CC1197/05    2005     L      NO. 2V

IN THE HIGH COURT OF SIERRA LEONE LEONE

MINING COMPANY                                                                         - PLAINTIFF

VS.

EURO AFRICAN IMPORT AND EXPORT COMPANY                 - 1st DEFENDANT

HENRY MOSES KAMARA                                                              - 2nd DEFENDANT

ROWLAND WRIGHT FOR THE PLAINTIFF

ABDUL FRANKLYN SERRY KAMAL FOR THE DEFENDANT

RULING DELIVERED THIS 8TH DAY OF MARCH 2007.

D. B. EDWARDS J .This is an application by MOTION dated 17th DAY OF OCTOBER .2006 for an order that these proceedings now pending in the High Court of Sierra Leone be stayed on the grounds that the proper forum for bringing this action is in Spain and that it will be just and equitable that the proceedings be commenced in Spain.

The application was supported by the Affidavits of Moses Henry Kamara sworn to on the 17th day of October 2006 and 20th day of October 2006 respectively together with the exhibits referred thereto to wit exhibits MHK1 -MHK3 and MHK4 respectively and the affidavit of Abdul Franklyn Serry Kamal Swom to on the 24th day of October 2006 .

The Plaintiff opposed the application on several grounds but did not file an affidavit in opposition.

The facts of the case up to this application are that the Plaintiff had issued a writ of summons intituled CC 1197/05 L. NO 21 dated 24th November 2005 against the 1st and second defendants claiming inter alia payment of debt due and owing to the plaintiff in the sum of Eur343, 455.00;interest thereon at 10% per annum; damages for breach of contract. A conditional appearance was entered and thereafter erstwhile counsel for the defendant made an application contesting the jurisdiction to try the matter in Sierra Leone when there was a clause stating that the matter ought to be tried by arbitration before any dispute could be brought to court. The application was unsuccessful before the erstwhile Judge of blessed memory .Thereafter the defendants changed solicitor who has since the

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17th of October made this application for stay of proceedings .To date and quite regularly no defence has been filed .

The contention of the defendants is that while the High Court of Sierra Leone has jurisdiction to try this case there exists a more convenient forum for the adjudication of this matter inconsequence of which the proceedings already commenced ought to be stayed hence their application for stay of proceedings in the High Court of Sierra Leone.

This matter concerns exclusive jurisdiction clauses and the inference which courts in this jurisdiction are to make of same. In particular under what circumstances it may or may not apply. Sierra Leone case law clearly provides for the striking down of exclusive jurisdiction clauses where the circumstances of the case so warrant proceedings being instituted in this jurisdiction. This follows from the common law where you cannot make an agreement ousting the jurisdiction of our courts . In the case of THE FEHMARN (1957) 2 LLOYDS REPORT 551AT P 555 PER LORD DENING

"Then, the next question is whether the action ought to be stayed because of th provision in the bill of lading that all disputes are to be judged by the Russian Courts . I do not regard the provision as equal to an arbitration clause , but I do say that the English courts are in charge of their own proceedings: and one of the rules which they apply is that a stipulation that all disputes should be judged by the tribunals of a particular country is not absolutely binding. It is matter to which the courts of this country will pay much regard and to which they will normally give effect, but it is subject to the overriding principle that no one . by his private stipulation, can oust these courts of their jurisdiction in a matter that properly belongs to them "

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Other cases dealing with the subject have been consulted viz EL AMRIA 1981 2 Lloyds report p 119-128 ; SVEN BORG VS WANZA 2 Lloyds Report 559 -576 ; HADSON TAYLOR &CO Vs A P MOLLER AND OTHERS MIS APP 348/87 UNREPORTED.A well known House of Lords decision which shows clearly the courts treatment of such applications is the case of the SPILIADA MARITIME CORPORATION VS CANSULEX LTD (1986) 3 ALL ER PAGE 843. This case explicitly lays down the factors that should weigh in the courts mind in granting or refusing such applications

From the above citations it is clear to me that the principles under which this Honourable Court will be guided could be stated thus:

1. Where plaintiff's sue in Sierra Leone in breach of an agreement to refer disputes to a foreign tribunal or court and the defendants apply for a stay of proceedings the Sierra Leone High court, assuming the claim to be otherwise within its jurisdiction, is not bound to grant a stay but has a discretion whether to do so or not.

2. The discretion could be exercised to grant the stay or refuse the stay

3. The discretion to grant the stay would only be exercised in favour of the defendant only where the defendant can show not merely that Sierra Leone was not the natural or appropriate forum for the trial but there was another available forum which was clearly or distinctly more appropriate than the Sierra Leone High Court.

In considering whether there was another forum which was more appropriate the court will do the following:

A) Look for the forum with which the action had the most real and substantial connection in terms of

a) In what country the evidence on the issues of fact is situated , or more readily available , and the effect of that on the relative convenience and expense of the trial as between the Sierra Leone and foreign court;

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b)  whether the law governing the relevant transaction of the foreign court applies and if so, whether it differs from (Sierra Leone law ) in any material respects;

c) with what country either party is connected and how closely, in effect what country or places the parties reside or carry on business

d) whether the defendants genuinely desire trial in the foreign country or are only seeking procedural advantages.

B) Where the defendant can show by affidavit evidence that his choiced forum is that to which the action has the most real and substantial connection he would have established a prima-facie case for stay of proceedings

C) Even so the plaintiff might be able to get the courts to refuse the stay if he can prove (the plaintiff is under obligation or has the burden to prove) that there are circumstances militating against a stay for example if the plaintiff would not obtain justice in the foreign tribunal in terms of

i) being deprived of security for their claim

ii) be unable to enforce any judgment obtained

iii) be faced with a time bar not applicable in Sierra Leone

iv)  for political, racial, religious or other reasons be likely to get a fair trial

Having stated the law, it behoves me to consider the facts before me. The affidavit in support of the stay of proceedings of the defendants did show the following:

That on the 21st of October 2003 at Barcelona in Spain the 2nd defendant on behalf of the 1st defendant company did enter into two agreements with the Plaintiff company. One was a joint venture agreement while the other was a Loan agreement. By clause I of the Joint Venture Agreement the applicable law and system was the Spanish Commercial Code and other applicable legal provisions. Also that by clause 15 of the said agreement the agreement shall be governed and construed in accordance with Spanish Law and clause 16 was to the effect that

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"The parties expressly submit any disputes that may arise concerning the interpretation, fulfillment or breach of this agreement to legal arbitration by the Barcelona Arbitration Tribunal, the award of which they undertake to abide by. The arbitration shall be carried out in accordance with the regulations of such tribunal and in Spanish. For the purposes of notices and any other matter , the parties designate the addresses set forth in clause 17 above "

By the loan Agreement, clause 9 provides that the applicable law of the agreement was Spanish law

By clause 10 it was a requirement that the parties expressly submit any disputes that may arise concerning the interpretation, fulfillment or breach of this agreement to the courts of Barcelona and for purposes of notices and any other matters , the parties designate the addresses set forth in the agreement.

That the defendant is a Sierra Leonean but married to Spanish citizen and carries a Spanish passport issued in Barcelona valid up to 2011 and that he has a home in Spain and business in Spain where he concluded the Agreements.

Counsel for the defendants / Applicants argued that if you look at clause 1 the joint venture agreement it further shows that the nationality of the parties was Spanish. He noted that even the second defendant was domiciled in Spain. He noted that there were no experts in Spanish Commercial law in Sierra Leone and that almost all the parties witnesses were in Spain and that one of the witness the defence intends to call is in Belgium. He concluded by saying that relying on the case of the SPILIADA MARITIME CORPORATIONVS CANSULEX LTD 1986 3 ALL ER which is a House of Lords decision the Spanish courts in Barcelona provided the forum with which the action had the most real and substantial connection

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The solicitor for the defendants in arguing for the stay of proceedings did make it clear that he quite accepts that our Sierra Leone Courts do have jurisdiction to try matters even where agreements may expressly provide otherwise but that this power may be stayed where there is a better forum brought to its instance on an application by the defendants . It is this power that he is asking this Honourable court to invoke in view of the real and substantial connection to the action which the Spanish forum provides.

As against what has been deposed and noting the facts which weighs on the courts in granting a stay, it is my opinion that the defendants have established, as it were, a prima-facie case for the granting of a stay and under such circumstances, the burden shifts to the plaintiff to show facts that will militate against granting this stay .The plaintiff did not file an affidavit in opposition but simply argued as follows:

That the applicant is a Sierra Leonean who happens to hold also a Spanish passport. That there was nothing in the application to suggest that the applicant has all his assets in Spain to suggest that the Spanish court will be able to fall on them. That it would be wrong for the courts to move the plaintiff from a jurisdiction of securing the benefits of his remedy. He also submitted that they have established that the defendants has assets in Sierra Leone and that the action has its real and closest connection to Sierra Leone in so far as the loan was provided for the purchase of mining equipments in Sierra Leone . He submitted that they would not be needing expert witnesses .

Without an affidavit in opposition these submission do not carry much weight. But even taking them as they are and attaching a small degree of weight on them they cannot in my opinion amount to factors which would militate against the stay. The proper course of action to have been taken by the plaintiff would have been not even to limit argument on why the Sierra Leone forum is equally appropriate or more appropriate but more so showing the negative aspects of trying the case in the other jurisdiction (Spain). As indicated above factors that ought to have been brought to the courts attention inan affidavit where they exist include the following

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i) their being deprived of security for their claim

ii) their being unable to enforce any judgment obtained

iii) their being faced with a time bar not applicable in Sierra Leone

iv) for political, racial, religious or pother reasons not likely to get a fair trial

Since such facts were never brought to the courts attention, it is proper to assume that they do not exist .I note too that the solicitor for the plaintiff said that there is nothing in the application to suggest that the applicant has all his assets in Spain to suggest that the Spanish courts will be able to fall on them. In the first place this was not disposed in an affidavit and secondly, it was the plaintiff that was under duty to say in an affidavit in opposition the reason why they will be unable to enforce judgment in Spain as against Sierra Leone . This they have not done and even said in their argument.

The counsel for the plaintiff/respondent also argued that for their claim the joint venture agreement has no bearing on this issue at hand and that a careful perusal of the writ of summons will disclose that their claim was based on the loan that was over due for payment and that there is no dispute as it were that could properly be referred to Spanish Courts . To this, I accept the argument of the defendants solicitor that even from the writ of summons these agreement are intricately linked . That apart, the exclusive jurisdiction clauses do not only refer to disputes regarding interpretation but disputes that may arise concerning the interpretation fulfillment or breach of this agreement to the courts of Barcelona (see clause 10 of the loan agreement)

Finally I wish to observe that a unique feature in this application is denoted by the fact that in 2 separate agreements signed the same day the parties by themselves have on two separate occasions in both the joint venture agreement and the loan agreement chosen Barcelona and the Spanish Jurisdiction . What I am to make of such choice, all things considered, is that they intend by all means that disputes should be tried in Spain and no where else . I take support for this in that in the case of E1 Amria at page 128 Lord Justice Brandon had this to say

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"In my judgment, where there is an exclusive jurisdiction clause , the basic principles are those stated in the Angelic Grace . namely that the parties should be kept to their bargain unless there is reason to the contrary "

In this instant case I see no reason to the contrary. This being the case, I have no doubt n my mind that the defendants are justified in their application I therefore order as follows

1. That these proceedings now pending in the High Court of Sierra Leone be stayed on the grounds that the proper forum for bringing this action is in Spain and that it will be just and equitable that the proceedings be commenced in Spain.

2. Each party to bear their own cost.

Hon Mr. Justice D B Edwards J

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