Plaza BV v The Law Debenture Trust Corporation Plc

An exclusive jurisdiction clause covering proceedings “in connection with” a settlement deed is construed broadly and purposively. The substance of the dispute, rather than the form of the pleadings, determines whether the clause is engaged.

Article 2 of the Brussels Regulation prevents a stay based on forum non conveniens, but does not prevent reflexive application of the mandatory exception for an exclusive jurisdiction agreement. A stay may also be granted where related proceedings remain pending because a court retains jurisdiction under undertakings and liberty to apply.

Summary judgment or strike-out is inappropriate where material issues concern the defendant trustee’s intentions, directions and exercise of discretion and require disclosure and cross-examination.

Plaza BV, a substantial holder of subordinated Bell Group bonds, brought proceedings in England against The Law Debenture Trust Corporation Plc, trustee of several Bell Group bond issues. Plaza alleged that the trustee would breach trust by implementing a partial desubordination strategy benefiting another bondholder.

The strategy and the trustee’s obligations were connected with a settlement deed governed by Western Australian law, which contained an exclusive jurisdiction clause in favour of the Western Australian courts. Related proceedings and undertakings remained before the Supreme Court of Western Australia.

The defendant sought a stay under CPR Part 11, alternatively summary judgment or strike-out. The central issues were whether the exclusive jurisdiction clause was engaged, whether the Brussels Regulation permitted a stay, and whether the claim should otherwise be stayed under case-management powers.

1. Stay ordered. The claim was stayed under CPR Part 11 and the court’s discretionary powers. The alternative applications for summary judgment and strike-out were therefore unnecessary, although both would have been refused.
2. The settlement deed’s exclusive jurisdiction clause covered the claim. Plaza’s pleaded complaint was, in substance, that the trustee would breach trust by refusing or failing to comply with obligations in the deed, including obligations to facilitate release of undertakings given to the Supreme Court of Western Australia. The phrase “in connection with” required a broad and purposive construction, and the court could consider the pleadings and the circumstances to which they referred.
3. Article 2(1) of the Brussels Regulation prevented a stay based on forum non conveniens following Owusu v Jackson and Ors [2005] QB 801. It did not, however, prevent reflexive application of article 23(1). Party autonomy and the mandatory contractual jurisdiction exception did not undermine the legal certainty protected by article 2.
4. Article 23(4) did not convert the trust deeds’ non-exclusive English jurisdiction clause into an exclusive clause. Jurisdiction remained a matter of the parties’ intention. Article 5(6) was irrelevant because Plaza sued the trustee in the Member State of its domicile.
5. The court considered that the requirements identified in The Alexandros T [2013] UKSC 70 were satisfied. The Australian proceedings were first commenced and remained pending because the undertakings and liberty to apply kept the Western Australian court seised. They were closely related to the English claim, and hearing the matters separately created a risk of irreconcilable decisions. The parties need not be identical.
6. The strong presumption in favour of a stay, the close connection with the Australian proceedings, the early stage of the English claim, the exclusive Western Australian jurisdiction clause and the Western Australian court’s proximity to the undertakings all favoured a stay. The court also considered that case-management powers could independently justify a stay in rare and compelling circumstances and would have exercised them here.
7. Summary judgment and strike-out would have been refused. The evidence disclosed material factual issues concerning the trustee’s present and future intentions, its relationship with the bondholder, its treatment of senior creditors and any relevant delegation or power of attorney. Those issues required disclosure and potentially cross-examination. The claim was not shown to be merely premature.

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