England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Claim No CL-2017-000440 Royal Courts of Justice. Rolls Building Fetter Lane, London, EC4A 1NL
		11 April 2018

MR SALTER QC:

Introduction

1. This is an application by the First to Third Defendants ("the Applicants") for summary judgment under CPR 24.2 dismissing the claims against them on the basis that those claims are statute-barred under the Limitation Act 1980. It raises the issue of whether the cause of action for breach of the implied undertaking in an exclusive jurisdiction clause arises once and for all when proceedings are begun otherwise than in the agreed forum, or arises successively each time a step is taken in those proceedings, or arises continuously for so long as those proceedings are on foot.

Background

2. There was no dispute about the facts which form the background to this application. The Claimant ("AMTF") is an English company. It has recently faced litigation in Germany brought by a number of its former clients, and has responded by taking proceedings in England against those former clients, claiming damages on the basis that the proceedings in Germany were in breach of a clause in AMTF's Terms of Business conferring exclusive jurisdiction on the courts of England and Wales.
3. AMTF also took similar proceedings in England against the German lawyers of those former clients. In AMT Futures Ltd v Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbH^[1] the Supreme Court dismissed AMTF's appeal against the Court of Appeal's decision that the English courts did not have jurisdiction over those claims. Lord Hodge explained the broad background to that action, and to the actions against AMTF's former clients (including the one presently before me), as follows:

[2] AMTF is incorporated in the United Kingdom and is based in London. It provides services as a non-advisory, 'execution only', derivatives broker for clients who wish to trade in derivatives and who are referred to it by introducing brokers. Among AMTF's clients were people who were domiciled in Germany, Austria, Switzerland or Belgium ('the former clients') and who were introduced to AMTF by independent brokers based in Germany ('the introducing brokers'). AMTF charged its clients commission for its service and paid commission to the introducing brokers.

[3] About 70 former clients, who were dissatisfied with the financial results of their transactions, commenced legal proceedings in Germany against both the introducing brokers and AMTF seeking damages under the German law of delict. The claim against the introducing brokers was that they had given bad investment advice or had failed to warn of the risks of the investments. The claim against AMTF was based on a liability which was accessory to that of the brokers: it was alleged that AMTF had encouraged the brokers to behave as they did by paying them commission from the transaction accounts which it operated for its clients and that it owed and had breached a duty in delict (tort) to the clients to prevent any transactions being undertaken contrary to their interests. AMTF challenged the jurisdiction of the German court. But many of the former clients have recovered damages from AMTF by way of settlement. AMTF estimates that by August 2013 it had spent £2,191,881.68 on investigating the German claims, legal costs in Germany and England and settlement costs.

[4] The agreements between AMTF and the former clients varied over time. But each contained clauses which provided (a) that English law would govern the rights and obligations of the contracting parties and the construction of their contract and (b) that the English courts would have exclusive jurisdiction in legal proceedings relating to the contract. AMTF asserts that the former clients have breached their contracts with it by raising legal proceedings against it in Germany and asserting rights under the German law of delict. AMTF has raised legal proceedings against many of the former clients seeking damages for breach of contract in the High Court in London.

4. The Defendants to the present action are among the former clients of AMTF who have taken proceedings in Germany. The German proceedings begun by the Applicants ("the German Claims") were started on 27 May 2008, and are still continuing. A trial of the German Claims took place before the Landgericht Duisburg on 13 January 2014. This resulted in a judgment dated 21 May 2014, dismissing the German Claims, on the basis that the German court had no jurisdiction. That decision, however, was reversed on appeal by the Oberlandesgericht Düsseldorf, and a further trial on the merits of the German Claims is now once more pending before the Landgericht Duisburg.
5. The Claim Form in the present action was issued on 11 July 2017, more than 9 years after the German Claims were begun. The Fourth and Fifth Defendants have ignored the present action. As a result, default judgments for damages to be assessed have been entered against them by the order dated 30 November 2017 of Popplewell J and by the order dated 12 January 2018 of Teare J. The Applicants, however, have participated in the present action and have served a Defence. In that Defence, the Applicants assert (inter alia) that the claims against the Applicants for breach of contract are statute-barred, having arisen more than six years before the action was brought.
6. The present application ("the Summary Judgment Application") was issued on 8 December 2017, supported by the witness statement (also dated 8 December 2017) of the Applicants' solicitor, Mr Stylianou. AMTF responded by issuing its own application dated 13 December 2017 ("the Amendment Application") for permission to amend its Claim Form and Particulars of Claim by deleting various references to the commencement of the German Claims. That application was supported by the first witness statement (dated 13 December 2017) of AMTF's solicitor, Mr Connell.
7. Both applications came before Picken J on 19 January 2018. There was insufficient time to hear both applications: but Picken J heard and granted the Amendment Application, expressly without prejudice to the outcome of the Summary Judgment Application. Mr Connell then made a second witness statement (dated 15 March 2018) in opposition to the Summary Judgment Application.

The statements of case

8. CPR 16PD 13.1 requires that, in the Defence, a defendant must "give details of the expiry of any relevant limitation period relied on". In the present case, the defence that these claims are all statute-barred is raised in paragraph 7 of the Defence of the First to Third Defendants, which avers that:

The allegations against each of the First to Third Defendants are that they acted in breach of contract by commencing and pursuing litigation in Germany in breach of contract. On the Claimant's own case those proceedings commenced, in the case of each of the First to Third Defendants, on 27 May 2008. The claim form was filed on 11 July 2017. Accordingly, the Claimant's claims were commenced over 6 years after the alleged breach of contract and so are time-barred.

9. As HHJ Havelock-Allen QC noted in MAC Hotels Limited v Rider Levett Bucknall UK Limited^[2], once a defence of limitation has been pleaded, the burden then shifts to the claimant to establish that the cause of action relied upon occurred within the relevant period of limitation, and so is not statute-barred. Where it can reasonably be expected that a defence that the claim is statute-barred will be raised (or where, as in the present case, such a plea has already been advanced when Particulars of Claim come to be amended), the Particulars of Claim should therefore plead the facts which give rise to the relevant cause of action in such a way as to show so far as possible when (on the Claimant's case) the cause of action is said to have arisen^[3].
10. In the present case, in paragraph 11 of the Amended Particulars of Claim AMTF relies (in particular) upon two terms which it alleges formed part of the client agreements between it and each of the Applicants. Those terms are as follows:

Clause 29: Liability and Indemnity:

29.3 You shall indemnify us against any costs, claims (including third-party claims), losses, liabilities, expenses, actions or demands whatsoever which we may suffer or incur directly or indirectly in connection with or as a result of any service provided or not provided or action taken or not taken under this Agreement except to the extent that such are due directly to our negligence, wilful default, or fraud, or our failure to comply with relevant SFA Rules.

Clause 33: Law and Disputes

33.1 This Agreement and all rights and obligations arising in respect of your Account shall be governed by, performed and construed in accordance with the laws of England and (except for matters concerning specific Transactions which require to be submitted to arbitration in accordance with applicable Market Rules) you irrevocably submit to the exclusive jurisdiction of the English Courts in relation to such disputes, without prejudice to our right to seek enforcement of any arbitration award or judgment in any other jurisdiction.

11. AMTF then pleads its claims against the First Defendant in paragraphs 16 to 18 of the Amended Particulars of Claim. After alleging in paragraph 16 that the First Defendant is bound by the contractual terms set out above, it states:

17. On or around 27 May 2008, the First Defendant commenced his German Claim. He has since taken (or authorised to be taken on his behalf) steps in continued pursuit of the German Claim. Such steps include in particular:

(1) Pursuing the German Claim to trial before the LG Duisburg on 13 January 2014.

(2) Pursuing an appeal in respect of the judgment of LG Duisburg dated 21 May 2014 (which judgment dismissed the First Defendant's German Claim on the basis that the German Court had no jurisdiction to decide the matter). In particular: (i) on 10 April 2014, the First Defendant filed process stating his intention to appeal to the higher German Court (OLG Düsseldorf); and (ii) filed such appeal on 14 August 2014.

(3) Failing to take any step to discontinue the German Claim, with which the German Court remains seised as at the date of these Particulars of Claim.

18. In the premises, by each such step, the First Defendant has breached his obligations to AMTF under Clause 33.1 .. and/or become liable to indemnify AMTF pursuant to [clause] 29.3 ..

12. Claims against the Second Defendant are pleaded in materially identical terms in paragraphs 19 to 21 of the Amended Particulars of Claim, and against the Third Defendant in paragraphs 22 to 24 of the Amended Particulars of Claim.

The arguments of the parties

13. The Applicants were represented by Mr Caley Wright. Mr Wright's argument, in summary, was that the cause of action for breach of an exclusive jurisdiction agreement such as that found in clause 33 accrues once and for all when proceedings in a non-contractual forum are begun. In his submission, on the true construction of the relevant contractual provisions, all that the Applicants agreed to do in the present case was not to begin litigation outside England. They did not agree to maintain the negative state of affairs that there should be no litigation otherwise than in England. Accordingly, time began to run against AMTF as soon as the German Claims were begun, because that was the earliest time at which AMTF could have brought an action against the Applicants. AMTF's claims therefore became statute-barred 6 years later, in May 2014.
14. Mr Wright relied in support of this argument on the following passage from Professor Adrian Briggs QC's book on Agreements on Jurisdiction and Choice of Law^[4]:

It has been assumed that the proper formulation of the claim is to allege that the issue of process and prosecuting the action to judgment was a breach of contract, though if the issue of proceedings is itself a breach of an express term of the agreement on jurisdiction, what follows will simply be the loss which results from it ..

.. A difficulty with the nature of the claim is that if the contract is seen as one to exclude the jurisdiction of the courts, it cannot be completely legally effective: parties cannot by contract create a jurisdiction which the courts do not have, and cannot by contract removal jurisdiction which the courts do have. ..

General answers to this are convincing. First, there is no need to interpret the contract as one to oust the jurisdiction of the court. It is much more natural to read the promise by each to the other as not to invoke the jurisdiction of the court, not as a promise that the court does not or does not have jurisdiction ..

A specific answer would to take advantage of superior drafting. All doubts dissolve where the contract provides that "no proceedings will be issued". The breach is undeniable. If a party breaches a clear and express promise not to issue proceedings, it is impossible to see how a claim for damages could be refused once the breach is demonstrated. If the promise is not express, it may be inferred from a jurisdiction agreement, but the superior drafting solution is certainly best.

Mr Wright also relied upon the analogy of contractual claims for breach of confidence and for breach of a restrictive covenant.

15. In Mr Wright's submission, AMTF cannot establish (and has not pleaded) either any "successive" breaches, or any "continuing" breach.

15.1 As to "successive breaches", it is a fundamental characteristic (in Mr Wright's submission) that they are independent of one another. For example, non-payment of rent in one month does not give rise to the non-payment of rent the next month. Each failure to pay rent is a breach of an individual, freestanding, obligation to pay. But here, the successive steps pleaded by AMTF were not independent, but simply necessary and direct consequences of the original alleged breach, the commencement of the German Claims. The first pleaded step - pursuing the action to trial - is either a series of steps (in which case the Amended Particulars of Claim fail to identify any particular step that was taken within the limitation period) or is a single step which starts with the commencement of the German Claims. As for the second step - the appeal - taking a further step in litigation cannot give rise to a freestanding cause of action: and the third pleaded step - failure to discontinue - is, on its face, a failure to act, in circumstances where no positive obligation to act has been pleaded.

15.2 Mr Wright also relied upon Sanders v Coward^[5] as authority for his submission that AMTF's failure to bring timely suit in relation to the breach constituted by the commencement of the German Claims waived that breach, and so precluded AMTF from complaining about the further prosecution of the claims so commenced.

15.3 As for any "continuing" breach, obligations giving rise to a continuously accruing cause of action are (in Mr Wright's submission) exceptional in character. In support of this argument, Mr Wright relied (inter alia) upon the decision of the Court of Appeal in VAI Industries (UK) Ltd v Bostock & Bramley^[6], where it was held that the express warranty given by a supplier of equipment gave rise to a single cause of action which accrued at the date of delivery, even though the warranty provided for a "warranty period". Mr Wright also relied upon Bell v Peter Browne & Co^[7], in which Nicholls LJ referred to :

.. The normal case where a contract provides for something to be done, and the defaulting party fails to fulfil his contractual obligation in that regard at the time when performances due under the contract. In such a case there is a single breach of contract. By way of contrast are the exceptional cases where, on the true construction of the contract, the defaulting party's obligation is a continuing contractual obligation. In such cases the obligation is not breached once and for all, but it is a contractual obligation which arises anew for performance day after day, so that on each successive day there is a fresh breach ..

16. Finally, Mr Wright submitted that any finding that the start date for limitation should be postponed until the conclusion of the German Claims would make a mockery of the policy that there should be a finite and reasonable period within which claims can be brought, in order to promote of legal certainty and so that "trials are heard at a time when there is sufficient reliable evidence"^[8].
17. For AMTF, Mr Andrew Scott submitted that this application was based upon a misunderstanding of AMTF's case. In his submission AMTF's pleaded claim (at least since it has been amended) is based only upon the conduct of the Applicants during the six year period prior to the commencement of the present proceedings. According to Mr Scott, Mr Wright's submissions address a case based on the wrongful commencement of the German Claims: but that is no longer a claim made by AMTF in this action. In any event, Mr Wright's submissions do not address AMTF's claim based upon the contractual indemnity in clause 29.
18. In Mr Scott's submission, it is well-established that a clause that provides for dispute resolution by particular means gives rise to an implied negative obligation. As Lord Mance JSC^[9] stated in AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC^[10]:

.. An agreement to arbitrate disputes has positive and negative aspects. A party seeking relief within the scope of the arbitration agreement undertakes to do so in arbitration in whatever forum is prescribed. The (often silent) concomitant is that neither party will seek such relief in any other forum ..

.. The negative aspect of an arbitration agreement is a feature shared with an exclusive choice of court clause. In each case, the negative aspect is as fundamental as the positive ..

19. Mr Scott further submitted that that negative obligation is not simply an obligation not to begin proceedings otherwise than in accordance with the agreement: it is also an obligation not to continue any such proceedings. Breach of the implied negative obligation by continuing proceedings otherwise than in the contractually agreed forum therefore gives rise to a continuing cause of action, which arises from day-to-day so long as the wrongful proceedings are on foot. It follows, in Mr Scott's submission, that, in the present case, the Applicants' contractual submission to the exclusive jurisdiction of the English Courts gave rise to an implied obligation not to commence or to continue the German Claims: and the Applicants' continued prosecution of the German Claims up to the present day therefore gives rise to a continuing cause of action, in relation to which AMTF is entitled to claim for the whole of the period beginning 6 years prior to the commencement of this action.
20. Mr Scott accepted Mr Wright's submission that that there is no decided case which directly supports AMTF's case on this issue. However, Mr Scott relied upon a number of statements of high authority in support of his submissions:

20.1 In Continental Bank NA v Aeakos Compania Naviera SA^[11], the loan agreement between the parties contained (as in the present case) a submission to the exclusive jurisdiction of the English courts. The plaintiff bank sought and obtained an injunction to restrain the defendant borrower from continuing proceedings which it had begun in the courts of Greece. In dismissing the defendant's appeal, Steyn LJ (giving the judgment of the Court of Appeal) observed that:

.. If the injunction is set aside, the defendants will persist in their breach of contract ..

20.2 In Alfred C Toepfer International GmbH v Molino Boschi SRL^[12] proceedings were begun in Italy in 1988, in breach of an arbitration agreement. In 1995, while those Italian proceedings were continuing, the plaintiff began proceedings in England, seeking (inter alia) a declaration and an anti-suit injunction. Mance J dismissed the plaintiff's summons for declaratory and injunctive relief as a matter of discretion, because of the delay in seeking the English court's assistance. However, in doing so, he rejected an argument put forward by the defendants that the claims were barred by laches, more than 6 years having elapsed since the Italian proceedings were commenced. Specifically, he referred to the continuance of the Italian proceedings as:

.. that current and continuing breach ..

20.3 In Schiffahrtsgesellschaft Detlef Von Appen GmbH v Wiener Allianz Versicherungs AG (the 'Jay Bola')^[13], Hobhouse LJ (with whose judgment Morritt LJ and Scott V-C agreed) explained that, in a case where a party has brought court proceedings in breach of an arbitration agreement:

.. the primary remedy must be to apply for an injunction to restrain the contract breaker from continuing with that action in breach of contract .. This is a simple example of an injunction to restrain a continuing breach of contract ..

20.4 In CMA CGM SA v Hyundai Mipo Dockyard Co Ltd^[14] the defendant shipyard had entered into 4 shipbuilding contracts with ERS, each containing a London arbitration clause and a clause prohibiting the transfer of rights or obligations without the other party's consent. CMA wanted to take over the contracts from ERS, but the defendant refused consent. CMA then issued proceedings against the defendant in France claiming damages in tort (under Art 1382 of the Code Civile) on the basis that consent had been unreasonably withheld. The shipbuilding contracts (containing the arbitration clauses) were then novated to CMA. CMA obtained judgment against the defendant in France. The defendant then began arbitration proceedings against CMA, seeking to recover the judgment amount as damages, on the basis that CMA was in breach of the arbitration clauses by continuing the French proceedings. The arbitrators found in favour of the defendant. Burton J dismissed CMA's appeal under the Arbitration Act 1996 s 69, stating that:

.. Whatever CMA may have hoped, expected or even intended, on a proper construction of the Shipbuilding Contracts as novated it came under an obligation to arbitrate an arbitrable dispute, once it owed obligations under those Contracts .. and thereafter was obliged to arbitrate such dispute not litigate it, refraining from any fresh, and terminating any existing, proceedings ..

20.5 In Hamilton-Smith v CMS Cameron McKenna LLP^[15], the defendant solicitors sought an anti-suit injunction to prevent breach of an exclusive jurisdiction clause by the continuance of parallel negligence proceedings against them in Antigua. In granting the injunction, Nugee J observed that:

.. It follows that the bringing of the Claimants' claims against CMS in Antigua is (very probably) a breach of contract, and the continued prosecution of them will (very probably) be a further breach ..

Analysis

21. The principles which the court should apply in dealing with an application under CPR Pt 24 by a defendant for summary judgment dismissing a claim were not in dispute. They were helpfully set out by Lewison J in his judgment in Easyair Ltd v Opal Telecom Ltd^[16]:

The correct approach on applications by defendants is, in my judgment, as follows:

i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 2 All ER 91;

ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]

..

vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;

vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725

22. The issue raised by the present application is whether the pleaded claims against the Applicants have no real prospect of succeeding because they are statute-barred. Since that limited issue involves no element of factual enquiry, the parties were agreed that it is one that, applying the principles set out in paragraph 21 above, the court can and should dispose of summarily under CPR Pt 24.
23. The parties were also helpfully in agreement on three other preliminary matters. First, it was common ground between the parties that time begins to run under the Limitation Act 1980 from the moment that the relevant cause of action is complete: that is, from "the earliest time at which an action [based on that cause of action] could be brought"^[17]. As Diplock LJ stated in Letang v Cooper^[18]:

.. A cause of action is simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person ..

24. Secondly, it was common ground between the parties that, in a claim such as this for breach of contract, the cause of action is complete as soon as there is a breach, notwithstanding that at that time no damage (beyond the purely nominal) has been suffered by the claimant^[19].
25. Thirdly, the parties were also in agreement that, in the case of a continuing breach of contract, a claimant can claim in respect of so much of the continuing breach as occurs within the 6 years (or 12 years, if the agreement is under seal) before action brought, as such a breach prima facie continues from day to day unless and until the innocent party elects to treat the continuing breach as a repudiation of the contract^[20]. In the present case the relevant period is 6 years, since the contract pleaded is a simple contract, not under seal.
26. Against that agreed background, I turn now to the matters that are in issue between the parties. I shall have to return, later in this judgment, to the issue of the way in which the claims against the Applicants have been pleaded. However, in my judgment, it is more logical to begin with the substance of the matter.
27. The central issue that I have to decide is the nature and extent of the obligation(s) created by clause 33 of AMTF's Client Agreement/TOB under which (according to AMTF's pleaded case) the Applicants "irrevocably submit[ted] to the exclusive jurisdiction of the English Courts".
28. As Lord Mance observed in the AES Ust-Kamenogorsk case mentioned in paragraph 18 above, the Applicants' express agreement to submit to the exclusive jurisdiction of the English courts contained within it, by necessary implication, a concomitant agreement not to pursue any claims within the scope of that submission in any other forum^[21]. The issue between the parties is as to whether that implied agreement prohibits only the starting of proceedings (as the Applicants contend) or whether it also prohibits (as AMTF argues) the continued pursuit of any such proceedings.
29. That issue requires me to interpret AMTF's Client Agreement/TOB in its commercial context, applying the approach to contractual construction laid down by the House of Lords and the Supreme Court in the series of cases culminating (for the time being) in Wood v Capita Insurance Services Ltd ^[22].
30. One such case is the well-known decision of the House of Lords in Fiona Trust and Holding Corpn v Privalov^[23]. That case was concerned with the correct interpretation to be given to the arbitration clause in charterparties on the Shelltime 4 Form. It established "the golden rule that if the parties wish to have issues as to the validity of their contract decided by one tribunal and issues as to its meaning or performance decided by another, they must say so expressly. Otherwise they will be taken to have agreed on a single tribunal for the resolution of all such disputes"^[24].
31. As Longmore LJ noted in Starlight Shipping Co v Allianz Marine & Aviation Versicherungs AG & Ors (The 'Alexandros T')^[25] "jurisdiction clauses are very similar to arbitration clauses .. and should likewise be given a sensible commercial meaning": and the opinions of their Lordships in the Fiona Trust case, although specifically directed to the scope of the arbitration clause under consideration in that case, also state a number of principles that are of relevance to jurisdiction clauses generally. For example, Lord Hope of Craighead observed^[26]:

[25].. ..[V]arious clauses .. serve various functions. In some a high degree of precision is necessary. Terms which define the parties' mutual obligations in relation to price and performance lie at the heart of every business transaction. They fall into that category. In others, where the overall purpose is clear, the parties are unlikely to linger over the words which are used to express it.

[26] [Law and jurisdiction clauses] fall .. into the latter category. No contract of this kind is complete without a clause which identifies the law to be applied and the methods to be used for the determination of disputes. Its purpose is to avoid the expense and delay of having to argue about these matters later. It is the kind of clause to which ordinary businessmen readily give their agreement so long as its general meaning is clear. They are unlikely to trouble themselves too much about its precise language or to wish to explore the way it has been interpreted in the numerous authorities, not all of which speak with one voice. Of course, the court must do what it can to provide charterers and shipowners with legal certainty at the negotiation stage as to what they are agreeing to. But .. [t]he proposition that any jurisdiction or arbitration clause in an international commercial contract should be liberally construed promotes legal certainty ..

32. Applying those principles to the facts of the present case, I have no doubt that the proper interpretation of clause 33 is that it obliges the Applicants to pursue any relevant claims in England and not elsewhere. That means, in my judgment, that it obliges them not only not to begin any relevant proceedings elsewhere, but also not to continue any such proceedings, and instead to bring them to an end.
33. I begin with the words actually used by the parties in clause 33. These are in fairly standard form, and say that the jurisdiction of the English courts in relation to disputes falling within the scope of the clause is to be "exclusive". In my judgment, the use of that word would have been a clear indication to a reasonable person, having all the relevant and admissible background knowledge, that the parties intended that proceedings falling within the scope of the clause should take place only in the English courts, and that such proceedings should not take place elsewhere. The fact that proceedings brought by the Applicants are taking place elsewhere is therefore, of itself, prima facie a breach of the promise made (on AMTF's pleaded case) by the Applicants in clause 33. Put more technically, the mere existence of such proceedings is prima facie a continuing breach of that clause.
34. Mr Wright's argument, that clause 33 requires only that proceedings should not be begun in any forum other than the English courts, and says nothing about the continued existence or continued prosecution of such proceedings, seems to me to ignore the ordinary and natural meaning of the word "exclusive". While proceedings are taking place in some other forum, the English courts cannot be said to have exclusive jurisdiction - that is, sole jurisdiction to the exclusion of all others.
35. As for Mr Wright's reliance upon Professor Adrian Briggs QC's observation^[27] that "if the issue of proceedings is itself a breach of an express term of the agreement on jurisdiction, what follows will simply be the loss which results from it", it seems to me to be probable that Professor Briggs was there addressing the "superior drafting" case "where the contract [expressly] provides that 'no proceedings will be issued'", which is the situation discussed later in the passage relied on by Mr Wright. It may also be that Professor Briggs was addressing a case where the relevant clause seeks to confer exclusivity on a tribunal other than the English courts. Professor Briggs' concern, in the passage quoted, is that an exclusive jurisdiction clause might, if widely interpreted, be characterised as an agreement to oust the jurisdiction of the courts, and so as void at common law^[28]. However, an agreement which ousts the jurisdiction only of foreign courts is not contrary to the policy of the law of England, and so is not void at common law^[29]. There can therefore be no objection on that ground to giving a liberal construction to a clause granting exclusive jurisdiction to the courts of England (or, for that matter, to giving a liberal construction to an arbitration clause^[30]). If it were (contrary to my impression) truly Professor Briggs' view that breach of a typical exclusive jurisdiction clause (such as clause 33) occurs only once and for all when proceedings are issued, then – despite Professor Briggs' undoubted authority in this area – I would have respectfully to disagree with him.
36. I am reinforced in my conclusions by the clear commercial purpose of clause 33. The reason why clause 33 was included was to protect AMTF against having to deal with proceedings brought by clients in any forum other than the English courts. To that end, one of the central purposes sought to be achieved by the inclusion of clause 33 would have been to confer on AMTF a strong prima facie right to the assistance of the English courts by way of anti-suit injunction to prevent the commencement or the continuance in any other forum of any such proceedings^[31].
37. That purpose would not be achieved if clause 33 merely prevented AMTF's clients from starting proceedings, but thereafter allowed them to continue to prosecute those proceedings without committing any further breach of contract. So construed, it would be difficult (and, perhaps, impossible) for AMTF to rely upon its rights under clause 33 to obtain an anti-suit injunction once proceedings in a non-contractual forum had been begun: for the mere continuance of those proceedings would, on that construction, not amount to a breach of contract. Yet that is the point - after proceedings have been begun in a non-contractual forum – when AMTF is most likely to hear about such proceedings, and so is most likely to need the assistance of clause 33. It seems to me that the parties, as rational businessmen, are highly unlikely to have intended such a perverse consequence.
38. I do not accept Mr Wright's submission that it is only in exceptional cases that a contractual obligation should be interpreted as a continuing one. It is no doubt correct that most positive obligations fall to be performed only once, and so do not on their true construction give rise to continuing obligations. Nevertheless, as Males J said in Equitas Ltd v Walsham Bros & Co Ltd^[32]:

.. I do not understand [Nicholls LJ's use of the word "exceptional" when referring to continuing obligations in Bell v Peter Brown & Co^[33]] to be imposing an independent requirement that there should be something exceptional about such a case. In my view Nicholls LJ was merely recognising that, in general, obligations fall to be performed once and for all on the date for performance and a failure to perform does not give rise to a series of repeated breaches. Nevertheless, the concept of continuing obligations is well-recognised and in some very ordinary cases, such as a landlord's obligation to keep premises in repair, is standard ..

39. In each case, it depends upon the nature of the obligation^[34]. Where, as here, the obligation is a negative one, there is no presumption one way or the other. If, as I have held, the obligation is to maintain a negative state of affairs - that is, that there should be no relevant proceedings otherwise than before the English courts – then that is a classic example of a continuing obligation.
40. The interpretation of clause 33 stated in paragraph 32 above is, in my judgment, entirely consistent with the policy behind the Limitation Act 1980. Mr Wright's argument that any interpretation of clause 33 which means that the start date for limitation continues until the conclusion of the German Claims would make a mockery of the policy behind the Limitation Act 1980 seems to me to be misconceived. Even on this interpretation of clause 33, AMTF will only be able to claim in respect of events occurring on and after the point 6 years before this action was begun. In any event, it must be doubtful whether considerations of statutory policy have, in general, any significant part to play in the interpretation of a private commercial contract.
41. I have reached my conclusion on the correct interpretation of clause 33 as a matter of first principles. However, it also seems to me that Mr Scott may have been too generous in conceding that there is no authority directly in point to support AMTF's case. On the contrary, it seems to me that many of the cases in which anti-suit injunctions have been granted restraining the continuance of proceedings already begun in a non-contractual forum, where the ground for the grant of the injunction has been the infringement of a legal right, will have been implicitly decided on the basis that the continued pursuit of those proceedings was itself a continuing infringement of that right.
42. Turning now to Mr Wright's other arguments, I do not accept that the case of Sanders v Coward^[35] establishes the proposition contended for by Mr Wright, which was that AMTF's failure to bring timely suit in relation to the breach constituted by the commencement of the German Claims waived that breach, and so precluded AMTF from complaining about the further prosecution of the claims so commenced. The issue discussed in that case was whether the innocent party had waived its right to treat the breach as a repudiation, bringing the agreement to an end. It was not concerned with a waiver of the right to sue for damages, and does not provide any support whatsoever for Mr Wright's argument.
43. I do, however, accept Mr Wright's submission that it is a fundamental characteristic of "successive breaches" that they are independent of one another. In my judgment, each further act done by the Applicants in pursuance of the German Claims is capable of having amounted to a further, and independent, breach of clause 33. Those further steps were not "necessary and direct consequences" of the commencement of the German Claims, as Mr Wright submitted. On the contrary, they were separate steps taken by the Applicants, who could at any time have brought (and could still bring) the German Claims to an end.
44. That brings me to Mr Wright's complaint that AMTF's Amended Particulars of Claim fail to identify any particular step that was taken within the limitation period, and therefore fail to disclose a cause of action that is not statute-barred. The case of London Congregational Union Inc v Harriss^[36] is not authority for the proposition for which Mr Wright relied upon it, that it is necessary for a claimant to identify in the Particulars of Claim the precise moment at which the cause of action arose. What that case decided (relevantly for present purposes) is simply that, when limitation is in issue, it is necessary for a claimant to show on the balance of probabilities that the cause of action arose within the limitation period.
45. As I have said in paragraph 9 above, Particulars of Claim should (when limitation is or is likely to be in issue) plead the facts which give rise to the relevant cause of action in such a way as to show as far as possible when (on the Claimant's case) the cause of action is said to have arisen. However, it is sufficient if the facts pleaded show that that moment was, on the balance of probabilities, within the limitation period, even if the relevant moment cannot be precisely identified. Here, paragraph 17 of the Amended Particulars of Claim^[37] in my judgment identifies with sufficient precision the specific steps alleged to have been taken by the Applicants within the relevant period of limitation, as well as pleading a continuing breach.
46. In one respect, however, it does seem to me that the Amended Particulars of Claim are open to criticism. That respect is the failure to plead the interpretation of the express obligation and/or the implied obligation relied upon by AMTF as having been breached. One of the main purposes of our system of pleadings is to identify the issues between the parties. In the present case, the breaches complained of by AMFT are breaches of the "silent concomitant" (to borrow the description used by Lord Mance JSC in AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC^[38]) of the express words used in clause 33. Yet the Amended Particulars of Claim plead only the express term, and do not set out AMTF's case with regard to that "silent concomitant". As a result, AMTF's case on that point is left to be inferred, and the Applicants have no positive case to which to respond. The consequence is that the parties' statements of case do not identify the real issues between them on this aspect of the case. That has made the arguments on this summary judgment application more complicated and less well focused than they should have been. It is, however, a defect that is capable of cure, and is not of itself a sufficient reason for giving judgment against AMTF on this application.
47. For the reasons set out above, I therefore find that:

47.1 Clause 33 of AMTF's Client Agreement/TOB, on its true interpretation, obliges the other party to that agreement not only not to begin any relevant proceedings in any forum other than in the English courts, but also not to continue any such proceedings, and instead to bring them to an end.

47.2 Given that interpretation, the allegations of breach of contract pleaded in paragraph 17 of AMTF's Amended Particulars of Claim, to the extent that they refer to events which occurred no more than 6 years before this action was begun, are not bound to fail because they are statute-barred.

48. My conclusion that AMTF's claims for breach of contract in relation to the period beginning 6 years before this action was begun are not bound to fail because they are statute-barred means that it is unnecessary for me to deal with the limitation position in relation to AMTF's claims for a contractual indemnity. Since I did not hear full argument in relation to that aspect of the matter, I shall not lengthen this judgment by any comments on it.
49. In the result, the Summary Judgment Application is dismissed.

Note 1    [2017] UKSC 13, [2017] 2 WLR 853 (SC), at [2]–[4].    [Back]

Note 2    [2010] EWHC 767 (TCC) at [42]. See also McGee, Limitation Periods (7th ed, Sweet & Maxwell, 2014) at [21.012] to [21.016].    [Back]

Note 3    See McGee, Limitation Periods (7th ed, Sweet & Maxwell, 2014) at [21.016]; and Driscoll-Varley v Parkside HA [1991] 2 Med LR 346 (Hidden J). Cf London Congregational Union Inc v Harriss [1988] 1 All ER 15, where (in a tort claim, in which the cause of action accrued on the first occurrence of damage) one part of the plaintiffs’ claim was dismissed, on the basis that they failed to show that the damage affecting that part had first occurred (and therefore that the cause of action in respect of that part had accrued) within the limitation period.    [Back]

Note 4    (OUP, 2008) at [8.48] (emphasis added).    [Back]

Note 5    (1846) 15 M&W 48 ,153 ER 756.    [Back]

Note 6    [2003] EWCA Civ 1069.    [Back]

Note 7    [1990] 2 QB 495 t 501 (emphasis added).    [Back]

Note 8    See Chitty on Contracts (32nd ed, Sweet & Maxwell, 2015) at [28-001].    [Back]

Note 9    With whom Lord Neuberger of Abbotsbury PSC, Lord Clarke of Stone-cum-Ebony, Lord Sumption and Lord Toulson JJSC agreed.    [Back]

Note 10    [2013] UKSC 35, [2013] 1 WLR 1889 at [1] and [25].    [Back]

Note 11    [1994] 1 WLR 588 at 598 (emphasis added).    [Back]

Note 12    [1996] 1 Lloyd’s Rep 510 at 515 (emphasis added).    [Back]

Note 13    [1997] 2 Lloyd’s Rep 279, CA, at 285 (emphasis added).    [Back]

Note 14    [2008] EWHC 2791 (Comm), [2009] 1 All ER (Comm) 568 at [25] (emphasis added).    [Back]

Note 15    [2016] EWHC 1115 (Ch) at [46] (emphasis added).    [Back]

Note 16    [2009] EWHC 339 (Ch) at [15]. See also Aquila WSA Aviation Opportunities II Ltd v Onur Air Tasimacilik ASi [2018] EWHC 519 (Comm) at [27], per Cockerill J.    [Back]

Note 17    Reeves v Butcher [1891] 2 QB 5-9 at 511, per Lindley LJ.    [Back]

Note 18    [1965] 1 QB 232 at 242.    [Back]

Note 19    See McGee, Limitation Periods (7th ed, Sweet & Maxwell, 2014) at [10.002].    [Back]

Note 20    See Chitty on Contracts (32nd ed, Sweet & Maxwell, 2015) at [28-035].    [Back]

Note 21    The concept that a covenant may be negative in substance though not in form is a familiar one in English law: see eg Metropolitan Electric Supply Ltd v Ginder [1901] 2 Ch 799, where an agreement by a customer to take the whole of the electric energy required for his premises from a particular supplier was held, in substance, to be a contract not take energy from any other person, which could be enforced by a prohibitory injunction.    [Back]

Note 22    [2017] UKSC 24, [2017] AC 1173.    [Back]

Note 23    [2007] UKHL 40, [2007] 2 All ER (Comm) 1053.    [Back]

Note 24    At [26], per Lord Hope of Craighead.    [Back]

Note 25    [2014] EWCA Civ 1010, [2014] 2 Lloyd's Rep 544 at [8].    [Back]

Note 26    At [25]-[26].    [Back]

Note 27    Quoted in full in paragraph 14 above.    [Back]

Note 28    See Chitty on Contracts (32nd ed, Sweet & Maxwell, 2015) at [16-053] – [16-056].    [Back]

Note 29    Addison v Brown [1954] 1 WLR 779.    [Back]

Note 30    Agreements to refer disputes to arbitration are recognised by statute as being lawful: see now the Arbitration Act 1996: but they also were not void at common law: see eg Scott v Avery (1856) 5 HLC 811; Edwards v Aberayron Mutual Ship Insurance Society (1876) 1 QBD 563; Hallen v Spaeth [1923] AC 684.    [Back]

Note 31    See eg Donohue v Armco Inc [2001] UKHL 64, [2002] 1 All ER (Comm) 97 at [24], per Lord Bingham of Cornhill; and Dicey, Morris and Collins on the Conflict of Laws (15th ed, Sweet & Maxwell, 2012) at [12-159] - [12-162].    [Back]

Note 32    [2013] EWHC 3264 (Comm), [2014] PNLR 8 at [67].    [Back]

Note 33    Quoted in paragraph 15.3 above.    [Back]

Note 34    Cf Larking v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221, HCA, at 236, per Dixon J: “The distinction may be difficult of application in a given case, but it must be regarded as one depending on the meaning of the covenant”.    [Back]

Note 35    (1846) 15 M&W 48, 153 ER 756.    [Back]

Note 36    [1988] 1 All ER 15.    [Back]

Note 37    Quoted in paragraph 11 above.    [Back]

Note 38    [2013] UKSC 35, [2013] 1 WLR 1889 at [1].    [Back]