The Commercial Court has held that a party intervening in proceedings as a “non-cause of action defendant” thereby submitted to the jurisdiction for the purposes of claims falling within the rubric of CPR 20.6: LLC EuroChem North-West 2 v Société Générale S.A. & Ors [2024] EWHC 1084 Comm (Cockerill J)
The proceedings arose out of performance bonds issued in favour of Eurochem by ING Bank N.V. in connection with a project for the design and construction of a fertiliser plant in Russia. The contractor was an Italian company called Tecnimont S.p.A.. Under the terms of an Italian law Facility Agreement between Tecnimont and ING, Tecnimont indemnified ING in respect of any payment to be made by ING to Eurochem under the performance bonds.
When the performance bonds were called by Eurochem, ING declined payment on the basis that Eurochem is ultimately owned or controlled by Andrey Igorevich Melnichenko, a Russian entrepreneur who was designated under Council Regulation (EU) 269/2014 on 9 March 2022. Eurochem denied that it was owned or controlled by any sanctioned individuals.
When Eurochem issued proceedings against ING in the Commercial Court seeking declarations that the bonds were payable, Tecnimont successfully applied to join as a “non-cause of action defendant” to support the bank in arguing that Eurochem was owned or controlled by sanctioned individuals and that payment in the place of performance would be unlawful.
Having been joined under Part 19, Tecnimont participated fully in the main proceedings, serving a defence to the Particulars of Claim and playing an active role at a CMC and at disclosure guidance hearings. However, when by notice under CPR 20.6 ING sought an indemnity from Tecnimont to abide the event that its defence in the main proceedings did not succeed, Tecnimont challenged the jurisdiction. In so doing it pointed to an asymmetric jurisdiction clause in the Facility Agreement which – so it argued - required ING to sue in Italy, and it denied that its admitted submission to the jurisdiction in respect of the main proceedings extended to the claim to be brought by ING under Part 20.6.
The Court noted the different treatment conventionally accorded to foreign claimants and defendants as regards submission to the jurisdiction: defendants submit on a claim by claim basis; claimants electing to sue in England and Wales render themselves amenable to all the incidents of litigating under the CPR, including cross claims permitted by the Part 20 regime. Recognising the absence of direct authority concerning the position of an intervener, but noting the distinction between willing and unwilling litigants fastened on by Rix LJ in Glencore International A.G. v Exter Shipping Ltd [2002] EWCA Civ 528, Cockerill J held that Tecnimont was a “willing” participant. Its active participation amounted to a submission to the jurisdiction for the purpose of closely related Part 20 claims. Having elected to participate in the main proceedings on the basis that its commercial interests demanded as much, Tecnimont could not take the plums without the duff.
Separately, Tecnimont’s challenge on the basis of forum conveniens was bad. Tecnimont did not have the better of the argument that the asymmetric jurisdiction clause on which Tecnimont sought to found that challenge conferred exclusive jurisdiction on the Italian courts and there was no sustainable argument that Italy was clearly or distinctly the forum conveniens.
In all the circumstances Tecnimont’s jurisdiction challenge was rejected and the Part 20 Claim was allowed to proceed.
Camilla Bingham KC acted for the successful Part 20 Claimant, ING Bank N.V., instructed by Clifford Chance LLP. A copy of Cockerill J’s judgment can be found below.
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