Key Facts
- •Afghanistan International Bank (AIB), domiciled in Afghanistan, and Yes Bank Ltd (Yes Bank), domiciled in India, are involved in a dispute over counter-guarantees.
- •The counter-guarantees, totaling over USD 14 million, were issued by Yes Bank to secure a contract between DABS (Afghan electricity company) and KEC (Indian company).
- •KEC obtained ex parte injunctions in the Bombay High Court, restraining AIB and Yes Bank from enforcing the guarantees.
- •AIB brought a Part 8 claim in the English High Court seeking declarations regarding its entitlement to payment under the counter-guarantees and the exclusive jurisdiction of the English courts.
- •The English High Court heard a summary judgment application, effectively treating it as a final hearing.
Legal Principles
Jurisdiction clauses in contracts can be exclusive even without explicitly using the word "exclusive."
Compania Sud Americana de Vapores SA v Hin-Pro International Logistics Ltd [2015] EWCA Civ 401 and AIG Europe SA v John Wood Group Plc [2021] EWHC 2567 (Comm)
The court's discretion to grant declaratory relief is not significantly impacted by the lack of an active contestation from the defendant if the claimant's position is well-founded and utility exists.
Rolls Royce PLC v Unite the Union [2009] EWCA Civ 387
The principle of comity between courts should be considered when granting declaratory relief which might assist foreign court proceedings.
Judge's reasoning
In Part 8 proceedings, the court determines what declaratory relief, if any, should be granted.
Agreed list of common ground and issues
Outcomes
The English High Court granted a declaration that the English courts have exclusive jurisdiction to determine all questions of fact and law concerning the counter-guarantees between AIB and Yes Bank.
The court found that the language of the counter-guarantees, providing that they "shall be subject to the jurisdiction of the courts of England", implied exclusive jurisdiction, relying on precedent and finding no basis for the defendant's hesitancy to concede this point.
The court dismissed AIB's broader claims for declarations.
These declarations sought to address issues not in dispute between the parties. The court was unwilling to grant declarations which did not reflect a judicial determination of a dispute.
There was no order as to costs.
The court balanced the fact that the defendant could have reasonably conceded the point decided in favour of AIB earlier, and the claimant took the risk and incurred significant costs by pursuing more expansive relief than ultimately granted.