© Clayton Utz, Lawyers. For reprints of this article contact: www.claytonutz.com.au


England ousts Australian jurisdiction again

June 2000. Written by Christopher Anderson.

The recent decision of the English High Court in Commonwealth Bank of Australia v White ex parte the Society of Lloyd's has again highlighted the problems for litigants in disputes involving the courts of more than one country.

Mr White, a former Lloyd's Name, sued Lloyd's in the Supreme Court of Victoria. Lloyd's objected to the Victorian court's jurisdiction, arguing that the contract between Lloyd's and Mr White - by which Mr White had become a Name at Lloyd's - provided that the English Courts had exclusive jurisdiction to hear any disputes.

Notwithstanding that clause, the Supreme Court of Victoria held that it had jurisdiction to hear the dispute between Mr White and Lloyd's. The Supreme Court's decision was confirmed by the High Court of Australia in February 2000.

Lloyd's, unhappy at the prospect of litigating in Victoria, then sought to obtain an anti-suit injunction from the High Court in England.

The English High Court gave effect to the exclusive jurisdiction clause in the agreement and granted the injunction, effectively preventing Mr White from continuing with the proceedings in Victoria.

In his judgment, Justice Cresswell stated that he had, with a full sense of comity, paid careful regard to the decisions of the Courts of Australia.

Nonetheless, he granted the anti-suit injunction because Mr White had not established a good reason for not granting the injunction to restrain a breach of the exclusive jurisdiction clause. This was in stark contrast to the Victorian court, which had previously held that there was good reason not to hold Mr White to the exclusive jurisdiction clause.

This case marks the second occasion in as many years in which the English High Court has taken a contrary view to the Australian High Court on issues of jurisdiction (see the article on the Akai case in the March 1999 edition of Insurance & Reinsurance ISSUES).

Both cases illustrate the uncertainties faced by litigants in transactions involving more than one jurisdiction. Given the global nature of the insurance and reinsurance markets today, these uncertainties continue to be of considerable concern to Australian insurers and reinsurers, and also to Australian insureds placing cover overseas - particularly, as is common, in the London market.

An exclusive jurisdiction clause in any type of agreement - whether it concerns becoming a Name at Lloyd's or simply the placement of insurance or reinsurance - is of limited value unless the parties are prepared to act quickly and take the necessary action to protect their interests, such as enforcing the clause by means of an anti-suit injunction.

It is worth considering that if Mr White had sought to obtain an anti-suit injunction from the Australian court before Lloyd's had been able to involve the English courts, the outcome of this case might have been entirely different.

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