Standard Chartered Bank (Hong Kong) Ltd & Anor v Independent Power Tanzania Ltd & Ors

A non-exclusive English jurisdiction clause combined with a forum non conveniens waiver does not remove the court’s power to stay proceedings. A stay requires very strong or exceptional grounds which were unforeseen and unforeseeable when the contract was made. Ordinary convenience factors and the prospect of parallel proceedings cannot suffice where the parties contemplated them.

Privity of interest requires sufficient identification between the parties to make it just that one should be bound by a decision involving the other. Corporate affiliation, commercial interest, knowledge and assistance do not alone establish privity. A foreign judgment creates issue estoppel only where the relevant parties or privies and the issues decided are identical.

The claimant banks sought sums due under an English-law facility agreement and security deed, together with declaratory and injunctive relief concerning shareholder support and share-security documents. The finance documents contained non-exclusive English jurisdiction clauses, forum non conveniens waivers and provisions contemplating concurrent proceedings in other jurisdictions.

The defendants sought stays in favour of Tanzania on forum non conveniens or case-management grounds. VIP Engineering and Marketing Ltd also sought dismissal or a stay for issue estoppel, abuse of process and alleged non-disclosure when permission was obtained to serve Pan African Power Solutions (T) Ltd outside the jurisdiction.

The central questions were whether exceptional and unforeseeable circumstances justified overriding the contractual jurisdiction bargain; whether litigation involving the claimants’ parent company in New York bound its subsidiary; and whether the English proceedings were otherwise abusive.

1. All the defendants’ applications were dismissed. A forum non conveniens waiver accompanying a non-exclusive English jurisdiction clause does not extinguish the court’s power to grant a stay. Nevertheless, a defendant must establish very strong or exceptional grounds which were unforeseen and unforeseeable when the contract was made. The absolute approach suggested in National Westminster Bank plc v Utrecht-America Finance Co [2001] EWCA Civ 658 was obiter and was not followed.

2. The conventional connecting factors favouring Tanzania did not satisfy that standard. The parties could readily foresee that defendants, witnesses and secured property would be in Tanzania, that Tanzanian law might arise and that enforcement proceedings might occur there. The contracts expressly contemplated parallel proceedings and the possibility of inconsistent findings. The Tanzanian proceedings had chiefly concerned interlocutory matters and were not close to trial. No equivalent of the accumulated expertise identified in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 existed.

3. A case-management stay is available only in a rare and compelling case. Granting one here would contradict the contractual scheme and effectively give priority to proceedings elsewhere. The case-management applications were therefore dismissed.

4. SCBHK was not privy to its parent company SCB in the New York litigation. Knowledge of that litigation, assistance through evidence, a commercial interest and membership of the same corporate group did not create the required degree of identification. SCBHK was consequently neither bound by SCB’s representations concerning Tanzania nor estopped by the New York decisions.

5. In any event, the issue decided in New York differed from the issue before the English court. The New York decision concerned whether Tanzania was preferable to New York for VIP’s tort claim against SCB. It did not determine the effect of the English jurisdiction clauses and forum non conveniens waivers upon SCBHK’s contractual claims. There was no collateral attack or abuse of process.

6. Although unnecessary to the result, the evidence did not establish a real risk that justice would be unavailable in Tanzania. Comity required cogent evidence. General reports, disputed threats and unresolved corruption allegations did not meet that standard.

7. There had been no material failure of full and frank disclosure when permission to serve PAP abroad was obtained. Even had there been an innocent omission, the interests of justice overwhelmingly favoured maintaining the order.

This was a first-instance determination of interlocutory applications. Popplewell J had previously permitted service of the claim on PAP in Tanzania under the Civil Procedure Rules 1998. The present court maintained that permission and dismissed the defendants’ applications for a stay, dismissal or setting aside of the proceedings.