cases successfully used, to support sioi:k finance.l
CONFUCT OF LAWS AND FOREIGN PROCEEDINGS
standard Bank pJc and another v Agnnvest Internationa/ Inc and others [2007]
EWHC 2595 (Queen's Bench Division, Commercial Court) (Teare J) (9 November 2007)
w h e t h e r exclusive jurisdiction clause was valid and whether
English law applied to a transaction.
Having failed to properly bring proceedings in London a first time,
the Bank obtained permission to serve the Company in Arisona.
BACKGROUND
Bank received a document appearing to be a notice of claim by the
Company in Egypt, ari.singout of the Option and the MSA,
In rhe interim, the Company brought counterclaims. The
Standard B^nk pic (the 'Bank') is a London-based bank, Agrinvesr
International Inc (the 'Company') is a trader in the emerging
debt market incorporaccd in Arizona, US. The Bank gra.nted che
Company a.n option (the 'Option') to purchase promissory notes
issued by the government of Kenya. Tlic Option had no express
choice of law or jurisdiction clause. An option fee was payable by
the Company to the Bank (the 'Option Fee'), The Bank and che
Company also entered into a master sale agreement (the MSA')
in respect of bonds issued by an Egyptian healthcare company
('Egyptco') and global depository receipts representing shares in
Egyptco. The MSA provided for English law and jurisdiction.
Having sold the bonds, the Company used parr of the sale proceeds
to pay the Option Fee. The share price of Egyptco then fell suddenly.
The Company provided the Bank with three promissoty notes.
Subsequently, the (Company made no further payments to the Bank.
The Company failed to repurchase the securities and the promissory
notes were dishonoured when the Bank presented them for payment.
The Company owed the Bank approximately US$6mplus interest.
Butterwofths Journal of International Banking and Financial Law
CONCLUSION
The MSA included an exclusive jurisdiction clause. Tlie Company had
showzi no good reason why it should not be held to that agteemeni.
The Egyptian proceedings were calculated to subvert or frustrate
the English action. It was a proper ca.se for the court to exercise
its discretion to grant an injunction against the Company and the
other defendants in respect of their counterclaims. English law was
the applicable law to the claims. As a matter of English Law, claims
by the Company against the Bank and its parent company were time
barred and the Bank's parenr was not liable as a matter of English
law as it had no contractual relationship with the Company.
•
Jciiathan Lawrence
K&L CMCS
joiialhiin.lauirence@klgiiles.com
www.klgates.ccm
December 2007