LLC Eurochem North-West 2 v Societe Generale SA & Ors

A party that voluntarily joins English proceedings and participates without reserving its position may submit generally to the jurisdiction. It cannot accept the advantages of participating in proceedings while resisting a closely connected contribution or indemnity claim arising from the same subject matter.

Under Italian law, the expression “any other competent Court” in an asymmetric jurisdiction clause is not confined to Italian courts merely because the agreement uses the term competente. Its meaning depends on the clause and contractual context. A clause permitting the bank alone to sue before any other competent court may confer jurisdiction on foreign courts.

Where there is no exclusive jurisdiction clause, the conventional Spiliada forum conveniens test applies. Fragmentation, inconsistent judgments, overlapping issues, efficiency, cost and delay strongly favoured England.

ING Milan and ING NV brought a Part 20 indemnity claim against Tecnimont under an Italian-law facility agreement. The claim arose from ING’s defence of EuroChem’s English proceedings concerning performance bonds issued at Tecnimont’s request.

Tecnimont had joined the English proceedings as a no-cause-of-action defendant, had actively participated in them and had relied on its commercial interest in the outcome. It later challenged the Part 20 claim under CPR Part 11, arguing that it had not submitted to the jurisdiction, that the facility agreement conferred exclusive jurisdiction on the Italian courts, and that Italy was the natural forum.

The central issues were whether Tecnimont’s conduct amounted to submission, whether the jurisdiction clause was exclusive or asymmetric, and whether England was clearly or distinctly the more appropriate forum.

1. Submission. The application was dismissed. Applying the principles in Deutsche Bank AG v Petromena ASA, Glencore International A.G. v Exter Shipping Ltd and Maple Leaf Macro Volatility Fund v Rouvroy, Tecnimont was a willing participant. It had sought joinder, had identified the connection between its facility-agreement obligations and the main proceedings, had filed a detailed defence, had sought disclosure and had made submissions on expert evidence. A disinterested bystander would regard that conduct as inconsistent with maintaining a jurisdictional objection.
2. Tecnimont could not accept the benefits of resisting EuroChem’s claim while rejecting the corresponding indemnity claim. The Part 20 claim was the claim which had motivated its participation and was not a distinct claim of the kind considered in interpleader cases. The “plums and duff” analysis therefore applied. Tecnimont had submitted to the jurisdiction in respect of the Part 20 claim.
3. Construction. Even absent submission, Article 19.2 of the facility agreement was not confined to Italian courts. The decision in Banca Popolare dell’Emilia Romagna v Banca Leaonardo S.p.A. concerned domestic Italian competence and did not establish the alleged technical meaning of Foro competente. The wording, the international character of the transaction and the commercial function of asymmetric clauses supported ING’s construction. The clause permitted proceedings before any jurisdictionally competent national or international court.
4. Forum conveniens. Applying Spiliada Maritime Corp v Cansulex, Italy was not clearly or distinctly the more appropriate forum. The English proceedings were central, the issues substantially overlapped, and an Italian claim risked fragmentation and inconsistent judgments. England also avoided additional costs and delay.
5. On the further contingency that the clause was exclusive and Tecnimont had not submitted, the Eleftheria factors did not establish very strong reasons to disregard the contractual choice. That contingency did not arise.