Factual and Procedural Background
Plaintiff claims ownership of a quantity of aluminium stored in a warehouse in The City, The State. Warehouse certificates were issued by Company A (Shanghai) to a bank to whom the goods had been pledged as security. After repayment of the sums advanced by the bank, the certificates were endorsed to Plaintiff. Company A (Shanghai) has not delivered the goods to Plaintiff, who commenced proceedings in The City, The State on 5 August 2014 seeking delivery. On 19 September 2014, this court granted Company A (Shanghai) an interim anti-suit injunction restraining Plaintiff from continuing the proceedings in The City, on the basis that the warehouse certificates contained an exclusive jurisdiction clause in favour of the courts of England.
At the September hearing, it was common ground that such a clause existed, but Plaintiff argued their claim in The City was based on a different contract, a tripartite Collateral Management Agreement ("the CMA"), which did not contain an exclusive jurisdiction clause. Plaintiff did not explain the basis of the claim in The City. Plaintiff later acknowledged service and indicated they would challenge jurisdiction and file expert evidence of foreign law, but no such challenge or evidence materialised.
Company A (Shanghai) learned that the foreign proceedings would continue even if Plaintiff complied with the anti-suit injunction. Consequently, Company A (Shanghai) applied for a final anti-suit injunction and a mandatory injunction ordering Plaintiff to discontinue the foreign proceedings, or alternatively an interim mandatory injunction. The application was based on the foreign proceedings being vexatious and in breach of the exclusive jurisdiction clause.
Plaintiff filed late evidence essentially confirming their claim lay under the CMA but did not explain the foreign proceedings under the warehouse certificates. At the hearing on 17 December 2014, Plaintiff's counsel made two key submissions: (1) the warehouse certificates did not contain an exclusive jurisdiction clause in favour of England, and (2) Plaintiff did have a claim against Company A (Shanghai) under the warehouse certificates. Company A (Shanghai) opposed these submissions and maintained the application.
Legal Issues Presented
- Whether the foreign proceedings initiated by Plaintiff in The City are vexatious and in breach of the exclusive jurisdiction clause in the warehouse certificates favoring the courts of England.
- Whether the warehouse certificates incorporate an exclusive jurisdiction clause in favor of the courts of England.
- Whether the Collateral Management Agreement or the warehouse certificates govern the jurisdiction and substantive claims between Plaintiff and Company A (Shanghai).
- Whether the court can grant a final or interim mandatory injunction requiring Plaintiff to discontinue the foreign proceedings.
- Whether there are strong reasons not to enforce the exclusive jurisdiction clause in favor of England.
Arguments of the Parties
Appellant's Arguments
- The warehouse certificates do not contain an exclusive jurisdiction clause in favor of England; the governing jurisdiction clause is that contained in the CMA, which provides for Singapore law and non-exclusive Singapore jurisdiction.
- The warehouse certificates were issued by Company A (Shanghai) as agent under the CMA, and thus the terms of the CMA should prevail over any inconsistent terms in the certificates.
- Plaintiff's claim against Company A (Shanghai) arises under the CMA, not the warehouse certificates, although Plaintiff accepts that any claim against Company A (Shanghai), which is not party to the CMA, must be under the warehouse certificates.
- The web-site containing the Terms and Conditions of Company A is difficult to follow and confusing as to which terms apply.
- General incorporation of terms is insufficient to incorporate dispute resolution clauses; specific reference is required.
- Evidence as to the making of the CMA, Company A (Shanghai)'s knowledge of the CMA, and its role as agent is necessary before the court can determine the jurisdictional issue.
- There are strong reasons not to enforce the exclusive jurisdiction clause in England, including the location of evidence and witnesses in The City, multiple similar claims in The City, the nationality of Plaintiff, and the lack of reciprocal enforcement of English judgments in The State.
Appellee's Arguments
- The claim that there is no exclusive jurisdiction clause in favor of England is unsupportable given the language of the warehouse certificates and incorporated Terms and Conditions.
- The foreign proceedings are vexatious as Plaintiff is maintaining inconsistent positions between the two jurisdictions.
- The terms of the warehouse certificates and the CMA can be given effect concurrently by applying the CMA to its parties and the warehouse certificates to their parties.
- The use of background and context cannot be extended to give meanings to terms in a contract to which Company A (Shanghai) is not party.
- Without evidence challenging the jurisdiction or explaining the basis of the foreign claim, Plaintiff's position lacks credibility.
- The court should give effect to the exclusive jurisdiction clause incorporated into the warehouse certificates.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Investors Compensation Scheme Limited v West Bromwich Building Society [1998] 1 WLR 896 |
Use of background and context in contract construction. |
Court considered that background is relevant but cannot be used to assign meanings to terms in a contract to which a party is not a party. |
| Standard Bank PLC v Via Mat International Limited [2013] EWCA Civ 490 |
Need for clear understanding of context to appreciate the significance of documents. |
Court acknowledged that evidence of context may be necessary before determining the true significance of contractual documents. |
| Siboti K/S v BP France SA [2003] 2 Lloyd's Rep 364 |
General incorporation of terms does not necessarily incorporate arbitration or jurisdiction clauses without specific mention. |
Court distinguished the present case on the basis that the incorporation expressly referred to "all disputes," thereby including dispute resolution clauses. |
| Donohue v Armco [2002] 1 Lloyd's Rep 425 |
Burden lies on party wishing to sue outside an exclusive jurisdiction clause to show strong reason for departure. |
Court applied the principle that strong reasons are required to depart from a valid exclusive jurisdiction clause. |
| The Eleftheria [1969] 1 Lloyd's Rep 237 |
Factors to consider when deciding whether to enforce jurisdiction clauses, including prejudice from inability to enforce judgments. |
Court acknowledged that inability to enforce judgments abroad can constitute strong reason not to enforce jurisdiction clauses. |
Court's Reasoning and Analysis
The court examined the conflicting positions regarding the basis of Plaintiff's claim in the foreign proceedings. Initially, Plaintiff asserted claims under the CMA which lacks an exclusive jurisdiction clause in England; however, the court found that any claim against Company A (Shanghai), not party to the CMA, must be under the warehouse certificates.
The court found Plaintiff's earlier denial that the warehouse certificates governed the relationship lacked credibility, but later accepted a belated explanation that the claim could be based on bailment under the warehouse certificates, consistent with English law, and no evidence was presented to the contrary under foreign law.
Regarding the existence of an exclusive jurisdiction clause, the court found the warehouse certificates incorporated the Terms and Conditions of Company A by reasonable notice, including a clause subjecting disputes to English law and exclusive jurisdiction of English courts. The court rejected Plaintiff's argument that general incorporation could not include dispute resolution clauses because the incorporation expressly covered "all disputes arising from" the certificates.
The court considered Plaintiff's submission that the CMA terms should prevail over inconsistent terms in the warehouse certificates due to agency and contextual factors. However, there was insufficient evidence before the court to determine this issue fairly, particularly regarding the knowledge and intentions of Company A (Shanghai) when issuing the certificates as agent.
Given the lack of evidence, the court could not grant a final or even an interim mandatory injunction requiring Plaintiff to discontinue the foreign proceedings. The court emphasized that a mandatory injunction on an interim basis requires a high degree of assurance that the basis for the injunction is correct, which was lacking here.
On the issue of enforcing the exclusive jurisdiction clause, the court noted the burden lies on Plaintiff to show strong reasons for departure. Although Plaintiff raised several reasons, including convenience and location of evidence, the court was not persuaded these amounted to strong reasons. However, the court accepted that the inability to enforce an English judgment in the foreign jurisdiction could constitute a strong reason not to enforce the clause.
Ultimately, the court dismissed the application for a final or interim mandatory injunction.
Holding and Implications
DISMISSED
The court dismissed the application by Company A (Shanghai) for a final or interim mandatory injunction requiring Plaintiff to discontinue the foreign proceedings. The court found that Plaintiff's claim under the warehouse certificates could not be dismissed as vexatious, and that the existence of an exclusive jurisdiction clause in favor of England was established but could not be definitively applied without further evidence. The inability to enforce an English judgment in the foreign jurisdiction was recognized as a potentially strong reason not to enforce the clause, but this issue was not determinative in the present application.
No new precedent was established. The decision leaves open the substantive jurisdictional dispute pending further evidence and clarifications regarding the contractual relationships and agency.