AXIS CORPORATE CAPITAL UK II LIMITED & Ors v ABSA GROUP LIMITED & Ors

A case management stay cannot be used as a disguised forum non conveniens application. Where the English court has mandatory jurisdiction under article 25(1) of the Brussels Regulation Recast, the court must respect that jurisdiction and the parties’ contractual rights.

A stay may be granted in appropriate case management circumstances, but it must serve a genuine case management purpose and cannot subvert the parties’ agreement to litigate in different jurisdictions. Duplication, increased costs, the risk of inconsistent judgments and the perceived suitability of a foreign forum do not justify a stay where they merely replicate forum considerations.

The claimants were reinsurers seeking negative declaratory relief in England concerning primary and excess reinsurance contracts. The defendants had commenced related proceedings in South Africa concerning liability under the primary reinsurances.

An earlier English decision held that the primary jurisdiction clauses were non-exclusive, while the excess jurisdiction clauses were exclusive in favour of England. The defendants applied under CPR rule 3.1(2)(f) and the overriding objective for a permanent stay of the English primary-reinsurance proceedings and a temporary stay concerning the excess reinsurances pending the South African proceedings.

The central issue was whether the court could grant a case management stay in circumstances involving overlapping foreign proceedings, duplication and a risk of inconsistent judgments.

1. Application dismissed. The defendants’ stay application was, in substance, an attempt to obtain through case management what could not be obtained by a jurisdiction challenge. It was therefore a forum non conveniens application by another name.
2. Article 25(1) of the Brussels Regulation Recast confers mandatory jurisdiction where the parties have agreed that a court of a Member State shall have jurisdiction. That applies whether the jurisdiction clause is exclusive or non-exclusive. A worldwide jurisdiction clause may still be a non-exclusive clause in favour of the English courts.
3. The court retains an inherent power to stay proceedings, preserved by section 49(3) of the Senior Courts Act 1981, and may use CPR rule 3.1(2)(f) for genuine case management purposes. Such a stay must recognise, rather than subvert, the parties’ contractual rights to proceed in different jurisdictions.
4. The relevant authorities establish that a stay pending foreign proceedings requires rare and compelling circumstances. Exceptionally strong grounds are required where the parties have conferred exclusive jurisdiction on the English court. A stay cannot be used inconsistently with the Brussels Regulation Recast or to achieve indirectly a result unavailable through the jurisdictional route.
5. The defendants relied on duplication, costs, the risk of inconsistent judgments, the South African location of evidence and the perceived centre of gravity of the dispute. Those were forum considerations. They did not constitute a legitimate case management basis for staying proceedings within the mandatory English jurisdiction.
6. The court accordingly dismissed the application. The defendants were ordered to pay assessed costs of £94,297.47. A disclosure direction was also made, allowing a further application after initial disclosure if justified.

First-instance decision. No appellate history was stated in the judgment.