Francis Joseph Campeau v Gottex Real Asset Fund 1 (OE) Waste SÀRL

This is an application by the Defendant (‘OE Waste’) seeking to set aside service of the Claim Form on it out of the jurisdiction. The basis of the application is that the courts of England and Wales do not have or should not exercise any jurisdiction which they may have over the claim. The Claimant (‘Mr Campeau’) served the present proceedings out of the jurisdiction on OE Waste without permission, relying on CPR r. 6.33(2B). The central question before the court is whether he was entitled to do so.

The dispute arises out of a sale and purchase agreement between OE Waste and Geco Holdco Ltd (‘Geco’) dated 17 April 2019 (‘the SPA’). By the SPA, OE Waste sold the entire issued share capital of Granville Ecopark Holding Company Ltd (‘GEHCL’) to Geco. The initial consideration was £17.7 million plus any deferred consideration to be calculated in accordance with Schedule 11 of the SPA, as well as payment of £30.4 million to enable repayment of various debts. No deferred consideration was in the event paid.

At the time of the SPA, Mr Campeau was a director of GEHCL. He was also head of the investment advisory team of South West Capital Partners LLP, which provided advice to Gottex Fund Management SARL, the investment advisor to the fund which owned OE Waste. OE Waste contends that he was also a de facto director of OE Waste.

Clause 10 of the SPA provided as follows:

‘10.1 Subject to clause 10.2, the liability of the Warrantors under the Transaction Documents shall be subject to the provisions of Schedule 6 (Limitations on Liability).

10.2

Nothing in this clause 10 or in Schedule 6 (Limitations on Liability) shall exclude or limit any liability or remedy in respect of fraud.

10.3

Each of the Warrantors undertakes that it will not (and will procure that none of its Affiliates will) bring any claim or other action (including a claim for contribution under the Civil Liability (Contribution) Act 1978) in respect of negligence or otherwise (a "Warrantor Claim") against any Target Company (or any of their respective directors, officers, employees or agents) in relation to any matter arising (directly or indirectly) out of or in connection with any Transaction Document. To the extent that any such Warrantor Claim exists (if any and without prejudice to the aforesaid), each Warrantor irrevocably and unconditionally waives the right to bring any Warrantor Claim against or recover any sums from any Target Company (or any of their respective directors, officers, employees or agents) in relation to any Warrantor Claim. It is intended that any Target Company (or any of their respective directors, officers, employees or agents) shall be entitled to the benefit of the undertakings, releases and waivers provided for in this clause for the purpose of, inter alia, the Contracts (Rights of Third Parties) Act 1999.’

Pursuant to Clause 1.1 of the SPA, ‘Warrantors’ were defined as including ‘the Seller’, i.e. OE Waste, and ‘Target Company’ was defined as including ‘the Company’, i.e. GEHCL. The term ‘Transaction Documents’ included the SPA.

Clause 17.6 of the SPA provided:

‘Except as expressly provided in this deed, a person who is not a Party to this deed will have no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any terms of, or enjoy any benefit under, this deed.’

Clause 18 of the SPA, which dealt with jurisdiction and governing law, provided as follows:

‘18.1 This deed and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with the laws of England and Wales.

18.2

Each Party irrevocably agrees that the courts of England and Wales will have exclusive jurisdiction to settle any dispute which may arise out of or in connection with this deed (including any dispute relating to any non-contractual obligations arising out of or in connection with this deed) and that accordingly any proceedings arising out of or in connection with this deed (including any proceedings arising out of or in connection with any such non-contractual obligations) shall be brought in such courts.

18.3

Each Party irrevocably submits to the jurisdiction of the courts of England and Wales and waives any right that it may have to object to an action being brought in those courts or to claim that the action has been brought in an inconvenient forum.’

On 27 December 2023, OE Waste commenced proceedings in Luxembourg against, inter alios, Mr Campeau, on the basis that OE Waste had sold GEHCL on terms which did not adequately reflect its value. It is alleged that Mr Campeau, as a de facto director of OE Waste at the time, had acted negligently or otherwise in breach of duty in connection with the negotiation of the SPA, such that GEHCL had been sold at an undervalue. In the Luxembourg proceedings it is alleged that GEHCL was sold for some £44.5 - 80 million less than its value.

A statement of Mr Da Silva, a partner of MOLITOR Avocats, who acts for OE Waste, states that the claims in the Luxembourg proceedings include claims for fraud and/or negligence, and that it is OE Waste’s intention to allege fraud against Mr Campeau.

Mr Campeau received documents exhibited to the Luxembourg Writ in June 2024. On 17 September 2024, Mr Campeau filed a response to the Luxembourg proceedings, contesting the jurisdiction of the Luxembourg courts, and in the alternative contending that the proceedings are a nullity or that OE Waste lacks standing to commence proceedings. For the purposes of the present hearing before this court, Mr Campeau has made it clear that he denies any liability to OE Waste; that he says that he was not a de facto director of OE Waste, and did not participate in the decision to enter into the SPA; that even if he owed any duties to OE Waste, they were not breached; and that the SPA was the culmination of lengthy and difficult arms’ length negotiations between OE Waste and a number of potential buyers, throughout which OE Waste was advised by an investment bank. Mr Campeau’s case is that the claim brought against him in the Luxembourg proceedings is entirely without merit.

Mr Campeau also has what is described, on his behalf, as a ‘more fundamental objection to OE Waste’s claim’, namely that it is brought in breach of clause 10.3 of the SPA. He also contends that, given that any claim against him in respect of the SPA will necessarily create a dispute over the scope of clause 10.3, clause 18.2 requires any such claim to be brought against him in England.

On 11 November 2024, Mr Campeau commenced Part 8 proceedings in this court seeking (1) a declaration that OE Waste has waived any right to bring the claim which it is currently asserting in the Luxembourg proceedings; (2) an injunction requiring OE Waste to discontinue the Luxembourg proceedings against Mr Campeau and prohibiting it from (a) bringing any further claim or other action in respect of negligence or otherwise against him in relation to any matter arising directly or indirectly out of or in connection with the SPA, save insofar as it consists of a claim arising solely out of fraud, and (b) bringing any proceedings arising out of or in connection with the SPA in any court other than the courts of England and Wales; and (3) damages. This claim was served in Luxembourg without permission. This was said to be done in reliance on CPR 6.33(2B)(a). Subsequently, in a witness statement served on 4 February 2025, it was said that Mr Campeau was entitled to, and did, rely on CPR 6.33(2B)(b) as well; and in May 2025 it was indicated that reliance was also placed on CPR 6.33(2B)(c).

OE Waste filed an acknowledgement of service dated 9 December 2024, indicating an intention to contest the jurisdiction of the English courts. On 6 January 2025, OE Waste filed the application challenging the jurisdiction of this court which is currently before me.

To guard against a situation in which this court finds that the service of the Claim Form which has been effected is invalid, on 7 May 2025, Mr Campeau filed notice of an application to extend the validity of the Claim Form, with a view to applying for permission to serve the Claim Form out of the jurisdiction. Mr Campeau has in fact issued an application for retrospective permission to serve out, but that has not been listed at the time of the hearing. OE Waste has confirmed that it is content for the application for an extension of the validity of the Claim Form, if it arises, to be determined as part of the present disposal of its jurisdiction challenge. As I say below, I regard it as unfortunate that this challenge has been heard without at the same time considering the application for permission to serve out.

In order properly to frame the arguments which arise on the present jurisdiction challenge, it is helpful to set out both the provisions of CPR r. 6.33(2B), and the relevant provisions of the Hague Convention referred to in CPR r. 6.33(2B)(a).

Thus, CPR r. 6.33(2B) provides as follows:

‘(2B) The claimant may serve the claim form on a defendant outside the United Kingdom where, for each claim made against the defendant to be served and included in the claim form—

(a)

the court has power to determine that claim under the 2005 Hague Convention and the defendant is a party to an exclusive choice of court agreement conferring jurisdiction on that court within the meaning of Article 3 of the 2005 Hague Convention; 

(b)

a contract contains a term to the effect that the court shall have jurisdiction to determine that claim; or

(c)

the claim is in respect of a contract falling within sub-paragraph (b).’

Article 3 of the 2005 Hague Convention provides:

‘For the purposes of this Convention -

a)

"exclusive choice of court agreement" means an agreement concluded by two or more parties that meets the requirements of paragraph c) and designates, for the purpose of deciding disputes which have arisen or may arise in connection with a particular legal relationship, the courts of one Contracting State or one or more specific courts of one Contracting State to the exclusion of the jurisdiction of any other courts;

b)

a choice of court agreement which designates the courts of one Contracting State or one or more specific courts of one Contracting State shall be deemed to be exclusive unless the parties have expressly provided otherwise;

c)

an exclusive choice of court agreement must be concluded or documented –

i)

in writing; or

ii)

by any other means of communication which renders information accessible so as to be usable for subsequent reference;

d)

an exclusive choice of court agreement that forms part of a contract shall be treated as an agreement independent of the other terms of the contract. The validity of the exclusive choice of court agreement cannot be contested solely on the ground that the contract is not valid.’

The argument for OE Waste is that Mr Campeau was not entitled to serve the Claim Form out of the jurisdiction without permission in reliance on the exclusive jurisdiction provision in clause 18.2 of the SPA. In short, OE Waste’s argument is that Mr Campeau was not a party to the SPA, and there is no other basis, whether pursuant to the Contracts (Rights of Third Parties) Act 1999 (‘the 1999 Act’) or as a matter of construction of the SPA on which Mr Campeau is to be treated as a party to, or permitted to rely on, the exclusive jurisdiction clause in the SPA. Moreover, there is no alternative basis in CPR 6.33(2B)(b) or (c) that would entitle Mr Campeau to serve the Claim Form out of the jurisdiction without permission.

Thus, Mr Legg for OE Waste argued that the ordinary position, in conformity with the general contractual rules as to privity, is that only a contracting party, or one such as an assignee in the place of the contracting party, can enforce an exclusive jurisdiction clause. He suggested that the essential question for the court is whether the 1999 Act provides a basis for Mr Campeau to serve out of the jurisdiction without permission, notwithstanding that he is not a party to the SPA. Mr Legg submitted that it did not, for two reasons.

First, Mr Legg submitted, the 1999 Act intentionally does not address jurisdiction in respect of a foreign defendant, and cannot in principle confer an entitlement on Mr Campeau to serve the Claim Form out because of an English exclusive jurisdiction clause. The 1999 Act was not intended to deal with jurisdiction agreements.

Secondly, there is nothing in the SPA which permits Mr Campeau or any other third party to rely on clause 18.2 of the SPA. Clause 10.3 refers to the 1999 Act, but clause 18.2 does not. Clause 17.6 by contrast expressly makes it clear that third parties may not have any rights to enforce any term unless ‘expressly provided’ by the SPA. The SPA does not expressly provide that Mr Campeau may enforce the exclusive jurisdiction clause, or that that clause applies to clause 10.3. Other similar release of liability clauses have been found not to engage jurisdiction clauses: see The Mahkutai [1996] AC 650. There is no basis to read or construe the SPA as impliedly providing a right to a third party to enforce the exclusive jurisdiction clause.

Mr Legg submits that CPR r. 6.33(2B)(b) is irrelevant, as that provision relates to jurisdiction clauses that do not fall within the Hague Convention, such as asymmetric or hybrid jurisdiction clauses. Any reliance on CPR r. 6.33(2B)(c) is equally misconceived. That sub-rule is there simply to close a perceived lacuna, whereby a party denying the validity of the relevant jurisdiction clause could still serve out.

On behalf of Mr Campeau, Mr Kinman made three principal arguments. In the first place, he submitted that what matters for the purposes of CPR r. 6.33(2B) is not whether Mr Campeau can enforce clause 18.2 of the SPA (although that is one of the issues to be determined as part of his claim here, should it continue). The issue is instead whether, by clause 18.2, OE Waste agreed that disputes between it and Mr Campeau relating to the SPA should be subject to the jurisdiction of the English courts. Those two questions are distinct. If the court were to determine that OE Waste had agreed that disputes between it and Mr Campeau should be subject to the jurisdiction of the English court, that is the end of the jurisdiction question.

Secondly, even if Mr Campeau is wrong to say that clause 18.2, on its own terms, amounts to an agreement by OE Waste that disputes between it and Mr Campeau are to be subject to English jurisdiction, the statutory effect of the 1999 Act is, nevertheless, to apply clause 18.2 to Mr Campeau’s claim.

Thirdly, even if Mr Campeau is obliged to show that he is entitled to enforce clause 18.2 for the purposes of CPR r. 6.33(2B), on a proper construction of the SPA, the rights conferred on him by clause 10.3 include an entitlement to have such rights litigated in England pursuant to clause 18.2.

Finally, and as already mentioned, should it be necessary, Mr Campeau would seek an extension of the validity of the Claim Form in order to afford him an opportunity to effect service out of the jurisdiction with permission.

This last point is one which may, as it seems to me, be of some considerable practical significance. The only point I am concerned with on this application is the jurisdictional question of whether Mr Campeau was entitled to serve the Claim Form out of the jurisdiction without permission.

An application for permission to serve out of the jurisdiction is not before me. I regard this as unfortunate. While I have not heard argument on such an application, there appears, at first sight, to be at least one available gateway for service with permission, namely CPR PD 6B paragraph 3.1(6)(c) (‘a claim is made in respect of a contract where the contract is … governed by the law of England and Wales’). If Mr Campeau is entitled to permission to serve out under that head or another head, that would appear to render the arguments about service without permission largely academic (and might render them entirely so if any permission were made retrospective).

It is convenient to start with the terms of each of the sub-paragraphs of CPR r. 6.33(2B). As Foxton J has correctly said, this provision has something of a convoluted history: JP Morgan International Finance Ltd v Werealize.com Ltd; Karonis v JP Morgan International Finance Ltd (‘Karonis’) [2025] EWHC 1842 (Comm), at [153]. The result of that convoluted history is a rule which, both by its structure and by its terms, lends itself to argument as to its scope.

Rule 6.33(2B)(a) applies where (1) the court has ‘power to determine’ the relevant claims under the 2005 Hague Convention; and (2) ‘the defendant is party to an exclusive choice of court agreement’ relating to that court within the meaning of the 2005 Hague Convention.

As to (1), what claims a court has ‘power to determine’ is, in my understanding, answered by the terms of Article 5 of the Hague Convention, taken with the restrictions and exclusions from the scope of the Convention in Articles 1 and 2 thereof. Article 5(1) provides, in particular, that ‘the court or courts of a Contracting State designated in an exclusive choice of court agreement shall have jurisdiction to decide a dispute to which the agreement applies, unless the agreement is null and void under the law of that State.’ It follows that r. 6.33(2B)(a) can have no application unless the dispute is one which falls within the scope of the choice of court clause.

As to what is entailed by (2), I do not consider that, for the purposes of CPR r. 6.33(2B)(a) it is a necessary requirement that the claimant should be a party to the exclusive choice of court agreement, though of course a party invoking r. 6.33(2B)(a) typically will be. The Convention itself does not require that the parties to the litigation should be parties to the choice of court agreement: see Brand & Herrup The 2005 Hague Convention on Choice of Court Agreements: Commentary and Documents (at p. 46). As to the terms of the sub-rule, these refer to the defendant being a party, not to the claimant, or to both parties, having to be parties to the choice of court agreement.

Rule 6.33(2B)(b) is, on its face, wide, and apt to cover cases within r. 6.33(2B)(a) as well as cases which would not fall within the scope of Article 3 of the Hague Convention. I agree with the limitation which Waksman J put on CPR r. 6.33(2B)(b) in IBM United Kingdom Ltd v LZLABS GmbH [2022] EWHC 2094 (TCC) at [133] that r. 6.33(2B)(b), just as much as r. 6.33(2B)(a), requires that the foreign defendant against whom it is invoked should be a party to the jurisdiction clause in question. No requirement is, however, stated, nor can in my view be read in, that the claimant must necessarily be a party to the contract, though again, of course, it typically will be. What is a requirement is that the contract should contain a term to the effect that the court shall have jurisdiction to determine ‘that claim’, ie each claim in the Claim Form, and thus, for the sub-rule to apply, it is necessary that the claims made are within the scope of the jurisdiction clause.

Rule 6.33(2B)(c) is also, on its face, wide. Its history and purpose have been discussed by Foxton J in QBE Europe SA/NV v Generali Espana de Seguros y Reaseguros [2022] EWHC 2062 (Comm), esp at [22], and in Karonis at [152]-[159]. Of particular note is what Foxton J said in [157]-[159] of Karonis.

I agree with what Foxton J suggests at [159], namely that CPR r. 6.33(2B)(c) is to be read as applying only when the claim is one which falls within the scope of the exclusive jurisdiction clause (albeit that the clause may have application only quasi-contractually). This, in my view, is the effect of the requirement that the claim be in respect of a contract ‘falling within sub-paragraph (b) above’, that is to say, a contract which contains a term to the effect that the English court shall have jurisdiction to determine ‘that claim’. Again, there is no requirement stated that the claimant must be a party to the jurisdiction clause.

Thus, in relation to each of sub-rules (a), (b) and (c) I do not consider that Mr Campeau’s not being a party to the SPA or clause 18.2 thereof necessarily precludes his reliance on that sub-rule; but to rely on any of the sub-rules he must show that the claims he seeks to bring are within the scope of clause 18.2.

I therefore turn to the question of whether Mr Campeau can show that the claims which he wishes to bring fall within the ambit of the jurisdiction clause. The standard to which this must be shown is, in my judgment, that of a good arguable case. This is consistent with what was common ground in IBM United Kingdom v LZLABS, see at [66], and with what was said in Canara Bank v M.C.S. International Ltd [2022] EWHC 2012 (Comm) at [41]-[52]. The test for a good arguable case in this context is the threefold test elucidated in Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10, at [70]-[80]. Where, as here, the issues in relation to the application of r. 6.33(2B) are essentially issues of law or as to the construction of the SPA, and in particular of the jurisdiction clause within it, a party will, in practice, be able to show a good arguable case only if the court considers, on the basis of the material before it, that that party has the better argument in relation to the question of law or construction involved.

As I have said above, Mr Campeau puts forward two main arguments as to why his claims fall within the scope of clause 18.2. The first is that, on a proper construction of that clause, it embraces disputes over the extent of Mr Campeau’s rights under the SPA (and in particular clause 10.3). The second is that this is the effect of the 1999 Act. If under the 1999 Act Mr Campeau must bring his claims subject to clause 18.2, then clause 18.2 is ‘a term to the effect that the court shall have jurisdiction to determine [his] claim’, within the meaning of CPR r. 6.33(2B)(b). I will consider these arguments in turn.

The basic approach to construction of a commercial contract such as the SPA is familiar. It was concisely summarised by Lord Hamblen JSC in Sara & Hossein Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2 at [29], as follows:

‘(1) The contract must be interpreted objectively by asking what a reasonable person, with all the background knowledge which would reasonably have been available to the parties when they entered into the contract, would have understood the language of the contract to mean.

(2)

The court must consider the contract as a whole and, depending on the nature, formality and quality of its drafting, give more or less weight to elements of the wider context in reaching its view as to its objective meaning.

(3)

Interpretation is a unitary exercise which involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its implications and consequences are investigated.’

While those are the general principles of construction, there have been a number of cases which have considered or bear upon the more specific question of whether exclusive jurisdiction (and arbitration) clauses can be said to apply to claims between one of the parties and non-parties. Many of these cases were considered by Foxton J in JP Morgan Securities Plc v VTB Bank PJSC [2025] EWHC 1368 (Comm) at [113] to [127] as part of a somewhat wider discussion of what the judge called ‘Third Party Claim Obligations’, and in Karonis at [76]-[96]. I will not repeat those extensive and painstaking analyses. Of particular relevance here are the references to Credit Suisse First Boston (Europe) Ltd v MLC (Bermuda) Ltd [1999] 1 All ER (Comm) 237; Morgan Stanley & Co International Plc v China Haisheng Juice Holdings Co Ltd [2009] EWHC 2409 (Comm); Team Y & R Holdings Hong Kong Ltd v Ghossoub [2017] EWHC 2401 (Comm); and Clearlake Shipping Pte Ltd v Xiang Du Marine Pte Ltd [2019] EWHC 2284 (Comm).

In addition to the cases referred to by Foxton J, I was referred to two other cases which have considered exclusive jurisdiction clauses in contracts which confer benefits on third parties. The first is the decision of the New South Wales Court of Appeal in Global Partners Fund Ltd v Babcock & Brown Ltd (in liq.) [2010] NSWCA 196. In that case, a general partner (‘GPF’) of a limited partnership sued a predecessor general partner (‘BBMGP’) for breaches of fiduciary duty and duty of care, and also sued other members of BBMGP’s group, including ‘BBL’, ‘BBI’ and ‘BBUS’. The limited partnership agreement (or ‘LPA’) was governed by English law and subject to the exclusive jurisdiction of the English court. It also contained exculpation and indemnity provisions benefiting each of BBMGP, BBL, BBI and BBUS. Only BBMGP was a partner to the LPA; BBL, BBI and BBUS had never been parties. Furthermore, clause 18.15 of the LPA excluded any reliance on the 1999 Act. The question arose as to whether the exclusive jurisdiction clause should be construed as extending to disputes between GPF and BBL, BBI and BBUS. The Court held that, in circumstances in which the dispute would involve the extent to which BBL, BBI and BBUS could rely on the exculpation and indemnity provisions of the LPA, it should. Between [74] and [80] Spigelman CJ said

‘[74] GPF sought to categorise the first three respondents as “non parties”. However, there are non parties and non parties. These respondents are not strangers to the LPA.

…

[78] Notwithstanding the fact that BBL, BBI and BBUS are not parties to the LPA, they cannot be categorised as members of an undifferentiated group of “non parties”. It may well be that cl. 18.11 will not apply to other non parties. However, the respondents in the present case are in a quite distinct category.

[79] In a context where the very contract confers rights on identified non parties, the choice of law and exclusive jurisdiction clauses should be construed as binding the parties with respect to proceedings in which such an indemnity may arise. Furthermore, the principles underlying the conclusion that such a clause should not be narrowly construed … apply, at least, to include claims against non parties who are so closely connected with the implementation of the contract as are BBL, BBI and BBUS.’

The other case is Millen v Karen Millen Fashions Ltd [2016] EWHC 2104 (Ch) (‘Millen’). In that case there were proceedings relating to a contract containing an exclusive jurisdiction clause (clause 21.2), whereby in relation to ‘any legal action or proceedings to enforce this Agreement or arising out of or in connection with this Agreement’ ‘each of the parties’ submitted to the jurisdiction of the English courts. A third party, which was given certain rights under the contract pursuant to the 1999 Act, argued that this provision did not apply to claims which they made pursuant to their rights under the contract. At [349] Richard Meade QC (sitting as a High Court Judge), said:

‘On the defendants’ interpretation, even the original identified third parties would not be bound, and so from the very start of the SPA they, subsidiary participants, would be able to sue anywhere while the original contracting parties would have to sue in England. That would mean that the claimant would be tied to England, while the parties on the other side of the deal, broadly speaking, could sue to enforce cl. 5 [which contained various restrictive covenants] via the original parties, in England, or via identified third parties, anywhere. None of this makes commercial sense in my view.’

Mr Meade QC (as he then was) reached the conclusion that the exclusive jurisdiction clause was binding on the third parties, and that proceedings which they had commenced other than in the courts of England and Wales were a breach of clause 21.2 (paragraph [350]).

What I take from the authorities in this area is the following:

I turn therefore to the process of construction in the present case. There are significant arguments on both sides. On behalf of OE Waste it can, in particular, be said that:

Despite the force of these points, I have reached the conclusion that Mr Campeau’s construction of clause 18.2 is to be preferred.

I should add the following point. As discussed below, I have reached the conclusion that the effect of the 1999 Act was to oblige Mr Campeau to enforce rights under the SPA given to him by the 1999 Act subject to the exclusive jurisdiction provision in clause 18.2. If this is right, then the parties should be taken to have contemplated that the rights conferred on third parties under clause 10.3 would necessarily be subject to the jurisdiction provision. This, to my mind, bolsters a construction of clause 18.2 as applying to disputes arising in relation to such third party rights. On this basis the parties would have contemplated that the third party would necessarily be constrained by the jurisdiction provision, and interpreting clause 18.2 as an agreement, between the parties, that such disputes would be subject to the exclusive jurisdiction of the English courts would cohere with this.

Thus, I have reached the conclusion that there is a good arguable case that the contractual scope of clause 18.2 did extend to a dispute over the extent of a third party’s rights under clause 10.3; and that the parties were agreed between themselves that such a dispute should be subject to the jurisdiction of the English courts. On this basis, the present case is one falling at least within CPR r. 6.33(2B)(b), and also in my view, though it probably does not matter, within CPR r. 6.33(2B)(a) and (c) as well.

Given the above, it is not strictly necessary for me to consider Mr Campeau’s argument as to the statutory effect of the 1999 Act. This is a controversial topic, involving a contested view of Parliament’s intentions in the 1999 Act, and in relation to some aspects of which the English courts have not spoken consistently. I have considered whether it would be better not to express a view on the point and leave it for a case in which it will be decisive, but have concluded that, given that I have heard argument on the point, and given the possibility that I may be wrong on the Contractual Scope issue discussed above, I should state my conclusions in relation to it.

As already indicated, Mr Campeau contends that the effect of the 1999 Act is that, insofar as he is seeking to enforce a right under the SPA pursuant to that Act, he must sue in accordance with the dispute resolution mechanisms of the SPA, ie clause 18.2. Mr Campeau points to the terms of s. 1 of the 1999 Act. Relevantly, it provides:

‘(1) Subject to the provisions of this Act, a person who is not a party to a contract (a “third party”) may in his own right enforce a term of the contract if—

(a)

the contract expressly provides that he may, or

(b)

subject to subsection (2), the term purports to confer a benefit on him.

(2)

Subsection (1)(b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party.

(3)

The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into.

(4)

This section does not confer a right on a third party to enforce a term of a contract otherwise than subject to and in accordance with any other relevant terms of the contract.

(5)

For the purpose of exercising his right to enforce a term of the contract, there shall be available to the third party any remedy that would have been available to him in an action for breach of contract if he had been a party to the contract (and the rules relating to damages, injunctions, specific performance and other relief shall apply accordingly).’

Mr Campeau places reliance on s. 1(4) and (5). He draws attention to the fact that these provisions, unlike s. 1(1)(b), are not subject to contrary agreement by the parties. His submission is that a third party exercising a right under s. 1(1) must sue in accordance with the contract’s dispute resolution provisions, and this is a statutory obligation under s. 1(4). It does not turn on the intention of the parties: see Nisshin Shipping Co Ltd v Cleaves & Company Ltd [2003] EWHC 2602 (Comm) at [42]-[48]. This obligation is demonstrated by Millen. Thus it follows that the SPA ‘contains a term to the effect that the court shall have jurisdiction to determine [his] claim’ within CPR r. 6.33(2B)(b) or at least that his claim is ‘in respect of’ such a contract within CPR r. 6.33(2B)(c).

Further or alternatively, he relies on s. 1(5) of the 1999 Act. He contends that he cannot obtain the same relief as a party to the SPA unless he can sue in the same courts as a party to the SPA, as other jurisdictions will have different rules as to quantification of damages, injunctions, specific performance and other relief.

OE Waste makes four main points in opposition to Mr Campeau’s case on s. 1 of the 1999 Act. It submits that the 1999 Act was not intended to deal with jurisdiction agreements, as the Law Commission Report makes clear. While initially the same was true of arbitration agreements, that was modified, resulting in s. 8 of the 1999 Act, but there was no equivalent provision deeming a third party to be party to a jurisdiction agreement.

Secondly, OE Waste submits that the Explanatory Notes to the 1999 Act emphasise that, pursuant to s. 7(4) of that Act, no attempt was made to change the law as to whether exclusive jurisdiction clauses can be enforced by third party beneficiaries of a contract.

Thirdly, the Act was intended to confer only benefits on third parties, and not, as a general matter, to subject them to burdens. The result of this is that ordinarily a third party would not be deemed a party to the exclusive jurisdiction clause.

Fourthly, the one theoretical exception is pursuant to s. 1(4) of the 1999 Act where a contract makes clear that any benefit to be conferred on a third party is subject to a conditional burden on the third party to comply with the exclusive jurisdiction clause. That would require clear expression to avoid the usual principles of privity and to avoid imposing a burden on a third party.

After the hearing of the application in this case, I asked the parties for submissions on the recently-decided case of Karonis. As a result of this, OE Waste relied on what Foxton J had said at [64] of that authority. Mr Campeau, by contrast, submitted that what was said by Foxton J in that paragraph contained an error of law, and that this was contributed to by the fact that Millen does not appear to have been cited.

I have reached the conclusion that Mr Campeau’s arguments on this point are correct. My reasons follow.

It was common ground that the 1999 Act was a partial implementation of the Law Commission’s report Privity of Contract: Contracts for the Benefit of Third Parties (No. 242). In that report, the Law Commission said (at paragraph 14.15), that:

“Ultimately our recommendation is that arbitration agreements and jurisdiction agreements should fall outside our proposed reforms because such agreements cannot operate satisfactorily unless any entitlement of the third party to enforce the arbitration agreement carries with it a duty on the third party to submit to arbitration (or to comply with the jurisdiction agreement). Yet our reform is concerned only with the conferring of rights and benefits on third parties and not with the imposition of duties and burdens. In our view, a third party should in general only be bound by an arbitration or jurisdiction agreement if it has agreed to be so bound in which case it becomes a true contracting party to the agreement and is no longer a third party to it.”

At paragraph 14.19, the Report said:

‘We therefore recommend that:

(52)

a third party shall have no rights of enforceability under our proposed reform in respect of an arbitration agreement or a jurisdiction agreement. (Draft Bill, clause 6(2)(d) and (e)’.

Clause 6(2)(d) and (e) of the appended Draft Bill was in these terms:

‘(2) Section 1 above confers no rights on a third party in the case of –

…

(d)

an agreement to submit to arbitration present or future disputes; or

(e)

an agreement as to the court, or courts, which are to have jurisdiction to settle present or future disputes or are not to have such jurisdiction.’

It is also to be noted that that draft Bill contained no equivalent of what is s. 1(4) of the 1999 Act. Nor, of course, did it contain what is now s. 8 of the 1999 Act.

In enacting the 1999 Act, Parliament removed clause 6(2)(d) and (e) of the draft Bill, and inserted ss. 1(4) and 8. Some indication of Parliament’s intention in making these changes may be derived from the debate in the House of Lords (which both parties put before me, and which is referred to in the well-researched footnotes to Raphael, The Anti-Suit Injunction (2^nd ed), [10.11]). Thus:

It is, I think, fair to say, as Mr Kinman on behalf of Mr Campeau does, that, despite the reference to arbitration clauses in the penultimate sentence, no distinction in principle was being drawn between arbitration and jurisdiction clauses; and what the Lord Chancellor said tends to indicate that the change in policy was being made in relation to both.

As I have said, the resulting changes from the draft Bill included both ss. 1(4) and 8. The relevant question as to whether a claim by a third party pursuant to the Act is subject to a jurisdiction (or arbitration) clause in the contract is whether that clause is a ‘relevant term of the contract’ for the purposes of s. 1(4). I consider that, if they are wide enough on their terms to apply to a dispute between the parties to the contract as to the term relevant to the third party’s claim, then a jurisdiction or arbitration clause generally will be a ‘relevant term’ of the contract. Thus, although the statement in Nisshin Shipping, at [36], that s. 1(4) had been in the Law Commission’s draft Bill was wrong, Colman J was, I consider, right in relation to the legislation as enacted to speak (at [42]) of ‘the underlying policy of the 1999 Act expressed in s. 1(4)’ as being that the third party ‘is confined to the means of enforcement provided by the contract to the promisee’. In that case that method of enforcement was arbitration, but what Colman J was saying appears applicable to a jurisdiction clause, if that had been the means of enforcement provided.

OE Waste relies on the fact that there is no equivalent of s. 8 of the 1999 Act in relation to jurisdiction agreements and argues that that shows that it was not intended that third parties should be able to enforce jurisdiction clauses under the 1999 Act. I agree with Mr Kinman, however, that that does not properly reflect the role of s. 8, as it was included in the 1999 Act. As the Explanatory Notes to the 1999 Act explained (para. 33), s. 8 ‘ensures that, where appropriate, the provisions of the Arbitration Act 1996 apply in relation to third party rights under this Act’ and that ‘without this section, the main provisions of the Arbitration Act 1996 would not apply because a third party is not a party to the arbitration agreement between the promisor and the promisee.’ The Notes further explain that these provisions are to apply in two situations: (a) where the third party’s substantive right is conferred subject to disputes being referred to arbitration (‘… (see section 1(4)’)), which is based on the ’conditional benefit’ approach; and (b) where the third party is given a right to arbitrate under s. 1 of the 1999 Act but the ‘conditional benefit’ approach is not applicable. I agree with Mr Kinman that there was no need for the equivalent of s. 8 in relation to jurisdiction clauses, because there is no equivalent in that context of the Arbitration Act 1996, which makes provision on the basis of who are ‘parties’ to the arbitration agreement.

In this regard, Millen is of significance and appears to me to support Mr Kinman’s case on s. 8. There the judge, in addressing an argument that third parties, identified as having certain benefits under the contract, were in breach of an exclusive jurisdiction clause by suing elsewhere to enforce the contract said, at [333]-[342]:

I further accept Mr Kinman’s submission that, in order for a third party to be subject to an exclusive jurisdiction clause in the contract if it wishes to enforce a right under the contract pursuant to the 1999 Act, it is not necessary that the parties to the contract should have, between themselves, mutually intended that the third party should sue and be sued only in the contractually agreed forum. At [43] of Nisshin, Colman J said:

‘[43] Much weight was placed by Mr Ashcroft on the proposition that whether the third party must proceed, by arbitration depends on the mutual intention of the parties to the arbitration agreement as to the availability of that agreement to a third party for enforcement of his rights. I accept Miss Hopkins’s submission that this proposition is true only to the limited extent that it is necessary that the scope of the arbitration agreement is wide enough to cover a dispute between the promisor and the promisee as to the performance of the substantive term. For the reasons which I have given, whether they did or did not express a mutual intention that that the third party should be entitled to avail himself of the arbitration agreement for the purpose of enforcing his rights under the substantive term in relation to which the 1999 Act has transferred to him a right of action is not relevant.’

I agree with that analysis, and consider that it is equally applicable in relation to jurisdiction clauses.

While the applicability of the jurisdiction / arbitration clause to the third party’s claim does not depend on that having been the intention of the parties to the contract, it does depend, as I have already said, on the jurisdiction / arbitration clause being a ‘relevant’ clause for the purposes of s. 1(4). In the present case, I consider that clause 18.2 is a ‘relevant’ clause. Thus: (a) clause 10.3 specifically confers rights on Mr Campeau (and others), and specifies that it is intended to create rights under the 1999 Act; (b) there is no mention in the SPA of any other jurisdiction where such rights should be enforced; (c) the only jurisdiction clause is one in favour of the courts of England and Wales; (d) the only legal provisions mentioned in relation to the rights of third parties under the SPA are English legal provisions, viz. the 1999 Act and the Civil Liability (Contribution) Act 1978; and (e) the terms of the jurisdiction provision are wide enough to encompass a dispute between the promisor and promisee as to rights under clause 10.3.

An answer to the foregoing analysis put forward by OE Waste is that the third parties must be entitled to rely on any rights provided for by clause 10.3 without condition as to jurisdiction, in that they should be able to raise clause 10.3 in any jurisdiction in which it is relevant. This, OE Waste says, is just what Mr Campeau has done in the proceedings in Luxembourg. I do not consider this to be a good answer to Mr Campeau’s case here. In my view, the third party is subject to the condition of having to adhere to the exclusive jurisdiction clause in relation to any proceedings it brings to enforce its rights under clause 10.3, while being able to deploy clause 10.3 as an answer to proceedings brought against it in proceedings elsewhere. This may be analysed as that the condition imposed by the SPA on the third party as to the exclusive jurisdiction of the English courts is implicitly restricted and not applicable to a case in which the third party needs to defend itself in proceedings brought elsewhere. A somewhat different way of analysing it is that all disputes in relation to clause 10.3 should be brought in the exclusive jurisdiction provided for, but that, if a party sues a third party elsewhere, it has waived what otherwise would have been its right to insist on issues relating to clause 10.3 being litigated in the exclusive jurisdiction provided for in clause 18.2.

I do not regard any stage of the approach outlined above to be contrary to the decision of the Court of Appeal in Fortress Value Recovery Fund I LLC v Blue Skye Special Opportunities Fund LP [2013] EWCA Civ 367. In that case it appears to have been accepted on all sides that if the third parties to the contract wished to bring proceedings to enforce the rights given to them under the partnership deed, they had to do so in arbitration, and if they brought court proceedings, those proceedings could be stayed. This was certainly the case in relation to an enforcement of the indemnity provision, but it appears that it would also have been the case in relation to other claims initiated by the third parties (perhaps for an injunction or for a declaration) whereby they sought to rely on the exclusion of liability contained in the partnership deed. (See in particular at [50] per Toulson LJ, ‘… an action against the partnership to enforce their rights [under clauses 7.2 and 7.14]…’, which is not confined to a claim for an indemnity). No doubt was expressed about the decision in Nisshin, which, on the contrary, was referred to with approval, including Colman J’s reference to the ‘underlying policy of the 1999 Act…’ in paragraph [42] of Nisshin, quoted above: see at [24] per Tomlinson LJ. This is sufficient, in my view, to show that my preferred analysis, above, is not inconsistent with Fortress.

The contentious issue in Fortress was whether any assertion of the defence provided by the exclusion clause in the partnership deed, even by way of defence, was subject to the arbitration agreement. The main difficulty with this was that, if right, it would mean that the third party, by s. 8(1) of the 1999 Act was deemed to be party to the arbitration agreement, with the result that arbitrators would have jurisdiction to determine the issue of whether the defence was available, even if the third party did not wish to participate in the arbitration and wished to be sued elsewhere (see paragraph [29] per Tomlinson LJ). These considerations led to a construction of the partnership deed in that case whereby the right of the third party to assert the defence based on the exclusion clause was found not to be subject to the arbitration clause (see paragraph [36] per Tomlinson LJ). Particular issues, accordingly, arose in that case because of the fact that what was involved was an arbitration clause, and because of the terms of s. 8 of the Arbitration Act; and in any event, the decision was one of construction of the deed with which the Court of Appeal was faced.

Similarly, Hurley Palmer Flatt Ltd v Barclays Bank plc [2014] EWHC 3042 (TCC) deals with a materially different situation. There, the question was whether a third party given rights under the 1999 Act could be determined by adjudication under an express term contained in the agreement between the original contracting parties. It was held, as a matter of construction, that a right to adjudicate was not conferred on the third party (at [21]-[23]). Further, because adjudication is a voluntary method of dispute resolution – in the sense that one party to a contract may, but is not obliged to, have a dispute temporarily resolved pending a final determination by the courts or, if applicable, arbitration – it is not the type of conditional benefit envisaged by s. 1(4) of the 1999 Act (at [24]-[30]). Those considerations in relation to the terms of the contract there in issue, and as to adjudication, do not apply to the present case.

I should also say that I do not consider that OE Waste’s reliance on s. 7(4) of the 1999 Act, or the Explanatory Notes relating to that subsection, assists it. That subsection ensures that references in the 1999 Act to the position ‘if the third party had been a party to the contract’ are not to be interpreted as meaning that the third party is to be treated as a party to the contract for the purposes of any other enactment.

OE Waste’s argument is that it is significant that the Explanatory Notes (para. 32) indicate that subsection 7(4) is not intended to have any bearing on the interpretation of Article 17 of the Brussels Convention; and that the ‘question of whether a third party given a procedural right to enforce a jurisdiction agreement under [s. 1 of the 1999 Act] falls within Article 17, or whether a third party with a substantive right under [s. 1], subject to a jurisdiction clause, is “bound” by that clause under Article 17 ... is a matter for the European Court of Justice’. OE Waste submits that this shows that the legislature intentionally left open the question of extra-territorial personal jurisdiction over third parties.

As is submitted on behalf of Mr Campeau, however, what that Explanatory Note emphasises is that the UK was not purporting to alter the effect of the Brussels Convention by the 1999 Act. Given that Mr Campeau is not relying on the Brussels Convention or its successor regulations, the question of whether he could have done does not arise. What I consider to be more notable is that Explanatory Note 32 contemplates that a third party claimant enforcing rights under the 1999 Act may, as a matter of domestic law, be obliged and entitled to litigate in accordance with a jurisdiction clause in the contract.

Finally, I have considered paragraphs [64]-[65] of Karonis. It is not clear to what extent the arguments put before me were put before Foxton J. In particular, and importantly, it is not apparent that Millen was cited to Foxton J. I consider that I should follow Millen unless I am persuaded that it is wrong. I am not so persuaded.

On the basis of the foregoing I consider that an assertion of the rights of third parties such as Mr Campeau to enforce clause 10.3 of the SPA pursuant to the 1999 Act was conditioned by the jurisdiction clause, such that a claim by such a third party asserting such rights should be brought subject to that clause. The assertion of a defence based on clause 10.3 in proceedings brought against Mr Campeau elsewhere would not be so subject.

For these reasons, I would hold that there is a good arguable case that, by reason of the provisions of s. 1 of the 1999 Act, coupled with clauses 10.3 and 18.2 of the SPA, Mr Campeau was obliged to bring any action seeking to enforce his rights under clause 10.3 in accordance with the exclusive jurisdiction provision in clause 18.2; and that, in consequence, the SPA ‘contains a term to the effect that the court shall have jurisdiction’ to determine Mr Campeau’s claims in these proceedings, for the purposes of CPR r. 6.33(2B)(b), or at least that Mr Campeau’s claims are ‘in respect of’ such a contract, for the purposes of CPR r. 6.33(2B)(c).

In the foregoing, I have not considered Mr Campeau’s alternative argument based on s. 1(5) of the 1999 Act. It is not necessary to say more about it and I prefer not to do so.

In light of my decisions on the first two points relied on by Mr Campeau, and because it appears to me to be an issue which will properly arise only in the course of the proceedings, I do not consider it necessary or appropriate to address the question of whether Mr Campeau is entitled to enforce clause 18.2 by way of injunction.

Finally, although, given my decisions above, it is not necessary, I will grant an extension of the validity of the Claim Form to permit Mr Campeau, if so advised, to seek permission to serve the Claim Form out of the jurisdiction and for retrospective validation of the service effected should such service be permitted. No cogent argument was advanced as to why this would not be appropriate.

For the reasons given above, I will dismiss OE Waste’s application.