Ourspace Ventures Ltd v Halliwell

A defendant’s conduct amounts to submission to jurisdiction only where, viewed objectively, it is unequivocal and the only possible explanation is an intention to have the case tried in England. Filing an acknowledgment indicating an intention to contest jurisdiction prevents later equivocal conduct from amounting to submission. A failure to apply within time under CPR 11 is not necessarily irrevocable, because the court may extend time. An asymmetric jurisdiction clause may permit one party to sue in other competent jurisdictions while binding the other party to the chosen court after notice. A clear drafting mistake may be corrected where both the mistake and the necessary correction are clear.

The claimant sought to enforce a personal guarantee securing a loan facility. The guarantee provided for LCIA arbitration, an option for the claimant to require disputes to be settled by the DIFC courts, and a provision stating that the clause benefited the claimant alone.

The claimant issued proceedings in England after sending a notice referring to the English courts. The defendant acknowledged service, indicated an intention to contest jurisdiction, sought an extension of time for his defence, and made his jurisdiction application more than 14 days after acknowledging service. He applied for a declaration that the English court lacked jurisdiction, or should not exercise it.

The issues included submission to jurisdiction, extension of time, construction of the jurisdiction clause, the effect of the notice, and whether the claimant could sue in England despite the notice.

1. Submission to jurisdiction. The objective test in Global Multimedia v Ara Media [2007] 1 All ER (Comm) 1170, drawing on SMAY Investments v Sachdev [2003] EWHC 474, required unequivocal conduct which could only be explained by an intention to have the case tried in England. Seeking an extension of time for a defence was not, by itself, sufficient. Nor was the defendant’s failure to apply within time sufficient, because it remained open to him to seek an extension.
2. The defendant had expressly ticked the acknowledgment-of-service box indicating an intention to contest jurisdiction. That clear indication meant that his subsequent request for more time and delay in making the application remained equivocal. He had not submitted to the jurisdiction.
3. Relief from sanctions. The court could consider relief without a formal application. Applying the principles in Denton, the delay of more than 13 weeks was serious and lacked a good reason. However, the claimant was neutral, no prejudice had been shown, the jurisdiction issue had been apparent from the acknowledgment, and refusing relief would disproportionately deprive the defendant of the ability to contest a claim of about £2.3 million. Time was extended and relief granted.
4. Construction of clause 17.3. The reference to the English courts in clause 17.3(a) was a clear drafting mistake. It was corrected to refer to the DIFC courts, since the clause referred to the DIFC courts on four other occasions.
5. The notice was accepted by both parties to be a Litigation Notice. The claimant’s right under clause 17.3(c) to bring proceedings in any other court with jurisdiction was not removed by serving the notice. The clause was an asymmetric jurisdiction clause. Mauritius Commercial Bank Ltd v Hestia Holdings Ltd [2013] EWHC 1328 (Comm) and Lornamead Acquisitions Limited v Kaupthing Bank [2011] EWHC 2611 (Comm) were highly persuasive. The notice instead prevented the defendant from challenging DIFC jurisdiction or commencing arbitration.
6. The application was dismissed.