Exclusive and Concurrent Jurisdiction Clauses

The question of the day is when does a forum selection clause in a contract really provide for exclusive jurisdiction of a court? Especially if it does not say “exclusive” (although even if it does that may not be the end of it)? A recent decision of Mr. Justice McEwan in B. A. Blacktop Ltd. v. Gencor Industries Inc., 2008 BCSC 231 reinforces the argument that exclusive jurisdiction can arise without an exclusive label.

On the one hand…

In a 1999 case Old North State Brewing Co. v. Newlands Services Inc., the BCCA found that the following clause did not cause the parties to attorn to the exclusive jurisdiction of B.C. court:

This Agreement will be governed by and interpreted in accordance with the laws of the Province of British Columbia, Canada and the parties will attorn to the jurisdiction of the Courts of the Province of British Columbia, Canada.

While the appellant argued that the above clause precluded the jurisdiction of a North Carolina court over the dispute, Finch J.A. concluded that because the clause did not use the world “exclusive”, it was in fact only a concurrent jurisdiction clause:

36 Clause 17 on its face does not purport to confer exclusive jurisdiction. As Chief Justice Furlong said in Westcott supra , it would have been a simple matter for the draftsman to have used the word “exclusive” if that was what the parties had intended. When both parties articulate their commitment to a forum, absent the express intention to render that forum one of exclusive jurisdiction, such a clause will be interpreted as necessarily conferring concurrent jurisdiction. As noted in Khalij , Mr. Justice Rutherford states, at page 360:

In fact, some recent case law suggests that even the use of the word ‘exclusive’ with respect to jurisdiction of a court in a contract does not oust the discretion of another court to find jurisdiction: see G & E Auto Brokers Ltd. et al v. Toyota Canada Inc. (1980), 117 D.L.R. (3d) 707, 25 B.C.L.R. 145, 13 B.L.R. 33 ; Pirana Small Car Centres ltd. v. Rumm et al , [1981] 5 W.W.R. 79, 27 B.C.L.R. 292 , 22 C.P.C.9.

The clause in the case at bar can therefore reasonably be construed as conferring concurrent jurisdiction. If there had been reason for the defendant to sue on the contract, as presently worded, it could have done so in British Columbia, and could have relied on the clause to answer any argument by the plaintiff that B.C. courts did not have jurisdiction. But, in my view, to say that the parties will attorn to the jurisdiction of the B.C. courts is very far from saying that the courts of no other state can exercise jurisdiction, if there is a proper foundation for so doing according to the rules of private international law.

After Old North, it seemed that to be interpreted as an exclusive jurisdiction clause, it had to employ the word “exclusive”, and its exclusive jurisdiction meaning could not made uncertain by other clauses.

And on the other hand…

In Blacktop, McEwan J. found that the following clause was in fact an exclusive jurisdiction clause, sufficient to grant a stay of proceedings in B.C. under R. 14(6)(b):

19. LAW CONTROLLING. This instrument and all questions regarding the performance of the parties hereunder shall be controlled by the laws of the State of Florida, and jurisdiction of any dispute shall be in Orange County, Florida.

McEwan J. did not engage in an interpretation exercise to determine whether the clause provided for exclusive or concurrent jurisdiction. He simply cited Z. I. Pompey Industrie v. ECU-Line N.V. for the “strong cause test” and Scalas Fashions Inc. v. Yorkton Securities Inc., 2003 BCCA 366, where BCCA found that “any disputes … shall be exclusively within the jurisdiction of the Courts of the Province” clause in a contract extended to tort claims arising out of the agreement. He did not cite Old North or any other authorities dealing with this subject.

Nevertheless, while at first glance the Blacktop conclusion seems to contradict Old North, since the clause does not contain the word exclusive, it in fact (impliedly) follows the decision of the BCCA in BC Rail Partnership v. Standard Car Truck Co., 2003 BCCA 597, where the court found the following clause to be an exclusive jurisdiction clause:

19(g) This Agreement shall be governed in all respects, whether as to validity, construction, capacity, performance or otherwise, by and under the laws of Nova Scotia, Canada (without giving effect to principles of conflicts of laws). Lessee irrevocably and unconditionally submits to the jurisdiction of and venue in, federal and provincial courts located in Nova Scotia, Canada for any proceeding arising under this Agreement, …

Disagreeing with the respondent’s argument that Old North dictated the interpretation of the clause as a concurrent, rather than exclusive, jurisdiction clause, Mackenzie J.A. explained that:

… nothing in the judgment of this Court in Old North State that requires us to adopt a literal construction against exclusivity in the interpretation of the clause before us. I am satisfied that the clause in Old North State was sufficiently different in its wording that it does not govern the interpretation of the clause before us. The chambers judge noted the difference in wording in her reasons and correctly concluded that Old North State did not determine the interpretation issue.

Relying by and large on the words “any proceedings” in the clause at hand, Mackenzie J.A. concluded that a “commercially reasonable” interpretation of this clause was as an exclusive jurisdiction clause.

So, is there an editorial conclusion that I can draw from this? Not much, really, except that while Old North apparently indicated that an exclusive jurisdiction clause is identified by the use of the word “exclusive”, BC Rail, as well as Blacktop, now indicate that “any proceeding” is an effective synonym to “exclusive” and may be sufficient to render a clause an exclusive jurisdiction clause. Ultimately, in the asbence of the words exclusive, there is probably an argument to be for either interpretation.