Worldview Capital Management SA v Petroceltic International Plc

Exclusive jurisdiction for company-law disputes does not extend to every contractual claim concerning a company’s strategy, governance or internal management. The claim must principally concern the validity of the company’s constitution or the validity of decisions of its organs.

For contractual jurisdiction based on the place of performance, the court must identify the principal obligation. Where no contractual place is specified, the court considers the place of actual performance and, if that cannot be established, the domicile of the relevant contracting party. An internal obligation requiring a company to review its own strategy and governance is not the provision of services for this purpose.

Worldview Capital Management SA, a substantial shareholder of Petroceltic International Plc, sought specific performance of an agreement under which Petroceltic undertook to conduct a business and strategic review and make related announcements.

Petroceltic, domiciled in Ireland, applied to set aside the proceedings for want of jurisdiction. The issues were whether the exclusive jurisdiction provision in article 22.2 of EC Council Regulation 44 of 2001 applied and, if not, whether article 5.1 conferred jurisdiction on the English court.

1. Article 22.2. The application of the exclusive jurisdiction exception had to be construed strictly. Following the approach in Hassett v South East Health Board and BVG v JP Morgan Chase Bank, article 22.2 concerns disputes whose principal subject matter is the validity of a company’s constitution, its nullity or dissolution, or the validity of decisions of its organs. It does not apply merely because a claim has some connection with company decisions or internal management.
2. Speed Investments v Formula One Holdings was distinguishable. That case concerned the validity of the appointment and composition of the company’s board. The present claim concerned performance of a contractual obligation to conduct a review. The possible involvement of company strategy, governance and shareholder interests did not alter its contractual character. Article 22.2 was therefore not engaged.
3. Article 5.1. The obligation in issue was the principal obligation under the relevant part of the agreement. The obligation to conduct the review under clause 6(a) was logically and existentially prior to the obligations to make announcements and present the results under clause 6(c). The reasoning in Source Ltd v TUV Rheinland Holding AG and Union Transport v Continental Light supported that conclusion.
4. The review was not the provision of services within article 5.1(b). It was an internal corporate obligation, not a supply made by a party typically providing services to clients or customers, and it was not rendered for remuneration. Article 5.1(a) therefore applied.
5. Where the contract did not specify the place of performance, the fallback approach in Wood Floor Solutions v Silva Trade applied. There was no sufficient evidence of where the review was actually performed, if at all. The relevant domicile was consequently that of Petroceltic, namely Ireland. Worldview had not shown a good arguable case that article 5.1 conferred jurisdiction on the English court.
6. Petroceltic’s application to set aside the proceedings for want of jurisdiction succeeded. A further forum conveniens argument was reserved because it had not been argued.

First-instance jurisdiction decision. The judgment records no prior appellate decision.