Citibank NA, London Branch v Oceanwood Opportunities Master Fund & Ors

A dispute falls within an English jurisdiction clause where it genuinely concerns rights and directions arising under an agreement governed by that clause, even though resolving it requires construction of another agreement. Related jurisdiction clauses in interconnected transaction documents must be construed together and commercially, giving each clause proper effect and avoiding fragmented or duplicative proceedings. A clause providing that proceedings may be brought in a foreign court need not determine the forum where another agreement expressly confers jurisdiction on the English courts over the substance of the dispute. Where Article 25 of the Regulation 1215/2012 applies, the resulting jurisdiction is exclusive and the court has no forum non conveniens discretion. The jurisdiction challenge therefore failed.

Citibank, acting as security agent and trustee under financing arrangements for the Norske Skog group, sought directions concerning whether it could rely on instructions from secured creditors including Oceanwood. Foxhill alleged that Oceanwood controlled the debtor and was therefore excluded from voting under section 2.09 of an Indenture governed by New York law.

The financing documents also included an Intercreditor Agreement, governed by English law, which contained an exclusive English jurisdiction clause covering disputes arising out of or in connection with that agreement. Foxhill had commenced proceedings in New York and challenged the English court’s jurisdiction, relying on the Indenture’s jurisdiction provision. The immediate issue was whether the dispute belonged in New York or England and Wales.

1. Jurisdiction under the Intercreditor Agreement. The dispute was genuinely concerned with whether Oceanwood could participate in an Instructing Group and whether Citibank could seek or accept its directions. Those were questions arising out of or in connection with the Intercreditor Agreement. The fact that answering them required consideration of section 2.09 of the Indenture did not alter that conclusion.
2. Interaction of the jurisdiction clauses. The Indenture and Intercreditor Agreement formed part of one transaction and expressly referred to each other. Their jurisdiction clauses had to be construed in that commercial context. A reasonable business person would not expect a genuine dispute under the Intercreditor Agreement to be fragmented, with different aspects sent to different courts, or for parties bound only by the Intercreditor Agreement to be required to litigate in New York. The English clause was therefore to be given its own effective operation. The court did not need to decide whether the Indenture clause was permissive, mandatory or exclusive in the abstract.
3. Article 25. Since the dispute fell within the English jurisdiction agreement, Article 25 of the Recast Brussels Regulation (Regulation 1215/2012) gave the English courts jurisdiction, which was exclusive unless the parties had agreed otherwise. There was consequently no discretion to stay the proceedings on forum non conveniens grounds.
4. Alternative exceptional-circumstances analysis. If necessary, the urgency of obtaining a decision before the sales process was materially advanced could have justified retaining the proceedings in England. However, Citibank and Oceanwood could not rely on Foxhill’s readiness for an expedited trial where that readiness resulted from undertakings and directions designed to prevent such reliance.

Foxhill’s jurisdiction challenge failed. Consequential directions, including an unconditional acknowledgment of service, were deferred to a further hearing.