Cosimo Borrelli & Ors v Mutaz Otaibi & Ors

An exclusive jurisdiction clause covering all matters arising from or connected with an agreement may extend to tortious and equitable claims where the conduct complained of consists of acts governed by that agreement. The relevant inquiry is whether the dispute originates in the legal relationship connected with the agreement, construed under its governing law. A broad conspiracy involving other parties does not displace that conclusion where the defendant’s alleged participation is centred on the contractual activities. An asymmetric jurisdiction clause falls outside the Hague Convention 2005. On a without-notice application, materiality is judged from the court’s perspective and includes principal difficulties and likely opposing arguments. Serious non-disclosure may justify setting aside an order, although the court may regrant permission on terms that remove any limitation benefit.

The claimants, investment funds and their liquidators, brought claims including conspiracy, dishonest assistance and knowing receipt against numerous defendants arising from transactions involving Aviation Notes. FFISA, the twenty-third defendant, applied to set aside an order of Knowles J permitting service out of the jurisdiction, relying on Luxembourg jurisdiction clauses in the Subscription Agreements and the Notes’ Conditions, and alleging material non-disclosure on the without-notice application.

The claimants separately sought permission to re-amend the Claim Form and Particulars of Claim. The court determined the scope and effect of the jurisdiction clauses, the alleged non-disclosure, and whether the proposed amendments should be permitted.

1. Jurisdiction. The claims against FFISA fell within the exclusive jurisdiction clause in the Subscription Agreements. The relevant legal relationship was connected with the issuing of the Series B Aviation Notes and receipt of their consideration. The alleged participation by FFISA consisted precisely of those activities. The fact that the claims were tortious or equitable did not take them outside the clause.
2. Applying Luxembourg law, the wording covering all matters arising from or connected with the agreements supported a broad construction. There was no sufficient evidence of a contrary subjective common intention. The court adopted, for present purposes, an approach analogous to that under the Brussels Regulation Recast, asking whether the disputes originated in the relevant legal relationship. The wider conspiracy and the involvement of other parties did not alter the conclusion.
3. The jurisdiction provisions in the Subscription Agreements took precedence over provisions incorporated from the Conditions. The court observed, alternatively, that the Conditions’ asymmetric clause would fall outside the Hague Convention 2005 and that strong reasons would exist not to enforce it by a stay. Those observations were unnecessary to the decision on the Subscription Agreements.
4. Non-disclosure. The claimants’ failure to disclose the Subscription Agreements and their jurisdiction provisions, together with the disparity between the Claim Form and Particulars of Claim, was a serious breach of the duty of full and frank disclosure. Materiality is assessed from the perspective of the judge dealing with the application, and the duty extends to matters which reasonable enquiries would have revealed. The order of Knowles J was set aside insofar as it affected FFISA.
5. Permission to serve FFISA out of the jurisdiction was regranted, with re-service dispensed with and on terms preventing the claimants from obtaining limitation benefits from the non-disclosure. Proceedings against FFISA were stayed, with permission to apply for dismissal if their continuation ceased to serve a useful purpose.
6. Amendments. Permission was granted to amend the Claim Form and Particulars of Claim against the other defendants, subject to removal of an inadmissible lengthy quotation and compliance with the requirement that statements of case plead material facts rather than evidence, argument or rhetoric.

First-instance decision on the Set Aside Application and Amendment Application. The judgment itself records the earlier order of Knowles J dated 10 February 2023, which was set aside insofar as it affected FFISA.