On 4 July 2016 the Eastern Caribbean Court of Appeal
(Blenman, Michel JJA & Webster JA (Ag.)) dismissed the appeal of SFC SWISS
FORFAITING COMPANY LTD (“SFC”) against the order of the British Virgin Islands
(BVI) Commercial Court (Leon J), whereby it acceded to Charles Samek QC’s client’s –
SWISS FORFAITING LTD (“the Fund”) – application challenging the
jurisdiction of the BVI Court.
The Fund had commenced proceedings against
SFC in the Zurich Commercial Court (“the Swiss Proceedings”) alleging that SFC
acted as its agent pursuant to a Trust Agreement and owed it substantial sums of monies which it held on
trust. SFC did not challenge jurisdiction in the Swiss court and defended
the claim on its merits. SFC asserted that it was entitled to retain
monies for services it provided to the Fund, but that it was entitled to pursue
a claim for monies against the Fund in the BVI. That claim was advanced
pursuant to an alleged ‘Services Agreement’ between it and the Fund Manager
(IAMC), the existence of which the Fund disputed. In any event, the Fund argued
it was not a party to the ‘Services Agreement’. In due course, SFC commenced an action in the BVI
against the Fund for the monies which it alleged the Fund owed it under the
Services Agreement. There was an overlap of the sums claimed in the BVI and in
the Swiss Proceedings as well as a number of connecting factors between the BVI
claim and the Swiss Proceedings. The Fund applied to the BVI court for
a stay of the BVI proceedings on the basis of forum non conveniens.
Leon J acceded to the Fund’s application but SFC appealed.
SFC raised a number of grounds of appeal including that (i)
the Commercial Court had found that the Fund was a party to the ‘Services
Agreement’, that that contract contained a BVI jurisdiction clause and that
accordingly the Commercial Court should have applied given effect to that
jurisdiction provision unless there were ‘strong reasons’ not too (as per Donohue v Armco Inc and others [2001] UKHL 64); (ii) Leon J gave inadequate reasons and the
Court of Appeal was entitled on that ground alone to set aside the order; (iii)
SFC was domiciled in BVI and there was a domiciliary presumption that
jurisdiction should be that of the BVI; (iv) Leon’s J’s exercise of discretion
was perverse and the Court of Appeal should find that BVI – not Switzerland –
was the proper forum.
Charles – instructed by Maples & Calder, and with him
Arabella di Iorio – argued that the appeal be dismissed. He submitted that (i)
Leon J had not found that the Fund was party to the alleged ‘Services
Agreement’ and thus the ‘strong reasons’ test did not apply; (ii) when the
judgment of Leon J was considered as a whole, and including the submissions
made by the parties, his reasons were apparent and sufficiently clear (applying
the English Court of Appeal guidance in English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605; (iii) there was no domiciliary presumption in commercial
matters, rather domicile was just one of a number of factors, relying on Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460 and the BVI
decision in Bitech Downstream Limited v Rinex Capital Limited; (iv)
Leon J’s exercise of discretion was not perverse and he came to the right
decision, particularly having regard to the guidance given in The Abidin
Daver [1984] AC 398 regarding prior pending proceedings in relation to the same
matter.
The Eastern Caribbean Court of Appeal accepted all of
Charles’ submissions and rejected SFC’s appeal. The link to the judgment can be found here.
The judgment is of important not only for BVI / Eastern
Caribbean practitioners but also because it reaffirms essential principles of
jurisdiction, comity and private international law, which are likely also to
gain in significance post Brexit. It is also of importance as regards
the proper interpretation of a passage of Lord Diplock in The Abidin Daver,
which has been the subject of much legal debate.
Blenman JA, in giving the principle judgment of the Court
held in an important passage:
“I agree with Mr. Samek, QC
that SFC in criticizing the judge gives a too narrow interpretation of Lord
Diplock’s use of the expression “same matter”. I have no doubt that as
urged by Mr. Samek, QC, that all that
Lord Diplock intended was to refer to
the desirability to avoid ‘the additional inconvenience
and expense which must result from allowing two sets of legal
proceedings from being pursued concurrently in two different countries where
the same facts will be in issue and the testimony of the same
witnesses required.’ I also agree with Mr.
Samek, QC that Lord Diplock did not intend that the
two actions must be completely about
the same matter. Neither does the
jurisprudence that has developed in
relation to the stay of proceedings require that the
subject matter in the two sets of proceedings should be the same. I
totally accept Mr. Samek, QC’s, view on
this point. In fact, contemporary application of the doctrine of
forum non conveniens seeks to ensure litigation is resolved in the country with
which it is most closely connected. What is required is
that there be a close connection between
both sets of litigation, namely, the local and the foreign
claim – this much was present in the case at bar.”
Charles is a member of the Bar of the Territory of the
British Virgin Islands and is able to argue cases before the High Court,
Commercial Court and Eastern Caribbean Court of Appeal. Anyone interested in instructing Charles for cases in the
Caribbean should contact his clerk Dan Woodbridge on +44 (0) 207 7797 8696.
