Trendtex Trading Corp v Credit Suisse

(HL) House of Lords

22 October 1981

Where Reported

[1982] A.C. 679 [1981] 3 W.L.R. 766 [1981] 3 All E.R. 520 [1981] Com. L.R. 262 (1981) 125 S.J. 761

Summary

Subject: Contracts Keywords: Assignment; Causes of action; Interest Catchphrases: Assignment; cause of action; legitimate and sufficient interest Abstract: T had a claim against D and, already being in debt to CS, sought further assistance from CS, which guaranteed its costs in the case. T then assigned to CS all rights against D up to the value of T's indebtedness to Cs.By a later document T assented to CS's sale to a third party of T's claim against D for USD 800,000. Summary: Held, CS had a genuine and substantial interest in the success of the litigation with D, and the assignment to CS was valid. However, it appeared from the face of the later agreement that a profit might well be made, either by the third party or by CS, out of the cause of action. That would clearly be champertous, as it involved trafficking in litigation. The agreement was therefore void for champerty. (Martell v. Consett Iron Company [1955] Ch. 363, Trepca Mines, Re [1960] C.L.Y. 499 and Laurent v. Sale & Co [1963] 1 W.L.R. 829 applied).

Cases Cited

Laurent v Sale & Co, [1963] 1 W.L.R. 829; [1963] 2 All E.R. 63; [1963] 1 Lloyd's Rep. 157; (1963) 107 S.J. 665 (QBD) Martell v Consett Iron Co Ltd, [1955] Ch. 363; [1955] 2 W.L.R. 463; [1955] 1 All E.R. 481; (1955) 99 S.J. 148; (1955) 99 S.J. 211 (CA) Trepca Mines Ltd, Re, [1960] 1 W.L.R. 1273; [1960] 3 All E.R. 304 (Note); (1960) 104 S.J. 979 (CA)

Legislation Cited

Criminal Law Act 1967 s. 13 Criminal Law Act 1967 s. 14

History of the Case

Direct History

Trendtex Trading Corp v Credit Suisse, [1980] Q.B. 629; [1980] 3 W.L.R. 367; [1980] 3 All E.R. 721; (1980) 124 S.J. 396 (CA) Affirmed by -->Trendtex Trading Corp v Credit Suisse, [1982] A.C. 679; [1981] 3 W.L.R. 766; [1981] 3 All E.R. 520; [1981] Com. L.R. 262; (1981) 125 S.J. 761 (HL)

Citations to the Case

Applied by Singh v Observer Ltd, [1989] 2 All E.R. 751 (QBD) Considered by Bourne v Colodense, [1985] I.C.R. 291; [1985] I.R.L.R. 339; (1985) 82 L.S.G. 923; (1985) 129 S.J. 153 (CA) Camdex International Ltd v Bank of Zambia, [1998] Q.B. 22; [1996] 3 W.L.R. 759; [1996] 3 All E.R. 431; [1996] C.L.C. 1477; Times, April 8, 1996 (CA) ED&F Man Ltd v EMR Management Services, Financial Times, February 12, 1985 (CA) Muduroglu v TC Ziraat Bankasi, [1986] Q.B. 1225; [1986] 3 W.L.R. 606; [1986] 3 All E.R. 682; (1986) 83 L.S.G. 2660; (1986) 130 S.J. 749 (CA) Pickering v Sogex Services (UK), 20 B.L.R. 66; (1982) 262 E.G. 770 Picton Jones v Arcadia Developments, [1989] 03 E.G. 85 (DC) Royal Bank of Canada v Woodhouse, [1998] B.P.I.R. 509 (CA (Ont)) Explained by Brownton Ltd v Edward Moore Inbucom Ltd, [1985] 3 All E.R. 499; (1985) 82 L.S.G. 1165 (CA) Referred to by Astro Exito Navegacion SA v WT Hsu (The Messiniaki Tolmi), [1983] 1 Lloyd's Rep. 666 (QBD (Comm Ct)) END OF DOCUMENT

Copr. (c) West 2002 No Claim to Orig. Govt. Works FOR EDUCATIONAL USE ONLY

*679 Trendtex Trading Corporation and Another Appellants v. Credit Suisse

Respondents

House of Lords

HL

Lord Wilberforce, Lord Edmund-Davies, Lord Fraser of Tullybelton, Lord Keith of

Kinkel and Lord Roskill

1981 July 20, 21, 22, 23; Oct. 22

Maintenance of Suit--Champerty--Assignment of cause of action--Swiss bank's financing of commercial contract and litigation--Whether sufficient interest for assignment of suit to be valid--Assignment to third party with no genuine commercial interest--Whether void for champerty Practice--Stay of proceedings--Jurisdiction--Swiss contract with exclusive Swiss jurisdiction clause--Assignment of English cause of action--English action claiming contract void--Whether action to be stayed--Exercise of judge's discretion The first plaintiff, Trendtex, a Swiss corporation whose share capital was owned by the second plaintiff, Temo, a Liechtenstein corporation, contracted to sell 240,000 tons of cement to an English company for shipment to Nigeria. The purchase price and demurrage were to be paid under a letter of credit issued by a Nigerian bank, C.B.N., which subsequently failed to honour the letter of credit. Trendtex claimed damages amounting to U.S. $14,000,000 in proceedings in England against C.B.N. whose plea of sovereign immunity succeeded at first instance. In January 1977 the Court of Appeal allowed Trendtex's appeal but C.B.N. was given leave to appeal to the House of Lords. Credit Suisse, the defendant Swiss bank, was a substantial creditor of Trendtex who had other creditors and could not have undertaken its contractual duties without the financial help of Credit Suisse who had guaranteed the legal costs and fees incurred by Trendtex's English solicitors in the action against C.B.N. Following agreements by which Trendtex purported to assign *680 to Credit Suisse its cause of action against C.B.N. by way of security, an agreement between Trendtex and Credit Suisse was signed in Geneva on January 4, 1978. The agreement recited that an offer had been received from a third party to buy Trendtex's right of action against C.B.N. for U.S. $800,000 and provided that Trendtex (1) released to Credit Suisse, who arranged for the other creditors of Trendtex to be satisfied, all its residual rights against C.B.N. and acknowledged that it had no further interest in the action against C.B.N., (2) gave a power of attorney to a representative of Credit Suisse to enable the action to be settled and (3) deposited 90 per cent. of its shares with the representative. The agreement (by article 6) was expressly stated to be "governed by Swiss law" and that any dispute arising from it was to be "judged by the Court of Geneva, exclusive of any other jurisdiction." On January 9, 1978, Credit Suisse's representative assigned Trendtex's cause of action against C.B.N. to a third party for U.S. $1,100,000. In February 1978 that action was settled by a payment by C.B.N. of U.S. $8,000,000. In March 1978 an action in England was commenced in the name of Trendtex and Temo against Credit Suisse claiming that the purported assignments of Trendtex's cause of action against C.B.N. to Credit Suisse and the agreement of January 4, 1978, were void and of no effect or alternatively that the agreement should be set aside, an account of all moneys received in settlement of the action against C.B.N., damages for breach of duty and the return of all shares held in Trendtex. On Credit

Suisse's claim for a stay of the action under the exclusive jurisdiction clause and the inherent jurisdiction of the court, and the plaintiffs' submission that the purported assignment of a bare cause of action was illegal and unenforceable as savouring of maintenance and champerty, Robert Goff J. held that effect should be given to the exclusive jurisdiction clause and, having regard to the "overwhelming strong Swiss connection" of the case, granted a stay. The Court of Appeal dismissed an appeal by the plaintiffs. On appeal by the plaintiffs:- Held, dismissing the appeal, (1) that, while Credit Suisse had had a genuine and substantial interest in the success of the C.B.N. litigation, the agreement of January 4, 1978, as entered into had manifestly involved the possibility, and indeed the likelihood, of a profit being made, either by the third party or possibly also by Credit Suisse, out of the cause of action, that that manifestly "savoured of champerty" as involving trafficking in litigation; and that, accordingly, any such assignment of the English cause of action as was purported to be made by the agreement for the purpose stated was, under English law, void (post, pp. 694C-D, F-H, 695D, 696A - 697A, 703D-E, G - 704B, 705D-E). Martell v. Consett Iron Co. Ltd. [1955] Ch. 363, Danckwerts J. and C.A.; In Re Trepca Mines Ltd. (No. 2) [1963] Ch. 199, C.A. and Laurent v. Sale & Co. [1963] 1 W.L.R. 829 applied. Per Lord Edmund-Davies, Lord Fraser of Tullybelton, Lord Keith of Kinkel and Lord Roskill. It remains a fundamental principle of English law that one cannot assign a bare right to litigate. If, however, the assignment is of a property right or interest, or if the assignee has a genuine commercial interest in taking the assignment and in enforcing it for his *681 own benefit, there is no reason why the assignment should be struck down as an assignment of a bare cause of action or as savouring of maintenance (post, pp. 696A - 697A, 703C, F- G). (2) That, however, the proper law of the agreement of January 4, 1978, being Swiss, it was for the Swiss court to determine what effect the invalidity of the assignment under English law had on the agreement as a whole; that there were other questions in issue between the parties besides the validity of the assignment and, accordingly, there was room for the operation of article 6 in spite of the champertous element in the agreement; and that, on the facts, since matters arose on which the Swiss courts would be better qualified to decide than the English courts, the decision to stay the proceedings had been right and the proceedings ought to be tried in Switzerland (post, pp. 695E - 697A, 704C - 705B, D-E). Decision of the Court of Appeal [1980] Q.B. 629; [1980] 3 W.L.R. 367; [1980] 3 All E.R. 721 affirmed. The following cases are referred to in their Lordships' opinions: Compania Colombiana de Seguros v. Pacific Steam Navigation Co. [1965] 1 Q.B. 101; [1964] 2 W.L.R. 484; [1964] 1 All E.R. 216. Ellis v. Torrington [1920] 1 K.B. 399, C.A.. Glegg v. Bromley [1912] 3 K.B. 474, C.A.. Guy v. Churchill (1888) 40 Ch.D. 481. Henry v. Geoprosco International Ltd. [1976] Q.B. 726; [1975] 3 W.L.R. 620; [1975] 2 All E.R. 702, C.A.. Heyman v. Darwins Ltd. [1942] A.C. 356; [1942] 1 All E.R. 337, H.L.(E.). Laurent v. Sale & Co. [1963] 1 W.L.R. 829; [1963] 2 All E.R. 63. Martell v. Consett Iron Co. Ltd. [1955] Ch. 363; [1954] 3 W.L.R. 648; [1954] 3 All

E.R. 339; [1955] Ch. 363; [1955] 2 W.L.R. 463; [1955] 1 All E.R. 481, C.A.. Trendtex Trading Corporation v. Central Bank of Nigeria [1977] Q.B. 529; [1977] 2 W.L.R. 356; [1977] 1 All E.R. 881, C.A.. Trepca Mines Ltd. (No. 2), In Re [1963] Ch. 199; [1962] 3 W.L.R. 955; [1962] 3 All E.R. 351, C.A.. The following additional cases were cited in argument: British Cash and Parcel Conveyors Ltd. v. Lamson Store Service Co. Ltd. [1908] 1 K.B. 1006, C.A.. De Hoghton v. Money (1866) L.R. 2 Ch.App. 164. Dulles' Settlement (No. 2), In Re [1951] Ch. 842; [1951] 2 All E.R. 69, C.A.. Fitzroy v. Cave [1905] 2 K.B. 364, C.A.. Hill v. Archbold [1968] 1 Q.B. 686; [1967] 3 W.L.R. 1218; [1967] 3 All E.R. 110, C.A.. Hutley v. Hutley (1873) L.R. 8 Q.B. 112. Mackender v. Feldia A.G. [1967] 2 Q.B. 590; [1967] 2 W.L.R. 119; [1966] 3 All E.R. 847, C.A.. May v. Lane (1894) 64 L.J.Q.B. 236, C.A.. Miliangos v. George Frank (Textiles) Ltd. [1976] A.C. 443; [1975] 3 W.L.R. 758; [1975] 3 All E.R. 801, H.L.(E.). Neville v. London "Express" Newspaper Ltd. [1919] A.C. 368, H.L.(E.). Torkington v. Magee [1902] 2 K.B. 427, D.C.. Wallersteiner v. Moir (No. 2) [1975] Q.B. 373; [1975] 2 W.L.R. 389; [1975] 1 All E.R. 849, C.A.. *682 INTERLOCUTORY APPEAL from the Court of Appeal. This was an appeal by the plaintiffs, Trendtex Trading Corporation (a company incorporated in accordance with the laws of Switzerland) and Temo Anstalt (a corporation established in accordance with the laws of the Principality of Liechtenstein), by leave of the Court of Appeal (Lord Denning M.R., Bridge and Oliver L.JJ.) from their decision on May 2, 1980, affirming the judgment of Robert Goff J. [1980] 3 All E.R. 721 on March 30, 1979. By his judgment, Robert Goff J. ordered that proceedings by the plaintiffs against the defendants, Credit Suisse (a company incorporated in accordance with the laws of Switzerland), be stayed pursuant to a clause in an agreement between Trendtex and Credit Suisse which stated that the agreement was "governed by Swiss law" and that any dispute arising from it was to be "judged by the Court of Geneva, exclusive of any other jurisdiction." The Court of Appeal gave the, plaintiffs leave to appeal on condition that security for costs be given. The facts are set out in their Lordships' opinions. Stanley Brodie Q.C. and Stephen Nathan for the plaintiffs. There is a distinction between a case where there is a contract for services and an action for damages connected with it and a case where the contract has gone (e.g., by repudiation) and the claim is for damages for the repudiation or breach. The lawful way for the defendants to have proceeded here would have been to take a charge on the proceeds of the litigation, which even a solicitor can do to secure his costs. The unlawful way was to take a purported assignment of a bare cause of action, which is what the agreement of January 4, 1978, on its face is. Not only is it a bare assignment, but it is champertous in any event, because it purports to give the defendants power to enforce the claim: actively to conduct the litigation, uncontrolled by the plaintiffs in any way. The existence of this agreement does not

affect the plaintiffs' claim for breach of fiduciary duty. Prima facie, there has been such a breach. At the hearing before the Court of Appeal, the defendants expressly invited the court to determine the issues of law relating to the assignability of a bare cause of action, maintenance and champerty. They thereby accepted that the English court was the more suitable forum for the determination of those issues, and adopted a position inconsistent with their application for a stay of proceedings. The Court of Appeal erred in exercising their discretion and granting a stay of proceedings when the defendants themselves had by their conduct recognised the desirability of litigating those issues in the instant case before the English court. When the case started, the plaintiffs were of the opinion that, although the case for trial in Switzerland was substantial, the action should nevertheless be brought in England for the following reasons. (1) The central issue was whether a bare right to litigate could be assigned. That was plainly a question to be decided by English law. England must be the natural forum. It is preferable to the Swiss court, which would have to rely on the assistance of an expert in English law, the whole doctrine being alien to them. (2) The subject matter of the agreement of January 4, 1978, related to an English cause of action. (3) The defendants carried on business in England. So, it occurred to the plaintiffs that, at least for those reasons, the defendants *683 might decide in their own interests to have the matter tried in England. The plaintiffs wanted it tried in England, because if the central issue were decided in their favour the defendants would have no case.) Reference may be made to the judgment of Robert Goff J. [1980] 3 All E.R. 721, 733b-c; to the submissions for the defendants in the Court of Appeal [1980] Q.B. 629, 640G-H, 644G-H, and for the plaintiffs in reply, at p. 647D-E; and to the judgment of Oliver L.J., at p, 662F-G. The action should, therefore, be tried in England. Whether it is a matter of waiver, or of estoppel, or of variation, by inviting the court to determine this simple issue in the case the plaintiffs cannot put forward a case that the whole case should be heard in Switzerland. [Reference was made to In Re Dulles' Settlement (No. 2) [1951] Ch. 842; and Henry v. Geoprosco International Ltd. [1976] Q.B. 726, 748-749.] The defendants having in the Court of Appeal invited the court to determine the case on the merits, they cannot do that on the one hand and protest the jurisdiction on the other. The conclusions to be drawn are: (1) so far as the exclusive jurisdiction clause is concerned, the court will enforce an exclusive jurisdiction clause unless the plaintiff can show a strong case why the court should exercise its discretion to disregard it. Once the defendants have asked the court to determine the case on the merits, it is difficult to say that the plaintiffs have not discharged that onus. (2) The first thing that the defendant, on whom the onus is, has to show is that there is another more appropriate forum for the determination of the issues in the case. Once the defendants say that the English courts are more appropriate on the main issue, it is difficult to say that Switzerland is more appropriate. Neither the common law nor equity has ever given effect to an assignment of a bare right to litigate. While the courts of equity have for long recognised and given effect to the assignment of choses in action, such as an equity of redemption, a bond, a contract or a debt (which was regarded as assignable property), an assignment of a bare right to litigate has always been regarded as illegal and contrary to public policy by the courts both at common law and equity. Claims for damages for breach of contract or for tort and claims to set aside conveyances on the ground of fraud or duress have been treated as bare rights to litigate incapable

of assignment. The reason for the rule is said to be that such assignments savour of or tend towards maintenance or champerty or both: see De Hoghton v. Money (1866) L.R. 2 Ch.App. 164; May v. Lane (1894) 64 L.J.Q.B. 236; Torkington v. McGee [1902] 2 K.B. 427; Ellis v. Torrington [1920] 1 K.B. 399 and Glegg v. Bromley [1912] 3 K.B. 474. What the law will not countenance is trafficking or speculating in causes of action. A cause of action is not a marketable commodity: De Hoghton v. Money L.R. 2 Ch.App. 164. Although there may be cases in which an assignment of a bare right to litigate may not involve maintenance or champerty, in most instances such an assignment would involve one or both of them; obviously someone who takes an assignment of a cause of action will usually intend to take control and intermeddle in the litigation, and the most likely reason for taking an assignment of a cause of action is that the assignee either has agreed to finance or take a financial interest in the litigation or has bought the cause of action outright, or a share in it, at a discount. Speculation in causes of action is just as objectionable in modern times as it ever *684 was, and the mere fact that an assignment of a cause of action may be effective and unobjectionable under the laws of a foreign jurisdiction such as Switzerland is no ground for relaxing the rule of public policy under the law of England. Furthermore, whilst the Criminal Law Act 1976 abolished the crimes and torts of maintenance and champerty, by section 14 (2) of that Act Parliament expressly preserved the rule of law as to cases in which a contract affected by maintenance or champerty is to be treated to be contrary to public policy or otherwise illegal: see per Scarman L.J. in Wallersteiner v. Moir (No. 2) [1975] Q.B. 373, 408F. There are exceptions to the rule against the assignment of a bare cause of action. These are as follows. (i) An assignment of a cause of action incidental to enjoyment of property transferred or assigned to the assignee is effective and enforceable. This is because the court regards the cause of action as incidental to the transfer of the property, for example, an estate or land and buildings, as part of the property transferred and necessary for its proper enjoyment. Thus, if an assignee can show that he has a legitimate property interest in the subject matter of the cause of action, the court will give effect to an assignment of it: Ellis v. Torrington [1920] 1 K.B. 399. Effect is also given to the assignment of a debt, which equity regards as property capable of assignment: Fitzroy v. Cave [1905] 2 K.B. 364. (ii) A trustee in bankruptcy always took and takes an assignment of all causes of action vested in the bankrupt by virtue of the provisions of the Bankruptcy Acts. Under the same statutes the trustee could and can assign a bare cause of action to a third party or creditor of the bankrupt in order to realise as fully as possible the assets of the bankrupt for the benefit of creditors: see Guy v. Churchill (1888) 40 Ch.D. 481. The reason for the statutory exceptions to the rule against the assignment of a bare cause of action is that the legislature regards the public policy in favour of realising as fully as possible a bankrupt's estate as outweighing the public policy preventing such assignments. (iii) An insurer who pays out his insurance claim has a right of subrogation to any claim that the insured may have against third parties in respect of the loss indemnified. The law therefore allows and gives effect to an assignment of such causes of action by the insured to the insurer. This is plainly justified by the pre-existing right of subrogation: see Compania Colombiana de Seguros v. Pacific Steam Navigation Co. [1965] 1 Q.B. 101. An assignee who lawfully takes an assignment of a cause of action because an assignment is within one of the exceptions cannot lawfully sub assign the cause of action to a subassignee unless that subassignee can similarly bring himself within

one of the excepted categories. The law distinguishes between an assignment of a bare right to litigate and an assignment of the future proceeds of litigation by way of charge. The court will give effect to the latter, which is not regarded as tending towards maintenance or champerty. This is because the future proceeds of litigation are regarded as property capable of being assigned and, further, because such an assignment does not result in the assignor losing control of the litigation. He may pursue it or discontinue it, or compromise it as he wishes. Not only may an ordinary creditor take an assignment of the fruits of a cause of action (Glegg v. Bromley [1912] 3 K.B. 474), so also may a solicitor as security for his costs. A convenient statement of the *685 relevant principles is to be found in Snell's Principles of Equity, 27th ed. (1973), p. 83. The distinction between an assignment of a bare right to litigate and an assignment of the proceeds of an action is not merely one of form. There is a very real likelihood that an assignee of a bare right to litigate is speculating in litigation, because he would need to have control of the litigation to protect his speculation, whereas a creditor who does no more than take an assignment of the proceeds of the action as security for a debt is prima facie seeking to protect the debt and not a speculation. Thus far, the appellants' submissions have been directed towards assignments that ex-hypothesi may in fact be completely free of maintenance or champerty. It is only because they savour or tend towards maintenance or champerty that the law does not give effect to assignments of bare rights to litigate. However, an assignment of a right to litigate or of the future proceeds of litigation will undoubtedly be illegal and unenforceable if it forms part of a contract which itself expressly provides for the unlawful maintenance of an action or for a champertous arrangement and is therefore illegal and contrary to public policy: see Criminal Law Act 1967, s. 14 (2) and Wallersteiner v. Moir (No. 2) [1975] Q.B. 373. There are material distinctions between the offences of maintenance and champerty and the principles of law relating to them. (a) Maintenance consists of assisting, or intermeddling in, or stirring up, the litigation of another. However, the law recognises that there are cases in which it is proper for one person to assist another in litigation, financially or otherwise. Where a person can establish that he has a legitimate interest in the outcome of the suit, he may lawfully support it. The relationships of master and servant, kinship, charity, a common commercial or financial interest in the subject matter of the suit, a trade union's support for its members, have all been held to constitute sufficient interest to warrant maintenance of a suit. At the time when maintenance was a tort and a crime, such an interest would afford a complete defence to a prosecution or a claim based on alleged maintenance: see British Cash and Parcel Conveyors Ltd. v. Lamson Store Service Co. Ltd. [1908] 1 K.B. 1006; Neville v. London "Express" Newspaper Ltd. [1919] A.C. 368; Martell v. Consett Iron Co. Ltd. [1955] Ch. 363 and Hill v. Archbold [1968] 1 Q.B. 686. (b) It has been said that champerty is merely a species of maintenance. In a sense, this is so, but champerty has always been and still is regarded as a pernicious offence of greater seriousness than maintenance: see per Lord Denning M.R. in In Re Trepca Mines Ltd. (No. 2) [1963] Ch. 199. It consists of an agreement to divide the proceeds of the litigation (campi partitio) and hence of speculation in litigation. A legitimate interest in the outcome of the suit that might justify maintenance will not justify champerty: see Hutley v. Hutley (1873) L.R. 8 Q.B. 112. Champerty can never be justified; there can be no exception to its unlawfulness, and there is no authority to the contrary.

The distinction between lawful maintenance and champerty can best be illustrated as follows. The plaintiff may nowadays be maintained in his suit by the legal aid authorities, and they may take a charge on the proceeds or the subject matter of the suit as security for costs. It would be unthinkable for a legal aid certificate to be granted on terms that the plaintiff should divide the proceeds of the litigation with the legal aid *686 authorities, or that the plaintiff should sell his cause of action to them. Similarly, in the case of a trade union giving financial aid to a member in support of litigation, its legitimate interest in the outcome of the suit could not justify it in taking an outright assignment of the cause of action of a share in any damages. The same reasoning applies to anyone who has a legitimate interest in maintaining a suit, be it kinship, charity, master and servant or a commercial and financial interest; such an interest can never justify the outright purchase of the cause of action or a share in the fruits of the litigation. There is no authority that supports the contrary proposition. The plaintiffs make three principal criticisms of the judgments of the Court of Appeal. (1) It is of the utmost importance to keep clearly in mind the distinction between (i) assignment of a bare cause of action for damages; (ii) maintenance; (iii) champerty. The first principal error into which the Court of Appeal fell was in failing to keep that distinction clear and in eliding those three matters, at some points actually equating maintenance and champerty. Champerty is a species of maintenance, but the two things are not the same. (2) The Court of Appeal confused the different meanings of the interest that will justify assignment of a cause of action with the interest that would justify a third party in maintaining the litigation of another. The two are distinct and separate. Both Lord Denning M.R. and Oliver L.J. regarded the kind of interest that would justify assignment and the kind of interest that would justify maintenance as the kind of interest that would justify champerty. It is clear from authority that there is no kind of interest at all that would justify champerty. Champerty can never be justified on any basis at all, save for certain specified exceptions, e.g. where a trustee in bankruptcy disposes of a cause of action to a creditor on the basis that there is a division of the proceeds between the trustee and the purchasing creditor (Guy v. Churchill 40 Ch.D. 481). (3) Even if the Court of Appeal did not like the state of the existing law, it had no jurisdiction to change it. Perfecting legislation is not a judicial function. Scarman L.J. in Wallersteiner v. Moir (No. 2) [1975] Q.B. 373, 409, said that the Court of Appeal could not do it; neither can the House of Lords. Merely because other countries have different rules, that is no reason to change our own. If there is not sufficient unhappiness in Parliament to change the law as regards solicitors, there is no reason to change it for bankers. Robert Goff J. was right at [1980] 3 All E.R. 721, 732f - 733c, esp. at 732h. There is an example of the elision referred to in the judgment of Lord Denning M.R. [1980] Q.B. 629, 655A. What Oliver L.J. says at p. 664F does not do justice to the plaintiffs' submissions. What he says at pp. 668G-669A is not the basis of Guy v. Churchill. Torkington v. Magee [1902] 2 K.B. 427 provides the answer to the view of Oliver L.J. [1980] Q.B. 629, 671 that he could not see any distinction between an assignment of a contract and assignment of a cause of action for damages. The passages in Ellis v. Torrington [1920] 1 K.B. 399 do not support Oliver L.J.'s propositions as he thought they did. Hutley v. Hutley L.R. 8 Q.B. 112, supports the proposition that the kind of interest that might justify maintenance (e.g. kinship) will not justify champerty. It also shows that there is no authority that remotely

suggests *687 that that is the position. [Reference was made to De Hoghton v. Money, L.R. 2 Ch.App. 164; May v. Lane, 64 L.J.Q.B. 236; Glegg v. Bromley [1912] 3 K.B. 474.] Those are the primary authorities. There are "special" cases. Fitzroy v. Cave [1905] 2 K.B. 364 is another case where. because it was property that was being assigned, the assignment was unobjectionable. Collins M.R. had, however, some misgivings about that. It is difficult to find any case that advances the proposition beyond a property interest. [Reference was made to Laurent v. Sale & Co. [1963] 1 W.L.R. 829; Guy v. Churchill, 40 Ch.D. 481; Compania Colombiana de Seguros v. Pacific Steam Navigation Co. [1965] 1 Q.B. 101 and In Re Trepca Mines Ltd. (No. 2) [1963] Ch. 199.] In Wallersteiner v. Moir (No. 2) [1975] Q.B. 373 the bank was not in extremis and not in a different position. It is difficult to see, having regard to section 14 (2) of the Criminal Law Act 1967, how Lord Denning M.R. could have regarded that Act as having swept away all the old law. As to the textbooks, see Pollock on Contracts, 13th ed. (1950), p. 321 (edited by Professor Winfield, but that part appears to be by Sir Frederick Pollock); Snell's Principles of Equity, 27th ed., p. 83. The House may consider it desirable to consider the law, but the law is plain: a banker cannot take an assignment of a bare cause of action, though obviously for the security of an overdraft he can take a mortgage to which a cause of action is attached. If the House were to decide that there were circumstances of interest that would justify what would otherwise be a bare assignment, one would end in the present case with, possibly, a valid assignment (just as there could be a valid assignment of a debt). That does not help the defendants, because they are still in the difficulty of facing the circumstances in which the agreement of January 4, 1978, came to be obtained. The circumstances are the same as those in In Re Trepca Mines Ltd. (No. 2) [1963] Ch. 199. The agreement has all the incidents of a champertous agreement: the defendants are ceding control completely. That is without the third party. If one goes further, the agreement is struck down because its object was the ultimate assignment of the cause of action to a third party, who was, of course, to get the benefit of the express terms of the agreement. Since the agreement itself contains all the elements of champerty, that is sufficient, since the House is unlikely to give any licence to champerty. Then, on the question of whether the House would extend the ambit of property interest that would justify the assignment of a cause of action, the House would do that only if there was clear evidence that the practice of bankers was being impeded in some way because the law did not give licence to the assignment of causes of action in cases such as the present. There is no evidence of this at all, apart from the view of Robert Goff J. It it were the case, then In Re Trepca Mines Ltd. (No. 2) [1963] Ch. 199 and Laurent v. Sale & Co. [1963] 1 W.L.R. 829 would have been decided the other way. There are possible abuses, which the old law was intended to check. On consideration, the submission that there should be an extension of the law to assist bankers does not bear examination: no bank would lend money on the security of this cause of action in the House of Lord. *688 On the assumption that the plaintiffs are wrong in their submissions so far and that the House upholds what Oliver L.J. said, the question is whether the agreement of January 4, 1978, was assignable. (If it was not, then, on Oliver L.J.'s view, the cause of action was not assignable.) Was the letter of credit ever assignable to the defendants? It was not: see Trendtex Trading Corporation v. Central Bank of Nigeria [1977] Q.B. 529. Oliver L.J. was not entitled to take it for granted that the

letter of credit was transferable, or that this was a transfer. If there is a dispute on this issue, it should be determined in England. The plaintiffs are not sure whether, if the case went to Switzerland, they would be able to get the letter of credit from the Midland Bank. "Transfer," Chitty on Contracts, 24th ed. (1977), vol. II, para. 2604 means an assignment, in the sense in which that term was used by Oliver L.J.; see also para. 2605. Moreover, see per Oliver L.J. [1980] Q.B. 629, 675H: the identity of the third party will become material, and on that issue issues of fact and law will arise. The champertous nature of the agreement of January 4, 1978, renders it illegal in the eyes of the law of England; it is, therefore, void ab initio. It is also void ab initio under the law of Switzerland because of the invalidity of the assignment: see the affidavit evidence, which was not challenged, and per Robert Goff J. [1980] 3 All E.R. 721, 733. If the plaintiffs are wrong on that, and Robert Goff J. and Oliver L.J. are right that, even if the assignment is void, the contract would survive, it is highly artificial to regard the exclusive jurisdiction clause as having the same force as it did when the parties made the agreement: see Mackender v. Feldia A.G. [1967] 2 Q.B. 590. As to discretion, the principle is the importance of discovery. Richard Yorke Q.C. and David Hunt for the defendants. The plaintiffs have not read any of the leading cases on maintenance and champerty. The defendants' case before the Court of Appeal (and to a lesser extent before Robert Goff J.) was that the law of maintenance and champerty in 1980 was not complicated and difficult and not a fearful monster before which the Swiss courts would quail. The matter has been considered exhaustively by the Court of Appeal twice this century, in British Cash and Parcel Conveyors Ltd. v. Lamson Store Service Co. Ltd. [1908] 1 K.B. 1006 and Martell v. Consett Iron Co. Ltd. [1955] Ch. 363; each time, it modernised and recast the law. It is unfortunate that Robert Goff J. did not look at Hill v. Archbold [1968] 1 Q.B. 686, or at the locus classicus, the judgment of Danckwerts J. in Martell v. Consett Iron Co. Ltd. [1955] Ch. 363. The question is: does the assignee have a sufficient interest in the subject matter of the suit at its commencement? This is clear from British Cash and Parcel Conveyors Ltd. v. Lamson Store Service Co. Ltd. [1908] 1 K.B. 1006, which seems to have been largely overlooked. It was noted only in Neville v. London "Express" Newspaper Ltd. [1919] A.C. 368, but was not cited, nor referred to in the judgments, in Glegg v. Bromley [1912] 3 K.B. 474 and Ellis v. Torrington [1920] 1 K.B. 399, which were thus per incuriam on this point. Pollock on Contracts, 13th ed., p. 321 would have been written differently if the author had had the British Cash case in mind. It was written before Martell v. Consett *689 Iron Co. Ltd. [1955] Ch. 363. Although, however, British Cash was not cited in Ellis v. Torrington, the judgment of Scrutton L.J. would have been exactly the same if it had been. Ellis v. Torrington is the law. Hutley v. Hutley, L.R. 8 Q.B. 112, is an anomalous case, relying on the exception of kinship. It may be that the whole concept of champerty and maintenance has gone, but it is not necessary for the defendants to go that far. From the cases, with the exception of Hutley v. Hutley, it appears that champerty now is merely an aggravated form of maintenance. The Court of Appeal in Hill v. Archbold [1968] 1 Q.B. 686 accepted that Martell v. Consett Iron Co. Ltd. was the locus classicus. The defendants' argument in the Court of Appeal was, therefore, that the law was straightforward: the Swiss courts would have no difficulty in applying it. Hutley v. Hutley, L.R. 8 Q.B. 112, is an oddity. It is the only case of which the

defendants are aware in which it was found that what had been done would be champerty but not maintenance. That is contrary to what Chitty J. said in Guy v. Churchill, 40 Ch.D. 481. The explanation of Hutley v. Hutley can only be that it is obviously a historical anomaly, Kinship was one of the recognised exceptions to maintenance and champerty from the very early days. The ratio of the exception is that the kinsman is disinterested; he becomes interested when he takes part of the proceeds, When Chitty J. in Guy v. Churchill said, at p. 490: "I know of no case ..." that must have included Hutley v. Hutley, so he did not regard that case as saying that one could have champerty without maintenance. In six cases, the judges have said that champerty was a form of maintenance (see, e.g., per Lord Finlay L.C. in Neville v. London "Express" Newspaper Ltd. [1919] A.C. 368, 382). It would be impossible to have champerty without maintenance, and the legal concept is not available. The plaintiffs' formulation starts in the wrong place with assignment of a bare cause of action. That is not the true position in law. The general rule, at any rate since 1873, is that all choses in action are assignable. To that general rule there are a very small number of exceptions. Those fall into only three main categories: (i) personal torts; (ii) allegations of fraud; (iii) assignments that savour of maintenance or champerty. There are dicta that support (ii). If necessary, one may say that there may be some doubt about it. [Reference was made to Ellis v. Torrington [1920] 1 K.B. 399, per Warrington L.J.] In Glegg v. Bromley [1912] 3 K.B. 474 (as also in Fitzroy v. Cave [1905] 2 K.B. 364), the judge was looking for something in the nature of property, but by then British Cash and Parcel Conveyors Ltd. v. Lamson Store Service Co. Ltd. [1908] 1 K.B. 1006 had been decided: a right of property was not necessary to prevent champerty or maintenance. What was being said in Glegg v. Bromley was that a bare right of action was not assignable because it savoured of champerty or maintenance. [Reference was made to R.S.C., Ord. 12, note 12/7-8/2 and Compania Colombiana de Seguros v. Pacific Steam Navigation Co. [1965] 1 Q.B. 101, 119.] There are 14 decided cases where an assignment of a bare *690 cause of action was not struck down for maintenance or champerty, and in all except two or three of them the point was taken. It is important to look at the nature of the agreement. It is unfortunate that before Robert Goff J., and to some extent before the Court of Appeal, at least until a late stage, the true position was not appreciated. It was assumed before Robert Goff J. that the agreement of January 4, 1978, was itself the assignment. That document proceeds, however, on the basis that there had already been an assignment on November 14, 1977, when the defendants' reversionary right was released. There was no champerty as at November 14, because the bank had a sufficient interest: see per Oliver L.J. [1980] Q.B. 629, 675G. Alternatively, if the assignment did not take place until January 4, 1978, it was not maintenance or champerty, for the reasons already given (see per Oliver L.J., at p. 675C-D). If the assignment of January 4 was good, it was not vitiated by the subsequent assignment to the third party. There is no evidence whatever as to whether the third party had an interest. It is not right to make assumptions on an interlocutory appeal. As to discretion, there are two matters: discovery, and the difficulty of application of the English law of maintenance and champerty. As to discovery, its value is important in an accusatory system where the plaintiff has to establish his case. In an investigatory system, the court itself has an interest in investigating the case. If documents are not provided, or information not given, it will draw adverse

conclusions. The two courts below are in the defendants' favour on this matter; the House of Lords will not interfere unless they went wrong in law. Hunt following. If the House is minded to reformulate the law regarding assignments of causes of action along the lines suggested by the defendants, that is something that it can do in its judicial capacity as opposed to requiring legislation. The dictum of Scarman L.J. in Wallersteiner v. Moir (No. 2) [1975] Q.B. 373, 408D et seq., was made in the context of, and in relation to, what Lord Denning M.R. had said, at p. 395F. He said it in relation to contingency fees. It is no part of the defendants' case to by-pass that process of public debate recommended in the Law Commission's report ("Proposals for Reform of the Law Relating to Maintenance and Champerty," October 25, 1966) in relation to contingency fees, which represent an important area of professional conduct; but there is no need to extend that reservation to the general area of maintenance or champerty. The dictum of Scarman L.J. is thus not relevant for the purposes of the present appeal. It is important to note the context in which section 14 of the Criminal Law Act 1967 appears. Section 13 abolishes the old offences, including maintenance and champerty. By section 14 (1) the tort of maintenance is abolished. All that section 14 (2) does is to make it clear, that, although the criminal law and the tort are abolished, the rules are to remain in force so far as they affect the validity of contracts. There is no suggestion whatever that Parliament is attempting to crystallise the law of maintenance and champerty as at 1967. It would be a wrong construction to say that it was doing it by implication. It is deliberately leaving it open to the *691 courts to say from time to time what maintenance and champerty are. Martell v. Consett Iron Co. Ltd. [1955] Ch. 363 was decided only some 12 years before the Act of 1967 was passed. It is inconceivable that, notwithstanding that from time to time the judges had brought maintenance and champerty up to date and restricted the scope of its operation, the legislature was saying: "enough is enough. " Section 14 (2) does not prevent the House from saying what the law of maintenance and champerty now is. It is also open to the House to say that what the legislature may have thought was the law in 1967 was not. On the general point as to whether the House should reformulate the law in its judicial capacity, see Miliangos v. George Frank (Textiles) Ltd. [1976] A.C. 443, 449-450 (Leggatt Q.C. arguendo); 469 (Lord Wilberforce), 479 (Lord Simon of Glaisdale). Two matters make it easier to reformulate the rule than it was in Miliangos: (i) it is a less serious exercise; (ii) there is no previous decision of the House from which the defendants are inviting the House to depart. Reformulating the rule is not changing the law. Yorke Q.C. When the defendants said that the House should not extend the ambit of the law that had been circumscribed in a series of decisions, they should have added that in no case has the court struck down an agreement on the ground of maintenance or champerty where the alleged maintainor was not a party. Brodie Q.C. in reply. There is a fundamental error in the defendants' submissions, and it found expression in the judgments in the Court of Appeal. It is important to keep separate assignment, maintenance and champerty. The defendants' error is that they confuse the two. They say that there can be no champerty without maintenance (that is right) and then that, if one finds no champerty, there cannot be maintenance. The fallacy (see Martell v. Consett Iron Co. Ltd. [1955] Ch. 363) is that that does not mean that there is no maintenance, merely that the maintenance is lawful. One can have maintenance justified by kinship, etc., but at the same time one may find matters rendering otherwise lawful maintenance unlawful, e.g. an agreement to

divide the proceeds. Many of the cases cited by the defendants are relevant to maintenance but not to champerty. British Cash and Parcel Conveyors Ltd. v. Lamson Store Service Co. Ltd. [1908] 1 K.B. 1006 was a case of maintenance from start to finish. There was not a word in it about champerty (though Hutley v. Hutley, L.R. 8 Q.B. 112 and Guy v. Churchill, 40 Ch.D. 481, were referred to in argument by Shearman K.C.). When considering whether there is champerty, only a property interest will justify what otherwise would be a champertous agreement: see Ellis v. Torrington [1920] 1 K.B. 399, 411 and Guy v. Churchill, at p. 489. The defendants described Hutley v. Hutley as an "oddity," but there is no answer to it if it was correctly decided, and the defendants do not say that it was not. If there is sufficient interest, maintenance becomes lawful maintenance. If, however, it is supported by a share in the proceeds without a property interest, it becomes champerty. If it is champerty, it is also unlawful maintenance. The answer to Chitty J.'s statement in Guy v. Churchill, 40 Ch.D. 481, 490: "I know of no case ..." is that when he uses the *692 word "interest" he must mean a property interest; it is in the context of property interest that his whole judgment proceeds. The United States practice regarding the assignment of causes of action varies from state to state. It was wrong for the Court of Appeal to assume that some countries allow speculation in causes of action. [Reference was made to Hutley v. Hutley, L.R. 8 Q.B. 112 and Laurent v. Sale & Co. [1963] 1 W.L.R. 829.] The primary purpose of the agreement in the present case was the assignment to a third party. The plaintiffs accept that the House has power to adapt principles of law to bring them into line with modern conditions, but there must be a limit beyond which it cannot go. If the defendants are asking it radically to alter the principle of law, that ought to be dealt with by the legislature; the House cannot do so. If, however, it is simply a matter of changing the kind of property interest that may justify an assignment of a cause of action, then it might do that, but should not unless there is a real need to do so. [Reference was made to the Law Commission's "Proposals for Reform of the Law Relating to Maintenance and Champerty," paras. 16, 17.] Their Lordships took time for consideration. October 22. LORD WILBERFORCE. My Lords, this is a further episode in the world-wide litigation which followed from the Nigerian cement debacle. Its history has been told with characteristic lucidity by Lord Denning M.R. in Trendtex Trading Corporation v. Central Bank of Nigeria [1977] Q.B. 529 ("the C.B.N. case") and in his judgment in the present case. The situation which gave rise to this particular action was that Trendtex, having a claim situated in England against the Central Bank of Nigeria ("C.B.N. ") for damages, put at U.S. $14,000,000, had difficulty in financing the litigation necessary to recover it. It therefore sought and obtained assistance from the respondents, Credit Suisse, which guaranteed its costs in the C.B.N. case. This was perfectly legitimate since Trendtex, in respect of the relevant trading in cement, owed Credit Suisse a large sum of money which Credit Suisse had no hope of recovering unless Trendtex succeeded in its claim against C.B.N. Trendtex failed at first instance in the C.B.N. case on the ground that C.B.N. had state immunity, but succeeded (January 1977) in the Court of Appeal. Leave was given to appeal to this House and a petition of appeal was lodged (April 1977). So the position at that stage was that Trendtex had a cause of action in this country of uncertain value: Trendtex might fail in the House of Lords and even if it succeeded

there might be subsequent obstacles to be overcome before it recovered any money. The present case arises out of a series of transactions between Trendtex and Credit Suisse, the third of which was designed to make room for a settlement of Trendtex's claim against C.B.N. A Swiss lawyer, MaOEtre Patry, was engaged to act for Credit Suisse. On Trendtex's side, the main representative was Dr. Hauser, its Swiss director, Trendtex itself - as was also Credit Suisse - being a Swiss company. There were three critical *693 documents: 1. On September 6, 1976, Trendtex assigned to Credit Suisse all its claims arising out of the cement contracts "until the claims of the assignee are covered." Credit Suisse was given power to bring actions in its own name or that of Trendtex. (The C.B.N. litigation had started in November 1975.) 2. On November 26, 1976, Trendtex surrendered to Credit Suisse all its claims (which must have included claims against C.B.N.) arising from the cement contracts and from a specified letter of credit issued by C.B.N. "to the full extent of the indebtedness to the transferee." I do not think that, whatever is the governing law of these documents, there can be much doubt that they were normal assignments by way of security from a debtor to its creditor bank. 3. A further agreement appears to have been reached at a meeting held on November 14, 1977, but the terms of this are the subject of dispute. However, on January 4, 1978, a formal and fairly elaborate agreement was entered into between Trendtex (acting by Dr. Hauser), Dr. Hauser personally and Credit Suisse (acting by MaOEtre Patry). It commenced by some recitals, the third of which stated that Trendtex was indebted to Credit Suisse for U.S. $1.5m., and the fourth of which recited an agreement that Credit Suisse would attempt to recover its claim against Trendtex by negotiating with C.B.N. The fifth recital was that Credit Suisse had received an offer from a third party to buy Trendtex's claim against C.B.N. for U.S. $800,000. The agreement then provided (article 1) that Trendtex did not oppose the sale by Credit Suisse to a purchaser of its choice of all Trendtex's claims against C.B.N. and recognised that it had no further interest in the C.B.N. case. Subsequent articles contained some elaborate arrangements for the satisfaction, out of money to be provided by Credit Suisse, of Trendtex's other creditors, authorisations to MaOEtre Patry to conduct the C.B.N. case on behalf of Trendtex or to settle it by negotiation, and security for Credit Suisse through transfer to Maitre Patry of the controlling shares of Trendtex (then owned by the second appellant Temo Anstalt) and resignation of Dr. Hauser as director of Trendtex. Article 6 was as follows: "This agreement is governed by Swiss law. Any dispute regarding its conclusion, interpretation or fulfilment shall be judged by the Court of Geneva, exclusive of any other jurisdiction." Soon after this, in February 1978, it is alleged that MaOEtre Patry went to Nigeria and settled the C.B.N. case for a payment of U.S. $8m. No part of this has been paid to Trendtex. The greater part of it, so it is said, has been paid to a third party who negotiated the settlement, whose identity Maitre Patry refuses to disclose. Thereupon two persons claiming to be able to issue instructions for Trendtex commenced this action in Trendtex's name, with Trendtex's parent company Temo Anstalt as joint plaintiff, claiming that the agreement of January 4, 1978, is void as contrary to public policy and offending against the law of champerty and maintenance. It is further asserted that Trendtex was induced to enter into the agreement by undue influence and economic duress, that MaOEtre Patry acted in breach of fiduciary duty and that Credit Suisse was vicariously liable for the loss thereby caused. The claim is for appropriate declarations, accounts and damages, and Temo Anstalt claims the return of the controlling shares in Trendtex. Upon this

Credit Suisse *694 applied to the court for the action to be stayed on the ground (inter alia, but this alone is relevant at the present stage) that the parties had agreed to the exclusive jurisdiction of the Swiss court. This depends, as I see it, upon two questions: (1) Whether the agreement of January 4, 1978 - and so the exclusive jurisdiction clause - is void as offending the law against champerty and maintenance. (2) Whether the court in its discretion should stay the action on the ground that the issues raised ought properly to be tried in Switzerland. In the courts below an examination in some depth was conducted into the English law of maintenance and champerty and in this House learned arguments in these matters were deployed. I wish to acknowledge indebtedness to the treatment in the judgments of the Court of Appeal and to the submissions of counsel. However, I do not think it necessary to pronounce upon such areas of this still obscure subject as remain in dispute, for in my opinion the appeal can and should be decided on fairly simple grounds, essentially those which appealed to Robert Goff J. and, in part, to Oliver L.J., and on this basis of the law laid down so clearly by Danckwerts J. and the Court of Appeal in Martell v. Consett Iron Co. Ltd. [1955] Ch. 363. If no party had been involved in the agreement of January 4, 1978, but Trendtex and Credit Suisse, I think that it would have been difficult to contend that the agreement, even if it involved (as I think it did) an assignment of Trendtex's residual interest in the C.B.N. case, offended against the law of maintenance or champerty. As I have already shown, Credit Suisse had a genuine and substantial interest in the success of the C.B.N. litigation. It had, and I do not think that the legitimacy of its action was challenged, guaranteed the previous costs. It had by the documents of September 6 and November 26, 1976, taken a security interest in the litigation or its proceeds. To carry this a stage further by a surrender of Trendtex's residual interest (if this was the effect of the agreement of January 4, 1978) would, in my view, have been lawful, though a question might have arisen (and indeed may arise) whether, after Credit Suisse had been satisfied as creditors, Trendtex could claim the return to it of any surplus. The possibility of this could not invalidate the agreement; it would arise under it, and clearly fall within the exclusive jurisdiction clause. The vice, if any, of the agreement lies in the introduction of the third party. It appears from the face of the agreement not as an obligation, but as a contemplated possibility, that the cause of action against C.B.N. might be sold by Credit Suisse to a third party, for a sum of U.S. $800,000. This manifestly involved the possibility, and indeed the likelihood, of a profit being made, either by the third party or possibly also by Credit Suisse, out of the cause of action. In my opinion this manifestly "savours of champerty," since it involves trafficking in litigation - a type of transaction which, under English law, is contrary to public policy. I take the definition of "champerty " (etymologically derived from "campi partitio") from Halsbury's Laws of England, 4th ed., vol. 9 (1974) para. 400: "Champerty is a particular kind of maintenance, namely maintenance of an action in consideration of a promise to give the maintainer a share in the proceeds or subject matter of the action." *695 Although ancient in origin, and so no doubt encrusted with disposable obsolescences, it has been given statutory recognition by the Criminal Law Act 1967, sections 13 and 14, which, while abolishing criminal and tortious liability for champerty, expressly preserves any rule of law as to the cases in which a contract involving champerty is to be treated as contrary to public policy and/or otherwise illegal.

Two modern cases in which agreements have been held void for champerty are In Re Trepca Mines Ltd. (No. 2) [1963] Ch. 199 (Court of Appeal) and Laurent v. Sale & Co. [1963] 1 W.L.R. 829. In Re Trepca Mines Ltd. was concerned with an agreement governed by French law which contained provisions remarkably similar to those of the agreement of January 4, 1978: it involved the participation by a third party, M. Teyssou, in contemplated litigation to the extent of 25 per cent. and M. Teyssou was given power to conduct the litigation. The Court of Appeal held this agreement to be champertous. In Laurent v. Sale & Co. there was an assignment to Laurent of debts due from a finance house, which it was known would have to be sued for, in consideration of the payment by Laurent of a proportion of the amount recovered, the litigation to be conducted by Laurent. It was held that this agreement and the assignment of the debts were champertous and unenforceable. I think that these decisions are sound in law and that the principle of them should be applied in the present case. In my opinion accordingly any such assignment of the English cause of action (Trendtex Trading Corporation v. Central Bank of Nigeria [1977] Q.B. 529) as was purported to be made by the agreement of January 4, 1978, for the purpose stated was, under English law, void. However, this does not conclude the matter. It remains to be decided what effect this has upon the agreement as a whole. The proper law of the agreement is Swiss and it is for the Swiss court to decide that question. In fact the agreement contains other provisions, of some of which Trendtex has had the benefit, upon which article 6 can certainly operate. Moreover other, and serious, questions are in issue between the parties as to the position of Maitre Patry which, I say with all proper reserve since the matter will have to be tried, appears equivocal. These latter questions may not fall within the exclusive jurisdiction clause but they must, in any event, be tried under Swiss law, as the law governing Maitre Patry's duties to Trendtex and his professional responsibilities. They are closely connected with the questions which arise strictly under the agreement of January 4, 1978. There is therefore room for the operation of article 6 in spite of the champertous element in the agreement so far as concerns any assignment of the claim against C.B.N. In these circumstances, while it is a matter of discretion whether a stay should be granted, some strong reason must be shown by Trendtex why the article should not be given effect in accordance with the parties' contractual intentions. All the relevant factors, including the procedural benefit to Trendtex of obtaining discovery under English law, were meticulously examined and balanced by Robert Goff J. who decided to grant a stay. After a further examination in the Court of Appeal, the same result was reached. Concurrent decisions of this *696 character in any event carry great weight, but I am satisfied, after my own balancing of the arguments, that the decision to stay was right, and that this litigation ought to be tried in Switzerland. I would accordingly dismiss the appeal. LORD EDMUND-DAVIES. My Lords, I am in respectful agreement with the speeches prepared by my noble and learned friends, Lord Wilberforce and Lord Roskill, which I have had the advantage of reading in draft. I therefore concur in holding that this appeal should be dismissed. LORD FRASER OF TULLYBELTON.

My Lords, my noble and learned friends, Lord Wilberforce and Lord Roskill, whose speeches I have had the privilege of reading in advance, have explained the issues in this appeal and I respectfully agree with them that the assignment by Trendtex of its cause of action against C.B.N., purported to be made by the agreement of January 4, 1978, was, under English law, void. What is the result so far as the present proceedings are concerned? The respondents seek to have them stayed in order that effect may be given to the provision in article 6 of the agreement of January 4, 1978, that "any dispute regarding its conclusion, interpretation or fulfilment shall be judged by the Court of Geneva, exclusive of any other jurisdiction." Robert Goff J. decided that the proceedings ought to be stayed, and the Court of Appeal affirmed his judgment. I have reached the same conclusion and I can state my reasons quite shortly as follows. The agreement contains provisions about several other matters besides the assignment or conveyance of the appellants' rights against C.B.N. to the respondents. I respectfully agree with Oliver L.J. in the Court of Appeal that, even if the assignment was invalid, it is possible that the parts of the agreement relating to other matters ought to receive effect. The agreement being governed by Swiss law, it would in my opinion be appropriate that the effect of the invalidity of the assignment upon the agreement as a whole should be considered by a Swiss court rather than by an English court. It is also relevant that both parties to the appeal are Swiss corporations and that the natural persons principally concerned in the negotiations that led up to the agreement, Maitre Patry and Mr. Hauser, are both Swiss nationals. This appeal is an interlocutory stage in an action which raises other questions, including questions as to whether a fiduciary duty was owed by MaOEtre Patry, a Swiss avocat, to the appellants, a Swiss corporation, and if so as to the standard of legal duty (and perhaps of professional ethics) incumbent upon such an avocat. These are matters upon which the Swiss courts are evidently better qualified to decide than the English courts. The whole agreement and the circumstances which led up to it are closely associated with Switzerland, and, the parties having agreed that the Court of Geneva was to have exclusive jurisdiction in all matters arising out of the agreement, I am of opinion that no sufficient reason has been shown for departing from the decisions of the judge and the Court of Appeal in favour of giving effect to that provision of the agreement. For these reasons I would dismiss the appeal. *697 LORD KEITH OF KINKEL. My Lords, I have had the benefit of reading in draft the speeches of my noble and learned friends, Lord Wilberforce and Lord Roskill. I agree that, for the reasons which they give, the appeal should be dismissed. LORD ROSKILL. My Lords, this appeal arises out of an application by the respondents (Credit Suisse) to stay an action brought against them by the two appellants, Trendtex Trading Corporation ("Trendtex"), a corporation incorporated in Switzerland and carrying on business in Zurich, and Temo Anstalt ("Temo"), a corporation incorporated in Liechtenstein, which was the beneficial owner of the entire share capital (100 bearer shares) of Trendtex. Temo was at all material times controlled

by a Mr. London who was and still claims to be one of the two joint general managers of Trendtex, the other being a Dr. Kennedy. Temo has no separate interest in this appeal from that of Trendtex and for convenience I shall treat Trendtex as the sole appellants, as indeed they were treated in argument before your Lordships' House. Though other grounds for seeking the stay were advanced in the summons, the sole ground relied upon in these proceedings was the presence of an exclusive jurisdiction clause in an agreement dated January 4, 1978, between Trendtex and Credit Suisse, which by article 6 provided: "This agreement is governed by Swiss law. Any dispute regarding its conclusion, interpretation or fulfilment shall be judged by the Court of Geneva, exclusive of any other jurisdiction." My Lords, on March 30, 1979, Robert Goff J. [1980] 3 All E.R. 721 granted Credit Suisse's application and stayed the action. With the leave of the learned judge Trendtex appealed to the Court of Appeal (Lord Denning M.R., Bridge L.J., as he then was, and Oliver L.J.) who on May 2, 1980, dismissed the appeal but gave leave to appeal to your Lordships' House. Though the Court of Appeal was unanimous in dismissing the appeal, the reasons given in the judgment of Oliver L.J., with whom Bridge L.J. agreed, differ from certain of the reasons given by the learned Master of the Rolls. My Lords, the factual background to this appeal is extremely complex. It is fully set out in the judgment of Robert Goff J. and I shall do no more than gratefully borrow from his judgment so much of his statement of the facts as is necessary for the understanding of the principal issues involved in this appeal. On July 24, 1975, Trendtex sold 240,000 metric tons of cement to Pan-African Export & Import Co. Ltd., c.i.f. Lagos/Apapa. Pan-African Export & Import Co. Ltd., as buyers, were to be responsible for discharging port demurrage. Payment of the purchase price and that demurrage was to be made under a letter of credit to be opened by the Central Bank of Nigeria (C.B.N.). The letter of credit was duly opened. Trendtex was notified of that fact by the Midland Bank in London. The Midland Bank was the corresponding bank of C.B.N. but it did not confirm the letter of credit. The first four shipments of cement were made and duly paid for. But there was great congestion at Lagos and large sums became *698 payable in respect of those four shipments for demurrage. Trendtex made two more shipments. C.B.N. refused to accept the document presented for the fifth shipment or liability for any of the demurrage claimed on two of the earlier shipments. Trendtex thereupon treated C.B.N. as having repudiated the contract contained in the letter of credit, and on November 4, 1975, began proceedings in England claiming some U.S. $14,000,000. On December 16, 1975, C.B.N. issued a summons to set aside those proceedings on the ground of sovereign immunity. On March 26, 1976, Donaldson J. upheld that claim to immunity. But on January 13, 1977, the Court of Appeal [1977] Q.B. 529 reversed that decision, at the same time granting C.B.N. leave to appeal to your Lordships' House. My Lords, this repudiation of the letter of credit by C.B.N. gave rise to grave financial problems for Trendtex, for Credit Suisse had financed Trendtex's purchases of the cement from German suppliers. As a result Trendtex became heavily indebted to Credit Suisse who had anticipated recoupment from the letter of credit which C.B.N. had repudiated. Credit Suisse in November 1975 agreed to guarantee the costs incurred by Trendtex in the action against C.B.N. which I have already mentioned. It was in this connection that on September 6, 1976, Trendtex executed in favour of Credit Suisse a document in German of which your Lordships

have both a translation and a copy of the original, headed (in translation) "Assignment." The "assignment" provides inter alia that Trendtex hereby "assigns all its claims from the contracts which it had made with Pan- African ... to the Credit Suisse; this until the claims of the assignee are covered. ..." On November 26, 1976, a further document was executed in favour of Credit Suisse, also in German, of which your Lordships have both a translation and a copy of the original, headed (in translation) "Declaration of Surrender." This provides inter alia that Trendtex "in fulfilment of its declaration of surrender of September 6, 1976, ... surrenders all its claims arising from the said contract and from the letter of credit issued by the Central Bank of Nigeria ... to the full extent of the indebtedness to the transferee. ..." My Lords, it will be convenient to observe at this juncture that the letter of credit upon which C.B.N. defaulted was payable in London. Trendtex's cause of action against C.B.N. was thus situate in London and was governed by English law. This has been common ground throughout all these proceedings. My Lords, following upon the grant to C.B.N. of leave to appeal against the reversal of Donaldson J.'s judgment upholding their claim to immunity, C.B.N. on April 20, 1977, presented a petition to your Lordships' House. But around this time, Messrs. Theodore Goddard & Co., who were then on the record as solicitors for Trendtex. received an indication that C.B.N. wished to enter into negotiations for the settlement of this claim. At this juncture Credit Suisse appointed a Swiss lawyer, Dr. Patry, to act on their behalf. This gentleman, who plays a prominent part in the remainder of the story, thereupon took a very strong line on behalf of Credit Suisse *699 vis-a-vis Trendtex, making it plain that the purpose of Credit Suisse was to recover the sum owing by Trendtex to Credit Suisse. The detail of what followed will be found in the judgment of Robert Goff J. [1980] 3 All E.R. 721 and I do not repeat it. Clearly, Credit Suisse and Dr. Patry on their behalf were in an extremely strong negotiating position vis-a-vis Trendtex. On December 21, 1977, Dr. Patry in a telex - the original was in French but your Lordships have a copy both of the original and of a translation - to Trendtex mentioned that he had informed them several times that "Credit Suisse has a possibility of realising Trendtex's rights with regard to the Central Bank of Nigeria for a substantial sum. The sum in question is U.S. $800,000." On January 4, 1978, the all-important agreement, out of which the present litigation arises, was concluded between Trendtex acting by Dr. Hauser, its sole director in Switzerland, and Credit Suisse acting by Dr. Patry. I quote only from the third and fifth recitals, noting as respects the third that in the letter of November 7, 1977, there referred to that debt had been described as "reduced" to U.S. $1,500,000. Recital 3. "Where as a result T.T.C." (that is Trendtex) "became indebted to C.S." (that is Credit Suisse) "and the amount of such indebtedness has been agreed upon by T.T.C. and C.S. as being U.S. $1.5m. as per a letter agreement dated November 7, 1977, and;" Recital 5. "Whereas C.S. has received an offer from a third party to buy T.T.C.'s rights against the Central Bank of Nigeria - such rights having been assigned by T.T.C. to C.S. on November 26, 1976, in guarantee of C.S.'s claim - for an amount of U.S. $800,000, and;" Article 1 provided as follows: "Subject to the terms and conditions of this agreement, T.T.C. is not opposed to the sale by C.S., to a purchaser of C.S.'s choice, of all rights and claims of any sorts

originally held by T.T.C. against Central Bank of Nigeria and/or against the Permanent Secretary Ministry of Defence of the Federal Republic of Nigeria and/or Pan-African Import & Export Co. Ltd. of London (Great Britain), for a consideration and terms of payment to be determined only by C.S. Consequently T.T.C. hereby irrevocably recognises that it has no further interest of whatsoever nature in the legal action conducted in London in its sole name but for the sole and exclusive benefit of C.S. (or the above mentioned purchaser) against Central Bank of Nigeria, in which claim T.T.C. is represented by the law firm Theodore Goddard & Co., solicitors, in London and which claim is now pending before the House of Lords." Robert Goff J. summarised the remaining provisions of this agreement as follows [1980] 3 All E.R. 721, 729: "Credit Suisse were to pay $388,000 to Trendtex on (i) a statement by Dr. Hauser to Credit Suisse that, by collecting that sum, he had been able to obtain a release from Trendtex's creditors and (ii) releases from Trendtex's creditors. In addition, Credit Suisse committed themselves to pay a further $72,000 to a certain Nigerian company ... if *700 it established a valid claim against Trendtex. To give Credit Suisse 'proper control of the good fulfilment by [Trendtex] of its obligations and undertakings hereunder,' Dr. Hauser undertook three things: (i) to deposit 90 per cent. of the shares of Trendtex with Dr. Patry, to be kept by Dr. Patry 'in escrow until such time that Dr. Patry thinks he can return the shares to Dr. Hauser'; (ii) to complete the formalities necessary to enable Dr. Patry, as long as he held the shares in escrow, to exercise the voting rights appertaining to them, as he deemed fit; (iii) to hand over to Dr. Patry his resignation as director of Trendtex to be used by Dr. Patry at the time of Dr. Patry's sole choice. Apparently the remaining 10 per cent. of the shares in Trendtex had already been pledged to Temo as security for a loan." I have already quoted article 6, the exclusive jurisdiction clause. My Lords, on January 20, 1978, Trendtex, acting by Dr. Hauser, gave Dr. Patry a full power of attorney. Dr. Patry then pursued negotiations with the Nigerian authorities. In a letter dated February 14, 1978, to their negotiating committee, Dr. Patry asserted that Trendtex's total claim in the House of Lords and in other proceedings was U.S. $24,913,460.38 and was increasing. Whence this figure emanated is not made plain in any document before your Lordships' House. On February 24, 1978, Trendtex, acting by Dr. Patry, settled with C.B.N. and the Nigerian authorities for U.S. $8m. which your Lordships were told was paid to the Midland Bank, New York. When Mr. London and Dr. Kennedy became aware of what had happened they were, perhaps understandably, suspicious of what had occurred.(Further correspondence followed to which it is not necessary to refer in detail beyond observing that in a telex dated March 30, 1978, from Dr. Patry to Dr. Hauser, the former stated that the claim against C.B.N. had been assigned to a third party on January 9, 1978, for U.S. $1,100,000. Who the fortunate third party was, who seemingly made a profit of U.S. $6,900,000 (i.e., $8m. less $1,100,000) within a few weeks, is not known. Credit Suisse have not revealed it and Dr. Patry, claiming that it is not relevant, has also declined to reveal it. In an affidavit sworn by Dr. Patry on October 22, 1979, he deposes as follows: "2. I am informed by Messrs. Theodore Goddard & Co., and I verily believe, that the non-disclosure of the identity of the purchaser of Trendtex's claim was the subject of adverse comment by counsel for the plaintiffs during the hearing before the Honourable Mr. Justice Goff. I regret that this non- disclosure may have

conveyed a wrong impression. Accordingly, and despite my continuing belief that in the circumstances of the present action, and in particular in the light of the agreement of January 4, 1978, the identity of the purchaser is not relevant, I consider that in the interests of the defendants I should explain the circumstances in which Trendtex's claim was sold to the unidentified purchaser and why I continue to be unable to disclose the purchaser's identity. "3. The sale was to a subsidiary of a Swiss trading corporation, not a bank or finance house. The subsidiary concerned is not a subsidiary or associated or affiliated company of Credit Suisse. I was *701 convinced at the time of the sale that it was the best commercial settlement possible for the defendants. I was entirely satisfied from my general experience in other matters of attempting to negotiate with the Nigerian authorities that no higher figure than the sale price could have been obtained before or in early January 1978 nor, in my view, was there any prospect of the defendants themselves negotiating any settlement direct with the Nigerian authorities. ... "6. ... I was entirely satisfied that there was no other potential purchaser either in Switzerland or elsewhere. Nor could I have obtained a higher price; if I could have, I would have been under a duty to have done so and I would have done so. Of course, I appreciated that the purchasers expected to make a profit on the transaction, otherwise they would not have agreed to pay $1,100,000. But the amount which they did make, and the speed with which they made it, I did not and had not grounds to foresee." Beyond this sparse information your Lordships have no knowledge of the terms upon which the benefit of Trendtex's claim against C.B.N. which, on January 4, 1978, Trendtex had assigned to Credit Suisse was sold to this anonymous third party, save that a large profit was apparently made by that third party. But your Lordships may think it obvious that one object, and indeed the principal object, of the agreement of January 4, 1978, was to enable Credit Suisse to resell the benefit of the assignment which they had that day obtained from Trendtex, their purchaser entering into the transaction with the avowed object of making a profit upon it if he possibly could from his purchase. My Lords, it is Trendtex's purpose in these proceedings brought in this country to seek to set aside these transactions and if possible to obtain the benefit of this $8m. for themselves. Credit Suisse having issued the summons to stay the action on the ground (inter alia) of the existence of the exclusive jurisdiction clause, Trendtex's first task must, in the circumstances, be to show that the English courts should entertain these proceedings and not insist upon whatever proceedings may be appropriate being heard and determined in accordance with article 6 by the court sitting in Geneva. Trendtex seeks to displace article 6 by contending that English law, which is already stated as the proper law of the chose in action which was the subject of the assignment to and reassignment by Credit Suisse, does not permit assignment of what is sometimes called a bare cause of action. This assignment and reassignment were not merely assignments of a bare cause of action against C.B.N. but also were void for maintenance and champerty and were thus illegal and this illegality extended to the exclusive jurisdiction clause itself: see the decision of your Lordships' House in Heyman v. Darwins Ltd. [1942] A.C. 356. Alternatively, it was argued that as a matter of discretion this action should be allowed to proceed here for the several reasons considered by Robert Goff J. in his judgment. My Lords, learned counsel for Trendtex put in the forefront of his attack on the judgment of Oliver L.J. with which, as already stated, Bridge L.J. agreed, the

contention that the learned Lord Justice had failed *702 to distinguish between the different nature of the interest required to support an assignment of a cause of action and an interest which would justify the maintenance of the cause of action by a third party and had considered that if there were a sufficient interest to support the one it would be, without more, sufficient to support the other. Further, he contended that no interest could justify a champertous agreement save in the specific case of a sale by a trustee in bankruptcy to a creditor of a cause of action on the basis of a division of any proceeds, this being authorised by statute: see Guy v. Churchill (1888) 40 Ch.D. 481. My Lords, before considering these submissions in any detail it is necessary to recall that the Criminal Law Act 1967 by section 13 (1) abolished the crimes of maintenance and champerty and by section 14 (1) provided that neither should any longer be actionable as a tort. But section 14 (2) further provided that these provisions should not affect any rule of law as to the cases in which a contract was to be treated as contrary to public policy or otherwise illegal. It therefore seems plain that Parliament intended to leave the law as to the effect of maintenance and champerty upon contracts unaffected by the abolition of them as crimes and torts. My Lords, it is clear, when one looks at the cases upon maintenance in this century and indeed towards the end of the last, that the courts have adopted an infinitely more liberal attitude towards the supporting of litigation by a third party than had previously been the case. One has only to read the classic judgment of Danckwerts J. affirmed by the Court of Appeal, in Martell v. Consett Iron Co. Ltd. [1955] Ch. 363 to see how this branch of the law has developed and how the modern view of sufficiency of interest has come about. My Lords, learned counsel cited to your Lordships many of the cases on maintenance which are there discussed. For my part I think no further review of them is necessary today. I would only emphasise the importance when reading them of distinguishing between the use of the word maintenance to denote lawful maintenance and the use of that word to denote what was then both a crime and a tort. My Lords, one of the reasons why equity would not permit the assignment of what became known as a bare cause of action, whether legal or equitable, was because it savoured of maintenance. If one reads the well known judgment of Parker J. in Glegg v. Bromley [1912] 3 K.B. 474, 490, one can see how the relevant law has developed. Though in general choses in action were assignable, yet causes of action which were essentially personal in their character, such as claims for defamation or personal injury, were incapable of assignment for the reason already given. But even so, no objection was raised to assignments of the proceeds of an action for defamation as in Glegg v. Bromley, for such an assignment would in no way give the assignee the right to intervene in the action and so be contrary to public policy: see Fletcher Moulton L.J., at pp. 488-489. My Lords, just as the law became more liberal in its approach to what was lawful maintenance, so it became more liberal in its approach to the *703 circumstances in which it would recognise the validity of an assignment of a cause of action and not strike down such an assignment as one only of a bare cause of action. Where the assignee has by the assignment acquired a property right and the cause of action was incidental to that right, the assignment was held effective. Ellis v. Torrington [1920] 1 K.B. 399 is an example of such a case. Scrutton L.J. stated, at pp. 412-413, that the assignee was not guilty of maintenance or champerty by reason of the assignment he took because he was buying not in order to obtain a cause of action but in order to protect the property which he had bought. But, my Lords, as I read

the cases it was not necessary for the assignee always to show a property right to support his assignment. He could take an assignment to support and enlarge that which he had already acquired as, for example, an underwriter by subrogation: see Compania Colombiana de Seguros v. Pacific Steam Navigation Co. [1965] 1 Q.B. 101. My Lords, I am afraid that, with respect, I cannot agree with the learned Master of the Rolls [1980] Q.B. 629, 657 when he said in the instant case that "The old saying that you cannot assign a 'bare right to litigate' is gone. " I venture to think that that still remains a fundamental principle of our law. But it is today true to say that in English law an assignee who can show that he has a genuine commercial interest in the enforcement of the claim of another and to that extent takes an assignment of that claim to himself is entitled to enforce that assignment unless by the terms of that assignment he falls foul of our law of champerty, which, as has often been said, is a branch of our law of maintenance. For my part I can see no reason in English law why Credit Suisse should not have taken an assignment to themselves of Trendtex's claim against C.B.N. for the purpose of recouping themselves for their own substantial losses arising out of C.B.N.'s repudiation of the letter of credit upon which Credit Suisse were relying to refinance their financing of the purchases by Trendtex of this cement from their German suppliers. My Lords, I do not therefore think that My. Brodie is correct in criticising the judgment of Oliver L.J. on the ground that the learned Lord Justice failed to distinguish between the interest necessary to support an assignment of a cause of action and the interest which would justify the maintenance of an action by a third party. I think, with respect, that this submission involves over-analysis of the position. The court should look at the totality of the transaction. If the assignment is of a property right or interest and the cause of action is ancillary to that right or interest. or if the assignee had a genuine commercial interest in taking the assignment and in enforcing it for his own benefit, I see no reason why the assignment should be struck down as an assignment of a bare cause of action or as savouring of maintenance. But, my Lords, to reach that conclusion and thus to reject a substantial part of My. Brodie's argument for substantially the same reasons as did Oliver L.J. does not mean that at least article 1 of the agreement of January 4, 1978, is not objectionable as being champertous, for it is not an assignment designed to enable Credit Suisse to recoup their own losses by enforcing Trendtex's claim against C.B.N. to the maximum amount recoverable. Though your Lordships do not have the agreement between Credit Suisse and the anonymous third party, it seems to me obvious, as *704 already stated, that the purpose of article 1 of the agreement of January 4, 1978, was to enable the claim against C.B.N. to be sold on to the anonymous third party for that anonymous third party to obtain what profit he could from it, apart from paying to Credit Suisse the purchase price of U.S. $1,100,000. In other words, the "spoils," whatever they might be, to be got from C.B.N. were in effect being divided, the first U.S. $1,100,000 going to Credit Suisse and the balance, whatever it might ultimately prove to be, to the anonymous third party. Such an agreement, in my opinion, offends for it was a step towards the sale of a bare cause of action to a third party who had no genuine commercial interest in the claim in return for a division of the spoils, Credit Suisse taking the fixed amount which I have already mentioned. To this extent I find myself in respectful disagreement with Oliver L.J. My Lords, in English law, at least as I think, contrary to My. Yorke's submission which Oliver L.J. [1980] Q.B. 629, 675 accepted, the agreement of January 4, 1978, does assign the cause of action. By English law I doubt if the two earlier

documents do have that effect. The language of those documents is that of security rather than of out-and-out assignment. But however this may be, if my view as to the effect in English law of article 1 is correct, I nevertheless respectfully agree with Oliver L.J. that it by no means follows that the whole agreement, including the exclusive jurisdiction clause, is void by Swiss law. I agree with the following passage in his judgment, at pp. 675- 676: "I agree with the judge that, assuming that the contemplated transaction with the third party was in fact one to which English law does not give effect and which therefore would be treated equally as ineffective by the Swiss court, it does not follow that the agreement as a whole is void by Swiss law. There was nothing ex facie necessarily illegal in the agreement. Whether any assignment under it fell foul of the English rules with regard to maintenance or champerty would depend upon the identity and interest of the unidentified third party, and in my judgment the judge was right in applying to the exclusive jurisdiction clause the reasoning of Diplock L.J. in Mackender v. Feldia A.G. [1967] 2 Q.B. 590, 601-604 and in holding that the question whether the agreement gave rise to 'enforceable rights and duties' was a dispute regarding the conclusion, interpretation or fulfilment of the agreement, was within the clause and fell to be determined according to the proper law of the agreement. Once that was determined, it was a matter for the judge's discretion whether or not to give effect to the exclusive jurisdiction clause by granting the stay sought by Credit Suisse ..." In reaching this conclusion I have not lost sight of the two affidavits of M. Bachi; but this evidence, in my judgment, affords far too insecure a foundation on which to reach the conclusion that the whole agreement, including the jurisdiction clause, is void by Swiss law. On this view it became a matter for the discretion of the learned judge whether or not this action should be stayed. He dealt with this matter fully and at considerable length in his judgment. The Court of Appeal *705 agreed with his reasoning. Like Oliver L.J., I see no reason for your Lordships' House to interfere with the learned judge's exercise of his discretion which seems to me, if I may respectfully say so, to have been entirely correct in principle. I would only add that I do not think that the obvious advantages to Trendtex of obtaining an order for discovery which would not be available to them in Switzerland can be allowed to outweigh the other reasons for leaving the parties to the forum of their own choosing, especially those mentioned by my noble and learned friend, Lord Fraser of Tullybelton, in his speech, which I have had the advantage of reading in draft. It remains only to deal with one short point which My. Brodie took at the outset of his submissions to your Lordships' House. This was founded upon the report of My. Yorke's argument in the Court of Appeal [1980] Q.B. 629, 640, 647, when he invited that court to decide the question of maintenance and champerty. From this My. Brodie argued that My. Yorke had submitted the whole question to the jurisdiction of the English courts within the principle enunciated by the Court of Appeal in Henry v. Geoprosco International Ltd. [1976] Q.B. 726, 749. It is a striking fact that no such submission was made to the Court of Appeal. My Lords, in my view this submission is untenable. My. Yorke was simply inviting the Court of Appeal to express their view as to the effect of English law of maintenance and champerty upon the assignment for such help as it might be to any Swiss court thereafter dealing with the matter. In the result I would dismiss this appeal. I would add that since preparing this speech I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Wilberforce, with which I

find myself in respectful agreement. November 19. The plaintiffs petitioned for amendment of the draft judgment of the House dated October 22, praying that it might be amended as to costs and that the defendants might be ordered to pay the plaintiffs' costs in the House of Lords and Court of Appeal. Nathan for the plaintiffs. [LORD WILBERFORCE. The plaintiffs should have notified this application at the time, but the House will entertain the petition. The point that was argued at great length, possibly at greater length, was the point of champerty. The plaintiffs are entitled to say that, although they failed in the result, they had some success on a point which took up quite a lot of time but which is of considerable importance in regard to what will be the ultimate relations between the parties.] Hunt for the defendants opposed the petition. The discretion which your Lordships' House has to entertain an application for costs after the event is a discretion which is very rarely exercised. The classic example is Broome v. Cassell & Co. Ltd. (No. 2) [1972] A.C. 1136: but there there was an unexpected turn of events; in the present case the judgments are comparatively short and certainly could have been read and the point understood in time to argue the matter in the usual way. *706 [LORD WILBERFORCE. It is not a jurisdiction to be exercised every day, but requires something unusual.] Their Lordships ordered that the draft order dated October 22 be discharged and that in lieu thereof the appeal should be dismissed with no order as to costs in the House of Lords or Court of Appeal. Representation Solicitors: Herbert Oppenheimer Nathan & Vandyk; Theodore Goddard & Co. Appeal dismissed with costs. Order accordingly. Plaintiffs to pay defendants' costs of petition to amend draft judgment. (M. G. ) (c) Incorporated Council of Law Reporting For England & Wales [1982] A.C. 679 END OF DOCUMENT

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