July 14, 2021
Sharif Shivji QC and Zara McGlone successfully represented the Defendant, MBS, in defending an application for summary judgment and applying for a stay of the proceedings in the BVI in favour of the courts of Hong Kong on the grounds of forum non conveniens.
The proceedings concerned a claim for payment under an equity derivative executed pursuant to the ISDA Master Agreement, where the underlying equity stake arose out of mining interests on the Turkish-Syrian border.
The summary judgment application was dismissed on the basis that (a) the Claimant’s standing was in dispute in circumstances where a previous company had been the party to the agreement and there was uncertainty about whether that company’s interest in the agreement had in fact been transferred to the Claimant in compliance with the strict rules about transfer in the ISDA Master Agreement; and (b) there was a serious dispute over the Claimant’s purported service of notice of termination of the agreement. The Defendant raised numerous other defences, but the judge found that it was not appropriate for him to determine those in the light of his other findings.
The forum challenge succeeded on the basis that Hong Kong was clearly and distinctly the more appropriate forum. In particular, Hong Kong law was chosen by the parties as the governing law of the agreement; Hong Kong was likely to be a more convenient location for the likely witnesses (even if they gave evidence remotely), all of whom would be based in Asia and Australasia by the time of trial; and the contract had a connection with Hong Kong, since that was where it was hoped that money for the venture would be raised from investors, and the company office had its address at the Lippo Centre in Hong Kong. The judge found that the case had no connection with the BVI beyond it being the place of the company’s incorporation (which was a factor which should be given modest weight).
This judgment illustrates a) the numerous technical pitfalls which arise out of the ISDA Master Agreement regime, and b) that notwithstanding the defendant’s incorporation in the jurisdiction, the practicalities of trial can mean that another jurisdiction is clearly and distinctly the more appropriate forum.
