HT-2023-000415 - [2024] EWHC 1199 (TCC)

“arising from or in connection with”

Dawnvale’s alternative submission was that, even if “these proceedings” were defined as the enforcement action HT-2021-LIV-000005, the words “any and all claims the Claimant may have against the Defendant arising from or in connection with these proceedings” were broad enough to catch the proposed new claim.

The first step in Dawnvale’s argument was that the words “may have” could encompass prospective claims, although it was conceded that they would not cover claims of which Hylgar was unaware. I accept this: see Kitchen Design and Advice ltd v Lea Valley Water Co [1989] Lloyds LR 2, 221 at 224 per Phillips J and Bank of Credit and Commerce International SA v Ali [2001] UKHL 8 at [10] per Lord Bingham. I did not understand Hylgar to submit that it was unaware of the potential claims now made. In my judgment, at the time of the Order, claims of the type now advanced were plainly foreseeable to both parties as a potential consequence of Dawnvale’s breach.

The critical point is thus whether the new claim is “arising from or in connection with” the enforcement proceedings. This wording is sometimes seen in jurisdiction and arbitration clauses, and “arising out of” is often used in contradistinction to “caused by” in liability insurance policies, but neither party referred to authority from these areas on the meaning of the wording. I drew the parties’ attention to Khanty-Mansiysk Recoveries Limited v Forsters LLP [2016] EWHC. At [39] Sir Bernard Eder construed the same words in the context of a settlement agreement. He concluded at [40] that:

I note also the comments of Lewison LJ in the same case in the Court of Appeal [2018] EWCA Civ at [36] where he held that the phrase “in connection with” was protean and “takes its meaning from the context in which it is used.”

I agree that these words need to be construed in their specific context. I agree also with Sir Bernard Eder’s view of the distinction between the two terms. In my judgment, “arising out of” imports a causal relationship and a closer, more proximate relationship with the proceedings than “in connection with”.

Neither party suggested an example of a claim or head of loss which could fall within the category of “in connection with” but not “arising out of”. Dawnvale’s submission was that all the new heads of loss were at the very least “connected with” the enforcement proceedings. Hylgar argued that the new claim neither arose from nor was connected with the enforcement proceedings.