Republic of Malawi

IN THE HIGH COURT OF MALAWI

COMMERCIAL DIVISION
BLANTYRE REGISTRY
COMMERCIAL CAUSE NUMBER 160 of 2020
(Before Msungama, J)

BETWEEN:
THE REGISTERED TRUSTEES OF BLANTYRE
HEALTH RESEARCH AND TRAINING TRUST................................... CLAIMANT
And
JOHN HOPKINS UNIVERSITY ................................................................ DEFENDANT

Coram:

Msungama, J.
Maziko Sauti- Phiri, Counsel for the Claimant
Ottober, Counsel for the Defendant
Makombe, Court Clerk

RULING
Introduction
1. This is an application by the Defendant for an order striking out, or alternatively,
staying the proceedings herein. The ground on the basis of which the order is sought
is that the proceedings have been commenced in a wrong forum, the parties having
contracted that the forum for resolving their disputes should be the State or Federal
Courts located in Baltimore, Maryland, United States of America. The application
is opposed by the Claimant. Both sides filed sworn statements and, apart from
addressing the Court orally, filed submissions in support of their respective
positions.

Factual Background
2. The Claimant is a public trust registered in Malawi. Its main objective is the
development of capacity for high quality scientific technology and expertise in
Malawi for the conduct of health research. The defendant is based in Baltimore,
Maryland, United States of America. The Claimant commenced these proceedings

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 against the Defendant claiming the sums of US$638,773 and US$263,550 being
unrefunded expenses allegedly paid out by the Claimant on behalf of the Defendant,
pursuant to certain grant agreements entered into between the parties which
required the Claimant to spend first and then invoice the Defendant for refunds.

3. It is not disputed that relationship between the parties was governed by, amongst
other instruments, an International Master Consulting Services Agreement, which
in its Clause 24. 5 states as follows:

“Jurisdiction and venue for any resolution of any dispute shall be in the
state or federal courts located in Baltimore, Maryland”

4. Further, Clause 17.1 of another sub-agreement also designed to govern their

relationship called the OCV-BILL & MELINDA GATES, states:

“This Sub agreement shall be governed by and construed in accordance

with the laws of the State ofMaryland, United States ofAmerica (excepting
the application ofUCITA any conflict of laws provisions which would serve
to defeat application of Maryland substantive law). Each of the parties
hereto agrees to venue in and submits to the exclusive jurisdiction of the
state and /or federal courts located within the state of Maryland for any
suit, hearing or other legal proceeding ofevery nature, kind and description
whatsoever in the event of any dispute or controversy arising hereunder or
relating hereto, or in the event any ruling, finding or other legal
determination is required or desired hereunder. Both parties hereto agree
to waive their respective rights to any trial by jury. ”

Evidence
5. As alluded to above, the evidence proffered by the parties in support of their
respective positions came by way of sworn statements. I must start by summarising
the evidence of the Claimant because the evidence of the Defendant mostly came
by way of rebuttal of the assertions by the Claimant. On behalf of the Claimant
there was filed sworn statements of one Newton Kumwenda, who at all material
times was the Executive Director of the Claimant. He indicated that although it is
true that the Defendant is based in the USA, it also maintains some presence in
Malawi through the following:

a) Through its business affiliate called the Bloomberg School of Business, it has
set up a research project called the John Hopkins Project (“JHP”) with its
principal place of business at Queen Elizabeth Central Hospital in Blantyre
Malawi.

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 b) The country Director for JHU has been based in Malawi since 2015 and was
involved in the close out audit of 2015.

c) JHU has an office at Makata, Blantyre which implements USAID projects.

d) JHU has provided JHP with vehicles and a high-tech laboratory and associated
accessories which is located at JHP at Queen Elizabeth Central Hospital.

6. The deponent continued to indicate that the auditors, Deloitte, who carried out the
closing audit are also in Malawi and so too all witnesses who are likely to testify in
this matter. The financial resources at the disposal of the claimant are minute as
compared with the resources at the disposal of the Defendant and it is unlikely that
the Claimant would afford to hire lawyers in the USA. He further asserted that the
advent of covid 19 has rendered travel very expensive with related restrictions. In
his view it would be fair and reasonable to put the meagre financial resources of
the Claimant to better use rather than for the pursuit of justice in the USA in terms
of travel costs and litigation expenses. It was his view that it would be much cheaper
and more convenient to have the litigation conducted here in Malawi where all the
witnesses and the documentary evidence are based.

7. The Defendant (applicant in this application) relies on the sworn statements sworn
by counsel Innocentia Ottober and counsel Songea. In a nutshell they state that the
parties agreed to have their disputes in respect of their agreements to be resolved
by the federal and /or state Courts of the state of Maryland USA and not the
Malawian courts. They further dispute the assertion by the Claimant on location of
intended witnesses and assert that all the witnesses that the Defendant intends to
call in respect of this dispute are all based in the USA. They further assert that the
engagement of the auditors, Deloitte was done from the Defendant’s Head Office.
They are of the further view that since the applicable law in respect of the dispute
is the law of the state of Maryland, USA, the Defendant would have to call expert
witnesses from the USA to testify in the Malawian court on the law of Maryland,
which would entail expenditure in terms of financial resources.

The Defendant’s (Applicant’s) Position

8. The position of the Defendant is that the Claimant herein freely signed the
agreements which contain exclusive jurisdiction and choice of law clauses. As such
the Claimant is bound by these exclusive jurisdiction clauses - Lindell Mills
Associates Ltd v Marshall [191] 14 MLR 175. The Defendant argues that where
a contract contains a non-exclusive jurisdiction clause as well as a forum non

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 convenience waiver, a waiver may nevertheless be granted if there are strong or
exceptional grounds which were inexistent and unforeseeable when the contract
was made: the cases of Standard Chartered Bank (Hong Kong) Ltd & Anr v
Independent Power Tanzania Ltd & Others [2015] EWCH 1640 (Com),
Deutsche Bank AG v Sebastian Holdings Inc [ 2009] EWHC 3069 (Comm) were
cited. The Claimant has not demonstrated that the factors which it relies on for
bringing the action in a Malawian court were non-existent or were not foreseeable
at the time the contracts were formulated. The Claimant, it is further argued, by
signing the agreements which contained the exclusive jurisdiction clauses, waived
its right to raise the question regarding the most appropriate forum (forum non
com-'miens') to resolve their disputes. It cannot be up to the Claimant to argue that
Malawi is the most convenient forum to resolve the dispute between the parties. In
view of the fact that we are dealing with an exclusive jurisdiction clause and not a
non-exclusive jurisdiction clause, the forum for resolving the dispute between the
parties arising from their agreements has been fixed. It is argued that in the
circumstances, a consideration whether Malawi is most appropriate forum is
irrelevant since the Claimant, by signing the contracts which contained an exclusive
jurisdiction clause is bound by the said contracts to resort only to the chosen forum.

The Claimant’s position

9. As already indicated above, this application is opposed by the Claimant, who insists
that the matter be dealt with by the High Court of Malawi where the action has
already been filed. They argue that this court is more appropriate than the federal
and / or state courts of Maryland, USA. Their stand is founded on the following
arguments:

a) The Defendant, though a USA based entity, has presence in Malawi.

b) The witnesses to be called by the parties are based in Malawi.

c) The books of accounts for the project are in Malawi.

d) Due to covid 19, it would be inconvenient and expensive to travel to Baltimore

USA in order to lodge a complaint in respect of an event that occurred in
Malawi especially taking into account the fact that the Claimant is a small trust
performing essential public health research for the benefit of Malawians, as
compared to the comparative expense and inconvenience on the part of the
Defendant in view of its size.
10. The Claimant argues that according to the ratio in the case Spiliada Maritime
Corp v Consulex Ltd [1986] 3 All ER 843 “the basic principle is that a stay will

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 only be granted on the ground of forum non conviniens where the court is
satisfied that there is some other available forum having competent jurisdiction,
which is a more appropriate forum for the trial of the action i.e. in which the case
may be tried more suitably for the interests of the parties and the end of justice”.
The Defendant further argues that the general rule on exclusive jurisdiction clauses
is that they can be departed from: Van Vuuren v Regent Insurance Co. Ltd
[2008] MLR Com 368 and Dr. Chidanti Malunga t/a Field Water and Land
O’Lakes Com Case No. 66 of 2014 (HC) Lilongwe Com Division (Unreported)
(Mtalimanja, J.). In the latter case the judge concluded that it would have been
expensive to try the matter in the USA if the exclusive jurisdiction clause was
applied.

Issue
11. The issue for the determination of the court is a simple one, whether it should
exercise its discretion in favour of the Defendant and order either a stay of the
proceedings or order that the proceedings be stricken out for having been brought
in a wrong forum.

Law
12. The criteria which govern the application offorum non convenience are set out in
the speech of Lord Goff in Spiliada Maritime Corp v Consulex Ltd [1987] AC
460 at pages 478 to 482 and these can be summarised as follows:

a) The burden is upon the claimant to persuade the court that the local court is
clearly the appropriate forum for the trial of the action.

b) The appropriate forum is where the case may most suitably be tried for the
interests of all parties and the ends of justice.

c) One must consider first what is the natural forum, namely that with which the
action has the most real and substantial connection.

d) If the court concludes at that stage that there is another forum which is
apparently as suitable or more suitable than the local court, it will normally
refuse the permission unless there are circumstances by reason of which justice
requires that permission should nevertheless be granted.

e) Where a party seeks to establish the existence of a matter that will assist him in
persuading the court to exercise its discretion in his favour, the evidential
burden in respect of that matter will rest upon the party asserting it.

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 13. In the present matter, what we are dealing with is an issue concerning the question
of exclusive jurisdiction clauses. The principles upon which the court grants stays
of action in cases of exclusive jurisdiction clauses were well expounded by Lord
Bingham in Donohue v Armco Inc [2002] 1 Lloyd's Rep 425 who said:

"If contracting parties agree to give a particular court exclusive jurisdiction

to rule on claims between those parties, and a claim falling within the scope
of the agreement is made in proceedings in a forum other than that which
the parties have agreed, the English court will ordinarily exercise its
discretion (whether by granting a stay of proceedings in England, or by
restraining the prosecution of proceedings in the non-contractual forum
abroad, or by such other procedural order as is appropriate in the
circumstances) to secure compliance with the contractual bargain, unless
the party suing in the non-contractual forum (the burden being on him) can
show strong reasons for suing in that forum. I use the word 'ordinarily' to
recognise that where an exercise of discretion is called for there can be no
absolute or inflexible rule governing that exercise, and also that a party may
lose his claim to equitable relief by dilatoriness or other unconscionable
conduct. But the general rule is clear: where parties have bound themselves
by an exclusive jurisdiction clause effect should ordinarily be given to that
obligation in the absence of strong reasons for departing from it. Whether a
party can show strong reasons, sufficient to displace the other party's prima
facie entitlement to enforce the contractual bargain, will depend on all the
facts and circumstances of the particular case. In the course of his judgment
in The Eleftheria [1970] P 94, at pp. 99-100, Brandon J helpfully listed
some of the matters which might properly be regarded by the court when
exercising its discretion, and his judgment has been repeatedly cited and
applied. ..."

The court continued that:

"Where the dispute is between two contracting parties, A and B, and A sues
B in a non-contractual forum, and A's claims fall within the scope of the
exclusive jurisdiction clause in their contract, and the interests of other
parties are not involved, effect will in all probability be given to the clause.
That was the result in Mackender v Feldia AG [1967] 2 QB
590; Unterweser Reederei GmbHv Zapata Off-Shore Co ('The Chaparral'}
[1968] 2 LI Rep 158; The Eleftheria [1970] P 94; DSV Silo- und
Verwaltungsgesellschaft mbHv Owners of the Sennar ('The Sennar') (No.
2) [1985] 1 WLR490; British Aerospace pic v Dee Howard Co [1993] 1 LI

THE High court

(COMMERCIAL DESIGN)
LIBRARY
P/EAG ?*
 Rep 368; Continental Bank NA v Aeakos Compania Naviera SA [1994] 1
WLR 588; Aggeliki Charts Compania Maritima SA v Pagnan SpA ("The
Angelic Grace') [1995] 1 Ll Rep 87; and. Akai Pty Ltd v People's Insurance
CoLtd[\991] CLC 1508."
As to the approach taken by the courts of other countries, the court went on to say
that:
"A similar approach has been followed by courts in the US, Canada,
Australia and New Zealand: see, for example, M/S Bremen v Zapata Off-
Shore Co (1972) 407 US 1; Volkswagen Canada Inc v Auto Haus Frohlich
Ltd [1986] 1 WWR 380; FAI General Insurance Co Ltd v Ocean Marine
Mutual Protection and Indemnity Association (1997) 41 NSWLR 559;
and Kidd v van Heeren [1998] 1 NZLR 324."

14. In summary, where parties have bound themselves by an exclusive jurisdiction

clause effect should ordinarily be given to that obligation in the absence of strong
reasons for departing from it because the parties proceed on the basis that disputes
are only to be decided in a particular jurisdiction and the courts respect this under
the principles guiding freedom of contract. There is no reason to apply a test other
than that stated in Donohue v Armco.

15. As regards what comprise "strong reasons", I do not need to go further than refer
to the approach as set out in The Eleftheria [1969] 1 Lloyd's Rep 237 at 242, by
Brandon J, namely that the court "should take into account all of the
circumstances of the particular case", the following being identified:

"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 trial as between the English and foreign Courts, (b) Whether the
law of the foreign Court applies and, if so, whether it differs from English
law in any material respects, (c) With what country either party is
connected, and how closely, (d) Whether the defendants genuinely desire
trial in the foreign country, or are only seeking procedural advantages, (e)
Whether the plaintiffs would be prejudiced by having to sue in the foreign
Court because they would (i) be deprived of security for that claim; (ii) be
unable to enforce any judgment obtained; (iii) be faced with a time-bar not
applicable in England; or (iv) for political, racial religious or other reasons
be unlikely to get a fair trial".
16. The discretion which the court is required to exercise in these matters is open ended
and the burden of showing that it is appropriate for the discretion to be exercised in
his favour is on the applicant. It is also incumbent upon the person opposing the

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 exercise of the discretion to show strong reasons why the parties should not be kept
to their bargain1.

Conclusion and disposal

17. A party who initiates proceedings in a particular court other than the court which
has been agreed between them as a forum for resolution for disputes between them
is, ordinarily, acting in breach of contract the remedy for which would be damages
or the grant of an order stopping or staying those proceedings. However, damages
may not be adequate as these would most likely be difficult to assess by comparing
advantages and disadvantages of commencing an action in different jurisdictions.
A stay would be the most useful remedy to the party who has been sued in a
different forum than the one the parties had agreed upon. In Continental Bank
NA v Aekos Compania Naniera SA ([1994] 1 WLR 588 the defendants had
instituted proceedings in Greece in breach of an exclusive jurisdiction clause. Sten
LJ said:

“... a claim for breach of damages for breach of contract would be a

relatively ineffective remedy. An injunction is the only effective remedy for
the appellant’s breach of contract. If the injunction is set aside, the
appellants will persist in their breach of contract and the bank’s legal rights
as enshrined in the jurisdiction agreements will prove to be valueless. Given
the total absence of special countervailing factors, this is a paradigm case
for the grant of an injunction.”

18. The decision in Aekos was followed in Angelic Grace [1995] 1 Lloyds Rep. 87
where a foreign action was brought in contravention of a London arbitration clause
in which Millett LJ said (at page 96):

“...there is no good reason for diffidence in granting an injunction to

restrain foreign proceedings on the clear and simple ground that the
defendant has promised not to bring them .... The jurisdiction is, of course,
discretionary and is not exercised as a matter of course, but good reason
needs to be shown why it should not be exercised in any given case”

19.1 am quite live to the fact that the principles applicable to a situation when one is
dealing with an application for an injunction to stop proceedings are quite different
from those applicable when one is dealing with an application for stay. However, I
have alluded to the above cited cases to bring out the emphasis on the question of
party autonomy and the importance of the courts to uphold the same. I thought it

1 OT Africa Lines Ltd v Magic Sports Lines [2005] EWCA Civ 710

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 important for me make this comment in order to assure the parties herein that am
not confusing the two concepts, viz, an injunction and a stay of proceedings.

20. In this case I have no doubt that this court has jurisdiction to handle the current
dispute between the parties. I can, therefore, not dismiss the matter on the ground
of lack of jurisdiction. That leaves me with the question of stay. In this respect, I
have to consider whether or not I should exercise my undoubted discretion in favour
of the Defendant by granting a stay on the ground that the Claimant promised not
to bring any action for the resolution of any dispute between the parties in relation
to agreements which they entered into anywhere else other than in the federal and
/or state courts of the state of Maryland in the USA. As already shown above, the
basic rule is that expounded in Donohue v Armco, to wit, that the court will
ordinarily secure compliance with an exclusive jurisdiction clause unless the party
suing in a non-contractual forum can show, the burden being on him, strong reasons
for suing in that forum.

21. The parties herein specifically agreed to submit all their disputes under the contracts
they entered into to the exclusive jurisdiction of a foreign court. In the
circumstances, I myself should therefore require very strong reasons to induce me
to permit one of them to go back on its word. The Defendant is an American entity
and the Claimant a Malawian entity. It may as well be that one of the attractions to
the Defendant in entering into these agreements with the Claimant was the
undertaking that any disputes would be settled in American courts, specifically the
Federal courts of the state of Maryland with whose procedures they are familiar and
which apply a law on which they can readily obtain advice from their own lawyers
in that jurisdiction.

22. Let me now proceed to examine the reasons which the Claimant contends are strong
enough to persuade this court that the matter must continue in this court thus
departing from the exclusive jurisdiction clause. Viz:

a) The Claimant contends that all witnesses are based in Blantyre, Malawi

This is disputed by the Defendant. The Defendant actually says all its intended
witnesses are based in the USA. It is not important for me to make a finding on
this fact as regards who is putting forward the true position. All I can say is that
even if all witnesses are based in Malawi, this is something that should have
been contemplated as a real possibility by the parties at the time they were
entering into this agreement with the attendant exclusive jurisdiction clause
especially in view of the fact that the parties were clear that the activities of the
project would be based in Malawi, but nevertheless chose, voluntarily, the

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 federal and/ or state courts of the state of Maryland, USA to have exclusive
jurisdiction. This, in my considered view cannot be said to be something that
was unforeseen by the parties.

b) All books of accounts are based in Blantyre, Malawi

Again, on this contention, the parties differ on the position. The Claimant says
all books of accounts are based in Blantyre, Malawi. The Defendant disputes
this and says these are in the USA at its Head Office. Just like in a) above, I do
not think it is important for me to make a finding as regards who is saying the
truth on this aspect. But even if we assume that all books of accounts are indeed
based in Blantyre, I would again say that that is not something that can be said
to have been an unforeseen possibility at the time the parties executed their
agreements.

c) The auditors who did the close-out audit are Deloitte and are based in
Blantyre, Malawi

My conclusion on this aspect is the same as above. I, therefore, do not need to

comment further.

d) A trial in the USA would be very expensive on the part of the Claimant
being a minute entity as compared with the Defendant

Although there is no evidence to support this contention, I would agree that

indeed court proceedings would be more expensive in the USA than would be
the case if the proceedings are continued in Malawi. Can one say that this, at
the time of entering the contract, was not foreseen? The answer is that this was
something that the parties did, or should have taken into account when they
chose the federal and /or state courts of the state of Maryland, USA, to have
exclusive jurisdiction over any of their disputes. I sympathise with the Claimant
in that respect. However, I will refrain from proceeding with a decision based
on emotion or sympathy rather than one that is guided by the applicable legal
principles. So indeed, although a trial in the USA would be more expensive, the
parties have to live with that reality. It should not lie in the mouth of the
Claimant at this stage that it would be too expensive for it to proceed against
the Defendant in the USA for, although that may as well be the case, it would
be a natural consequence of its own free bargain. As for covid 19 travel
restrictions, these are now prevalent in almost all jurisdictions so it matters not,
in my view where the matter is held.

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 23. In conclusion, I do not see any strong and or exceptional grounds which were non­
existent and unforeseen at the time the parties entered made their agreements to
warrant allowing one of the parties to depart from its own bargain. I am firmly of
the view that Standard Chartered Bank (Hong Kong) Ltd & anor v
Independent Power Tanzania Ltd & ars [2015] EWHC 1640 (Comm) which
authority the Claimant tried to persuaded me not to follow is a good authority in
this respect. I see a lot of merit in the principles enunciated in that authority and I
choose to follow it. I have carefully looked at both Van Vuuren and Dr Chidanti
Malunga cases. I have concluded that the facts in the present matter are not similar
to those in the two cases hence my reaching a different conclusion.

24. In the circumstances, I exercise my discretion in favour of the Defendant and order
a stay of the proceedings as prayed for, not on the ground that this court lacks
jurisdiction, but rather that there are no good, substantial and exceptional
circumstances which were non-existent and unforeseen at the time of entering into
the agreements in question. The Defendant’s application, therefore, succeeds and
consequently these proceedings are accordingly stayed.

Costs
25. Costs ordinarily follow the event. In this matter, I see no reasons for departing from
that norm. I, therefore, award party and party costs to the Defendant. These will
either be agreed upon by the parties or assessed by the Assistant Registrar in case
of failure of agreement.

Pronounced in Chambers at the High Court, Commercial Division, Blantyre Registry this
3rd day of February, 2022.

M. T. Msungama
Judge

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