Team Y&R Holdings Hong Kong Ltd & Ors v Ghossoub

An exclusive jurisdiction clause may cover contractual disputes forming part of a wider statutory claim, even where the chosen court cannot determine the statutory claim as a whole. Claims against non-contracting parties require clear contractual language and are not ordinarily covered. An anti-suit injunction remains discretionary. Duplication, inconsistent decisions, and the need for the foreign court to determine the statutory claim may constitute strong reasons against relief. For alternative service, knowledge of the claim, substantial service attempts, absence of prejudice and compliance with treaty considerations may establish good reason under the Civil Procedure Rules 1998. Inadvertent non-disclosure does not automatically invalidate service orders where the result would probably have been unchanged.

The claimants, companies within the WPP group, brought an anti-suit claim concerning a Hong Kong unfair-prejudice petition issued by Mr Ghossoub. They also brought a defaulting shareholder claim under the parties’ sale and purchase agreement. Applications were made for an interim injunction restraining the Hong Kong proceedings and for orders confirming service out of the jurisdiction and alternative service.

The central issues were whether the contractual exclusive jurisdiction clauses covered the disputes raised by the Hong Kong petition, whether they could be enforced in respect of claims against non-contracting parties, whether strong reasons justified refusing an injunction, and whether the service orders should be set aside for procedural non-disclosure or lack of good reason.

Anti-suit injunction. The court had power under section 37 of the Senior Courts Act 1981 to grant relief. At the interlocutory stage, the claimants had to show a high degree of probability of an entitlement to restrain the foreign proceedings. Under the approach in Donohue v Armco Inc [2001] UKHL 64, an exclusive jurisdiction bargain would ordinarily be enforced unless strong reasons justified departure.

1. The Hong Kong unfair-prejudice petition, considered as an overall statutory claim, was outside clause 23.2 of the SPA because the English court could not entertain or remedy that claim. However, the word dispute was not confined to the overall form of proceedings. Contractual disputes connected with the SPA remained within the clause, and allegations of breach of the SPA formed a central and substantial part of the petition.
2. The clause did not extend to claims against TYRH, WPP plc and Y&R, which were not parties to the SPA. The contract had to be read as a whole. Clause 23.2 referred to the parties, clause 21.11 addressed third-party rights without extending the jurisdiction clause, and the proposed wider construction would create imbalance and uncertainty.
3. The Hong Kong proceedings against the non-contracting parties were not shown to be vexatious, oppressive, collusive or collateral. The Hong Kong courts had also considered the petition properly founded.
4. Despite a contractual breach concerning part of the dispute against Cavendish, strong reasons existed to refuse relief. The petition would necessarily continue in Hong Kong against the other respondents and in respect of matters outside the clause. An injunction would cause duplication and a risk of inconsistent decisions. The Hong Kong court was the court required to determine the statutory petition and the appropriate remedy for all parties.
5. The court rejected the complaint of undue delay and lack of comity. The English application had been issued promptly; subsequent delay resulted from service difficulties. Obiter, the court also rejected the submission that unfair-prejudice disputes were inherently incapable of being referred away from the English court, referring to Fulham Football Club (1987) Ltd v Richards [2012] EWCA Civ 855 (CA).
6. Under CPR 6.15 of the Civil Procedure Rules 1998, there was good reason for alternative service. Mr Ghossoub knew the claims and their contents, substantial attempts had been made to serve him, the treaty process had not been deliberately subverted, and no legitimate prejudice resulted.
7. There had been failures to make full and frank disclosure on the without-notice applications. They were inadvertent, would probably not have changed the orders, conferred no unfair advantage, and did not justify the disproportionate step of setting aside service.

The interim anti-suit injunction was refused. The applications to set aside service of both claims were also refused.

not stated in the judgment.