Securities battle to be fought in England

Posted: 16th October 2013

SkyscraperIn a case that illustrates the jurisdictional difficulties that so often arise in disputes involving companies with a global presence; the High Court has asserted its exclusive right to resolve a contractual disagreement between a French bank and a hedge fund that has its principal place of business in New York.

The dispute concerned alleged contracts – said to have been concluded by a handful of instant message communications - by which high yield distressed securities with a face value of $95 million were traded. The defendants to the action were four members of an investment management group (the hedge fund) who were based variously in London, New York and Luxembourg.

The issues between the parties encompassed wide-ranging disagreements as to whether valid contracts had been concluded and, if so, when, on what terms and between which parties. The bank argued that the contracts had been finalised in England and were subject to exclusive English jurisdiction clauses. The hedge fund was equally insistent that English law did not apply and that the dispute should be determined in New York, or possibly Luxembourg.

Both sides had ‘left no stone unturned’ in their attempts to convince the Court that the issues between them should be resolved in the jurisdiction which each considered would most favour their case but the Court preferred the bank’s arguments on the evidence and found that it had exclusive jurisdiction over all parties, including the three overseas defendants.

The hedge fund’s challenge to English jurisdiction was dismissed and the Court also issued an anti-suit injunction, requiring termination of parallel proceedings which the hedge fund had commenced in New York and which raised essentially the same issues as those arising in the English proceedings.