UCP Plc v Nectrus Ltd

A non-exclusive English jurisdiction clause creates a strong prima facie case that England is the appropriate forum. A party seeking a stay or dismissal must show an available alternative forum and strong, or very strong, reasons for departing from the contractual choice. Foreseeable convenience factors and parallel proceedings ordinarily carry little weight.

Where jurisdiction is founded on Article 25 of the Brussels I Regulation Recast, and the competing proceedings are in a third state, Articles 33 and 34 do not confer a discretion to decline jurisdiction. The English court must therefore exercise the jurisdiction conferred by the parties’ agreement.

UCP Plc brought proceedings against Nectrus Ltd for alleged breaches of an English law-governed Investment Management Agreement concerning stranded investment deposits. The agreement contained a non-exclusive jurisdiction clause in favour of the English courts.

Nectrus sought dismissal, a stay or a refusal to exercise jurisdiction under CPR 11 and related provisions. It relied on proceedings in the Isle of Man concerning shareholder distributions, contending that the Isle of Man was the more appropriate forum and that the same issues might arise by way of set-off. UCP argued that Article 25 of the Brussels I Regulation Recast applied and left no discretion to stay or decline jurisdiction.

The central issues were the effect of Article 25, the common law approach to non-exclusive jurisdiction clauses, the availability and appropriateness of the Isle of Man forum, and lis alibi pendens.

1. Application dismissed. The court had jurisdiction under Article 25 of the Brussels I Regulation Recast and had no power or discretion to decline that jurisdiction in favour of proceedings in the Isle of Man.
2. Articles 33 and 34 concerned stays where jurisdiction was based on domicile or special jurisdiction provisions under Articles 4 and 7 to 9. They did not apply where jurisdiction was founded on an Article 25 jurisdiction agreement. The absence of any reservation for Article 25 supported the inference that no further discretion to decline jurisdiction was intended. This was consistent with party autonomy under recital 19 of the Regulation.
3. At common law, a non-exclusive English jurisdiction clause is a strong factor and creates a strong prima facie case that England is the appropriate forum. The clause must be considered at the first stage of the Spiliada exercise. The applicant must ordinarily show an available alternative forum which is clearly or distinctly more appropriate, together with strong or very strong reasons for departing from the contractual choice.
4. The Isle of Man proceedings were not an available forum for determination of the English contractual claim as currently constituted. Nectrus maintained that the English claim could not be advanced by way of set-off, offered no waiver of that position, and did not suggest that free-standing proceedings could be commenced in the Isle of Man.
5. Even if the Isle of Man were available, the factors relied on were insufficient. The existence of foreseeable parallel proceedings, UCP’s Isle of Man incorporation, the potential application of Manx law, and the contingent possibility of a set-off defence did not overcome the jurisdiction clause. The English claim concerned an English law contract.
6. The lis alibi pendens argument also failed. There was no cross-claim in the Isle of Man proceedings, and the Regulation’s provisions concerning lis alibi pendens did not apply to the circumstances presented.