National Bank of Kazakhstan & Anor v The Bank of New York Mellon SA/NV, London Branch

Jurisdiction under the branch-operation gateway requires a sufficient nexus between the dispute and the branch. That requirement was satisfied where the dispute concerned obligations performed through, and a contractual relationship managed by, the London branch.

Related-action provisions do not require a stay where the proceedings concern different applicable laws and there is no significant risk of conflicting decisions. A case-management stay in those circumstances requires exceptional and compelling justification.

A contractual exemption referring to circumstances beyond the bank’s control, including any order imposed by any judicial authority, may extend to foreign orders binding the bank in personam. Declaratory relief remains discretionary and will generally be refused where it is abstract, unnecessary, unsupported by all interested parties, or sought mainly to assist foreign proceedings.

The Republic of Kazakhstan and the National Bank of Kazakhstan sought declarations concerning assets in Kazakhstan’s National Fund held by the defendant under a Global Custody Agreement governed by English law. The defendant had frozen the assets after receiving Dutch and Belgian attachment orders obtained by creditors enforcing a Swedish arbitration award.

The claim raised issues concerning jurisdiction under the Brussels Recast Regulation, related proceedings, case-management stays, the construction of clause 16(i) of the Agreement, sovereign immunity, the situs and place of performance of intermediated securities, and the discretionary grant of declarations.

1. Jurisdiction. The claim fell within Article 7(5) of the Brussels Recast Regulation. The required nexus existed because the dispute concerned the National Fund, the GCA and the defendant’s response to the foreign orders through its London branch. That conclusion applied to the Republic as well as to the National Bank.
2. Related proceedings and stay. Article 30 did not apply because the English and Belgian proceedings were not sufficiently closely connected. Although the Regulation’s concept of conflicting decisions is broad, the relevant issues arose under different applicable laws and there was no significant overlap creating a risk of irreconcilable judgments. The court also declined a case-management stay. Such a stay would require exceptional and compelling circumstances, which were absent.
3. Clause 16(i). Assuming, without deciding, that the claimants’ analysis of English private international law was correct, the contractual construction still failed. The clause’s language was clear and deliberately wide. Orders of Belgian and Dutch courts to which the defendant owed in personam obligations, and which exposed it to civil and criminal consequences if disobeyed, fell within circumstances beyond its direct and reasonable control and within the reference to any order imposed by any judicial authority. The clause contained no qualification based on whether an English court would recognise the foreign order. Whether the required causal connection existed would be fact-sensitive.
4. Declarations. The central declaration failed because it depended on the rejected construction of clause 16(i). The other declarations were abstract, unnecessarily broad, controversial, insufficiently investigated, or unsupported by the presence of the parties principally interested in opposing them. The proposed immunity declaration did not resolve a substantial issue between the parties, since the defendant took a neutral position on the relevant commercial-use question. The claim was dismissed.

This was a first-instance Part 8 claim. No appeal history is stated in the judgment.