Enforcement of Exclusive Jurisdiction Clauses and Anti-Suit Injunctions14 November 2024

I.   Application for an interim anti-suit injunction

Augusta was required to establish that there was a high degree of probability that Top Oil was bound by the exclusive jurisdiction agreement at clause 17 of the Detailed Terms. Given that the transaction had proceeded on the terms contained in the Detailed Terms, including exercise of the trigger pricing options, the court concluded that on the high degree of probability test, the Detailed Terms were clearly agreed as between Augusta and Cast Oil. The more relevant question was whether Cast Oil had accepted the terms as agent for Top Oil so that Top Oil was bound by them.

Augusta argued that the MoU granted Cast Oil actual authority from Top Oil to contract with Augusta on Top Oil’s behalf.

Top Oils’ objection to this was that Mr Offiong (the acting officer of Top Oil) did not have Top Oil’s authority to conclude the MoU in the first place.

Augusta relied on the “indoor management rule” of company law in its argument; as Top Oil had made out to Cast Oil that Mr Offiong had all the usual authority of a director of the company, if the MoU had been challenged by Top Oil, Cast Oil would be able to rely on the doctrine of ostensible authority to bind Top Oil.

The court found that there was a “high degree of probability that the MoU was a binding agreement” as between Top Oil and Cast Oil. This meant that there was a high degree of probability that Augusta was dealing with Cast Oil as Top Oil’s agent and therefore Top Oil was bound by agreements made by Cast Oil on its behalf. Such agreements would include the Detailed Terms, meaning that Top Oil was bound by the exclusive jurisdiction clause contained therein.

II.   Strong Reasons for Granting an Anti-Suit Injunction Claim

Having established that Top Oil was bound by the exclusive jurisdiction agreement, the court found that the Nigerian Proceedings concerned disputes or claims arising “out of or in connection with” the agreement in the Detailed Terms and held that there was a contractual basis for an interim anti-suit injunction.

Having justified the application on contractual grounds, the court concluded that there were no strong reasons to refuse the anti-suit relief. Top Oil had suggested that there had been a lack of promptness by Augusta in applying for the relief. However, this was not deemed to amount to any culpable delay nor to establish any reason strong enough to refuse the relief.

III.   Late Application to Challenge Jurisdiction

Top Oil’s application to challenge jurisdiction was late. Rule 11(4) of the Civil Procedure Rules provides that a jurisdiction application not made within the period specified in the rules means that a defendant “is to be treated as having accepted that the court has jurisdiction to try the claim”. The court held that even if this rule did not apply, Top Oil’s actions, which included its failure to make an application in time, its lack of indication of any intention to make an application in time and the requesting of an extension of time to file a defence, amounted to a submission at common law to the jurisdiction of the court, and this could not be withdrawn.

Key takeaways

• Parties to contracts containing an exclusive jurisdiction clause in favour of the English courts can be reassured that the courts will enforce the jurisdiction agreement and establish themselves as the appropriate forum for settling disputes. Only “strong reasons” will prevent an application for an anti-suit injunction being granted.
• Detailed terms to a sale contract may be issued at a later date than the original sale contract agreed between parties. Such detailed terms will be considered to be binding even if they are not counter-signed – English courts will look to the conduct of the parties to ascertain whether there was acceptance, and as such whether the terms are enforceable.
• An application for an anti-suit injunction should be made promptly.
• Parties that seek to challenge and establish jurisdiction where proceedings in England & Wales have commenced should also be aware of the sanctions for delay.
• A party seeking to challenge jurisdiction should also be careful not to inadvertently submit to the courts of England & Wales through its conduct, as this prevents them from making or sustaining a challenge. Whilst the mere filing of an acknowledgement of service alone does not constitute a step in the proceedings amounting to submission, the acknowledgement of service form must make it clear that the defendant intends to dispute the court’s jurisdiction.

London Trainee Fawwaz Ahmed also contributed to this article.