Case No: HQ13X03092
Neutral Citation Number: [2013] EWHC 2994 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 08/10/2013

Before:

THE HONOURABLE MR JUSTICE STUART-SMITH
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Between:

	Cuccolini S.R.L	Claimant	
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	Elcan Industries Inc.	Defendant	

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Robert Howe QC and Tom Cleaver (instructed by Mishcon De Reya) for the Claimant
Alexander Milner (instructed by Osborne Clarke) for the Defendant 

Hearing dates: 25 September 2013 
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Judgment
Mr Justice Stuart-Smith: 
Introduction
1.	This is an application by the Defendant [“Elcan”], which is a New York company, for an order setting aside the service of proceedings on forum non-conveniens grounds and for a declaration that the English courts should not exercise any jurisdiction over Elcan in these proceedings.
Factual Background
2.	The Claimant [“Cuccolini”] is an Italian company that manufactures vibrating screening machines.  On 10 June 2010 Cuccolini entered into an agreement [“the Agreement”] with Elcan which appointed Elcan to be the sole distributor of Cuccolini’s machines in the United States and to be a non-exclusive distributor in Canada.  The Agreement imposed a number of obligations upon Elcan, including that it should use its best commercial endeavours to promote the distribution and sale of the machines.  Clause 14.2 provided for termination by either party if the other party repeatedly breached any of the terms of the Agreement “in such a manner as to reasonably justify the opinion that its conduct is inconsistent with it having the intention or ability to give effect to the terms of this Agreement.” 
3.	Clause 28 is central to this application and provided as follows:
 
  “28	GOVERNING LAW AND JURISDICTION

28.1 This Agreement and any dispute or claim arising out of it or in    connection with it or its subject matter shall be governed by and construed in accordance with the laws of England and Wales.

28.2 The parties irrevocably agree that the courts of the England and Wales shall have the necessary jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter.

28.3 The parties shall nonetheless retain the right within their discretion to institute proceedings in any court having jurisdiction or, upon the written agreement of the parties, to resolve any disputes in accordance with alternative dispute resolutions such as mediation or arbitration.”

4.	On 5 June 2013, Cuccolini’s solicitors wrote to Elcan terminating the Agreement in accordance with Clause 14.2, relying upon multiple allegations of breach of the Agreement.  On 10 June 2013 Cuccolini issued these proceedings, which allege multiple and repeated breaches of the Agreement by Elcan, and promptly applied for permission to serve the claim form on Elcan outside the jurisdiction pursuant to CPR 6.36, 6.37 and Practice Direction 6B, paragraphs 3.1(6)(c) and (d).  The application was supported by a witness statement from Ms Hill, Cuccolini’s solicitor, which identified Clause 28 of the Agreement as the foundation for the application and outlined the nature of the claim.  She expressed the Claimant’s view (which cannot be seriously doubted) that the claim raised serious issues to be tried and submitted that the English courts are clearly and distinctly the most suitable forum.
5.	On 11 June 2013, Master Roberts made the order granting permission that is now challenged by Elcan.
6.	Before the English proceedings had been served on it in the United States, Elcan issued proceedings in the United States District Court for the Southern District of New York.  Those proceedings allege a conspiracy between Cuccolini and two other parties (who are based in Virginia), namely Peters Equipment Company LLC [“Peters”], and Mr Robert Ramsey, an officer of Peters.  The nature of the conspiracy is alleged to be that Cuccolini conspired with Peters and Mr Ramsay to remove Elcan and to replace it with Peters as Cuccolini’s distributor.
7.	Elcan’s solicitors filed an acknowledgement of service on 8 July 2013 and issued the present application on 29 July 2013.  The application is supported by witness statements from Mr Hayward (Elcan’s English solicitor) and Mr Samberg (its US attorney).  Cuccolini resists the application and has filed a witness statement from Ms Hill in support of its opposition.
The Issues
8.	 The parties have, by their evidence and submissions, raised the following issues:
i)	Does the Court have a discretion to stay the proceedings?
ii)	If the Court has a discretion to stay the proceedings, has Elcan satisfied the requirements to persuade the Court to do so?
iii)	Did Cuccolini give full and frank disclosure to Master Roberts and, if not, should his order be set aside and jurisdiction declined for that reason?
9.	In her witness statement opposing the application, Ms Hill raised a further issue, namely whether Elcan had submitted to the jurisdiction by requesting an extension of time for filing a Defence.  However, it is clear that there is a dispute of fact in relation to that issue which the Court cannot resolve on this application.  That issue is therefore not for determination now.
Summary
10.	For Elcan to succeed in its application, it needs to succeed on one or other of issues 2 and 3.  The parties indicated that they did not request the Court to decide Issue 1 if it became unnecessary to do so. 
11.	For the reasons set out below, Elcan fails on Issues 2 and 3 and therefore fails in its application.  I therefore record the opposing submissions on Issue 1 in brief outline, but do not decide it.
Issue 1: Does the Court have a Discretion to Stay the Proceedings?
12.	As a threshold objection to Elcan’s application, Cuccolini submits that the Court has no discretion to stay proceedings.  It does so by parity of reasoning with the decision of the European Court of Justice in Case C-281/02 Owusu v Jackson [2005] ECR I-1383.  
13.	The present case is subject to Article 23 of Council Regulation (EC) No. 44/2001 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters, which provides that:
“If the parties, one or more of whom is domiciled in a Member State, have agreed that a court or the courts of a Member 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 jurisdiction.”
14.	Owusu was a decision on Article 2 of the Brussels Convention, which provides:
“Subject to the provisions of this Convention, persons domiciled in a contracting state shall, whatever their nationality, be sued in the courts of that state.”
15.	In Owusu the ECJ held that the doctrine of forum non conveniens was inapplicable in a case to which Article 2 applied on the basis that it would undermine the predictability of the rules of jurisdiction laid down by the Brussels convention and thereby undermine the principle of legal certainty, which is the basis of the Convention.  Cuccolini submits that, by parity of reasoning, the doctrine of forum non conveniens is inapplicable in cases such as the present to which Article 23 applies; and it relies upon decisions and dicta in the English courts, including an observation by Lord Collins of Mapesbury in UBS AG v HSH Nordbank [2009] EWCA Civ 585, that the “prevailing view” is that there is no scope for the application of the doctrine to remove a case from a court which has jurisdiction under the Regulation.
16.	Elcan submits that, even if the reasoning in Owusu is applicable in a case involving an exclusive or non-exclusive jurisdiction clause, it is inapplicable where, as here, there are parallel proceedings pending in the courts of a non-Member State.  In support of its submission it relies upon the first instance decision in JKN v JCN [2011] 1 FLR 826 where the Court concluded that it was neither necessary nor desirable to extend the reasoning in Owusu to such a case.
17.	Because I find against Elcan on Issues 2 and 3, it is not necessary to decide Issue 1 and I neither do so nor express any views on it.
Issue 2: If the Court Has a Discretion to Stay the Proceedings, Has Elcan Satisfied the Requirements to Persuade the Court to Do So?
The Applicable Principles
18.	This issue proceeds on the assumption that the Court has a discretion to stay the proceedings.  Subject to two glosses, Elcan accepts that the applicable principles are accurately set out in the judgment of Gloster J in Amtec International Ltd v Biosafety USA Inc [2006] EWHC 47 (Comm) at [7], a case involving a non-exclusive jurisdiction clause:
“i) The fact that the parties have freely negotiated a contract providing for the non-exclusive jurisdiction of the English courts and English law, creates a strong prima facie case that the English jurisdiction is the correct one. In such circumstances it is appropriate to approach the matter as though the claimant has founded jurisdiction here as of right, even though the clause is non-exclusive […]
ii) Although, in the exercise of its discretion, the court is entitled to have regard to all the circumstances of the case, the general rule is that the parties will be held to their contractual choice of English jurisdiction unless there are overwhelming, or at least very strong, reasons for departing from this rule […]
iii) Such overwhelming or very strong reasons do not include factors of convenience that were foreseeable at the time that the contract was entered into (save in exceptional circumstances involving the interests of justice); and it is not appropriate to embark upon a standard Spiliada balancing exercise. The defendant has to point to some factor which it could not have foreseen at the time the contract was concluded. Even if there is an unforeseeable factor or a party can point to some other reason which, in the interests of justice, points to another forum, this does not automatically lead to the conclusion that the court should exercise its discretion to release a party from its contractual bargain […] In particular, the fact that the defendant has, or is about, to institute proceedings in another jurisdiction, not contemplated by the non-exclusive jurisdiction clause, is not a strong or compelling reason to relieve a party from his bargain, notwithstanding the undesirability of parallel proceedings. Otherwise a party to a non-exclusive jurisdiction clause could avoid its agreement at will by commencing proceedings in another jurisdiction […]”
19.	The two glosses proposed by Elcan are that:
i)	In the first sentence of (i), Gloster J should not have said that the fact that the parties had freely negotiated a contract providing for the non-exclusive jurisdiction of the English courts and English law created a strong prima facie case that the English jurisdiction is the correct one, but should merely have said that it created a strong prima facie case that the English jurisdiction is a correct one;
ii)	Gloster J went too far in the first sentence of (ii) in referring to overwhelming, or at least very strong, reasons for departing from the rule, and should instead have said that there needed to be strong reasons for departing from it.
20.	I note in passing that the words “overwhelming”, “very strong” and “strong” are all elastic and incapable of precise definition, although Elcan’s submission is plainly to the effect that “overwhelming” and “very strong” set the bar too high.  Gloster J’s use of the term “overwhelming” can be traced back to an illuminating passage in the judgment of Moore-Bick J in Mercury Communications Ltd v Communication Telesystems International [1999] 2 All ER (Comm) 33 where, considering the application of a non-exclusive jurisdiction clause, the Judge emphasised the importance of the parties’ agreement to give the English courts jurisdiction as follows:
“Although a non-exclusive English jurisdiction clause leaves the parties free to bring proceedings elsewhere without thereby committing any breach of contract, it has generally been regarded as a powerful factor in favour of allowing proceedings brought in this country to continue. There are, it seems to me, two reasons why that should be so. In the first place, as Mr. Berry submitted, a clause of that kind involves a contract by each party to submit to the jurisdiction of the English courts if the other chooses to bring proceedings in this country. Although neither party binds itself to bring any action here, each of them does agree to submit to the jurisdiction if an action is brought against it. Secondly, as part and parcel of agreeing to submit to the jurisdiction each party must be taken to have recognised that this country would be an appropriate forum for the trial of the action. In British Aerospace Plc v Dee Howard Co Waller J. recognised both of these factors. The contract before him in that case contained on its true construction an exclusive jurisdiction clause in favour of the courts of this country, but he also considered what the position would be if the jurisdiction clause were non-exclusive. Having considered the decisions of Hobhouse J. in S & W Berisford Plc v New Hampshire Insurance Co. [1990] 1 Lloyd's Rep.454 and Hirst J. in The Standard Steamship Owners' Protection and Indemnity Association v Gann [1992] 2 Lloyd's Rep. 528 he said (page 375 col.1): 

“It seems to me on the language of the clause that I am considering here, it simply should not be open to DHC to start arguing about the relative merits of fighting an action in London, where the factors relied on would have been eminently foreseeable at the time that they entered into the contract. Furthermore, to rely before the English Court on the factor that they have commenced proceedings in Texas and therefore that there will be two sets of proceedings unless the English Court stops the English action should as I see it simply be impermissible, at least where jurisdiction in those proceedings has been immediately challenged. If the clause means what I suggest it means they are not entitled to resist the English jurisdiction if an action is commenced in England, it is DHC who have brought upon themselves the risk of two sets of proceedings if as is likely to happen BAe commence proceedings in England. Surely they must point to some factor which they could not have foreseen on which they can rely for displaying the bargain which they made i.e. that they would not object to the jurisdiction of the English Court.

Adopting that approach it seems to me that the inconvenience for witnesses, the location of documents, the timing of a trial and all such like matters are aspects which they are simply precluded from raising. Furthermore, commencing an action in Texas, albeit that may not be a breach of the clause, cannot give them a factor on which they can rely, unless of course the action has continued without protest from BAe.”

As Waller J. subsequently made clear, he considered that the inclusion in the contract of a non-exclusive jurisdiction clause made it appropriate to approach the issue of forum conveniens as if the plaintiff had founded jurisdiction here as of right (see page 376 col.2). To that extent his comments relate directly to the position in the present case. 

In principle I would respectfully agree with that approach. Although I think that the court is entitled to have regard to all the circumstances of the case, particular weight should in my view attach to the fact that the defendant has freely agreed as part of his bargain to submit to the jurisdiction. In principle he should be held to that bargain unless there are overwhelming reasons to the contrary. I would not go so far as to say that the court will never grant a stay unless circumstances have arisen which could not have been foreseen at the time the contract was made, but the cases in which it will do so are likely to be rare.”
21.	Later in the Judgment, Moore-Bick J considered the impact of concurrent proceedings in California:
“If CTS is to obtain a stay of these proceedings, therefore, it can only be on the grounds that there are concurrent proceedings in California in which the same issues will be litigated. Mr. Ivory submitted that that is a powerful factor of itself and one which is “neutral” in the sense that CTS cannot be criticised for having begun proceedings there. However, there would be more force in the argument if CTS had not expressly agreed to submit to the jurisdiction of the courts of this country. As Waller J. pointed out in British Aerospace v Dee Howard Co, it is the defendant, in this case CTS, who has brought upon itself the risk of two sets of proceedings since it must have been aware when it started its own action that Mercury might well bring proceedings here to recover the amounts which it alleged still to be outstanding. If the court were generally to stay proceedings here simply on the grounds that the defendant had already commenced proceedings in another jurisdiction, it would effectively deny the plaintiff the benefit of the defendant's submission to the jurisdiction and encourage other parties who have had second thoughts about their contracts to rush to begin proceedings in another forum. The proceedings in California are still in their early stages and Mercury has not acquiesced in their continuation. The fact that its challenge to the jurisdiction has now been heard and dismissed does not seem to me to take the matter any further since whenever this application was heard the court would have had to take account of the possibility that the proceedings there would continue. In the circumstances of the present case I do not think that the existence of those proceedings provides sufficient grounds for staying this action.”
22.	Without limiting or paraphrasing these statements of principle, I note three points.  First, while recognising that both “overwhelming” and “very strong” are elastic terms, I respectfully agree with and adopt Gloster J’s use of those words in formulating the test that Elcan must satisfy.  Second, I respectfully agree with and adopt Moore-Bick J’s clear explanation why “particular weight should … attach to the fact that the defendant has freely agreed as part of his bargain to submit to the jurisdiction”, which justifies the principled conclusion that he should be held to his bargain unless there are overwhelming reasons to the contrary.  Third, I respectfully agree with and adopt the observations of Waller J and Moore-Bick J about the weight to be attached to the existence of proceedings brought in another jurisdiction.  For the reasons they gave it seems to me that, where a party has freely agreed that the English Courts shall have jurisdiction, the fact that there are proceedings in another jurisdiction should of itself be afforded little weight since that state of affairs must have been within the reasonable contemplation of the contracting parties when they entered into their agreement, particularly where the agreement was that the English courts should have non-exclusive jurisdiction.
23.	The difficulties facing a party that requests the English courts to decline jurisdiction are increased where, as here, the parties have chosen England as a neutral forum with which neither is connected.  In Bas Capital Funding Corp v Medfinco Ltd [2004] 1 Lloyd's Rep 652, Lawrence Collins J said at [192]:
“I am satisfied that it would require very strong grounds to override a choice of English jurisdiction, and that the normal forum conveniens factors have little or no role to play, especially where it could be inferred from the lack of other connections with England that the parties had chosen the English forum as a neutral forum.”
24.	Elcan submitted that, when considering the relative appropriateness of competing fora, the precise terms of the relevant jurisdiction clause should be considered.  That may be right in theory – and Cuccolini points to the inclusion of the word “irrevocably” in Clause 28.2; but in practice there seems to be little difference between an agreement such as the present which expressly recognises the right of the parties to bring proceedings in other courts having jurisdiction and an agreement which merely vests the English courts with non-exclusive jurisdiction.  In either event, the possibility of proceedings in other jurisdictions must have been in the parties’ reasonable contemplation when making their agreement, and they have vested the English courts with jurisdiction in that knowledge and contemplation.
25.	Elcan also submitted that the courts will more readily grant a stay where the interests of third parties are involved, or where claims are made outside the scope of the jurisdiction clause.  In support of this proposition it relied upon Donohue v Armco [2002] 1 Lloyd’s Rep 425, where Lord Bingham said at [27]:
“The authorities show that the English court may well decline to grant an injunction or a stay, as the case may be, where the interests of parties other than the parties bound by the exclusive jurisdiction clause are involved or grounds of claim not the subject of the clause are part of the relevant dispute so that there is a risk of parallel proceedings and inconsistent decisions. These decisions are instructive. In Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349 there was a tripartite dispute but only two of the parties were bound by a clause conferring exclusive jurisdiction on the court in Barcelona. Kerr J at first instance was impressed by the undesirability of there being two actions, one in London and the other in Barcelona (pp. 363–364). The Court of Appeal took a similar view (pp. 377, 385). Sachs LJ thought separate trials particularly inappropriate where a conspiracy claim was in issue (p. 377). In Aratra Potato Co Ltd v Egyptian Navigation Co (‘The El Amria’) [1981] 2 Ll Rep 119 the primary dispute was between cargo interests and the owner of the vessel, both parties being bound by a clause in the bill of lading conferring exclusive jurisdiction on the courts of Egypt. But the cargo interests had also issued proceedings against the Mersey Docks and Harbour Co, which was not bound by the clause. The Court of Appeal upheld the judge's decision refusing a stay. In the course of his leading judgment in the Court of Appeal Brandon LJ said (at p. 128): 
‘I agree entirely with the judge's view on that matter, but would go rather further than he did in the passage from his judgment quoted above. By that I mean that I do not regard it merely as convenient that the two actions, in which many of the same issues fall to be determined, should be tried together; rather that I regard it as a potential disaster from a legal point of view if they were not, because of the risk inherent in separate trials, one in Egypt and the other in England, that the same issues might be determined differently in the two countries. See as to this Halifax Overseas Freighters Ltd v Rasno Export (“The Pine Hill”) [1958] 2 Ll Rep 146 and Taunton-Collins v Cromie [1964] 1 WLR 633.’
Citi-March Ltd v Neptune Orient Lines Ltd [1996] 1 WLR 1367 also involved third party interests and raised the possibility of inconsistent decisions. Colman J regarded separate trials in England and Singapore as not only inconvenient but also a potential source of injustice and made an order intended to achieve a composite trial in London despite a Singaporean exclusive jurisdiction clause: see at pp 1375–1376. Mahavir Minerals Ltd v Cho Yang Shipping Co Ltd (The M C Pearl) [1997] CLC 794 again involved third parties and raised the possibility of inconsistent findings. Despite a clause conferring exclusive jurisdiction on the courts of Seoul, Rix J refused to stay proceedings in England. He regarded the case as on all fours with Citi-March (see p. 805) and at p. 798 observed: 
‘It seems to me that so far the plaintiffs have shown strong cause why the jurisdiction clause should not be enforced. This is indeed a paradigm case for the concentration of all the relevant parties' disputes in a single jurisdiction. If in such a case a host of different jurisdiction clauses were to be observed, the casualty at the root of the action would become virtually untriable. The action would fragment and reduplicate, at vast cost … ’
A similar approach is discernible in Ultisol Transport Contractors Ltd v Bouygues Offshore SA (‘The Bos 400’) [1998] CLC 1526, in which the disputes involved four parties only two of whom were bound by an English exclusive jurisdiction clause. Although the effect of the clause was described by Evans LJ as ‘near-conclusive’ (para. 29), an injunction to restrain proceedings in South Africa was refused. In para. 27 of his judgment Evans LJ said: 
‘In my judgment, two questions arise, one a matter of principle. First, should the court, when deciding whether or not to enforce the exclusive jurisdiction clause by means of an injunction which prevents Bouygues from continuing with its proceedings against Ultisol in South Africa, take into account the effects of such an injunction on persons who are not parties or entitled to enforce the contract containing the jurisdiction clause, Portnet and Caspian here, but who are both necessary and proper parties to the litigation wherever it is held? In my judgment, the clear answer to this question is “yes”. Clarke J did so in his judgment and the contrary has not been argued before us. The relevance of the potential effects on third parties has been recognised in other authorities … ’
Sir John Knox also held that proceedings should be allowed to continue in South Africa because, among other reasons (see p. 1537), 
‘this is the only way in which to minimise, if not avoid altogether, the risk of inconsistent decisions in different jurisdictions.’”
26.	Donohue was a case in which the Claimants were seeking an anti-suit injunction to prevent the Defendants from suing Mr Donohue in any forum other than England, relying upon the fact of an exclusive jurisdiction clause in favour of the English courts which, if effective, affected some but not all of the potential parties to a wide-ranging and complex multi-national dispute.  Proceedings had already been instituted in New York which were neither vexatious nor oppressive.  
27.	Elcan submits that the principles identified by Lord Bingham are equally applicable to cases such as the present where a party is seeking to rely upon an agreed jurisdiction clause to prevent the stay of English proceedings.  In support of that submission it refers to a dictum of Thomas J in Akai v People’s Insurance  [1998] 1 Lloyd’s Rep 90, 104 that “where proceedings are brought in breach of a jurisdiction clause, the test for the grant of an anti-suit injunction is the same test as that applied where a stay of English proceedings is sought”.  However, it is to be noted that Thomas J qualified his observations by saying that:
“To a considerable extent the principles to be applied in an application in the context of a jurisdiction clause in a contract between the parties are the same whether a court is considering an application for a stay or an application for an anti-suit injunction; the principles generally differ only where the different nature of the relief sought renders a particular principle inapplicable to the form of relief.”  [Emphasis added]
More fundamentally, his statement is inconsistent with the clear statement by Lord Bingham at [24] of Donohue that:
“I am mindful that the principles governing the grant of injunctions and stays are not the same [as those governing the grant of anti-suit injunctions]… . Considerations of comity arise in the one case but not in the other.”
28.	Considerations of comity provide a potent reason why the principles that are applicable to anti-suit injunctions should differ from those applying to an application to stay proceedings brought in this jurisdiction in accordance with a jurisdiction clause that has been agreed to by the parties to those proceedings.  Where the issue is whether to restrain the proceedings that have been brought here in accordance with a jurisdiction clause, it seems to me to be much more important that the parties will have had in reasonable contemplation that proceedings may be brought elsewhere and that such proceedings may involve other parties.  That being so, it is not clear why the involvement of other parties in the foreign proceedings should be a powerful consideration for the court considering whether to stay the English proceedings, since it is a readily foreseeable consequence of the non-exclusive jurisdiction Agreement to which the parties freely committed themselves.  While that agreement carries with it the potentially undesirable side effects of multiplicity of proceedings and inconsistent outcomes, that is a direct and contractually acceptable consequence of the parties’ agreement and is not, in my view, necessarily a powerful argument in favour of a stay.
Application of the principles to the facts of the present case
29.	Recognising that it cannot rely upon the mere fact of the New York proceedings as sufficient grounds for the granting of a stay, Elcan relies upon the fact that “the overall dispute involves not only Elcan and Cuccolini, but also two additional parties in the form of Peters and Mr Ramsay.”  It submits that their involvement cannot reasonably have been foreseen because “Elcan and Cuccolini cannot sensibly be taken to have foreseen, at the time of making the Agreement, that the other party might dishonestly conspire with third parties so as to deprive the other party of the benefit of the agreement, and certainly not to have accepted that any claims arising out of such a conspiracy would be most appropriately determined in England.”  In oral submissions, Elcan reformulated the submission to be that the parties cannot have had such disputes in their reasonable contemplation at the time of making the contract.  
30.	In my judgment, Elcan is applying the wrong test when referring to what the parties actually foresaw or had in contemplation at the time of making the agreement.  The correct test involves asking what was foreseeable, not what was actually foreseen.  Once the correct test is applied, Elcan’s submission is unsustainable.  Although it is doubtless true that, at the moment when the contract was concluded, neither party was thinking about the disputes that followed or might follow, it cannot be said that they (or the fact that they would involve third parties) were unforeseeable.  What is unforeseeable has to be looked at in the context of the factual background.  Here an Italian company and a New York company were entering into an agreement for distribution of the Italian company’s products in the US.  The contract made provision for termination on various grounds.  It was obvious that, if the contract was terminated, disputes might arise.  It was also obvious that one of the reasons that might underlie the manufacturer’s decision to terminate might be that it wished to substitute another distributor in place of the old one, and that it may wish to put the new distributor in place promptly so as to protect and maintain its sales efforts in the territories.  Therefore, on a disputed and acrimonious termination, it was obvious that disputes may arise about the conduct of the manufacturer and new distributor both before and after termination.  In such disputes, allegations that the third party has behaved improperly or illegally and that it has acted with the connivance of the manufacturer are commonplace, whether the allegations be well founded or not.  This is not mere hypothetical reasoning but is a situation that is familiar to the courts, as the facts of Evans-Marshall v Bertola [1973] 1 WLR 349 – a decision relied upon by Elcan for other purposes – show. There, on the purported appointment of a new distributor of the first defendant’s sherry, the plaintiffs claimed damages against the first and second defendant (who had not been parties to the distribution agreement) for conspiracy and against the second defendant for interference with the contracts made by the plaintiff. There is nothing unusual about such disputes.
31.	It follows that it was foreseeable that an acrimonious termination might lead to disputes involving third parties and the making of allegations of conspiracy of the type that are now made by Elcan in the New York proceedings against Cuccolini, Peters and Mr Ramsay.  I reject the submission that any greater level of specificity was required in what was foreseeable as being quite unrealistic; but I am satisfied that the facts alleged against Cuccolini, Peters and Mr Ramsay fall within the limits of what was foreseeable at the time of the conclusion of the contract.
32.	Even if Elcan had shown that the actual dispute involving these third parties was unforeseeable, I would not accept that it amounted to a very strong or overwhelming reason sufficient to justify a stay of these proceedings.  As I have outlined above, I consider that when considering an application for a stay, the fact of foreign proceedings involving third parties is considerably less potent than it may be in the context of an application for an anti-suit injunction.  Elcan has singularly failed, in my judgment, to identify any characteristics of the broader dispute that provides sufficient reason to set aside the Master’s order or to decline jurisdiction. 
33.	Elcan submits that it would be unjust to require it to bring its claims against Cuccolini by way of counterclaim in the English proceedings while simultaneously pursuing identical claims in the USA against Peters and Mr Ramsay.  The short answer to this submission is that Elcan is not forced to do any such thing.  It is by its own choice that it has brought the New York proceedings; furthermore it has not demonstrated that involving the third parties in the English proceedings is unfeasible or will give rise to unfairness.  In this regard, a number of points arise:  
i)	First, the parties have agreed by Clause 28(1) that the Agreement and any dispute or claim arising out of “or in connection with it or its subject matter” shall be governed by and construed in accordance with the laws of England and Wales and by Clause 28(2) have irrevocably conferred jurisdiction upon the courts of England and Wales to settle any such dispute.  It is therefore difficult to see how it can be unjust for the Courts of England and Wales to exercise jurisdiction in relation to the claims directly arising under the contract and the broader claims involving the third parties, all of which arise in connection with its subject matter;
ii)	As Elcan realistically accepted, the requirements for joining the third parties in the English litigation appear readily to be satisfied;
iii)	Even if Peters and Mr Ramsay were to ignore the English proceedings and then to resist enforcement, which is not to be assumed as certain, that is a consequence of the agreement that the parties freely concluded;
iv)	While obtaining the assistance of the US courts in support of the English litigation may be cumbersome, that too is a consequence of the parties’ agreement;
v)	Difficulties in relation to compulsion and the conduct of the litigation in England may be seen as the price (which was evidently considered to be acceptable when concluding the Agreement) to be paid by the parties for the advantages of England’s provision of a neutral forum.
34.	For these reasons, and adopting the principles that I have outlined above, I reject Elcan’s submission that it has shown sufficient grounds to persuade the court to exercise its discretion to order a stay of these proceedings.
Issue 3: Material Non-Disclosure
35.	By its written submissions Elcan submits that Cuccolini should have disclosed to the Master on making its application for permission to serve out of the jurisdiction that it was issuing the proceedings in haste, that the reason for that haste was that it contemplated that proceedings might be brought by Elcan in another jurisdiction, and that the jurisdiction of the English Court might therefore be challenged.  When asked during oral submissions precisely what information should have been provided to the master but was not, Elcan’s formulation was: “These proceedings are being issued when they are and for declaratory relief only because we anticipate that proceedings may be brought in another jurisdiction and we perceive that it will be advantageous to us in the event that those proceedings are issued for us to have issued here first.”
36.	One obvious quirk embedded in this submission is that the parties are agreed that the fact that Cuccolini issued in England before Elcan issued elsewhere is irrelevant to the Court’s consideration of forum non conveniens arguments.  Elcan is therefore submitting that Cuccolini should have disclosed facts that were irrelevant to the Master’s decision whether or not to grant permission to serve out of the jurisdiction.
The Applicable Principles
37.	It is common ground that an applicant for permission to serve out of the jurisdiction has to make full and fair disclosure of facts material to the application.  However, it is also well established that the requirements of the duty of full disclosure depend on the context.  The principles were summarised by Lawrence Collins J in Konamaneni v Rolls Royce Industrial Power (India) Ltd [2002] 1 WLR 1269 at [180 – 181]:
“On an application without notice the duty of the applicant is to make a full and fair disclosure of all the material facts, i e those which it is material (in the objective sense) for the judge to know in dealing with the application as made... But an applicant does not have a duty to disclose points against him which have not been raised by the other side and in respect of which there is no reason to anticipate that the other side would raise such points if it were present.
... it has been held that it would not be reasonable to expect an applicant for permission to serve out to anticipate all the arguments or points which might be raised against his case... A failure to refer to arguments on the merits which the defendant might raise at trial should not generally be characterised as a “failure to make full and fair disclosure”, unless they are of such weight that their omission may mislead the court in exercising its jurisdiction under the rule and its discretion whether or not to grant permission...”
	He then adopted with approval the dictum of Kerr J in BP Exploration v Hunt [1976] 3 All ER 879, at 894:
“the court should not consider the supporting affidavit as though it were marking an examination paper, deciding one way or the other merely on the basis of the extent to which the affidavit could have been improved. The primary question should be whether in all the circumstances the effect of the affidavit is such as to mislead the court in any material respect concerning its jurisdiction and the discretion under the rule.”
38.	More recently, in MRG (Japan) Limited v Engelhard Metals Japan Limited [2003] EWHC 3418 (Comm), Toulson J said at paragraphs [25-26]:
“Materiality therefore depends in every case on the nature of the application and the matters relevant to be known by the judge when hearing it. I was referred to a number of statements on the duty of disclosure in the context of applications for freezing injunctions. In such cases the court is being asked to make an order of an exceptional kind, prohibiting or restricting a defendant's use of its own assets before any adjudication has been made against it. Because of its draconian nature, it is a jurisdiction which requires great caution and a wide range of factors may have a bearing on the court's decision.
An application for permission to serve out of the jurisdiction is of a very different nature. The general principles about disclosure on without notice applications still apply, but the context is different. The focus of the inquiry is on whether the court should assume jurisdiction over a dispute. The court needs to be satisfied that there is a dispute properly to be heard (i.e. that there is a serious issue to be tried); that there is a good arguable case that the court has jurisdiction to hear it; and that England is clearly the appropriate forum. Beyond that, the court is not concerned with the merits of the case.”
39.	I respectfully accept and endorse these as statements of the correct principles to be applied.  What the statements make clear is that facts will only be regarded as material to an application if the effect of their omission is such as to mislead the court in a respect that is material to the application being considered.  The passage at [26] of MRG is a timely reminder of the limited scope of the Court’s inquiry when considering whether to permit service out of the jurisdiction.  It follows that facts will only be regarded as objectively material to that inquiry if they go to the questions on which the Court needs to be satisfied.
40.	Elcan placed reliance upon a passage from the decision of Lawrence Collins J in Ophthalmic Innovations International (UK) Ltd v. Ophthalmic Innovations International (Inc) [2004] EWHC 2948 (Ch).  The judge said at [45]:
“The existence of overlapping proceedings in a foreign jurisdiction between the same or related parties (whether pending or prospective) is likely to be a particularly relevant matter which in normal circumstances must be disclosed, and the non-disclosure of which may well of itself lead to the order for permission being set aside.” [Emphasis added by Elcan]
41.	This observation was made in the context of a case where the Claimant had been pursuing substantive proceedings against the defendant for over a year in California, which it misleadingly referred to as “preliminary proceedings” when successfully applying without notice for permission to serve out of the jurisdiction.  The reference to “pending or prospective” is instructive and limits the scope of the observation: pending means that the proceedings are on foot, while prospective must be limited to those that are in prospect, with the implication that the prospect of their being brought has been intimated.  Lawrence Collins J was therefore not including within his observation an obligation to refer to the possibility that proceedings might be brought in another jurisdiction simply because of the existence of a dispute between the parties which the other party might or might not wish to litigate abroad.  More to the point for present purposes, Lawrence Collins J did not purport to say that pending or prospective proceedings would always be a material fact to be disclosed: he went no further than saying that they were “likely to be a particularly relevant matter” which in normal circumstances should be disclosed, and the non-disclosure of which may well of itself lead to the order for permission being set aside.  Whether or not they would be material in a given case must be fact sensitive and to be determined in accordance with the principles that I have set out above.
Application of the principles to the facts of the present case
42.	Elcan’s submission is unsustainable for the following reasons:
i)	If it had been Cuccolini’s perception that issuing the English proceedings before proceedings were issued elsewhere would gain it an advantage in the context of a forum non conveniens dispute, that perception would have been mistaken.  Accordingly, it could not have influenced the Master’s decision whether to give permission to serve out and was immaterial;
ii)	The fact that the proceedings were being issued “for declaratory relief only” did not mean that the proceedings were insubstantial, vexatious or improper.  A declaratory judgment would have the effect of establishing that Cuccolini’s termination of the Agreement was lawful and would therefore dispose of Elcan’s arguments that it was unlawful because of the existence of a conspiracy.  It would be enforceable in the United Kingdom and in Cuccolini’s home country, Italy; and Elcan confirmed that it does not submit that it would be unenforceable in New York.  These are substantial benefits to be derived from the litigation.  Nor can it be said that the proceedings are vexatious or improper when Elcan does not dispute the validity of Clause 28 or that it provides a proper basis for an application for permission to serve out of the jurisdiction;
iii)	The mere fact that Cuccolini may have contemplated that proceedings might be brought by Elcan in another jurisdiction does not mean that there were “pending or prospective” proceedings within the meaning of Lawrence Collins J’s observation in the Ophthalmic case and, even if it did, does not render that fact material.  Foreign proceedings may always be contemplated in a case founded on a non-exclusive jurisdiction clause but that does not of itself render the possibility material.  Ms Hill referred expressly to the jurisdiction clause in her witness statement in support and exhibited the Agreement: she therefore made full disclosure of the basis upon which jurisdiction was founded.
43.	In his witness statement in support of Elcan’s application, Mr Hayward identified other matters which he said should have been disclosed.  They were not pursued at the hearing and Elcan confirmed that it did not rely upon them.  In my judgment, that concession was correctly made and I do not refer to the other matters further.
44.	For these reasons, Elcan’s submissions on issue 3 fail.
Conclusion
45.	Elcan fails in its challenge to the Master’s decision to grant permission to serve out of the jurisdiction and its application that the Court should decline jurisdiction in these proceedings.