Terre Neuve SARL & Ors v Yewdale Ltd & Ors (14) Driss Mriouah

Jurisdiction clauses are construed objectively and may extend across related contracts only where their wording and the contractual context support that construction. Relevant factors include the parties, subject matter, interdependence, timing and whether the agreements formed one package. Different parties, materially different subject matter and substantial temporal separation strongly tell against extension.

Under Article 6(1) of the Lugano Convention, claims against a foreign defendant may proceed with claims against an English anchor defendant where they are closely connected and joint determination is appropriate to avoid irreconcilable judgments. Forum non conveniens has no role once Lugano jurisdiction is established, subject to the narrow abuse principle.

On an application to serve out, gateway facts require a good arguable case, but the merits require only a serious issue to be tried.

The claimants alleged that €10.6 million paid under a tax optimisation scheme was misappropriated after payment to Yewdale. They brought contractual, tortious, fiduciary and restitutionary claims against companies and individuals in several jurisdictions.

GPF challenged jurisdiction under Article 23 of the Lugano Convention, relying on Swiss jurisdiction clauses in four written asset-management and fiduciary agreements. The Campbell Co-Defendants, domiciled in Switzerland, challenged jurisdiction under Articles 2, 5 and 6(1), and on abuse, forum, human-rights, arbitration and jurisdiction-clause grounds. Judah El Maleh, domiciled in Israel, challenged service out under CPR rules 6.36 and 6.37 and Practice Direction 6B paragraph 3.1(3).

The central issues were whether the written jurisdiction clauses covered the pleaded oral agreements and claims, whether Article 6(1) was satisfied, and whether the claims against Judah El Maleh met the applicable threshold.

1. GPF’s application dismissed. The jurisdiction clauses in the written agreements did not cover the claims based on the alleged oral tax-optimisation agreements. Applying the Extended Fiona Trust Principle, the court considered the parties, subject matter, interdependence, timing and contractual package. The written and oral agreements had different parties, different subject matter and separate legal existence. The written agreements concerned management of assets or shares already held by Largely; the claims concerned money which allegedly never reached Largely. They were not negotiated or concluded as one package. The 2012 clause also faced the difficulty of retrospective application.
2. The broad construction of jurisdiction clauses does not imply a jurisdiction clause into another contract. Nor does reliance on the written agreements to identify the applicable Swiss law establish that their jurisdiction clauses govern the separate oral agreements. The contractual, tortious, restitutionary and fiduciary claims therefore fell outside the clauses. It was unnecessary, but the court added that the claims did not arise in connection with the particular legal relationships governed by the written agreements for Article 23 purposes.
3. Campbell Co-Defendants’ applications dismissed. Yewdale was a proper English anchor defendant. The claims against the Swiss-domiciled defendants shared a common factual and legal investigation concerning the movement and dissipation of the same funds. It was expedient to hear them together because separate proceedings created an obvious risk of irreconcilable judgments. Article 6(1) did not require identical legal bases.
4. Forum non conveniens considerations could not displace jurisdiction established under the Lugano Convention. Following Owusu v Jackson (Case C-281/02) [2005] QB 801, the court had no discretion to decline jurisdiction on convenience grounds. Following PJSC Commercial Bank Privatbank v Kolomoisky [2019] EWCA Civ 1708, reliance on Article 6(1) was not abusive merely because suing the anchor defendant also enabled proceedings against foreign defendants. Fraud or collusion was required, and none was shown.
5. The 1998 arbitration agreement was outside the Lugano Convention, did not bind the Campbell Co-Defendants and did not concern the pleaded claims. Article 5 provided an alternative jurisdictional basis and did not undermine Article 6(1). Article 6 of the ECHR was not infringed.
6. Judah El Maleh’s application dismissed. For service-out purposes, gateway facts required a good arguable case, while the merits required only a serious issue to be tried. Both the tort claim under Articles 41 SCO and 305bis SPC and the derivative claim under Articles 716a, 717 and 754 SCO met that threshold. The evidence concerning his senior supervisory role, witness evidence and recordings raised serious issues as to knowledge or suspicion, guarantor duties, breach, causation and direct damage. Those issues required trial and could not properly be resolved by a mini-trial.
7. Judah El Maleh was a proper party because the claims against him were closely connected with the claims against HSBCPB and Nessim El Maleh and required overlapping investigation. England and Wales was the proper place for the claim. All three applications therefore failed and were dismissed.

This was a first-instance jurisdiction judgment. The judgment records earlier decisions in the same proceedings, including [2019] EWHC 1119 (Comm) and [2019] EWHC 1847 (Comm), and permission to appeal was refused by Males LJ on 6 November 2019. Those decisions were not under appeal in the present judgment.