Summary
The claimant, Plaza, was incorporated in the Netherlands. The defendant, LTDC, was an English company.
LTDC is the trustee of five subordinated bond issues which were issued by the Bell Group which was based in Australia. The Bell Group went bust.
The proceedings were initiated in Australia. The Australian action was settled by a Deed of Settlement, dated 17 September 2013. LDTC and Plaza were parties to the Deed which included a State of Western Australia jurisdiction clause.
In June 2014, Plaza commenced proceedings in England. It sought injunctive relief restraining LDTC from implementing the Second Supplemental Deed as well as declaratory relief LDTC implementation of the Second Supplemental Deed would amount to a breach trust. LDTC challenged jurisdiction of the English court.
The English High Court stayed the English proceedings since the dispute was within the scope of the exclusive jurisdiction clause. Articles 23 and 28 of Brussels I were applied reflexively. Mrs Justice Proudman held:
“61 There is however a separate issue whether one can glean the wider principle from Owusu for which Mr Moss contends, that is to say that the court should not undermine the mandatory effect of article 2 through means other than forum non conveniens in the strict sense.
62 Mr Snowden points out that there are exceptions to art 2 in arts 23 and 28. […]
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64 Mr Moss is of course right that these provisions do not apply directly because Western Australia is not a member state. However, Mr Snowden submits that these provisions should be applied reflexively. He says that, despite Owusu , the Court may apply articles 23 and 28 reflexively if it determines (a) that the exclusive jurisdiction clause should operate and (b) that the existence of the proceedings in the Western Australian Court renders it expedient that Plaza's arguments be heard there.
65 Reflexive application is a term of art in the field of conflicts of law, allowing the court to apply by analogy provisions of European law by treating non-member states as if they were member states. It was given extensive consideration by Andrew Smith J in Ferrexpo […].
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76 I note that article 23 (1) is a mandatory exception to article 2 , unlike forum non conveniens . In my judgment Owusu does not bar a reflexive application of article 23 (1) . A mandatory exception to a rule does not have the same potential to undermine legal certainty as a discretionary exception.
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114 Although I have to be careful not to bring in forum non conveniens by the back door, I note both the presumption in favour of a stay and also the weight in favour of a stay given by the first two factors specified in Owens v. Bracco .
115 Finally, the three factors identified in Owens v. Bracco are not an exhaustive statement as to what the court can take into account when considering whether to exercise its discretion. I therefore add that I have also taken into account the fact that Plaza's complaint that it will be materially prejudiced by Partial Desubordination is likely to be heard by the Western Australian Court before any amendments of the trust deeds can take place.
116 Far from rebutting the presumption that a stay will be ordered, all the circumstances of the case weigh in favour of LDTC.
117 However, it seems to me that the question of the nature of lis alibi pendens (that is to say, whether it is merely a constituent factor of forum non conveniens and, if so, the effect of Owusu ) is one that merits full argument. While I tend to agree with Andrew Smith J in Ferrexpo that the Court is not bound by Owusu to reject the lis alibi pendens argument, I can and do limit my decision to the fact that the Deed of Settlement contains an exclusive jurisdiction clause and that, following the decision of Norris J in Winnetka , it should be applied.” [76]
The appeal against the judgment of the High Court is still outstanding.