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Republic of Angola & Anor v Perfectbit Ltd & Ors: EWHC rejects foreign exclusive jurisdiction clause in favour of English courts as appropriate legal forum

11 July 2018

The English High Court has issued a significant judgment in Republic of Angola v Perfectbit Ltd [2018] EWHC 965 (Comm), where it took jurisdiction over claims by the Republic of Angola ("Angola") and Banco Nacional de Angola (the "BNA") against eight co-defendants, whom they allege were involved in a conspiracy to defraud, despite an exclusive jurisdiction clause favouring the courts of Angola.

Agreements which bear an international element will usually contain a clause which confers exclusive jurisdiction on the courts of a particular country. The courts will usually uphold such clauses unless there are exceptional reasons for departing from them.

In order to assess whether exceptional reasons should apply, the courts will apply the forum non conveniens test to determine which jurisdiction will best serve the interests of all the parties and the ends of justice.

Turning to the index dispute, the claims were borne out of two contracts purported to have established an investment fund, one of which contained an exclusive jurisdiction clause specifying that the contract was subject to Angolan law and asserting the Angolan courts as the appropriate forum for any disputes. The Plaintiffs brought their claims before the English Commercial court and the Defendants were unsuccessful in their argument that the English court did not have jurisdiction.

Angola and BNA allege that they were induced to pay in excess of US$500 million to a defendant company domiciled in England, in respect of an investment fund established by the Defendants for the benefit of Angola. The eight co-Defendants are alleged to have conspired to defraud the Claimants.

The payments were made subject to two contracts entered into by BNA with another defendant company domiciled in Angola. One contract purported to be subject to Angolan law and contained an exclusive jurisdiction clause preferring the Angolan courts, with the other subject to English law and an arbitration clause specifying England as the appropriate forum.

Having first obtained proprietary injunctions, worldwide freezing orders and disclosure orders against the Defendants, Angola and BNA subsequently issued personal and proprietary claims for deceit and/or conspiracy seeking recoupment of the lost payments.

The Angolan Defendants contended that Angola and BNA were both bound to pursue their claims through the Angolan courts by virtue of the exclusive jurisdiction clause contained in one of the two contracts.

Bryan J determined, inter alia, that since there were ongoing and concurrent claims against Defendants domiciled in England, and since these claims would proceed in England in any event, the English courts were clearly the most appropriate forum.

The Court dismissed the jurisdictional challenge on the basis that:

"… England is clearly and distinctly the appropriate forum where the case can most suitably be tried for the interests of all the parties and the ends of justice, in particular in the context of the fact of continuing proceedings in England against other defendants on the same or closely allied issues, and in circumstances where the duplication of proceedings would also give rise to very real risks of inconsistent findings and increased costs."

Although this judgment has confirmed pre-existing principles, it has highlighted that the English courts are prepared to reject an exclusive jurisdiction clause in circumstances where there are ongoing and interlinked proceedings, where all claims relating to a central dispute have inextricable links to England over and above those to the state named in the clause.

The Jersey Royal Court has tended to follow the English principles of forum non conveniens (as approved in the Jersey Court of Appeal in Durant v Brazil [2010] JCA 214). Therefore, where an opportunity arises to test the point in Jersey, one might reasonably expect the Jersey court to adopt the same approach of the English Commercial Court in Republic of Angola v Perfectbit Ltd [2018] EWHC 965 (Comm).

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