CL-2025-000010 and CL-2025-000091 - [2025] EWHC 1842 (Comm)

If the Directors themselves have no contractual or quasi-contractual right not to be sued in the Greek Proceedings, then WRL asserts that it is the beneficiary of a contractual promise from JPM not to sue WRL’s or Viva’s Representatives otherwise than in this jurisdiction. In JP Morgan Securities Plc and ors v VTB Bank PJSC [2025] EWHC 1368 (Comm), I referred to an obligation owed by one party to its contractual counterparty not to bring certain types of claim against a non-party as a “Third Party Claim Obligation”.

A “Third Party Claim Obligation” must arise either on the construction of the relevant contract or by implication. In JP Morgan, when considering the admittedly more challenging argument that an arbitration agreement gave rise to a Third Party Claim Obligation, I reviewed a number of authorities which have considered this issue at [101]-[134]. Those authorities were supplemented in this case by four further first instance authorities which I did not consider in JP Morgan.

The first is the decision of Mr Justice Morison in Horn Linie GmbH & Co v Panamericana Formas e Impresos SA (The Hornbay) [2006] EWHC 373 (Comm). In that case, cargo was carried under a bill of lading which contained an English EJC. Proceedings were commenced by cargo interests in Chile to enforce the bill of lading contract, but against Maritrans, the shipowner’s Chilean agents, rather than against the shipowner. The shipowner obtained ASI relief to restrain those proceedings:

However, The Hornbay was relied upon by Blair J and Burton J in the second and third decisions cited, delivered within a month of each other in 2009.

In Vitol SA v Arcturus Merchant Trust Limited [2009] EWHC 800 (Comm), there was (arguably) an English EJC in the contract between Vitol and the defendant. The defendant had sued Vitol and its wholly owned subsidiary and agent, Mansel, in Nigeria, seeking a declaration that the contract was null and void, and the return of the deposit paid. Granting ASI relief on Vitol’s application in respect of both Vitol and Mansel in an ex tempore judgment, Blair J at [36] held:

“I shall now consider the position of Mansel which is also a party to the Lagos proceedings. Mansel is a wholly owned subsidiary of the claimant. It acted at all times solely as the claimant's agent. In Nigeria to all intents and purposes it stands in the shoes of the claimant. In my view, Horn Linie v Pan Americana … is authority for the proposition that an exclusive jurisdiction clause can cover the claims made against an agent in such circumstances so as to bring such a claim properly within the ambit of the anti-suit injunction. In my view the claimant has made out a good case including both principal and agent in the terms of the injunction in the present case.”

I accept that this case appears to treat The Hornbay as authority for the proposition that an EJC can involve a promise by one party only to sue the other’s agent in the contractual forum in cases where the agent “to all intents and purposes stands in the shoes of the [principal]”. The issue was dealt with very briefly, and Blair J only appears to have been concerned with whether the claim was arguable. It is not clear whether Blair J’s conclusion was reached by way of construction or implication. The attempt to obtain a declaration of non-liability against Mansel might be said to have been premised on Mansel being the putative party to the disputed contract, but Mansel was not party to the English proceedings, and the decision was not premised on “quasi-contractual” ASI reasoning.

Less than one month later, on 3 April 2009, Burton J delivered judgment in Deutsche Bank AG v Highland Crusader Offshore Partners LP [2009] EWHC 730 (Comm), after hearing argument the day before. There were English non-exclusive jurisdiction clauses (“NEJC”s) in various contracts referred to as the GMRAs between DBAG and various companies in the Highland group. Highland sued DBAG and an associated company called DBSI (which acted in an agency role under certain of the transactions on behalf of both DBAG and Highland) in Texas seeking declarations of non-liability under the GMRAs. In due course, the Texas proceedings were expanded to include damages for negligent and fraudulent misstatement against DBAG and DBSI which were alleged to have induced the GMRAs, and “other tortious claims relating to the GMRAs, a breach of the contract in relation to the alleged inadequacies of the Default Valuation Notices and a claim by Highland for unjust enrichment and promissory estoppel”. An employee of DBAG said to have made some of the misrepresentations was later joined to the Texas proceedings.

The GMRAs contained a promise by Highland not to sue DBSI to recover amounts owed or enforce rights in connection with or as a result of the transaction effected within the framework of the GMRAs (referred to in the case as the “no action clause”). DBSI had signed the GMRAs and Burton J found that it was arguable that DBSI was party to the NEJC. DBSI was made party to the English proceedings and supported the application for ASI relief.

The Texas proceedings were found not to involve a breach of the NEJC ([22]), but Burton J held that they were vexatious and oppressive so far as DBAG was concerned on the basis that DBAG had already commenced English proceedings, and that where there was a contractual non-exclusive jurisdiction clause, a party would ordinarily act vexatiously and oppressively in pursuing proceedings in the non-contractual jurisdiction in parallel with proceedings in the contractual jurisdiction, unless there were exceptional reasons, not foreseeable at the time when the contractual jurisdiction was agreed ([27]). That conclusion was overturned on appeal ([2009] EWCA Civ 725).

Before Burton J, there was no challenge to the correctness of The Hornbay “and the conclusions to be drawn from that decision in relation to the appropriateness of an anti-suit injunction where a claim is made, in a non-contractual jurisdiction, against an agent of the contracting party” (see [15(iii)]). There was some debate as to whether the claims against DBSI and Mr Newell involved a breach of the “no action clause” ([30(ii)]) which Burton J did not find it necessary to resolve:

“Whether or not the pursuit of DBSI amounts to a breach of clause 5, it does seem at the very least arguable that the principles of The Hornbay, to which I referred above, and whose applicability, as I have indicated, Mr Allen QC did not challenge, apply. In that case an anti-suit injunction was granted by Morison J, in circumstances in which the defendants unsuccessfully resisted a claim by shipowners in London, the contractual forum, for an anti-suit injunction, when, in order to seek to avoid the consequences of a jurisdiction clause, their claim in Colombia, which related to the contract, was brought in proceedings, not against the shipowners, but against the shipowners' agents.”

At [34] he continued:

“I conclude it to be at least strongly arguable, as set out above, that DBSI are engaged by the non-exclusive jurisdiction clause and became a party to it. However, quite apart from that, I am satisfied that the principles in The Hornbay entitle me to conclude that, in practice, the action in Texas, so far as it concerns joinder of agents or servants of the Claimant for the purpose of enforcing relief in connection with the contract, all of which would be justiciable in the United Kingdom, that the injunction should relate also to suit against DBSI. The same principle would apply to Mr Newell as a servant or agent. No substantive ground has been put forward as to why or whether there is any claim against him which is not in reality one made against his principals/employers and in connection with the Agreements and Transactions, and in the light of The Hornbay I grant an injunction in favour of the Claimant and DBSI in relation to pursuit of Mr Newell also.”

There were a number of bases on which ASI relief extending to the pursuit of the Texas proceedings against DBSI could have been granted, including on the basis that it was a party to the NEJC in the GMRA, or benefited from an express agreement not to pursue it in the “no claims clause”. The decision was, moreover, one founded on the vexatious and oppressive jurisdiction, there being no argument (save by reference to the “no claims” clause) that the bringing of the Texas proceedings was a breach of contract. It is not, with respect, entirely clear to me what principle Burton J regarded The Hornbay as establishing, and which factors of the case before him engaged that principle.

In Royal Bank of Scotland plc v Highland Financial Partners LP [2012] EWHC 1278 (Comm), Burton J addressed similar issues to those which arose in the DBAG v Highland case. RBS and Highland had entered into a loan in the form of a CDO transaction. The transaction was constituted by various contracts. RBS obtained summary judgment on its claim for repayment, the amount of Highland’s liability being determined at a subsequent quantum hearing. After the quantum hearing, Highland commenced proceedings in Texas against RBS and two of its officers (Hall and Griffiths) in relation to the same transactions, alleging that RBS employees had given dishonest evidence. RBS applied for ASI relief on the basis that:

A major issue in the case was whether injunctive relief should be refused on the basis that RBS had come to court with unclean hands and whether the liability judgment should be set aside on the basis that it had been procured by fraud. However, an issue also arose as to whether RBS could rely on the EJCs to restrain the Texas proceedings against Hall and Griffiths (which alleged that, when acting on behalf of RBS, Hall and Griffiths had repeatedly made untruthful statements and been guilty of culpable non-disclosures).

At [150], Burton J referred to the decision of Teare J in Morgan Stanley & Co International plc v China Haisheng Juice Holdings Co Ltd [2009] EWHC 2409 (Comm), [27] which had rejected the argument that the EJC before him extended to claims against non-parties (a case I referred to in JP Morgan at [117]), and also to The Hornbay, his own earlier decision in the Deutsche Bank v Highland case, Lord Scott’s judgment in Donohue v Armco Inc [2001] UKHL 64 (which I discussed in JP Morgan at [114]-[115]), Mr Justice Norris’ judgment in Winnetka Trading Corporation v Julius Baer International Ltd [2008] EWHC 3146 (Ch) (JP Morgan, [116]) and a decision of Flaux J in Whitesea Shipping & Trading Corp v El Paso Rio Clara Ltda (The Marielle Bolten) [2009] EWHC 2552 (Comm). That last decision involved an express promise in a Himalaya clause in a bill of lading not to sue the servants or agents of the carrier, and does not appear to take the present debate further.

At [153], Burton J concluded:

“Quite apart from any desire or obligation to pay an indemnity or a contribution to Messrs Hall and Griffiths, I am satisfied that what Mr Nicholls describes as the obvious reputational damage for RBS resulting from the making of a claim as to what Messrs Hall and Griffiths have allegedly done during their employment, in itself gives RBS a sufficient interest. I would accordingly conclude that to restrain the Texas Proceedings, not only against RBS, but also against Messrs Hall and Griffiths, falls within the ambit of the exclusive jurisdiction clause and/or is a proper consequence of it.”

Finally in this regard, I was referred to Bannai v Erez [2013] EWHC 3689 (Comm), another decision of Burton J. In that case, there was an arbitration agreement between Mr Bannai and Mr Reifman. Israeli court proceedings were commenced by Mr Reifman’s trustee in bankruptcy against Mr Bannai, his son and ten companies, which Mr Bannai sought to restrain by ASI relief. At [32], Burton J upheld the granting of ASI relief in relation to the companies as follows:

“I am satisfied, as was Hamblen J, that there is jurisdiction to make such an order in order to avoid the arbitration clause being frustrated and circumvented. It is obvious, not least from the fact that the Trustee wished to continue with the very same Request for Instruction proceedings, to which the Companies and David Bannai had been joined, against them, even after the grant of the injunction by Walker J, that if no such order is made and the arbitration proceedings commenced between the Trustee and the Claimant, the Israeli proceedings would continue against the Companies in parallel, for the relief which the Trustee seeks in relation to transfers of ownership and declarations of interest in the assets, leading to oppressive litigation on two fronts and to no purpose. There is an analogy that can be drawn with the case of The Hornbay [2006] 2 Lloyd's Law Rep 44 (where there was not an arbitration clause but an exclusive jurisdiction clause), where the Claimants were entitled to restrain proceedings not only against them but against their agents.”

It is not entirely clear whether this based The Hornbay injunction on vexatious and oppressive or contractual grounds.

It will be apparent from these authorities, and the other cases to which I referred in JP Morgan, that English law does not currently offer a clear and consistent answer to the question of when proceedings against a non-party in some other forum will be found to be a breach of an EJC or arbitration agreement, with the vast preponderance of authority being at first instance. In particular, it is unclear whether such an outcome depends purely on the construction of the EJC or arbitration agreement on conventional principles of contractual construction, or whether there is some more general legal doctrine or policy at play which prioritises maximising the efficacy of the forum selection agreement over any more conventional exercise of contractual construction and implication.

It will also be apparent from the JP Morgan case that I have difficulty with the latter suggestion. An obligation of the relevant kind would appear to engage the Gilbert Ash principle of construction and require sufficiently clear words to constrain a contracting party’s right to sue third parties (JP Morgan, [103]). There is a formidable body of first instance authority which support the view that clear language is required to achieve such an outcome, much of which I referred to in JP Morgan: by way of brief summary, Credit Suisse First Boston (Europe) Ltdv MLC (Bermuda) Ltd [1999] 1 All ER (Comm) 237, 252; Team Y&R Holdings Hong Kong Ltd v Ghossoub [2017] EWHC 2401 (Comm), [82(3)], [82(7)]; Clearlake Shipping Pte Ltd v Xiang Da Marine Pte Ltd [2019] EWHC 2284 (Comm), [23]-[24]; Topalsson GmbH v Rolls-Royce Motor Cars Ltd [2023] EWHC 2092 (TCC); and Renaissance Securities (Cyprus) Ltd v ILLC Chlodwig Enterprises [2024] EWHC 2843 (Comm), [28].

It would also involve a considerable asymmetry, with the third party’s ability to sue the contracting party in a court of its choosing unconstrained (an issue which concerned Teare J in Morgan Stanley & Co International plc v China Haisheng Juice Holdings Co Ltd [2009] EWHC 2409 (Comm), [24] and [27] and Mr Rabinowitz KC in Ghossoub, [82(5)]), an asymmetry which might become particularly pronounced if the contracting party wished to counterclaim in proceedings brought by a third party. Finally, it is not as if an agreement between two parties that one of them will not sue servants, agents or contractors of the other is not well-travelled contractual ground, being a staple of the Himalaya clause.

I have identified various issues with what might be termed the Hornbay line of cases in the preceding paragraphs. It may be that they reflect a principle of law that if an agent is sued effectively as principal in respect of the contract entered into by the principal and which contains an EJC, the EJC will extend to those proceedings against the agent as well, although the quasi-contractual ASI jurisdiction which has more clearly developed since those cases were decided may provide a surer foundation for relief. For present purposes, it is sufficient to note that if The Hornbay and the associated cases do establish a principle of law of this kind, it is not one which is engaged here. The Directors are not being sued under the SHA, nor as agents of WRL. Under the applicable law, WRL has no legal responsibility for the Directors’ conduct in the management of Viva (see [16] above), a legal position which WRL has not been slow in pointing out (see e.g. paragraph 17.1 of WRL’s Amended Counterclaim).

If clause 42 is to create a Third Party Claim Obligation, it must do so through the conventional processes of construction or implication.

For the reasons explained at [44]-[49] above, I am satisfied that, far from containing clear language establishing a Third Party Claim Obligation, clause 42 is inconsistent with its application to disputes between anyone other than WRL, JPM and those who adhere to the SHA by Deeds of Adherence. It has been noted that express language addressing third party rights without reference to the EJC tells against the suggestion that the EJC in a contract protects third parties by a promise as to where they can and cannot be sued (Ghossoub, [82(3) and (4)]; Topalsson, [113]-[114] and Renaissance Securities in the Commercial Court, [38]-[39]). That consideration applies even more strongly here, because clauses 33.3 and 38.5 both address what entitlements the Representatives can derive from the SHA, without referencing the EJC.

WRL has also relied on the obiter dicta of Lord Scott in Donohue v Armco Inc [2001] UKHL 64, [60] that an EJC with one joint tortfeasor may as a matter of contract preclude claims in another forum against another joint tortfeasor. I, respectfully, have difficulty with that suggestion for the reasons given in JP Morgan, [115] and [124], although the particular issues it would raise in the context of an arbitration agreement are not present in this case as they were in J.P. Morgan. I detect a similar lack of enthusiasm for the proposition from Teare J in Morgan Stanley, [30] and from Mr Rabinowitz KC in Ghossoub, [75]. There was no attempt to argue that WRL was a tortfeasor under Greek law for the Article 919 claim, and, on its face, that suggestion is inconsistent with the agreed position as to Greek law at [16]. The possibility of the Directors having a legal right to an indemnity from WRL (a consideration which troubled Lord Scott) would appear to be remote given the premise of any Article 919 liability and the terms of Article 332 of the GCC. Even if these issues had been overcome, I would have concluded that there is no principle of construction of EJCs to the effect suggested by Lord Scott.

WRL also advances its case on the basis that the dispute being litigated in the Greek Proceedings is “in substance” a dispute between WRL and JPM, with the claim against the Directors being, in effect, a “proxy war” between JPM and WRL. In this connection, WRL understandably placed considerable reliance on the decision in the Court of Appeal in LLC EuroChem North-West-2 v Tecnimont SPA [2023] EWCA Civ 688, which I discussed in JP Morgan at [126]-[129]. This was a case in which Tecnimont had relied in an arbitration with EuroChem on an Italian government decree finding that EuroChem’s Italian subsidiary was controlled by a sanctioned entity. The Italian subsidiary brought public law proceedings in Italy to challenge that decision, and Tecnimont sought to intervene in those proceedings to resist that attempt (for the purpose of improving its position in the arbitration and associated court proceedings).

By a majority, the Court of Appeal held that this involved a breach by Tecnimont of the arbitration agreement:

Taking the “same issue” reasoning first:

Turning to the “proxy war” aspect:

Finally, there is WRL’s case on implication. This involved implying the terms in bold into the SHA:

I am satisfied that no such implication is possible: