Swissmarine Corporation Ltd v O.W. Supply & Trading A/S

On Friday 15 May 2015 SwissMarine Corporation Limited (“SwissMarine”) applied for an anti-suit injunction against O. W. Supply & Trading A/S (“OW Supply”), a Danish company that had filed for bankruptcy in the Bankruptcy Court of Aalborg, Denmark on 7 November 2014. The application was said to be urgent: it was initially made ex parte, but short notice was apparently given to OW Supply’s solicitors, Clifford Chance LLP (“Clifford Chance”), on 14 May 2015, which was a bank holiday in Denmark. SwissMarine sought an order restraining OW Supply (i) from proceeding with an action that it had brought in the District Court in Lyngby, Denmark (the “Lyngby action”) and (ii) from commencing any other or further proceedings in Denmark or elsewhere against SwissMarine directed to obtaining a “disputed” sum claimed under an ISDA Master Agreement (the “ISDA Agreement”) or any transaction thereunder.

I did not have time to hear the application on 15 May 2015, but held a short hearing, at which SwissMarine was represented by Mr Stephen Robins and OW Supply was represented by Ms Camilla Bingham QC. I had a skeleton argument from Mr Robins, but (as was wholly understandable in the circumstances) only a short note from Ms Bingham. I adjourned the application to Monday 18 May 2015: I had satisfied myself that there was no immediate urgency for an order in respect of the Lyngby action because it became clear that OW Supply could not prosecute it until 26 May 2015 (when apparently it might have been able to enter a default judgment if SwissMarine neither served a defence nor had an extension of time to do so), and I made an order designed to protect SwissMarine from OW Supply bringing other proceedings before I heard the application. (On reflection, perhaps the order was not justified: in his skeleton argument Mr Robins expressed a concern that OW Supply might obtain default judgment in the Lyngby action and then try to enforce it elsewhere. On re-reading the documents, I found no evidence or submission about a risk from other proceedings except that they might be brought for this purpose, but I did not appreciate that when I made the order.)

At the resumed hearing Ms Bingham and Ms Stephanie Wood represented OW Supply, having served a longer skeleton over the weekend. Mr Robins was unable to attend on 18 May 2015 and Mr Steven Berry represented SwissMarine, having served a “supplementary skeleton argument”. There was a distinct change of the focus of SwissMarine’s argument. On 15 May 2015 it was on a submission that the Lyngby action was vexatious or oppressive. In the supplemental skeleton argument and on 18 May 2015 it was that in bringing and pursuing the Lyngby action OW Supply was in breach of a jurisdiction agreement in the ISDA agreement. However, as I see it, the application was always put on both bases: at least neither was ever disclaimed.

The parties agreed at the start of the resumed hearing that I should deal with the application as if it had been served with the requisite notice (although I did not understand that that concession on the part of OW Supply extended to any question of costs), and so I treat this as an inter partes application.

At the resumed hearing Mr Berry applied orally to amend the claim form and the particulars of claim. He also applied for permission of the court under article 20.6 of Schedule 1 of the Cross-Border Insolvency Regulations 2006 (the “CBIR”) to make the proposed amended claim. I return to these applications.

At the hearing on 18 May 2015 there emerged questions that counsel had not anticipated, in particular about the meaning and effect of the jurisdiction provision in the 2002 Master Form of ISDA Agreement. I was sent further submissions in writing and a number of authorities after the hearing. On 21 May 2015 I heard further brief submissions about the new points, and then after it Ms Bingham again put in further written submissions on 27 May 2015. So did Mr Berry, whose late submissions went beyond the new points, but they reached me only after I had sent the parties a draft of my judgment: they did not persuade me to alter any of my conclusions. As a result of this chequered history and because of the court’s vacation, I give judgment only today on what had started life as an ex parte application only on 15 May 2015.

The ISDA Agreement was made between SwissMarine and OW Supply and was dated 22 May 2014. It was in the ISDA 2002 Master Agreement form and included a schedule. It recorded that SwissMarine and OW Supply anticipated entering into one or more transactions. As is evidenced by a document headed “Confirmation – Swap” and dated 3 September 2014, they entered into such a transaction (the “September transaction”). Its details are not important for present purposes: it was by way of a derivatives contract for differences, SwissMarine being the fixed price payer and OW Supply being the floating price payer. The confirmation document expressly stated that it supplemented, formed part of and was subject to the terms of the ISDA Agreement, which itself provided that such confirmations were included in the Master Agreement and that “All Transactions [were] entered into in reliance on the fact that this Master Agreement and all Confirmations [formed] part of a single agreement between the parties …, and the parties would not otherwise enter into any Transactions”.

The ISDA Agreement specified various “Events of Default” including that a party “becomes insolvent or unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due” and other events associated with insolvency. There is no dispute that there was an Event of Default when OW Supply filed for bankruptcy on 7 November 2014, and the Bankruptcy Court of the Court of Aalborg appointed Ms Pernille Bigaard and Mr John Sommer Schmidt as trustees. (Other Events of Default are pleaded by SwissMarine in its Particulars of Claim, but they are not relevant for present purposes.) It defined the expression “Potential Event of Default” as “any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default”. Under the ISDA Agreement, as SwissMarine alleges and I shall assume for present purposes, because of the Event of Default it (but not OW Supply) had the right (but not the obligation) to designate an Early Termination Date, but it has not done so. The agreement also provided that “Each obligation of each party [to make specified payments] is subject to (1) the condition precedent that no Event of Default or Potential Event of Default has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant transaction has occurred or been effectively designated and …”. It included at section 13 provisions about the governing law and jurisdiction, which I set out later.

On 20 February 2015 SwissMarine brought these proceedings. It relied on a provision of the ISDA Agreement that each party represented that no “Event of Default or Potential Event of Default or, to its knowledge, Termination Event [a defined expression, which I need not recite or explain] with respect to it has occurred or is continuing”, which representation was to be deemed repeated when a transaction was entered into under the ISDA Agreement; and it alleged that that representation by OW Supply was untrue when the ISDA Agreement and the transaction were made in that on 22 May 2014 and 22 September 2014 OW Supply was insolvent or unable to pay its debts. SwissMarine’s prayer for relief (as pleaded in the Particulars of Claim dated 20 February 2015) did not include injunctive relief, and was for:

On 3 February 2015 Peter Smith J had made a Recognition Order in respect of OW Supply (and other associated entities) under the CBIR, and it was advertised in the London Gazette on 13 February 2015. As a result these proceedings contravened the automatic stay under article 20 of Schedule 1 to the CBIR. SwissMarine was unaware of the order when it brought these proceedings, and on learning of it, having asked OW Supply to agree to the lifting of the stay, it applied to the Companies Court for permission (in part retrospective) to commence and continue them. After exchanges between SwissMarine’s solicitors, Holman Fenwick Willan LLP (“HFW”), and Clifford Chance, on 30 March 2015 Warren J made an order by consent that, notwithstanding the Recognition Order, “… SwissMarine has permission to commence and continue a claim against OW Supply in the High Court of Justice of England and Wales, Queen’s Bench Division, Commercial Court (Claim No. 2015 Folio 183) for declaratory relief (including a declaration of non-liability) in respect of those contracts between SwissMarine and OW Supply identified and as particularised in the Particulars of Claim dated 20 February 2015”. I was told that the order was made “on paper”, and that in support of it SwissMarine lodged a Skeleton Argument of Mr Robins.

These proceedings were served on 9 April 2015. OW Supply did not dispute the court’s jurisdiction in its acknowledgment of service. The parties agreed to the time for service of the defence being extended initially to 21 May 2015, and then later. Accordingly, no defence has been served.

The Lyngby action was issued on 9 March 2015, and OW Supply by its trustees make this claim (to cite the translation in evidence): that SwissMarine “be ordered to pay to [OW Supply] the countervalue of USD 2,552,083.33 plus statutory interest from the institution of these proceedings until payment is made”. It refers to the bankruptcy proceedings in the Aalborg court, and pleads that “When OW [Supplies] went bankrupt there were outstanding accounts between the parties under the derivatives agreement subject to [the ISDA Agreement] in the form of [the September transaction]”, and that the “close-netting out of the parties’ accounts as at 7 November 2014 shows net outstanding accounts in [OW Supply’s] favour of USD 2,552,083.33”. It goes on to plead that, in view of section 58(h) of the Danish Securities Trading etc Act, “the term laid down in clause 2(a)(iii) of the [ISDA Agreement] must be deemed not to apply to a Danish estate in bankruptcy both as a consequence of the general insolvency law principles and as a consequence of the close-out netting laid down in the Danish Securities Trading etc Act”. OW Supply exhibited to the writ a legal opinion of Professor Ulrik Rammeskow Bang-Pedersen about the effect of section 58h: it explains that the section is by way of a derogation from the general rule in section 40(2) of the Danish Bankruptcy Act that close-out netting takes place as at the date of the issue of the bankruptcy order. It suffices to say that Mr Berry did not dispute Ms Bingham’s submission that the opinion supports OW Supply’s pleaded case. With regard to the jurisdiction of the Lyngby court, it is said that the jurisdiction provision in the ISDA Agreement is not binding on OW Supply “as the case is of an insolvency law character and consequently exempt from the scope of [the Brussels Regulation as enacted in Denmark]. It follows from the case law regarding the rules of Danish Administration of Justice Act on agreements on jurisdiction that an estate in bankruptcy is not bound by any agreements on jurisdiction made in agreements etc before the bankruptcy”.

SwissMarine submit that the contention that there were “outstanding accounts between the parties” when OW Supply “went bankrupt” is wrong: they say that nothing was outstanding until, at the earliest, the first date in 2015 when sums would fall due under the swap contract. I do not consider that I should take a view about that on an application of this kind, and I do not see its relevance to what I have to decide.

On 9 April 2015 the Lyngby court issued a certificate of service, and on 12 May 2015 the certificate was served on HFW Nominees Limited, together with a covering letter stating that SwissMarine has 14 days from the date of service to file a defence. Mr Berry asserted that in doing so OW Supply was relying on HFW Nominees Limited being appointed as the process agents under the ISDA Agreement. That assertion was not supported by evidence, it is an inference that I am not prepared to draw and it would not, in any event, affect my decision. Mr Berry also relied on a court document that was served with the proceedings that was headed (in the translation in evidence) “Guidelines for defendants in civil proceedings (pre-trial proceedings)”, and went on to state under “About the writ of summons” this: “A writ of summons in civil proceedings has been served on you. In the writ of summons the plaintiff has submitted a claim that corresponds to the judgment which the plaintiff wishes the court to deliver in this case”. This appears to be a standard document designed to give general help to litigants, perhaps particularly unrepresented litigants. I do not consider that it assists me to determine in any relevant way the nature of the Lyngby proceedings.

As is stated in Dicey, Morris & Collins, The Conflict of Laws (15^th Ed, 2014) at rule 38(5), “Subject to the provisions of the Brussels I Regulation and the Lugano Convention, an English court may restrain a party over whom it has personal jurisdiction from the institution or continuance of proceedings in a foreign court, … where it is necessary in the interest of justice”. I shall return to the opening qualification. There is no dispute that the court has personal jurisdiction over OW Supply. SwissMarine submits that it is necessary in the interest of justice to make an injunction against O W Supply because:

The parties agreed by the jurisdiction provision of the ISDA Agreement that the English court has exclusive jurisdiction over the subject-matter of the Lyngby action and OW Supply is in breach of the the ISDA Agreement in bringing it; and

The Lyngby action is vexatious or oppressive.

The general principle stated in Rule 38(5) is well-established but, as Ms Bingham submitted, the court exercises caution before restraining a party from pursuing proceedings in a foreign court. By way of further submissions:

Ms Bingham observed that I should not grant an injunction to restrain the Lyngby action if it is within the Brussels Regulation: see the decisions of the European Court of Justice in Turner v Grovit (Case C-159/02), [2005] 1 AC 101 and West Tankers Inc v Alliance SpA (Case C-185/07), [2009] 1 AC 1138.

If it is not disputed or it is clear that foreign proceedings are in breach of the parties’ contract (whether by way of a jurisdiction agreement or an arbitration agreement), there is “no good reason for diffidence” in granting injunctive relief to enforce the promise: see Aggeliki Charis Compania Maritima SA v Pagnan SpA (The “Angelic Grace”), [1991 1 Lloyd’s Rep 87 per Millett LJ, with whom Neill LJ agreed. However, Ms Bingham submitted that Raphael, The Anti-Suit Injunction (2008) at paras 13.31-13.32 correctly describes the position whether it is uncertain whether there is an applicable agreement:

Ms Bingham submitted that the court should be particularly cautious about making an anti-suit injunction where (as here) the respondent is suing in his own court.

Mr Berry did not dispute Ms Bingham’s submissions. I accept her general submission about the caution that the court will exercise before making an order of this kind: Snell’s Equity (23^rd Ed, 2014) para 18-094. I also accept the first two of her further submissions. I am not persuaded of the third: the authority that Ms Bingham cited in support of it (and from which I infer it derived) was the judgment of Parker LJ in Metall und Rohstoff AG v ACLI Metals Ltd, [1984] 1 Lloyd’s Rep 598, 613. However, even if it be supposed that Parker LJ’s observation does not now need to be qualified in light of subsequent jurisprudence, it should be read in full:

I come to the meaning and application of the jurisdiction agreement, and the starting point, of course, must be the wording of the contract. Section 13 of the ISDA Agreement is headed “Governing Law and Jurisdiction”, and it provides (so far as is material) as follows:

Jurisdiction. With respect to any suit, action or proceedings relating to any dispute arising out of or in connection with this Agreement (“Proceedings”), each party irrevocably:-

if this Agreement is expressed to be governed by the laws of the State of New York, to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City;

waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party; and

agrees, to the extent permitted by applicable law, that the bringing of Proceedings in any one or more jurisdictions will not preclude the bringing of Proceedings in any other jurisdiction.

Service of Process. Each party irrevocably appoints the Process Agent, if any, specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any party’s Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. …”.

OW Supply contends that:

The jurisdiction clause does not apply at all to the Lyngby action; and

In any case, the parties did not agree that the English courts should have any relevant exclusive jurisdiction.

Ms Bingham’s first argument was that the Lygnby action is not covered by the jurisdiction agreement because it is not a suit, action or proceedings relating to a dispute arising out of or in connection with the ISDA Agreement or any non-contractual obligations arising out of or in relation to it. She submitted that in it OW Supply is not seeking to have determined any dispute under the ISDA Agreement or about the parties’ rights and obligations under it, and there is no dispute about their contractual rights and obligations. The question for the Lyngby court will be how the Danish insolvency regime applies to them.

Ms Bingham submitted that the position here is therefore not materially different from that considered by the Court of Appeal in AWB (Geneva) SA v North America SS Ltd, [2007] EWCA 739. That case concerned forward freight swap agreements between AWB Geneva SA (“AWB”) and North America Steamships Ltd (“NASL”), a Canadian company. They were made under a 1992 ISDA Master Agreement and evidenced by confirmations. That Master Agreement provided at section 13(b) that “With respect to any suit, action or proceedings relating to this Agreement (“proceedings”), each party irrevocably:- (i) submits to the jurisdiction of the English courts, if this Agreement is governed by English law”. Each of the confirmations provided that “Pursuant to Section 13(b) of the Standard Agreement, this Agreement shall be governed by and construed in accordance with English law and subject to the exclusive jurisdiction of the High Court of Justice in London, England”. NASL filed for bankruptcy in Canada, and the trustee in bankruptcy elected to affirm the swaps on behalf of the estate. He brought proceedings in the Canadian court seeking an order that parties to the swaps might not refuse to perform any obligation or make any payment to NASL as a result of its insolvency of other related matters. AWB sought an injunction in this court, contending that it was no longer obliged to make any payment under the swaps, relying on section 2(a)(iii) (which was in the same terms as in the ISDA Agreement in this case). It said (loc cit at para 25) that “Although the Trustee had made clear that the Canadian court was not being asked to rule on the existing rights and obligations of the parties under the swaps, that court was being asked to create new rights by preventing AWB and Pioneer from relying on existing rights. Any new rights could only be contractual rights. The action of the Trustee in seeking the relief… was therefore to be characterised not as action in respect of insolvency, but as a matter which affected the contract and so was within the jurisdiction clause …”. Thomas LJ (with whom Chadwick and Latham LJJ) rejected that submission (at paras 26 and 27): “Clearly, if the proceedings in Canada were proceedings which related to a dispute under the contract, then that would be characterised as a contractual issue and subject to the exclusive jurisdiction clause which I accept is wide in its scope. … It is, in my view, a matter for the Canadian court to decide on the relief that it is prepared to grant within the scope of those proceedings as it is concerned with issues of insolvency and not with issues that relate to the contractual obligations under the agreement. The application in relation to the exercise of its insolvency jurisdiction is therefore not within the clause”. Thus the test adopted by Thomas LJ was stated variously as whether the Canadian proceedings “related to a dispute under the contract” and whether they related to “contractual obligations under the agreement”. There was some debate during the hearing before me about whether there is any difference between these formulations, and if so which is to be preferred, but I perceive no difference that could be relevant for present purposes.

Ms Bingham submitted that this reasoning applies to the Lyngby action. Therefore I must consider (i) whether the foreign proceedings (respectively the Danish and the Canadian proceedings), and (ii) whether the jurisdiction agreements between the parties in the two cases are materially different. It is convenient to take first the agreements.

The jurisdiction agreements are not identical: Mr Berry did not initially rely on the differences in his submissions, but he did so in reply. There are two reasons that the wording of the agreements for difference: (i) in the NASL case the parties had used the 1992 ISDA Master Agreement, whereas here the agreement was based on the 2002 ISDA form, and (ii) in this case the parties added wording through the schedule. For convenience, I set out the opening words of section 13(b) with the changes made through the schedule underlined. “Jurisdiction. With respect to any suit, action or proceedings relating to any dispute arising out of or in connection with this Agreement or any non-contractual obligations to the extent permitted by applicable law arising out of, or in relation to, this Agreement (“Proceedings”), each party irrevocably:― (i) submits:― …”.

I am not persuaded that the difference between the two standard forms assists SwissMarine. I cannot see how the Lyngby action might relate more closely to a dispute arising out of or in connection with the ISDA Agreement than to the ISDA Agreement itself. As is observed by Firth, Derivatives Law and Practice, para 11.186 fn 4: “Under the 2002 Master Agreement the submission applies to ‘any dispute arising out of or in connection with’ the Agreement, which would cover claims in (for example) tort and restitution as well as for breach of contract. Under the 1992 Agreement, the submission is in respect of proceedings ‘relating to’ the Agreement, although it is unlikely that a different conclusion would apply”.

As for the additional wording in the schedule, Ms Bingham observed that Mr Berry did not refer to it when he opened the case: she drew my attention to it. She might have added that it was also ignored when the jurisdiction agreement was invoked in SwissMarine’s skeleton argument for the application to Warren J. These are only forensic points: they do not impinge on the proper interpretation on the jurisdiction agreement, nor do I accept Ms Bingham’s submission that they should influence whether I exercise my discretion to grant an injunction.

However, I am not persuaded that the additional wording significantly expands the jurisdiction agreement in a way that might help SwissMarine. It simply extends it to cover “non-contractual obligations” (or makes clear that it does so). The wording does not bear on the question whether OW Supply can invoke the protection of Danish insolvency rules, or whether the jurisdiction agreement was intended to prevent this. I cannot accept that the parties evinced an intention in the schedule that OW Supply (or SwissMarine) should abandon the protection of its national insolvency regime. Clearer wording would be required to evince this intention. I add that I see force in Ms Bingham’s submission that it is relevant that Denmark has not implemented Council Regulation 1346/2000 on Insolvency Proceedings, and the parties are, I accept, to be taken to have known this when they made. But in my judgment OW Supply does not need to rely on this point.

Ms Bingham had a broader argument about the factual matrix in which the ISDA Agreement was made: that it informs the interpretation of the jurisdiction agreement more generally, and indicates that the standard jurisdiction wording should not be interpreted in this ISDA Agreement so as to prevent OW Supply from relying on the Danish insolvency regime by bringing proceedings in Denmark. I am not persuaded of that. To my mind, when parties choose to use for a contract a standard wording such as the ISDA Master Agreement form, generally their own circumstances at the time of the contract will not affect the interpretation of the wording. By choosing standard wording, parties usually evince an intention that the wording as incorporated into their contract should be given its usual meaning.

I therefore see no relevant distinction between the two jurisdiction agreements, but Mr Berry submitted that the Lyngby action is materially different from the Canadian proceedings considered in the NASL case. There, as is explained in the first-instance judgment of Field J [2007] EWHC 1167 (esp at paras 15, 18 and 30), the trustee in bankruptcy planned to have a reconstruction under the Canadian Companies Creditors Arrangements Act approved by the majority of creditors and sanctioned by the court, and only then to enforce the swap agreements in proceedings in England: the Canadian proceedings were brought to implement this strategy. In the Lyngby action, as Mr Berry emphasised, the relief sought is an order for payment, which he characterised as an “ordinary civil debt claim”. Ms Bingham, however, submitted that I should look beyond what relief is sought and examine what is to be decided in the Lyngby action and what is its purpose: like the NASL case, it is not about what rights and obligations the parties have under the contract: in both cases the real question is (or was) how the foreign insolvency regime operates on those rights and obligations. I consider that Ms Bingham has a strong argument: I cannot foresee exactly what issues might emerge in the Lyngby action, and can only consider it as presently constituted. As it stands, it seems to me materially similar to the NASL proceedings.

In my judgment, SwissMarine have not shown a sufficient case that the jurisdiction agreement applies to the Lyngby action to justify its submission that it should be granted an anti-suit injunction on the grounds that in bringing and pursuing the action OW Supply is acting in breach of it.

OW Supply has another argument, which confirms this conclusion. If the jurisdiction agreement applies at all to proceedings such as the Lyngby action, does the English court have exclusive jurisdiction in respect of it, and did OW Supply agree not to bring or pursue such proceedings in any other court? As Ms Bingham observed, the jurisdiction agreement does not include a promise to bring all claims to which section 13(b) refers in the English court; nor does it include an express promise not to bring proceedings elsewhere; and section 13(b)(iii) contemplates that, at least in some circumstances, that there might be proceedings in different jurisdictions.

However, section 13(b)(i) does provide that in some circumstances the parties submit to the exclusive jurisdiction of the English court, namely where “the Proceedings do involve a Convention Court”, a court that is bound to apply to them either article 17 of the Brussels Convention or article 17 of the Lugano Convention. Article 17 of the Brussels Convention provides that “If the parties, one or more of whom is domiciled in a Contracting State, have agreed that a court or the courts of a Contracting State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have exclusive jurisdiction”. Article 17 of the Lugano Convention is to similar effect.

It was not immediately obvious to me what the parties had in mind (or are taken to have had in mind) when they agreed to submit to the exclusive jurisdiction in these limited circumstances. The User’s Guide to the ISDA 2002 Master Agreement (2003), published by ISDA, throws light on this, explaining the changes made to the jurisdiction agreement in the ISDA 1992 Master Agreement, which provides:

SwissMarine advanced three arguments in support of its submission that under jurisdiction agreement the English courts have an exclusive jurisdiction such that OW Supply agreed not to bring or pursue the Lyngby action. Mr Berry submitted:

That, these proceedings having been brought, the effect of section 13(b)(i)(1)(B) is that the English courts have exclusive jurisdiction over all disputes arising out of the ISDA Agreement;

That, these proceedings having been brought, the effect of section 13(b)(i)(1)(B) is that the English courts have exclusive jurisdiction over the dispute that is the subject matter of these proceedings; and

That, even if section 13(b)(i)(1)(B) does not apply, nevertheless because OW Supply agreed to submit to the jurisdiction of the English courts, it is a breach of the agreement to bring proceedings elsewhere.

Mr Berry’s submission in support of all three arguments was that the “Proceedings” to which section 13(b)(i)(1) refers are these Proceedings, brought in the English court. I find this difficult to accept: I cannot think how Proceedings before the English court could ever “involve a Convention Court” in any ordinary sense of the word “involve”. It seems to me more natural to suppose that the section refers to “Proceedings” before another court: on this view the use of “involve” is less strained, and might, as Ms Bingham suggested, have been adopted in preference to an expression such as “brought in” to avoid debate about whether and in what order courts have been seised. But I do not reach a concluded view about that.

The simple fact is that, if neither the English courts nor the Danish courts are “Convention Courts” within the meaning of section 13, neither these proceedings nor the Lyngby action have anything to do with a “Convention Court”. On the face of the definition of Convention Court, they are not. However, Mr Berry submitted that the reference in the definition to the 1968 Brussels Convention should be interpreted as referring to, or including a reference to, the Brussels Regulations of 2001 and 2012. He relied on articles 68.2 of both Regulations, which read “In so far as this Regulation replaces the provisions of the Brussels Convention between Member States, any reference to the Convention [or, in the 2012 regulation, that Convention] shall be understood as a reference to this Regulation”. Mr Berry submitted on this basis that:

I therefore reject Mr Berry’s first two arguments. He cited in support of the third the judgment of Males J in BNP Paribas SA v Anchorage Capital Europe LLP, [2013] EWHC 3073 (Comm). The second defendant, Anchorage Capital Group LLC (“Anchorage”) (and other defendants) sought to challenge the jurisdiction of the English court in proceedings brought by BNP Paribas SA (“BNPP”), and BNPP applied for an anti-suit injunction to restrain the second defendant, Anchorage, from pursuing New York proceedings on the basis that they were in breach of this clause (in which “you” referred to Anchorage): “This Agreement shall be governed by, and construed in accordance with, English law and you irrevocably submit to the jurisdiction of the English courts in respect of any matter arising out of this Agreement or our services to or Transactions with you under this Agreement”. There was a dispute about whether this was to be understood to provide for exclusive jurisdiction, but it was common ground that the New York proceedings were in respect of “essentially the same issues” as the English proceedings. Males J said this (loc cit at paras 91 and 92):

I do not think that this reasoning has any application here. First, as I have explained, the issues in the Lyngby action cannot be said on the material before me to be “essentially the same” as those in these proceedings: it appears that the Lyngby action is essentially about the Danish insolvency regime. Secondly, there is no room in the ISDA Agreement to infer that proceedings brought elsewhere are in breach of OW Supply’s agreement to submit to the English courts because they would deprive SwissMarine of a right to litigate in a chosen non-exclusive jurisdiction, or they would render it worthless. The express agreement that the jurisdiction was not exclusive means that the parties have the right to bring proceedings elsewhere, and section 13(b)(iii) means that that right is not lost to one party if the other brings proceedings in the chosen non-exclusive jurisdiction.

I therefore reject the contention that SwissMarine has a sufficiently strong case about breach of the jurisdiction agreement for an anti-suit injunction, and I come to its argument that OW Supply should be prohibited from pursuing the Lyngby action because it is oppressive or vexatious. It cites Dicey, Morris and Collins (cit sup) at para 12-084, who give as examples of foreign proceedings that may be restrained as vexatious or oppressive an action brought “for no good reason in a court which will disregard an express choice of English law” and an action “which interfere[s] with or undermine[s] the control of the English court over its own process”. It says that this is such a case: because Denmark is not party to the Council Regulation 1346/2000 on Insolvency Proceedings, the English courts will not recognise the Danish insolvency regime, and as a matter of English law it does not override the rights and obligations of the parties: see Global Distressed Alpha Fund Partnership v PT Bakrie Investindo, [2011] EWHC 256 (Comm) and Dicey, Morris & Collins (loc cit) which states as rule 217, “Subject to the effect of the Insolvency Regulation, a discharge from any debt or liability under the bankruptcy law of a foreign country outside the United Kingdom is a discharge therefrom in England if, and only if, it is a discharge under the law applicable to the contract". Unless SwissMarine submits to the jurisdiction of the Danish court, and it says that it will not do so, no order of the Danish court will be enforceable as a matter of English law: Rubin v Eurofinance SA , [2012] UKSC 46. This does not mean that OW Supply could not seek to enforce an order in other jurisdictions where SwissMarine has assets, and SwissMarine relies on an article in TradeWinds of 24 April 2015, which states that OW Supply is trying to resolve derivatives claims in Denmark in order to “bypass legal complications in the UK”, quoting Mr Schmidt as saying that “There’s actually some precedent from Lehman Brothers making this difficult in the UK … These contracts are all under the English law, so we’re now trying to bring them in Denmark”.

Thus, SwissMarine contends that:

OW Supply is asking the Danish court to apply Danish law to the parties’ rights and obligations, and to override English law, in particular English law about the validity and effect of section 2(a)(iii) of the ISDA Agreement.

OW Supply is seeking an unfair advantage by obtaining an order from the Danish court, which is unenforceable under English law but which it will seek to enforce elsewhere, notwithstanding the parties’ choice of English law to govern the contract, and thereby it is in breach of agreement as to the governing law.

OW Supply is trying to thwart and undermine these proceedings, which were started first. SwissMarine expresses a fear that OW Supply hopes to obtain a Danish order and to enforce it before it can obtain a declaration in these proceedings.

OW Supply ignores in the Danish proceedings the contention in these proceedings that the ISDA Agreement and the September Transaction are voidable for misrepresentation. SwissMarine submits that it would be unfair and unjust to allow OW Supply to obtain an order from the Danish court and enforce it before the rescission allegation has been decided.

Ms Bingham answered these contentions, and I am not persuaded by them.

First, the evidence of Ms Bigaard is that when it brought the Lyngby action OW Supply supposed that SwissMarine would defend them inter alia on the basis that the plea of rescission is properly before the English court and if it succeeded, therefore the trustees could not succeed in the Lyngby action on their argument about section 58h(2). It was not suggested that I should reject that evidence, and there is no proper reason for doing so.

Secondly, Ms Bingham argued that the Danish court is not being asked to decide any question about the meaning or effect of the contract. There is nothing to suggest that it is. Nor is there any proper basis for rejecting OW Supply’s case that it recognises that these proceedings will continue and that they will determine SwissMarine’s claim in misrepresentation and as to the effect of section 2(a)(iii) of the ISDA agreement: the Lyngby action does not challenge SwissMarine’s right to pursue their claims in these proceedings. Nor does OW Supply intend to enter into a race for judgment between this court and the Danish court.

Further, the Lyngby action, Ms Bingham observed, was not brought in response to these proceedings, but is one of some 25 actions that have been brought to derivative counterparties since the insolvency. This in itself would make me hesitate to grant an injunction: I would wish to have a better understanding of the position in the Danish insolvency than I have been given in order to satisfy myself that an injunction would not result in SwissMarine being given an unwarranted advantage over other creditors (who are not of course before the court) and would not bring about an unjustified inequality in the distribution of assets.

Ms Bingham submits that the Danish trustees in bankruptcy wish the court to rule how the Danish insolvency regime generally, and section 58(h) in particular, would affect the claim against SwissMarine. The Danish court is the natural and appropriate court to determine this, and the Lyngby action is brought for this purpose. The implication of SwissMarine’s application is not that that should be determined in another court, but that it should not be determined anywhere, and moreover that it is vexatious and oppressive for the trustees to seek a determination. To my mind, it is not. While English law does not recognise the Danish insolvency regime, other jurisdictions where SwissMarine has assets might well do so, and I accept that the trustees, who are, as Ms Bigaard explained in her statement, administering one of the largest bankruptcies in Denmark, have a proper interest in resolving the question and are entitled to have it resolved. At least (and this is sufficient to refuse the application), I have no reason to think otherwise.

I should refer more specifically to SwissMarine’s argument that the Court will restrain as vexatious or oppressive foreign proceedings that do not respect a governing law agreement. It cited the judgments of Teare J in Standard Bank plc v Agrinvest International Inc, [2007] EWHC 2595 (Comm) at paras 26 and 27 and of Field J in Transfigura Beheer BV v Kookmin Bank, [2006] EWHC 1921 (Comm). I do not consider that those authorities assist SwissMarine: the purpose of the Lyngby action is not to have decided by a foreign law the proper construction of the contract or the parties’ rights or obligations under it. I do not accept that SwissMarine has shown a sufficient case that OW Supply is breaking or disregarding the governing law agreement, or that it threatens to do so.

I therefore refuse SwissMarine’s application even without reference to the qualification to rule 38(5) in Dicey, Morris & Collins: see para 15 above. I should, however, refer to it. SwissMarine contends that the Lyngby action is not covered by the Brussels Regulation, being excluded by article 2(b) that provides that the Regulation shall not apply to “bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings”. Therefore, it does not cover action which “derive directly from” bankruptcy proceedings and are “closely connected with them”: see Gourdain v Nadler (C-133/78), [1979] ECR 733 at para 4. As I have mentioned, OW Supply pleads in its Danish pleading that the Lyngby action is outside the Regulation, and Mr Berry said that therefore this is “common ground”. Ms Bingham did not dispute this.

However, this does not dispose of the question. It is for the court to decide whether or not the Brussels Regulation applies to the Lyngby proceedings, and, as I understand the jurisprudence of the European Court of Justice, before making an anti-suit injunction, I would have to satisfy myself that it would be consistent with the scheme of the Regulation to do so. The parties’ consensus does not excuse me from examining the position for myself. Mr Berry also suggested that in some way OW Supply might be estopped from disputing before me that the Lyngby action is outside the Regulation, but for similar reasons this does not mean that I need not examine the position.

On the face of it, a Danish court is better able to undertake this inquiry than I would be even if I were assisted by expert evidence about their nature of the action. In fact, I have no such assistance: I simply have the writ of summons. Certainly, if I had accepted SwissMarine’s characterisation of the Lyngby action as an “ordinary civil debt claim”, I would not have been able to conclude that it is outside the Regulation, and for this reason would have refused SwissMarine’s application. It is only because I reject it, and because I accept OW Supply’s submissions about the purpose and true nature of the Lyngby action that I do not think that SwissMarine’s application is answered by Turner v Grovit (cit sup) and the West Tankers case.

But there is a related point: these proceedings are being pursued under the permission granted by Warren J. In the skeleton argument provided to him in support of the application, the position adopted by SwissMarine was that the Lyngby action is within the Regulation: it contended that therefore it was brought in breach of the jurisdiction provision in the ISDA Agreement. The skeleton argument referred to the Gordain case (cit sup) and continued, “It seems clear that the Danish actions do not derive directly from the Danish bankruptcy proceedings and are not connected with them”; and Mr Robins submitted that, “The Danish actions are therefore not within Article 2 of the Brussels Regulation Recast. They are therefore covered by the English exclusive jurisdiction clause”. Thus, SwissMarine was able to contend on the application for permission that “The English court is required by mandatory provisions of the Brussels Regulation Recast to determine” their claims in this action, and that the Danish court was obliged to stay the Lyngby action if it involves the same cause of action as these, or at least it has a right to do so if the two proceedings are “related”, albeit involving different causes of action.

As will be apparent, SwissMarine’s submission is now quite the opposite: it is that the claim in the Lyngby action is “only viable because of article 58” of the Danish Securities Trading etc Act and so because of OW Supply’s insolvency and the bankruptcy proceedings, and that it therefore derives from and is closely connected with them and is within article 2 of the Brussels Regulation. This change of tack has not been sufficiently or sensibly explained by SwissMarine. Indeed, its submissions to Warren J were drawn to my attention only by OW Supply. Therefore, (i) the permission was obtained on a basis that is inconsistent with the arguments that SwissMarine now advances, and (ii) the permission does not cover a claim for an anti-suit injunction. SwissMarine needs permission to amend the proceedings to introduce a claim for injunctive relief and to pursue the proceedings so amended, and it applies to me accordingly. (There is no dispute that, for the reasons explained by HHJ Thornton QC in Joinery Plus Ltd v Laing Ltd, [2003] BPIR 890 at para 105, any court, and not only the Companies Court, can give permission under section 11 of the Insolvency Act, 1986, and that by analogy I can do so under article 20.6 of Schedule 1 to the CBIR.) I decline to exercise my discretion to grant permission in the absence of a fuller and cogent explanation of SwissMarine’s change of position about the nature of the Lyngby action, and why the application to Warren J was presented on a basis that it now disclaims. I do not say that there is no proper explanation, but it has not been provided. For this reason too I would refuse the application for an injunction, as well as the applications for permission to amend and for permission under the schedule to the CBIR.