In the recent decision of ED&F Man Capital Markets v Come Harvest Holdings the public policy desire to avoid multiple proceedings and inconsistent judgments has carried the day on an application to serve a foreign defendant out of the jurisdiction.
This case is of direct relevance in the Cayman Islands and British Virgin Islands, where the relevant procedural rules are substantively the same as those in England and the courts are regularly requested to exercise jurisdiction over foreign defendants.
In ED&F, the claimant contracted for the purchase of metals from two Hong Kong companies. The metals were purportedly stored in warehouses across Asia but the claimant subsequently discovered that the metals did not exist. The English claimant commenced proceedings against the counterparties in England (being the jurisdiction agreed in the contracts) and then obtained the court’s permission to serve additional Californian and Singaporean defendants. One foreign defendant disputed that England was the “proper place” to bring the claims (this being the articulation in the procedural rules of the forum conveniens test and one of the three matters the court must be satisfied about before granting permission to serve a foreign defendant out of the jurisdiction).
On an application for permission, the court is tasked with identifying a single jurisdiction in which the claims against all defendants may most suitably be tried in the interests of all the parties and the ends of justice. As is clear from the brief description of the facts above, there were a number of potential jurisdictions given the location of the parties. The desire to avoid multiple proceedings and inconsistent judgments is often a decisive factor where, if the court denies permission, the claimant is left to launch multiple litigations against various defendants across the globe. However, in Lungowe v Vedanta Resources, the court held that this factor is given less weight where the risk of multiplicity arises from the claimant’s own choices (in that case, the English defendant offered to submit to the jurisdiction of the Zambian court – if accepted, the whole case could have been tried in Zambia - but the claimant nonetheless chose to sue the English and Zambian defendant in England).
In ED&F, the foreign defendant ambitiously argued that the claimant had created the risk of multiplicity through its decision not to engineer a single composite forum in Singapore by either requesting that the Hong Kong defendants waive the jurisdiction clause in the contracts or by simply suing all the defendants in Singapore in breach of the jurisdiction clause. The High Court considered this went too far, distinguishing Vedanta on the basis that the claimant here did not exercise a straightforward choice between England and Singapore (or any other jurisdiction) where all defendants could be sued.