In this case, the parties entered into a series of derivatives contracts with each other relating to energy commodities. The contracts were governed by English law. Further, clause 13.2 of the contracts provided that: “with respect to any suit, action or proceedings relating to these general terms and conditions each party irrevocably submits to the jurisdiction of the English courts.”
In November 2014, the Defendant, OW, filed for bankruptcy in Denmark. That was an event of default under the contracts, entitling the Claimant, GMI to withhold making payments to the Defendant for so long as the event of default continued (cf. Lomas v Firth Rixson  EWCA 419). Subsequently, OW commenced proceedings in the Danish court seeking to rely on a provision of Danish insolvency law to force GMI to close out the contracts, with a view to claiming the sum of US$1.6 million said to be due from GMI by way of close out payment.
GMI in turn commenced proceedings in England for declarations that (in summary) (1) an event of default with respect to OW had occurred and was continuing; (2) GMI was not liable to make any payments to OW (including any requests for “eligible credit support” under a credit support agreement) for so long as the event of default continued; (3) no early termination date had occurred under the contracts; (4) Danish insolvency law would have no impact on the rights of the parties under the English law contracts; and (5) GMI having commenced proceedings in England, clause 13.2 of the contracts precluded OW from commencing proceedings relating to the contracts in any other jurisdiction.
On a summary judgment application, it was held by Teare J that GMI was entitled to declarations 1-3 and 5, and granted judgment accordingly. As to declaration 4, although Teare J accepted that Danish insolvency law could not affect the parties’ rights under the English law contract, he held that there was no useful purpose in granting a declaration to that effect, because the real issue between the parties was whether any future order of the Danish court would be enforceable in England, and that issue had not yet arisen.
The judgment of Teare J is interesting for its discussion of the circumstances in which declaratory relief will be granted by the English courts, and also for its guidance as to the approach to be taken in construing jurisdiction clauses (paras 36-55 of the judgment). In the latter regard, the Judge held that the fact that the parties had agreed to English law suggested that they intended the English jurisdiction clause to be an exclusive one, rather than non-exclusive. He also held that even if the clause was not intended to be “exclusive” in all cases, its effect was that, once one party had decided to invoke the jurisdiction of the English court, the other party was at that stage precluded from issuing proceedings elsewhere. In other words, the commencement of proceedings in England could convert what was otherwise a non-exclusive clause into an exclusive one. In this regard the Judge followed the recent judgment of Males J in BNP Paribas v Anchorage  EWHC 3073 (Comm).
Luke Pearce appeared on behalf of the successful claimant, instructed by Holman Fenwick Willan LLP.