was joined and the proposed amendments were permitted. Its delay was justified by the need first to await the outcome of its Texas application. Its participation was also appropriate because Highland sought to pursue claims against it.
2. Jurisdiction clause. The clause covered contractual, quasi-contractual and tortious claims connected with the agreements and transactions. Applying Fiona Trust and Holding Corporation v Privalov [2007] 4 AER 951 and Deutsche Bank AG v Asia Pacific Broadband Wireless Communications Inc [2008] 2 Lloyd’s Rep 619, an allegation that the agreement or jurisdiction clause was induced by misrepresentation did not prevent the selected English court deciding the issue.
3. Anti-suit test. The clause was non-exclusive, so commencing proceedings elsewhere was not itself a contractual breach. Nevertheless, where parallel proceedings existed, the court applied the approach in Sabah Shipyard (Pakistan) Ltd v Islamic Republic of Pakistan [2003] 2 Lloyd’s Rep 571, supported by British Aerospace plc v Dee Howard & Co [1993] 1 Lloyd’s 368, Mercury Telecommunications Ltd v Communication Telesystems International [1999] 2 All ER (Comm) 33, BP plc v National Union Fire Insurance Co [2004] EWHC 1132 (Comm), Antec International Ltd v Biosafety USA Inc [2006] EWHC 47 (Comm) and HIT Entertainment Ltd v Gaffney International Licensing Pty Ltd [2007] EWHC 1282. Parallel proceedings in the non-contractual forum were ordinarily vexatious and oppressive unless exceptional, unforeseeable circumstances justified them.
4. The Texas first-filed rule and juridical advantages such as jury trial or punitive damages did not govern. The court also rejected reliance on Royal Bank of Canada v Cooperative Centrale Raiffeisen-Boerenleenbank BA [2004] 1 Lloyd’s 471 as inconsistent with the subsequent line of authority and confined to its unusual clause.
5. The injunction extended to the Texas proceedings against Deutsche Bank, Deutsche Bank Securities Inc and the individual agent. The Texas proceedings were to be stayed, rather than terminated, pending determination of the Commercial Court proceedings, preserving the possibility of later costs arguments.