On 28 April 2017 the Court of Appeal handed down a significant judgment concerning the effect of exclusive jurisdiction agreements and how, notwithstanding the clear wording of such an agreement, a party may nevertheless submit to the jurisdiction of the English Court and waive any right to rely upon an exclusive jurisdiction agreement in favour of the courts of another country.
This is the latest decision in the long-running Re Fi Call Ltd litigation between Apex Global Management Ltd and Global Torch Ltd: a major international fraud case arising out of a telecommunications joint venture in the Middle East.
The appeal concerned the attempt of Mr Almhairat and his company, Apex, to stay the execution of part of the first instance judgment against them on the basis that the relevant contract, a Share Purchase Agreement (“SPA”), contained an exclusive jurisdiction clause in favour of the courts of Saudi Arabia. This was a novel jurisdiction challenge as it was made after judgment had been given at the culmination of over four years litigation. Nevertheless, Mr Almhairat and Apex argued on appeal that during the litigation they had maintained that the SPA was a forgery to which they had never agreed. Therefore, they said, by analogy with the House of Lord’s decision in Fiona Trust v Privalov  UKHL 40, the correct point at which to raise a jurisdiction challenge based on the clause was after the English Court had determined that the SPA was in fact true and binding upon Apex.
Dismissing the Appeal, Gloster LJ (Black LJ and Sir Christopher Clarke agreeing) held that, notwithstanding the fact that the jurisdiction clause in the SPA encompassed the relevant dispute, Apex and Mr Almhairat had submitted to the jurisdiction of the English Court and/or waived their right to rely upon it by virtue of their conduct in engaging in the litigation without raising a jurisdiction challenge on this basis earlier. At the very latest the challenge ought to have been made (if necessary in the alternative) when it became known to Apex that Global Torch was relying upon the SPA and its terms. In addition, given that the trial judge (Hildyard J) had found that the true version of the SPA – which had been signed by Mr Almhairat – was the one containing the exclusive jurisdiction clause, it followed that the appellants must always have known that this was the binding SPA, making their failure to raise their objection to jurisdiction earlier all the more egregious.
Global Torch also successfully showed on appeal that Apex and Mr Almhairat had acted unconscionably and that there was evidence that Mr Almhairat or Apex would in any event refuse to submit to the jurisdiction of the courts of Saudi Arabia.
The decision emphasises the need for jurisdiction challenges to be made “as early as possible”. A late challenge will be treated within the relief from sanctions framework under CPR rule 3.9. Failing to make the challenge at an early stage may, as in the present case, result in a party being held to have submitted to the jurisdiction of the English Court notwithstanding any jurisdiction agreement to the contrary on the basis that any right to rely upon such agreement has been waived.