Vitol SA v Arcturus Merchant Trust Ltd

Where parties have agreed an exclusive jurisdiction clause, the chosen forum generally overrides convenience considerations that were foreseeable when the contract was made. The English court will ordinarily restrain proceedings brought in another forum in breach of that bargain unless strong reasons justify refusal. Foreign law conferring jurisdiction on the foreign court is not, without more, such a reason.

An exclusive jurisdiction clause may extend to claims against an agent acting solely for the contracting principal. Summary judgment is appropriate where the defendant has no real prospect of establishing that an apparently authorised officer lacked ostensible authority, particularly where subsequent conduct is inconsistent with that case.

Vitol SA sought relief arising from an agreement for the sale of gasoil to Arcturus Merchant Trust Ltd. The agreement contained an English exclusive jurisdiction clause in Vitol’s standard terms. Arcturus disputed the authority of its chief operating officer to conclude the agreement, commenced proceedings in Lagos seeking declarations and repayment of a security deposit, and challenged the jurisdiction of the English court.

Vitol applied for an anti-suit injunction and summary judgment. The issues were whether the English court had jurisdiction, whether the Lagos proceedings should be restrained, whether the injunction could extend to Mansel Commercial Services Ltd, Vitol’s Nigerian agent, and whether Arcturus had a real prospect of defending the contractual claim.

1. Jurisdiction. The challenge to the English court’s jurisdiction was dismissed. Under Practice Direction B of CPR Part 6, paragraph 6(d), Vitol had to show a good arguable case that the contract contained a term conferring jurisdiction, a serious issue to be tried, and that England was clearly the appropriate forum. The course of dealing established a good arguable case that the second contract incorporated Vitol’s standard terms, including the exclusive jurisdiction clause. The form requirement in article 17 of the Lugano Convention was satisfied by that standard.
2. Where an exclusive jurisdiction clause has been agreed, the parties’ choice overrides convenience considerations that were foreseeable when the contract was made: Import Export Metro v Compania Sud Americana De Vapores S.A. [2003] 1 Lloyd’s Rep 405. The Nigerian Admiralty Jurisdiction Decree was unsupported by evidence. Even if foreign law gave the Lagos court exclusive jurisdiction, that would not be a strong reason to refuse relief.
3. Anti-suit injunction. The Lagos proceedings concerned the existence of the contract and therefore fell within the exclusive jurisdiction clause. An injunction ordinarily follows unless strong reasons are shown: Donohue v Armco Inc [2002] 1 Lloyd’s Rep 425. Comity required respect for the parties’ contractual choice, rather than deference to the foreign forum: OT Africa Line Ltd v Magic Sportswear Corpn [2005] 2 Lloyd’s Rep 170. The injunction properly extended to Mansel, which acted solely as Vitol’s agent: Horn Linie v Pan Americana [2006] 2 Lloyd’s Rep 44.
4. Summary judgment. Arcturus accepted that its chief operating officer had ostensible authority unless Vitol was on notice of an actual limitation. The evidence did not establish such notice. Arcturus’s subsequent correspondence and its pleading in the Lagos proceedings were inconsistent with the asserted lack of authority and supported ratification. Vitol therefore obtained summary judgment for approximately US$1.99 million.
5. The claim for approximately US$142,000 in carrying charges was not summarily determined. Although the contractual delay penalty clause was not a penalty and had the hallmarks of a genuine pre-estimate of loss, there remained an issue about the period for which the charges were payable. The security deposit was to be retained in diminution of the judgment debt. Costs were summarily assessed at £50,000.

First-instance decision. No prior appellate decision is stated in the judgment.