E D & F Man Capital Markets Ltd v Straits (Singapore) PTE Ltd

When deciding whether England is the proper place for multi-defendant litigation, the risk of multiple proceedings and irreconcilable judgments is an important but non-conclusive factor. Its weight is not automatically reduced merely because the claimant previously contemplated proceedings abroad.

A claimant brings that risk upon itself where it has a real choice to litigate against all defendants in one foreign forum but elects to retain proceedings against an anchor defendant in England. There is no equivalent choice where an exclusive English jurisdiction clause keeps the anchor claim in England and the anchor defendant has not offered to waive it.

A provisional intention, expressed during foreign pre-action disclosure proceedings, does not amount to an irrevocable election where no substantive foreign proceedings were commenced.

The respondent, MCM, alleged that it had suffered a US$284 million fraud involving several defendants. Its contracts with the first and second defendants contained exclusive English jurisdiction clauses. MCM began Singapore pre-action disclosure proceedings against Straits while provisionally intending to sue Straits there, but later discontinued those proceedings and joined Straits to its existing English claim.

A Deputy High Court Judge dismissed Straits’ challenge under Civil Procedure Rules 1998 Part 11. He held that England was clearly the proper place for the claims, principally because a single English trial would avoid multiple proceedings and inconsistent judgments.

Straits appealed, arguing principally that MCM’s earlier choice of Singapore prevented it from giving substantial weight to those risks. It also relied on approbation and reprobation, the need for caution under the necessary or proper party gateway, alleged misuse of Singapore disclosure, and the governing-law provisions of the Rome II Regulation.

1. The appeal was dismissed unanimously. The Supreme Court’s decision in Lungowe v Vedanta Resources plc [2019] UKSC 20 did not establish a general rule requiring the court to discount the risk of multiple proceedings whenever a claimant had previously considered using another jurisdiction. The risk remains one important, though non-conclusive, factor in the forum conveniens evaluation.

2. The choice considered in Vedanta arose because the anchor defendant was willing to submit to the foreign jurisdiction, enabling all claims to be tried there. No equivalent choice existed here. The first and second defendants had not offered to waive their exclusive English jurisdiction clauses, so the claims against them would continue in England regardless of the claim against Straits.

3. MCM had begun no substantive proceedings against Straits in Singapore. Its intention to do so remained provisional and changed when evidence supported an overarching conspiracy claim against several defendants. By the date of the service-out application, MCM intended to pursue all claims in England. There was therefore no irrevocable election and no approbation and reprobation.

4. The alleged conspiracy required the claims against Straits to be considered alongside those against the other defendants, with mutual disclosure available to all. Given the exclusive English jurisdiction clauses and the submission of most other defendants to English jurisdiction, the avoidance of multiple proceedings and inconsistent judgments strongly supported England as the single composite forum.

5. The judge had exercised the caution required when relying on the necessary or proper party gateway. It was unnecessary and undesirable to decide where direct damage occurred under article 4 of the Rome II Regulation, because that issue could not affect the appeal’s outcome.

6. The proper-place requirement already involved an exercise of discretion. MCM’s statements to the Singapore court were not false, and its use of protected material resulted from an inadvertent error that had been remedied by redaction. Refusing service out on that basis would have been disproportionate.

7. Formal permission to amend was unnecessary before dismissing the jurisdiction challenge. Redaction left the same valid case for service out as had existed when permission was originally granted.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously. The court upheld the conclusion that England was clearly the proper place for the claim against Straits: [2019] EWCA Civ 2073.

2. High Court, Commercial Court: On 4 July 2019 Daniel Toledano QC, sitting as a Deputy High Court Judge, dismissed Straits’ challenge under Part 11 of the Civil Procedure Rules 1998 to the jurisdiction of the courts of England and Wales. No neutral citation is stated in the judgment.