Structure of the Spiliada test: two limbs to answer a single question

Two preliminary points need to be made and got out of the way. First, it is usual to deal separately with the cases in which the parties have, and have not, agreed in advance upon the court before which the dispute is to be litigated. The rules of common law applicable to jurisdiction agreements, which are relevant to stays of English proceedings when the agreement is for a foreign court, are examined in Chapter 23.

Second, even if the parties have made an agreement on choice of court for the English courts, or have made a contractual promise that neither will argue that the English court is a forum non conveniens, the defendant may still make, and the court may still entertain, an application for a stay of proceedings. Naturally it will be hard for the applicant/defendant to persuade the court to allow him to obtain a stay by doing the very thing he has promised the claimant not to do,^[1] but it is neither impossible nor inadmissible. In effect, a promise not to challenge or complain about the jurisdiction of the English court is treated as analogous to an exclusive jurisdiction agreement for the English courts.’ As the relief will be granted only in extreme cases, there is probably no difficulty in allowing an application which will rarely be successful; but if, say, events have occurred which allow it to be argued that what has happened falls outside what the parties must have had in mind when they made the agreement, then the application may be made and, in a proper case, a stay may be ordered.

In the absence of any relevant agreement on choice of court, the defendant who wishes the court to stay proceedings commenced against him, is required to show that the interests of justice favour a stay of proceedings. In order to make the plea good, the applicant is required to show that there is an available forum elsewhere that is clearly or distinctly more appropriate than England for the resolution of the dispute between the parties: this is the first limb of the Spiliada test. If the applicant (defendant) succeeds in that task, the burden passes to the respondent (claimant), to show why it would nevertheless be so unjust to prevent him suing in England and to leave him to try his luck overseas, that the English proceedings should not be stayed after all: this is the second limb of the Spiliada test. If the applicant (defendant) does discharge the burden placed upon him at the first stage, the presumption in favour of a stay is a heavy one. The respondent (claimant) should expect to have a hard task to show, at the second stage, that there is still sufficient reason why the case should be heard in England rather than in the forum clearly more appropriate for it.

The test is, at least to begin with, sequential: it has two limbs, taken one after the other, not two questions operating side by side. However, if and when the second stage is reached, and it is necessary to decide whether to allow the case to continue to be heard in England, even though a more appropriate forum is overseas, the fact that the overseas forum is clearly or distinctly more appropriate than England will be a factor which bears on whether, overall, it would be just or unjust to stay the proceedings. With this in mind, while it is correct to analyse the two limbs of the test separately, one must not forget that the ultimate issue, or the overarching question, is whether the interests of justice require a stay of proceedings. This is important, because certain factors, such as the existence of an actual Us alibi pendens, or the possibility that other parties may join or be joined to the litigation at a later date, or the fact that an English judgment would not be recognised as conclusive by a foreign court before which the defendant would need to claim over against a third party, do not fit neatly and tidily within only one but not the other of the limbs of the Spiliada test. It may also be that points of legitimate concern about the quality of adjudication available from the foreign court, which now have more prominence than once they did, do not neatly fit, either. It does not appear worthwhile to seek to force them to do so; it is more realistic to recognise that, although the Spiliada limbs are an excellent starting point, the goal in every case is to identify whether the interests of justice favour a stay. The two limbs of the test in Spiliada help to answer this question, but they do not constrain it. To use another idiom, they are ‘pointers rather than boundary marks’.^[2]

• [1] UBS AG v Omni Holdings AG [2000] 1 WLR 916; Marubeni Hong Kong & South China Ltd v Mongolian Government [2002] 2 All ER (Comm) 873. 2 UBS AG v Omni Holding AG [1999] EWHC 850 (Ch), [2000] 1 WLR 916; General Motors Corp v Royal<£ Sun Alliance Insurance Pic [2007] EWHC 2206 (Comm), [2008] Lloyd’s Rep IR 311. In National Westminster Bank v Utrecht-America Finance Corp [2001] EWCA Civ 658, [2001] 3 All ER 733, it was thought that such an express promise was fatal to an application for a stay; the view of the Court of Appeal in UBS AG v HSH Nordbank AG [2009] EWCA Civ 585, [2009] 2 Lloyd's Rep 272, [100], was probably not quite so pronounced. 3 Standard Chartered Bank (Hong Kong) Ltd v Independent Power Tanzania [2015] EWHC 1640 (Comm), [2015] 2 Lloyd’s Rep 183. 4 The claimant may exceptionally apply to stay his own proceedings pending parallel proceedings in a foreign court if this is what good management of the litigation requires: A-G v Arthur Andersen & Co [1989] ECC 224. If, for example, the claimant issues the claim form merely to save limitation, it may be proper to grant him a stay of the proceedings he has commenced if the natural forum is an overseas court and the application is made immediately after service of the claim form; see also Deaville v Aeroflot Russian International Airlines [1997] 2 Lloyd’s Rep 67; but cf Centro International Handelshank AG v Morgan Grenfell [1997] CLC 870, where the court was notably more sympathetic to the view that if the claimant had commenced proceedings, he was obliged to move them along and allow the defendant actively to defend them; See also Insurance Co of the State of Pennsylvania v Equitas Insurance Ltd [2013] EWHC 3713 (Comm); Asturian Foundation v Alibrahim [2020] EWCA Civ 20, [2020] 1 WLR 1627; Federal Republic of Nigeria v Royal Dutch Shell [2020] EWHC 766 (Comm). The broad question will be one of what justice demands in the individual circumstances of the case. 5 Normally it will be available, because the defendant undertakes to submit to its jurisdiction. But if the court would not have jurisdiction, because there was a jurisdictional impediment which the defendant could not waive, or because the claimant’s action is not admissible in that court, the case is one where there is not an available forum elsewhere; and an application for a stay will be rendered much more difficult. See below, para. 22.23. 6 See Unwired Planet International Ltd v Huawei Technologies (UK) Co Ltd [2020] UKSC 37 (insufficient evidence that Chinese court had jurisdiction to settle the terms of the FRAND licence which was in dispute between the parties).
• [2] The Atlantic Star [1974] AC 436, 468 (Lord Wilberforce, referring to the requirements of a predecessor test). 2 [1987] AC 460, 464-465. 3 As distinct from a discretion: VTB Capital Pic v Nutritek International Corp [2013] UK.SC 5, [2013] 2 AC 337, [156]. 4 Hindocha v Gheewala [2003] UK.PC 77, [24] (Lord Walker). 5 In Cherney v Deripaska [2009] EWCA Civ 849, [2010] 1 All ER 456, [7], the court said that the parties’ money would have been better spent on a trial of the merits: a conclusion which was, in the circumstances of the particular case, more than a little challenging. In AK Investment CISC v Kyrgyz Mobil Tel Ltd [2011] UK.PC 7, [2012] 1 WLR 1804, [7] (a service out case), the complaint was directed at the volume