Home > Claim stayed despite exclusive jurisdiction clause (Traxys Europe SA v Sodexmines Nigeria Limited and Basem El Ali)

Claim stayed despite exclusive jurisdiction clause (Traxys Europe SA v Sodexmines Nigeria Limited and Basem El Ali)

14th August 2020

Claim stayed despite exclusive jurisdiction clause (Traxys Europe SA v Sodexmines Nigeria Limited and Basem El Ali)

Claim stayed despite exclusive jurisdiction clause (Traxys Europe SA v Sodexmines Nigeria Limited and Basem El Ali)

Notwithstanding an exclusive jurisdiction clause requiring proceedings against a company to be brought in England and Wales, claims within those proceedings against the company’s sole shareholder and alter ego in tort (including conspiracy claims involving D1) were stayed on the basis of forum non conveniens.

Traxys Europe SA v Sodexmines Nigeria Limited and Basem El Ali [2020] EWHC 2195 (Comm)

What are the practical implications of this case?

This decision offers an interesting illustration of how the various factors relevant to the determination of the forum conveniens are to be balanced. The party raising the jurisdiction challenge here had previously persuaded the foreign court that claims should be brought in England and was now endeavouring to persuade the English Court that the same claims should be brought in the earlier jurisdiction. Although this was noted as an unattractive feature and one which was perhaps relevant to the court’s discretion, it was given very limited weight in determining whether England and Wales was the forum conveniens. It also makes clear that the burden of proof is to be determined on a purposive interpretation of the issues before court rather than on the specific type of application in which the issues arise.

What was the background?

This decision offers an interesting illustration of how the various factors relevant to the determination of the forum conveniens are to be balanced. The party raising the jurisdiction challenge here had previously persuaded the foreign court that claims should be brought in England and was now endeavouring to persuade the English Court that the same claims should be brought in the earlier jurisdiction. Although this was noted as an unattractive feature and one which was perhaps relevant to the court’s discretion, it was given very limited weight in determining whether England and Wales was the forum conveniens. It also makes clear that the burden of proof is to be determined on a purposive interpretation of the issues before court rather than on the specific type of application in which the issues arise.

The central allegation in the proceedings was that defendants had dishonestly substituted a virtually worthless product for a valuable tin product which was to be supplied to the claimant. The claimant sought permission to serve on D2 out of the jurisdiction, an application which was not opposed. D2 did not apply to set aside the grant of permission, an application he was entitled to make, but instead applied for a stay of the proceedings on the grounds that Nigeria is the forum conveniens.

What did the court decide?

The judge noted that the burden of proof typically lies on the defendant when seeking a stay on the grounds of forum non conveniens to establish the alternative forum more appropriate than England and Wales. The burden of proof is the opposite where a claimant requires permission to serve out of the jurisdiction.

In this case, although D2 applied for a stay rather than an order setting aside the permission to serve out, the judge concluded that the principles underlying that distinction dictated that the burden in this case was on the claimant. The judge set out the arguments raised by the claimant in favour of England and Wales being the proper forum and those raised by D2 in favour of Nigeria. Having done so, he concluded that although the proceedings against D1 were issued in England due to an exclusive jurisdiction clause in the relevant sales contracts with the claimant, those proceedings would likely fall away if the claimant had to bring its claims against D2 in Nigeria. The judge preferred the arguments raised by D2 and concluded that those raised by the claimant were lacking in cogency.

The events which founded the tort claim all took place in Nigeria and the centre of gravity in the claim against D2 was Nigeria. The stay was, therefore, granted and would have been even if the burden of proof had been with the defendant.

The worldwide freezing injunction would remain in force until the claimant had an opportunity to obtain similar relief from the courts in Nigeria.

Case details

  • Court: High Court, Queen’s Bench Division, Commercial Court
  • Judge: Mr Justice Teare
  • Date of judgment: 12 August 2020

This article was first published by Lexis PSL on 14 August 2020.

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Sally Wollaston
Sally Wollaston
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