Commercial Court

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

Fecha: 18-Jul-2025

The claims for declarations

The claims for declarations

167.

The Directors make various claims for declarations of non-liability:

A declaration that the Directors are not liable to JPM in respect of the subject matter of the SHA.

ii)

A declaration that the Directors are not liable to JPM in respect of the claim made in the Greek Proceedings.

iii)

A declaration that they are not liable to JPM in respect of any claim for damages for the alleged diminution in the value of JPM’s shareholding in Viva.

168.

There are a number of issues which might arise in relation to the appropriateness and terms of these Declarations. The answer to those questions will be heavily influenced by the issue of whether the Greek Proceedings continue. If they do not (on the basis of my conclusion as to the effect of clause 33.1(c)), then there may be no need for any Declarations. If they do continue, issues would arise as to the appropriateness of making Declarations for the purpose of enabling the Directors to deploy them in the Greek Proceedings (and as to their effect there). Those questions are best left to a point when the final outcome of the ASI claims is known.

169.

It follows that for present purposes, I propose to limit myself only to the issue of whether there is a gateway for the proposed Declarations, on which I did not hear extensive argument, and which, to some extent, overlaps with other issues in the case.

170.

To the extent that:

a declaration is sought as to the absence of a liability on the Directors’ part under the SHA (and the utility or appropriateness of such a declaration on the basis of my findings must be highly questionable, there being no apparent basis for a claim against the Directors under the SHA); or

ii)

as to the meaning and effect of the Clause 33 Contract (if it were appropriate to grant such a declaration and it would serve any useful purpose);

then I accept that such claims fall within Practice Direction 6B para. 3.1(6)(c), both the SHA and the Clause 33 Contract being governed by English law (as is common ground).

171.

To the extent that a declaration is sought as to the Directors’ non-liability in tort, that would appear to require a “good arguable case” that the claim fell within PD 6B para. 3.1(16A), which in turn depends on showing (in this case) a good arguable case that the applicable law of the tort claim is English law (for the purpose of PD 6B para. 3.1(9)(c), this being the provision relied upon for the purposes of gateway (16A)). This raises a complex question on which I heard extensive argument, but also an issue of some potential sensitivity if, contrary to my ruling, the Greek Proceedings proceed, and this question is addressed by the Greek courts.

172.

Identifying the applicable law of the tort claims in the Greek Proceedings involves the application of Rome II, and in particular (in this case), the following provisions of Rome II:

Article 4:

“General rule
1.
Unless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.
2.
However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.
3.
Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.”

ii)

Article 14:

“Freedom of choice
1.
The parties may agree to submit non-contractual obligations to the law of their choice:
…
(b)
where all the partes are pursuing a commercial activity, also by an agreement freely negotiated before the event giving rise to the damage occured.
The choice shall be expressed or demonstrated with reasonable certainty by the circumstances of the case and shall not prejudice the rights of third parties.
2.
Where all the elements relevant to the situation at the time when the event giving rise to the damage occurs are located in a country other than the country whose law has been chosen, the choice of the parties shall not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement.”

iii)

Article 16:

“Overriding mandatory provisions
Nothing in this Regulation shall restrict the application of the provisions of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the non-contractual obligation.”

173.

I am satisfied, applying Article 4(1), that JPM clearly has the better of the argument that the damage claimed here occurred in Greece. The tort claim concerns the alleged interference in JPM’s rights as a shareholder in a Greek company and the resultant loss of value in those shares. The fact that JPM has legal rights relating to its share ownership which are governed by English law under the SHA (as well as rights arising under Greek law under the Articles of Association and Greek companies law) does not affect the place of damage, nor does the fact that it would possible (by virtue of clause 7.2 of the SHA) to hold meetings relating to the management of Viva outside Greece. The Directors’ submission that because English law might be relevant to determine where particular obligations were to be performed, it follows that “the place of the relevant ‘damage’ … is England”, is, with respect, a non sequitur.

174.

The Directors then point to the Article 4(3) “escape clause”. This has been described as an “exceptional” provision, and it has been observed that Article 4(3) sets a “high hurdle” for the party seeking to establish an applicable law under this provision: see Dicey, Morris & Collins on the Conflict of Laws (16^th), [35-032]. As Linden J noted in Owen v Galgey [2020] EWHC 3546 (QB), [60], Article 4(3) requires that it be “‘clear’ that there is a ‘manifestly’ or obviously closer connection with the country other than that which is indicated by articles 4(1) and (2)”. Linden J continued at [61]:

“Article 4(3) is an exception/exceptional in these senses but in my view, there is no additional test of exceptionality and it is therefore not necessary for the court to be satisfied, for example, that the facts of the case are also exceptional or unusual in nature before applying Article 4(3). What is required is the application of the words of Article 4 with an awareness of the aims of Rome II. The aim of Articles 4(1) and (2) in particular, is to achieve certainty. They will provide the answer in a given case unless they can be displaced. But [Rome II] also aims ‘to bring a degree of flexibility, enabling the court to adapt the rigid rule to an individual case so as to apply the law that reflects the centre of gravity of the situation’ through Article 4(3), albeit this provision will only operate in a clear and obvious case.”

175.

In this case, the Directors rely on the Clause 33 Contract to bring the claim in the Greek Proceedings within Article 4(3): a contract between JPM and the Directors, which it is common ground is subject to English law, and which determines when claims in tort can and cannot be brought by the Directors and JPM (inter alios) against each other. A similar issue was considered by Bright J in Magomedov v TPG Group Holdings (SBS) LP [2025] EWHC 59 (Comm). In that case, a clause in the so-called Omirico SPA was said to lead to the application of English law under Article 4(3). Omirico was a Cypriot company which acquired a majority share interest in NCSP, a commercial port central to one of the tortious conspiracies alleged in the case. Omirico was owned by two companies: Port Petrovsk owned by Mr Magomedov and his brother, and Fenti owned by Transneft. Mr Magomedov claimed that he was threatened for the purpose of forcing him to agree to a sale of Port Petrovsk’s interest in Omirico for a below market price to Fenti. While Mr Magomedov said that he never agreed to the sale, a document purporting to be a sale of Port Petrovsk’s interest to Fenti was entered into and proceeded to completion– the Omirico SPA.

176.

The Omirico SPA was subject to a choice of English law (clause 22.1). Further:

Clause 15.1(d) of the Omirico SPA provided that “except for any liability in respect of a breach of this Agreement, no Party (or any of its Connected Persons) shall owe any duty of care or have any liability in tort or otherwise to the other Party (or its respective Connected Persons) in relation to the transaction."

ii)

Clause 16 of the Omirico SPA provided"without prejudice to any provision of this Agreement and with effect from Closing, a Party, both for itself and on behalf of its respective Affiliates, hereby releases the other Party (including in relation to the Purchaser, Transneft) or its respective Affiliates from, and waives, any claims against, and liabilities of, such persons that may have potentially arisen during the period prior to the date of this Agreement (or may arise in future), whether in contract, tort or otherwise, in connect with, or relating to, such Party holding its respective shares in Omirico and/or the such Party or its Affiliates participating in management of Omirico, the Omirico Subsidiary and/or the NCSP Group…"

177.

One of the conspiracies alleged by Mr Magomedov was the conspiracy to cause the sale of Port Petrovsk’s interest in Omirico to Fenti for an undervalue, and an issue arose as to the applicable law of that claim. Mr Magomedov sought to rely on the terms of the Omirico SPA to contend that English law applied to that conspiracy claim, through the gateway of Article 4(3) of Rome II. That conclusion was rejected (in circumstances in which neither Mr Magomedov nor the proposed defendants to the NCSP conspiracy were parties to the Omirico SPA), Bright J holding that the choice of law was not “significant”.

178.

For the reasons given in Magomedov, I would not regard the choice of English law in the SHA between JPM and WRL as a sufficient factor for Article 4(3) purposes. However, in this case, the Directors’ position is in one sense stronger, in that they and JPM are both parties to the Clause 33 Contract, which is directly concerned with JPM’s ability to bring tort claims against them.

179.

Nonetheless, I have concluded that JPM has the better of the argument that the implied choice of English law in the Clause 33 Contract is not itself sufficient to lead to the application of English law under Article 4(3):

Article 4(3) requires that a particular tort, or “the tort in question” be “manifestly more closely connected with” another legal system. It envisages looking at the connections between the particular tort advanced, and a particular system of law.

ii)

The Clause 33 Contract does not purport to define the obligations of the Directors to JPM nor to regulate how the Directors are to act towards JPM. To that extent, it does not inform or regulate the conduct which forms the basis of the proposed tort claim.

iii)

Rather, the Clause 33 Contract is concerned only with exempting the Directors and JPM from liability to the other for certain types of legal wrong in relation to the subject matter of the SHA.

iv)

If the question is asked “what relevance does Clause 33 have to any claim brought in tort against the Directors in relation to the subject matter of the SHA?”, the only answer is (and will always be) that for tort claims falling outside clause 33.2, “it is an agreement that there shall be no such liability save in limited circumstances”.

If an agreement of this kind is to determine the law applicable to a tort claim relating to the subject matter of the SHA, to my mind it can only be because it involves a choice of applicable law for Article 14 purposes. If it cannot achieve that objective by satisfying the strictures of Article 14, it would be contrary to the scheme of Rome II to find that it had been given the same practical effect by displacing the presumptive applicable law under Article 4(3).

vi)

Treating clause 33 as sufficient to lead to the application of English law under Article 4(3) would also involve the application of English law to claims which clause 33 does not seek to regulate (i.e. those falling within clause 33.2).

vii)

It would also involve a certain circularity in relation to the operation of Article 15 of Rome II, by which the law applicable to a non-contractual obligation will govern “the grounds for exemption from liability, any limitation of liability and any division of liability”, yet the law of a contract governing the exemption of limitation of liability would, by virtue of Article 4(3), become the applicable law (see [28(iii)] above).

180.

Turning to Article 14(1), I have found this a more difficult issue, which required more “air time” than could be found for it in a packed hearing or in the limited time available to produce a judgment:

The Directors rely on clause 41 of the SHA which provides:

“This Agreement and any non-contractual obligations arising out of, or in connection with, it shall be governed by, and interpreted in accordance, with English law.”

ii)

For this clause to avail the Directors for Article 14 purposes, it must form part of a contract to which they are parties with JPM (cf. Article 14(1), “the parties may agree …”).

iii)

For reasons I have given earlier, the Directors are not parties to clause 41 of the SHA as such, nor are they given rights under the 1999 Act in relation to that clause (cf. clause 38.6).

iv)

Is it, however, a term of the Clause 33 Contract? There is no express incorporation of clause 41, and indeed no incorporating language of the kind present in The Mahkutai [1996] AC 650 (“all exceptions, limitations, provision, conditions and liberties herein benefiting the carrier”), in which case Lord Goff appears to have been of the view that the choice of law “already applies to the bill of lading contract itself and may for that reason apply to another contract which comes into existence pursuant to its terms.” Further, the choice of law clause in that case applied to the contract only, and it might be said that incorporating a choice of law for non-contractual claims is more challenging. It is also significant that clause 38.5 does not identify clause 41 as a clause which Representatives are to obtain the benefit of. The Directors’ submission, in a footnote in the skeleton argument, is that “the Directors must be entitled to rely upon this choice of law agreement, whether upon its proper construction, pursuant to clause 38.5, since clause 41 is ancillary and necessary to the enforcement of clause 33 … or pursuant to a term implied into the SHA.”

There is the further issue that if clause 41 is transposed to the Clause 33 Contract, it would involve a selection of a governing law for tort claims “arising out of or in connection with” the Clause 33 Contract. The tort claims brought in the Greek Proceedings do not seem to “arise out of” the Clause 33 Contract (which is not the source of substantive obligations). The argument that they “arise … in connection with” that contract is more difficult, given the very limited content of the Clause 33 Contract, than the same argument in the context of the SHA.

vi)

Further, Article 14 posits a relatively high threshold for such an agreement (viz the choice being demonstrated “with reasonable certainty”), and I note the observation in Dicey, Morris & Collins, [34-046] that this is a case in which an express choice is more likely than an implied choice.

181.

In addition to that threshold question, further issues may arise as to whether clause 33 (if it did incorporate clause 41 or otherwise constitute a choice of law for Article 14(1) purposes) was “freely negotiated”, which has been held to require “a genuine opportunity to influence its contents” (Pan Atlantic Chartering Inc v UNIPEC UK Co Ltd [2016] EWHC 2774 (Comm), [185]-[191]). This is not a case in which the Directors rely on rights acquired as transferees of a pre-concluded contract but one in which clause 33, at least, is negotiated (and I am sure freely negotiated – if it matters, WRL and JPM have agreed as much in clause 38.8) by JPM and WRL acting as the Representatives’ agents. However, for later Representatives (given the “from time to time” element of the definition), the clause 33 package is pre-agreed. The application of this aspect of Article 14 in this case is not straightforward, and received limited attention in the course of argument. There is also the issue of whether any Article 14(1) choice would be displaced by Article 14(2).

182.

In these circumstances, I have reluctantly concluded that I should not decide the Article 14 point at this stage. On my conclusions, it is not necessary to do so, and should that cease to be the case, it is a point which would benefit from more extended argument than could be accommodated within a packed and expedited hearing.