Factual and Procedural Background
The Appellant, as claimant, appeals an order by the trial judge which stayed claims against the Respondents relating to declarations about an additional purchase price under a Music Catalogue Agreement dated 20 March 2020. The Agreement provided for payment of royalties from recordings of the first Respondent to the Appellant, with an additional purchase price payable in certain circumstances.
Clause 14 of the Agreement governed jurisdiction and law, providing for English law and exclusive jurisdiction of English courts for disputes, but with a carve-out allowing claims by the Respondents relating to the purchase price to be brought in courts in Los Angeles or New York.
The dispute concerns the Appellant's claim that the Respondents failed to pay royalties ("Sony Receipts") held on trust for the Appellant, while the Respondents contend that the additional purchase price is due to them and justifies retention of such royalties. The Respondents issued proceedings in Los Angeles after the Appellant commenced proceedings in England, resulting in parallel litigation.
The English court stayed the purchase price claims, finding that the Respondents' choice to litigate in Los Angeles crystallised jurisdiction in that forum for those claims. The Appellant appeals the stay and the consequential costs order.
Legal Issues Presented
- Whether the trial judge erred in construing clause 14 of the Agreement to allow the Respondents to choose jurisdiction for purchase price claims after the Appellant commenced proceedings in England.
- Whether clause 14 confers exclusive jurisdiction on the English courts for the Appellant’s claims in their entirety.
- Whether there were grounds for ordering a stay of any part of the Appellant’s claim, given the parallel proceedings.
- Whether clause 14 constitutes an exclusive jurisdiction clause within the meaning of the Hague Convention, prohibiting the English court from declining jurisdiction.
- Whether the English court should exercise its discretion to grant a stay to avoid parallel proceedings and inconsistent judgments.
Arguments of the Parties
Appellant's Arguments
- Clause 14 is an asymmetric jurisdiction clause where both parties irrevocably submit to the exclusive jurisdiction of English courts, except the Respondents have a limited option to bring purchase price claims in the US.
- The carve-out in the fourth sentence applies only to claims by the Respondents, not the Appellant, who retains exclusive English jurisdiction for all claims including purchase price claims.
- The judge’s "floating jurisdiction" concept is incorrect; jurisdiction is fixed at the date of issue of proceedings.
- Parallel proceedings are inherent in asymmetric jurisdiction clauses and do not justify a stay.
- There is no basis for a discretionary stay; English courts are the appropriate forum for all claims.
- Reliance on the "one-stop shop" principle from Fiona Trust was misplaced as it does not apply to the asymmetric clause here.
Respondents' Arguments
- The fourth sentence of clause 14 grants the Respondents an option to require purchase price disputes to be litigated in Los Angeles or New York, overriding the second sentence’s English jurisdiction for those claims.
- This creates two exclusive jurisdictions: purchase price claims in the US, other claims in England, avoiding duplicative proceedings.
- The US-related provisions in the Agreement support a US jurisdiction option for purchase price claims.
- The Appellant unilaterally commenced English proceedings knowing the Respondents intended to litigate purchase price claims in California, undermining the Respondents’ option.
- The judge correctly found that exercising the option crystallised jurisdiction in California, justifying a stay of English purchase price claims.
- Parallel proceedings risk inconsistent judgments and justify a discretionary stay.
- Relied on case law supporting avoidance of parallel proceedings and the "one-stop shop" presumption in multi-forum contracts.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Fiona Trust v Privalov [2007] UKHL 40 |
One-stop shop principle presuming disputes under a contract should be decided by the same tribunal. |
Discussed but distinguished as the present clause is asymmetric and contemplates parallel proceedings. |
| Lornamead Acquisitions Ltd v Kaupthing Bank HF [2011] EWHC 2611 (Comm) |
Jurisdiction clauses for the benefit of one party do not allow renunciation of jurisdiction in proceedings brought by the other party. |
Supported the Appellant’s argument that the Respondents cannot unilaterally avoid English jurisdiction once proceedings are properly commenced. |
| Mauritius Commercial Bank v Hestia Holdings Ltd [2013] EWHC 1328 (Comm) |
Asymmetric jurisdiction clauses allow one party to sue abroad but do not disapply exclusive English jurisdiction for claims brought by the other party. |
Supported the Appellant’s interpretation of clause 14 as allowing parallel proceedings but not loss of English jurisdiction. |
| BNP Paribas SA v Trattamento Rifiuti Metropolitani SpA [2019] EWCA Civ 768 |
Presumption of mutual exclusivity in jurisdiction clauses; overlapping jurisdiction clauses generally not intended. |
Respondents relied on this for the one-stop shop presumption; Court found clause 14 clearly contemplates parallel proceedings. |
| BNP Paribas SA v Anchorage Capital Europe LLP [2013] EWHC 3073 (Comm) |
Anti-suit injunctions justified where party breaches exclusive jurisdiction clause by litigating in another forum. |
Respondents used this to argue against parallel proceedings; Court found distinctions and did not accept it undermined Appellant’s position. |
| The El Amria [1981] 2 Lloyd's Rep 119 |
Risk of inconsistent judgments justifies stay of proceedings to avoid procedural disaster. |
Referenced by Respondents to support stay; Court found risk exaggerated given parties and issue estoppel rules. |
| Citi-March Ltd v Neptune Orient Lines Ltd [1996] 1 WLR 1367 |
Asymmetric jurisdiction clause; stay granted to avoid inconsistent decisions. |
Respondents relied on this; Court distinguished as this case involved multi-party litigation unlike the present dispute. |
| CA Indosuez (Switzerland) SA v Afriquia Gaz SA [2023] EWCA Civ 1072 |
Jurisdiction of English court is fixed at date of issue of proceedings. |
Supported the Court’s rejection of the "floating jurisdiction" concept advanced by the judge below. |
| Canada Trust v Stolzenberg (No. 2) [2002] 1 AC 1 |
English court jurisdiction determined at commencement of proceedings. |
Reinforced the principle that jurisdiction cannot be lost after commencement by unilateral action. |
| Housden v The Conservators of Wimbledon and Putney Commons [2008] EWCA Civ 200 |
Judicial restraint advised where issues need not be decided. |
Court declined to decide applicability of Hague Convention to asymmetric clauses as unnecessary. |
Court's Reasoning and Analysis
The Court began by affirming that the proceedings were properly commenced in England pursuant to the exclusive jurisdiction clause in the second sentence of clause 14. The carve-out in the fourth sentence grants only the Respondents an option to bring purchase price claims in Los Angeles or New York, and does not apply to the Appellant’s claims.
The judge below had construed clause 14 as creating a "floating jurisdiction" that crystallised in favour of the Respondents' chosen US forum upon their commencement of proceedings there. The Court rejected this as contrary to established authority that jurisdiction is fixed at the date of issue of proceedings and cannot be lost by unilateral action.
The Court analysed the language of clause 14, particularly the phrase "Notwithstanding the foregoing," as a limited qualification allowing the Respondents to litigate purchase price claims in the US without revoking their irrevocable submission to English jurisdiction for all claims by the Appellant. The Court found no basis for reading the clause as permitting the Respondents to revoke English jurisdiction or for treating the US jurisdiction as exclusive for all parties.
The Respondents’ argument that the Appellant could bring counterclaims in the US was dismissed as incompatible with the exclusive jurisdiction clause and the asymmetric nature of the agreement.
The Court acknowledged the risk of parallel proceedings but held that this was an inherent feature of asymmetric jurisdiction clauses and did not justify a stay. The risk of inconsistent judgments was mitigated by issue estoppel and the fact that the English court is seized of all claims other than those the Respondents choose to litigate in the US.
Regarding the discretionary stay, the Court found no basis to exercise discretion to stay proceedings given the English court’s clear jurisdiction, the governing law, and the absence of a more appropriate forum. The Court declined to decide whether the Hague Convention applies to asymmetric jurisdiction clauses, considering it an unnecessary obiter dictum.
Holding and Implications
The appeal is ALLOWED and the stay of the purchase price claims granted by the trial judge is lifted.
The direct effect is that the English court retains jurisdiction over all claims by the Appellant, including those relating to the purchase price, notwithstanding the Respondents’ option to litigate purchase price claims in the US. The Respondents cannot unilaterally revoke the English court’s jurisdiction by commencing proceedings in California or New York.
No new precedent is established on the applicability of the Hague Convention to asymmetric jurisdiction clauses, as this issue was left undecided. The case reaffirms established principles on jurisdiction being fixed at commencement of proceedings and the interpretation of asymmetric jurisdiction clauses.