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Cyprus: Possible guidance from the English Courts on the Interpretation of jurisdiction clauses as “exclusive”

 

During the past years English courts have been willing to interpret clauses as giving exclusive jurisdiction to the English courts, even though the word “exclusive” does not appear in the clause. Such an interpretation was given in the recent case of Global Maritime Investments Cyprus Limited v O.W. Supply & Trading A/S [2015] EWHC 2690 (Comm).

Summary of the case

The parties entered into numerous derivatives contracts relating to energy commodities which were governed by English Law. The jurisdiction clause provided that “Withrespect 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 had filed for bankruptcy in Denmark whereas in turn the Plaintiff had commenced proceedings in England for declarations that amongst other reasons, the contracts precluded the Defendant from commencing proceedings relating to the contracts in any other jurisdiction other than England.

 

Construing Jurisdiction clauses

 

The judgment that was handed by Teare J is rather interesting for its guidance as to the approach to be taken in construing jurisdiction clauses.In summary Teare J held the following:

 

(a)   the fact that the parties had agreed to English law suggested that they intended the jurisdiction clause in the contracts to be an exclusive one, rather than non-exclusive;

 

and

 

(b)    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. 

 

Hence Teare J concluded that the jurisdiction clause was an exclusive jurisdiction clause and followed the judgment of Males J in BNP Paribas v Anchorage [2013] EWHC 3073 (Comm).

 

The judgment handed by Teare J highlights how the courts are willing to interpret jurisdiction clauses as conferring exclusive jurisdiction on the courts of a particular country even where such clauses do not specify that the jurisdiction is intended to be exclusive.

 

 

For further information on this topic please contact

Ms. Nada Starovlah (nstarovlah@pittaslegal.com) at SOTERIS PITTAS & CO LLC,

by telephone (+357 25 028460) or by fax (+357 25 028461)

 

The content of this article is intended to provide a general guide to the subject matter. Specialist advise should be sought about your specific circumstances.