## Facts

- An English-registered company operated motor-trading businesses in Angola through five subsidiaries in which it held 51% and a Portuguese businessman held 49%.
- In December 1973, the businessman agreed to sell his shares to the company for 76 million escudos, payable in four instalments.
- The first three instalments were paid; the fourth instalment (20 million escudos) due in January 1976 was not paid.
- The share-sale contract contained an exclusive jurisdiction clause designating the District Court of Luanda as the sole competent court for litigation.
- Angola became independent in 1975 and adopted a new constitution under a Marxist government amid civil conflict, creating uncertainty about private law continuity, property rights, and judicial independence.
- The seller left Angola in 1975 and later sued in the English Commercial Court in 1977 for the unpaid instalment (or its sterling equivalent).
- The company sought a stay based on the exclusive Luanda clause; the trial judge refused, finding strong reasons to allow the English action to proceed.

## Issues

1. Whether an English court should stay proceedings brought in England in breach of an exclusive foreign jurisdiction clause absent “strong cause” to refuse a stay.
2. Whether Angola’s post-contract political and constitutional changes meant the chosen Luanda court was materially different from the court contemplated when the clause was agreed.
3. Whether evidence of instability and doubts about judicial independence in the chosen forum established a real risk of substantial injustice sufficient to defeat the clause.

## Decision

- The Court of Appeal dismissed the company’s appeal and affirmed the order refusing a stay.
- The court treated the exclusive jurisdiction clause as the starting point but held that strong reasons justified not enforcing it.
- The radical change in Angola’s legal and political conditions, and resulting concerns about the practical availability of a fair trial in Luanda, supported refusal of the stay.
- The appellate court found no basis to interfere with the trial judge’s discretionary conclusion that it was just and proper for the English proceedings to continue.

## Legal Principles

- An exclusive jurisdiction clause will ordinarily be enforced by staying proceedings brought in a different forum unless the plaintiff shows strong cause to the contrary.
- The stay decision is discretionary and turns on whether it is just and proper, in all circumstances, to hold the parties to their chosen forum.
- Strong cause may be established where the chosen forum is not practically or legally suitable, including where there is a real risk the plaintiff will not obtain justice (e.g., compromised judicial independence or political interference).
- Major post-contract changes to the legal order of the chosen forum can mean the designated court is materially different from the tribunal contemplated when the clause was made, supporting refusal to stay.

## Conclusion

The Court of Appeal held that, despite an exclusive Luanda jurisdiction clause, the English action could proceed because Angola’s post-independence transformation created strong cause to refuse a stay, including a real risk of substantial injustice in the contractual forum.


Carvalho v. Hull, Blyth (Angola) Ltd., [1979] 1 W.L.R. 1228 (Eng. C.A.)