COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION, COMMERCIAL COURT
THE HONOURABLE MR JUSTICE COLMAN
Strand, London, WC2A 2LL
B e f o r e :
THE RIGHT HONOURABLE LORD JUSTICE RIX
THE RIGHT HONOURABLE LORD JUSTICE RICHARDS
| Konkola Copper Mines Plc
ARH Limited S.A.
|- and -
|Coromin Limited & others
Swiss Reinsurance Company & others
Part 20 Defendants/ Appellants
Mr Steven Berry QC (instructed by Messrs Ince & Co) for the Respondents
Hearing dates : 25 & 26 October 2005
Crown Copyright ©
Lord Justice Rix :
KCM and the Zambian underwriters; the consent orders; and the Zambian proceedings
"In principle, the consequence is a highly unsatisfactory procedural situation which it is hard to imagine that any commercial judge would have permitted to arise if the full effects of such an order had been disclosed at the time of the consent application for a stay…
In these circumstances I have adjourned the reinsurers' application for the Part 20 proceedings to be stayed and for germain relief until after the representations of the claimants and the Local market Insurers.
The representations should deal with the following issues:…
(iii) why the claimants should be permitted to pursue their parallel claims against Coromin in these proceedings while simultaneously pursuing their alternative claim against the Local Market Insurers in Zambia;
(iv) whether the claim against Coromin in these proceedings should not be struck out or stayed forthwith pending determination of the Zambian proceedings."
"32. In the course of the parties' representations in relation to these orders Mr Simon Bryan for Coromin made it clear that his clients did not at this stage invite a stay of KCM's claim against Coromin even if the claim by KCM against the Local Insurers was to be pursued in Zambia and was to be stayed in England. The main reason for this was that Coromin was concerned that the English proceedings should be driven forward so that (i) all the issues between the parties should be decided as soon as possible by this court, (ii) Aon could be joined before time expired under the Limitation Act and (iii) these proceedings would be brought to trial before proceedings in Zambia. Although both KCM and Coromin would have preferred to have all the issues tried by the English courts, it was at least KCM's belief that because of the Zambian Law and Jurisdiction Clause in the KCM wording it might be unable to hold the order of Gloster J giving leave to serve the Local Insurers with the English proceedings. On the other hand, Mr David Lord for the Reinsurers invited me to stay the entirety of the English proceedings in favour of all issues being tried in Zambia, for he submitted that the key issue in the whole litigation was whether the Local Insurers were liable to KCM. Failing that course, he relied on the Reinsurers' basic submission in these proceedings, that at least there should be a stay of the Part 20 proceedings against the Reinsurers.
33. Having given due consideration to these representations I concluded that it would not be appropriate either to set aside the consent orders or to strike out or stay KCM's claim against Coromin. Although counsel both for KCM and Coromin volunteered that it would be much more preferable for all the issues between all parties to be determined in the English courts, Coromin did not object to the fragmentation of the proceedings resulting from the consent order and KCM strongly preferred to adhere to the agreement on jurisdiction with the Local Insurers rather than to embark on the application by the Local Insurers to set aside service outside the jurisdiction.
34. Accordingly, the Reinsurers' application to stay the Part 20 claim against them must be approached in the context of the English proceedings subject to the stay of KCM's claim against the Local Insurers and to KCM's intention to resort to the Zambian courts for that claim."
"If at the time of any occurrence in respect of which a claim is or may be made under this Policy there is any other insurance effected by or on behalf of the Insured covering the occurrence, the Insurers shall not be liable under this Policy to pay or contribute more than their rateable proportion of any sum payable in respect of such event."
"4.3 If at the time of any Occurrence resulting in a loss under this Policy there is any other Insurance effected by or on behalf of the Insured covering such loss or any part of it, the liability of Insurers under this Policy shall be limited to their rateable proportion of such loss."
"The Judge was confronted in this case with a procedural and jurisdictional tangle which permitted no wholly satisfactory solution. It was however important to his decision that he did not judge it possible to make an order which would ensure trial of all proceedings arising out of all the agreements in one forum."
The dispute between Coromin and the Reinsurers
"Notwithstanding Condition 4.3, OTHER INSURANCE, it is agreed that coverage under this Policy is to apply when the perils, limits and/or conditions set forth in this Policy are in addition to or broader in meaning and/or scope than those of specific local or primary policies…"
"We also attach corrections to certain individual declarations/cessions to the excess reinsurance slip for your attention. We would be grateful if you could sign and return the slip indicating your agreement to a written line of 30% as per previous discussions."
The judge's solution to the issues
"I am not persuaded that the Reinsurers have indeed shown a strong enough case that such reinsurance of Coromin as they underwrote was subject to Zambian Law and Jurisdiction so as to engage the jurisdiction of this court to stay these Part 20 proceedings. The case advanced by Coromin for the Reinsurers being reinsurers of Coromin's liability to KCM only under the global all risks policy appears at this stage to be stronger than the Reinsurers' case that they reinsured Coromin's liability to the Local Insurers subject to the Zambian Law and Jurisdiction Clause. Accordingly, on my provisional view of the evidence adduced on this application, I do not consider that the Reinsurers have shown a good arguable case that they can invoke the Zambian Law and Jurisdiction Clause against Coromin."
"For these reasons, were it necessary to decide the point as a matter of discretion, I should conclude that there are good reasons or strong cause why in the interests of justice a stay of the Part 20 proceedings against the Reinsurers should not be granted. Whereas much weight in the discretionary balance must be given to the Reinsurers' entitlement to the enforcement of the jurisdiction clause and to the location of the evidential centre of gravity of the dispute as to whether the loss was covered by the specified perils in the KCM wording, as well as to the interest of Zambian Law being administered in Zambian courts, these considerations are, in my judgment, outweighed by the general interests of justice that conflicting decisions on key issues should be avoided and by the desirability of permitting the joinder of Aon in the English proceedings and of having the issues between KCM, Coromin, the Reinsurers and Aon all decided by one tribunal and in proceedings in which they are all entitled to participate."
"The discretionary exercise which I have already carried out takes into account all the factors which would have to be considered in applying the overriding objective under CPR 1.1. The most effective case management approach in this case is, in my judgment, that this action should now proceed with normal expedition, involving all parties, including the Reinsurers and Aon, and that at the case management conference in the near future a date for trial be fixed."
The Reinsurers' submissions on appeal concerning discretion
Coromin's submissions on discretion
Discussion and decision on discretion
"In deciding whether to grant a stay at this stage it is important not to lose sight of the realistic practicalities of this litigation. The key to this is that the parties are responsible and experienced corporations in the insurance industry and in the case of KCM in international commerce. They all have access to the advice of very experienced international litigation solicitors and counsel."
The jurisdictional challenge
"The court in such cases must be concerned not even to appear to express some concluded view as to the merits, e.g. as to whether the contract existed or not…It is also right to remember that the "good arguable case" test, although obviously applicable to the ex parte stage, becomes of most significance at the inter partes stage where two arguments are being weighed in the interlocutory context which, as I have stressed, must not become a "trial". "Good arguable case" reflects in that context that one side has a much better argument on the material available. It is the concept which the phrase reflects on which it is important to concentrate, i.e. of the court being satisfied or as satisfied as it can be having regard to the limitations which an interlocutory process imposes that factors exist which allow the court to take jurisdiction."
"There may be many cases where all that is necessary is to show a good arguable case in the sense that, in the absence of a positive evidential challenge to the applicant's case on the relevant foundation for his jurisdictional application, the applicant need only adduce just sufficient evidence to make good a "strong argument". As recognised by Waller LJ in Canada Trust, there may be other cases where in order for the court to be adequately satisfied that it should take jurisdiction it would be necessary for enough to be put before the court to permit it to accede to the application in spite of the countervailing evidence. That might in many cases involve a provisional view as to whether, on the limited evidence available from both sides the respondent's evidence could at least provisionally be regarded as less compelling than that adduced by the applicant. A similar approach would, in my judgment, be called for where, as in this case, the applicant invited the court to cede jurisdiction to a foreign court rather than to assume it."
"The underlying issue, namely whether it is right for the court to take jurisdiction remains the same, whether the immediate issue before the court on a challenge to jurisdiction is, have the matters necessary to bring the case within art 2 or one of the heads of special jurisdiction been established to the requisite degree, or, must the court decline jurisdiction (or stay the proceedings) because of the alleged existence of a foreign jurisdiction clause within art 17, or because the courts of another contracting state are allegedly first seised of a dispute involving the same cause of action and between the same parties within the meaning of art 21."
"In these cases it has to be accepted by the defendants that, on the face of it and without the jurisdiction clauses, the claimants would be entitled to invoke English jurisdiction under arts 5(3) and 6(1) of the Regulation/Convention. I am prepared to accept that a burden remains on the claimants to satisfy the court that it should take jurisdiction, despite the existence of the jurisdiction clauses in the contracts."
"The question of the standard of proof required when a defendant seeks to rely on a foreign jurisdiction agreement in a case where, apart from the alleged jurisdiction agreement, the English court would undoubtedly have jurisdiction under the Judgments Regulation, is not finally settled"
and also observed that
"The good arguable case test is not capable of very precise definition, but reflects the idea that the claimant must properly satisfy the court that it is right for the court to take jurisdiction."
"[Canada Trust] does not deal with the burden or standard, when the defendant claims that the English court (which would otherwise have jurisdiction) has no jurisdiction by virtue of a foreign jurisdiction clause. In Knauf U.K. G.m.b.H. v. British Gypsum Ltd.,  1 WLR 907 (CA) Mr Justice David Steel had held that the burden on good arguable case in relation to an alleged German jurisdiction clause lay on the defendants. The Court of Appeal did not find it necessary to decide on the claimants' argument that the good arguable case test was too low a threshold where a litigant sought to use what is now art. 23 to derogate from a jurisdiction otherwise established under the Brussels Convention, but the point was not necessary to decide: see page 925. See also Carnoustie Universal S.A. v. ITWF,  I.L.Pr.82, at 102. This question was not developed in argument before me, but subsequently I put it to the parties that unless there were a submission to the contrary (which there was not) I would proceed on the basis that the standard is good arguable case in the sense of which side has the better of the argument, and that the burden (on which I consider that Mr. Justice David Steel's approach is right) would only matter if the argument were evenly balanced."
Lord Justice Richards:
Sir Anthony Clarke MR: