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

Fecha: 18-Jul-2025

Clause 42 of the SHA

Clause 42 of the SHA

39.

The Directors’ skeleton argument (in particular paragraph 76(3)) appeared to accept that they were not parties to clause 42 of the SHA. However, the position was less clear in oral argument (e.g. Day 1 page 55, lines 21-22), and in any event, the question of whether clause 42 is capable of applying to claims by or against Representatives comes in at a number of stages of the argument in this case (including whether clause 42 involves a promise between those parties in contractual privity not to bring proceedings against Representatives elsewhere than in England and Wales, and whether it can have that effect in combination with clause 33). For that reason, it is convenient to consider the terms of clause 42 in detail at this point.

40.

Clause 42 provides as follows:

“42.1
Except as expressly provided otherwise in this Agreement in respect of a dispute resolution mechanism, any Party may give notice of any Dispute (a Dispute Notice) to all of the other Parties. The Dispute Notice shall include a detailed description of the Dispute, against whom it is addressed and any steps taken by the Parties to resolve it. Within 10 Business Days of receipt of the Dispute Notice, those against whom the Dispute is not addressed shall notify the Party who sent the Dispute Notice if they wish to be involved in the Dispute and if so, in what capacity.
42.2
Following the Dispute Notice, the Parties, or such of them against whom the Dispute is addressed, Parties who respond to the Dispute Notice or otherwise declare themselves to be interested in the Dispute, shall attempt in good faith to resolve the Dispute through a face-to-face meeting or telephone conference call within 15 Business Days after the date that the Dispute Notice was received under Clause 42.1 (or such longer period as may be agreed in writing between the Parties) (the First Resolution Period). The Parties shall meet at least on one occasion in this period. Consent to a first meeting proposed by one Party shall not be unreasonably withheld by the others. The Parties’ Representatives shall have full authority to engage in these negotiations and to enter into any settlement agreement on the Parties’ behalf.
42.3
If the Parties are unable to resolve the Dispute by amicable negotiation within the First Resolution Period, the Dispute shall be referred to the respective Dispute Representatives of the parties within 15 Business Days after the end of the First Resolution Period. The Dispute Representatives shall attempt in good faith to resolve the Dispute through a face-to-face meeting or telephone conference call within 10 Business Days after the date on which it was referred to them in writing (or such longer period as may be agreed in writing between the Parties). The Dispute Representatives shall meet at least on one occasion in this period. Consent to a first meeting proposed by one Dispute Representative shall not be unreasonably withheld by the Dispute Representatives. The Dispute Representatives shall have full authority to engage in these negotiations and to enter into any settlement agreement on the parties’ behalf.
42.4
Except to obtain interim or provisional relief or where expressly provided otherwise in this Agreement, neither Party may bring any proceedings under Clause 42.5 in relation to any Dispute until the procedure in Clauses 42.1 to 42.3 (inclusive) has been followed.
42.5
Except as expressly provided otherwise in this Agreement in respect of a dispute resolution mechanism, the English courts shall have exclusive jurisdiction in relation to all Disputes. For these purposes, each party irrevocably submits to the jurisdiction of the English courts and waives any objection to the exercise of that jurisdiction. Each party also irrevocably waives any objection to the recognition or enforcement in the courts of any other country of a judgement delivered by an English court exercising jurisdiction pursuant to this Clause.
42.6
Each party irrevocably consents to service of process or any other documents in connection with proceedings in any court by facsimile transmission, personal service, delivery at any address specified in this Agreement or any other usual address, mail or in any other manner permitted by the law of the place of service or the law of the jurisdiction where proceedings are instituted, including but not limited to service to any party’s agent for service of process in accordance with Clause 43.
42.7
Each party acknowledges that each of WRL and JPM may be irreparably harmed by any breach of the terms of this Agreement and that damages alone may not necessarily be an adequate remedy. Accordingly, each of WRL and JPM shall be entitled to seek the remedies of final or interim injunction, specific performance and other equitable relief, or any combinations of these remedies, for any potential or actual breach of its terms.
42.8
The provisions of Clauses 42.1 to 42.4 (inclusive) shall not apply in respect of any Disputes in relation to Schedule 15.”

41.

A “Dispute” is defined as:

“a dispute arising between the parties out of or in connection with this Agreement, including disputes arising out of or in connection with:
(a)
the creation, validity, effect, interpretation, termination, performance or non-performance of, or the legal relationships established by, this Agreement;
…
(c)
any non-contractual obligations arising out of or in connection with this Agreement”.

42.

This part of the Directors’ argument involves the assertion that they are “Parties” for the purposes of clause 42: a necessary requirement both for reasons of privity of contract (if that argument is being run), and because, taken as a whole, and having regard in particular to clause 42.1 which introduces the concept of “Dispute”, clause 42 is expressed to apply to Disputes between the Parties.

43.

Before turning to the provisions of the SHA which directly bear on this issue, it is helpful to calibrate the interpretative approach to be followed. EJCs and arbitration agreements are not restrictively construed as to their subject-matter on Gilbert Ash lines, even though they take away the right the parties would otherwise have had to bring proceedings in any court of competent jurisdiction, and even though a requirement to bring proceedings in a particular forum may itself prevent a party from being able to bring certain types of claim which would have been available elsewhere: Riverrock Securities Ltd v International Bank of St Petersburg [2020] EWHC 2483 (Comm), [57]-[61] where relevant authorities are collected (I deal with the approach to the issue of whether an EJC precludes a claim against a non-party otherwise than in the chosen forum at [76] and following below but in my view, clear words are also required for a contractual provision to have this effect).

44.

Rather, they are ordinarily construed expansively, with perhaps the most striking summary of that expansive interpretation canon being Lord Hoffmann’s statement in Fiona Trust & Holding Corp v Privalov [2007] UKHL 40, [13] – which applies to EJCs as well as arbitration agreements –that “the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal. The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator's jurisdiction.”

45.

Mr Weekes KC sought to adopt that rationale, and harness the power of the associated interpretative presumption, for the purposes of determining who the contractual parties to the EJC in clause 42 were, suggesting that rational businessmen are likely to have intended that all claims relating to the subject matter of the SHA would be brought in a single forum: not simply those between JPM and WRL, but those between either of those entities and the other’s Representatives, or between the Representatives inter se. However, I am not persuaded that the Fiona Trust approach is applicable in this context. Even between the same parties, the Fiona Trust approach must yield when the parties have entered into more than one agreement in relation to the same transaction which make different provisions for dispute resolution (BNP Paribas SA v Trattamento Rifiuti Metropolitani SpA [2019] EWCA Civ 768). The question of who is party to an EJC raises a fundamental issue of whether there is an EJC between the parties to the Greek Proceedings, rather than its scope. To this extent, there is some analogy with the distinction between contract formation and contract validity drawn by the Court of Appeal in DHL Project Chartering Ltd v Gemini Ocean Shipping Company Ltd [2022] EWCA Civ 1555, in which the limited utility of Fiona Trust when addressing the former question was noted at [58] and [62]. This is a context in which the strong policy in favour of efficient, non-fragmented, dispute resolution cannot override a careful consideration of the effect of the contractual language.

46.

Subject to the issue of the interrelationship of clauses 33 and 42 which I address at [54] and following below, I am satisfied that the “Representatives” as defined in the SHA are not “Parties” for the purpose of clause 42, and are not parties to the contractual promises in relation to the bringing of proceedings in clause 42.5.

47.

As originally executed, the SHA introduced JPM and WRL as “Parties”. It is not without interest that when the SHA was amended and restated some months later, JPM and WRL were formally defined at the start as “the Parties”, although it is not necessary to grapple with the chronological complexities which might follow from relying on the terms of the restatement as an interpretative aid. There are also numerous provisions which treat “the Parties” as synonymous with JPM and WRL (e.g. clauses 10.6, 15.2 and 29.3). JPM and WRL are the sole signatories to the SHA.

48.

The SHA defines the “parties” as “the parties to this Agreement from time to time (including any person who at the relevant time is a party to, or has agreed (by executing a Deed of Adherence) to be bound by, this Agreement), and Parties, Party and party shall be construed accordingly”:

While the definition is non-exhaustive, the reference to the execution of a Deed of Adherence as one of the categories of “Party” is significant. Clause 1.4 provides that JPM and WRL will procure that Viva becomes a party to the SHA by executing a Deed of Adherence. That contemplates a formal process for becoming a Party by execution of a Deed. There is no provision for the Representatives to execute such a Deed, nor have the Directors done so.

ii)

The contractual form of the Deed of Adherence is in Schedule 11. There is provision for adhering parties to take the steps which JPM and WRL are to take under the SHA: give addresses for notices (clause 4) and appoint agents for service (clause 5). Significantly, there is express provision for clause 42 to apply (clause 8). The adhering parties sign and execute the Deed.

iii)

By contrast, as explained below, there is no provision for Representatives to give contractual notice addresses, nor appoint agents for service, nor to comply with the other elements of clause 42. The Representatives do not sign and execute any similar document.

49.

Clause 29 contains a provision regulating how parties give notice to other parties. Clauses 29.1 and 29.2 regulate the giving of “any notice to be given by one party to another party in connection with this Agreement”. Clause 29.3 assumes that the only Parties are WRL and JPM, providing “the addresses and email addresses of the parties for the purpose of Clause 29.1 are” addresses for JPM and WRL. As noted above, there is provision for this clause to operate in the case of those who become parties to the SHA by executing Deeds of Adherence, but no mechanism for Representatives or the Directors.

50.

The terms of clause 33 are also inconsistent with the suggestion that Representatives are “Parties” for the purposes of clause 42 (as opposed to parties to the separate contract, of narrower scope, constituted by clause 33 itself):

The “chapeau” to clause 33 provides that the SHA sets out “the whole agreement between the parties in respect of the subject matter of this Agreement”. Clauses 33.1(a) and (b), which are also concerned with the position as between contracting parties, also refer to “the parties”.

ii)

By contrast, the concept of “Representatives” is used in clause 33.1 in contradistinction to the parties (“any party (or its respective Representatives)”).

iii)

Clause 33.3 adopts a similar contradistinction, providing “each party agrees to the terms of this Clause 33 on its own behalf and as agent for each of its Representatives.”

iv)

Further, the narrow terms of clause 33.3 by which the parties act as agents of the Representatives only in relation to clause 33 tells strongly against the suggestion that the Representatives are parties to other provisions of the SHA in relation to which there is no equivalent of clause 33.3, such as clause 42.

51.

Clauses 38.5 and 38.6 are also significant in this regard:

Clause 38.5 gives the Representatives a limited “third party right” to enforce parts of clause 33 (“the relevant terms”). While that provision is something of a curiosity when clause 33.3 gives the Representatives a “first party right” to enforce clause 33 (see [30(ii)] above), the language of clause 38.5 once again is inconsistent with the suggestion that the Representatives are “Parties” to the SHA more generally, as is the provision allowing “the parties” (in contradistinction to the Representatives) to amend the terms of clause 33.

ii)

The limited scope of clause 38.5 (viz a right to enforce part only of clause 33) is inconsistent with the Representatives having contractual rights in relation to clauses other than “the relevant terms” in clause 33 (and, specifically, clause 42).

iii)

The limited and focussed nature of clause 38.5 is reinforced by the wider exclusion of third party rights in clause 38.6. That expressly refers to the limited right of third party enforcement given by clause 38.5, and states that, subject to that, “a person who is not a party to this Agreement shall have no right under [the 1999 Act] or any other statutory provision to enforce any of its terms”. Clause 38.5, therefore, characterises the right given to Representatives by the preceding sub-clause as an exception to the general rule that persons who are not parties to the SHA (sc. including the Directors) have no right to enforce its terms.

52.

Finally, the terms of clause 42, and the closely associated clause 43, are also inconsistent with persons other than JPM, WRL and those who execute Deeds of Adherence being parties to that clause:

The entry point to clause 42, which is a tiered dispute resolution clause, is a Party giving notice of a Dispute. The first stage in the process is good faith negotiation between the Parties’ Representatives (clause 42.2), who are to have full authority to settle, with a further escalation if no settlement is reached to the Parties’ Dispute Representatives.

ii)

While I accept a natural person could appoint a representative in this context, the definition of Dispute Representative is:

“Dispute Representative means in the case of each party, such individual nominated in writing in the case of JPM and WRL to each other party as soon as possible following the date of this Agreement and in the case of any other party as soon as possible after adherence to the terms of this Agreement”.

iii)

Once again, this contemplates that the parties to clause 42 are JPM, WRL and those who adhere to the terms of the SHA, which, in context, means someone who has executed a Deed of Adherence.

iv)

Clause 42.4, which mandates the following of the tiered process save in limited cases, states “neither Party may bring any proceedings under Clause 42.5 in relation to any Dispute until the procedure in Clauses 42.1 to 42.3 (inclusive) has been followed” (emphasis added). While a point with very limited weight, particularly given the scope for Deeds of Adherence which expressly incorporate clause 42, this naturally contemplates two parties (JPM and WRL).

Clause 42.6 provides for service of court documents in relation to proceedings, “including but not limited to service to any party’s agent for service of process in accordance with Clause 43.” Clause 43 appoints agents for service for JPM and WRL, but no one else (with Deeds of Adherence expressly addressing the position of subsequent joiners). Clause 43 is an integral part of the dispute resolution mechanism, and operates even-handedly between the parties. However, the Representatives and Directors do not appoint agents for service, which, if they were nonetheless parties to clause 42, would give them the ability to serve proceedings on JPM and WRL in this way, without being subject to such service themselves.

vi)

Clause 42.7, intended to assist the specific enforcement of clause 42, involves acknowledgements by JPM and WRL, but no one else, about the significance of the clause. “New joiners” will give equivalent acknowledgements through their Deeds of Adherence, but there is no such provision for the Representatives and Directors. Once again, this points against the Directors being contractual parties to clause 42, and would lead to asymmetry in clause 42’s operation if they were.

53.

The textual arguments arising from clauses 42 and 43 of the SHA are sufficiently strong to displace the argument that, because clause 33 contemplates claims against Representatives, clause 42 must apply to such claims. An argument along those lines appealed to Teare J in Dell Emerging Markets (EMEA) Ltd v IB Maroc.com SA [2017] EWHC 2397 (Comm), a case in which the EJC in question was much less hostile, textually, to the inclusion of Dell affiliates. Even so, this construction would appear to have involved IB Maroc assuming an obligation in relation to claims against Dell affiliates which was not reciprocated by those affiliates in relation to claims against IB Maroc. The ASI granted in Dell Engineering is one which was also justifiable on the quasi-contractual basis (see [19] and [21]-[34] of that decision).