Music and passion were always the fashion but what about jurisdiction?

I recently wrote about the importance of jurisdiction clauses in legal contracts and just days after that blog was published, the Court of Appeal handed down judgment in an appeal concerning a jurisdiction clause. This case highlights the importance of being clear as to which party can bring a claim and where.

In the case of Hipgnosis SFH 1 Limited v Barry Manilow and others [2025]. The legal claim centres around a Music Catalogue Agreement from March 2020 between Hipgnosis SFH 1 Limited (the Appellant) and the other parties in the case, including the well-known singer Barry Manilow (the Respondents). The agreement was about receivables, including royalties in Mr Manilow’s music in return for an initial purchase price. There was also an additional purchase price payable in certain circumstances.

The governing law and jurisdiction clause is reproduced below. For reasons that will become apparent, the fourth sentence has been highlighted in bold – this has been done by us for ease of explanation.

“This Agreement and any related dispute or claim (contractual or non-contractual) shall be governed by, and construed in accordance with, English law. Each party irrevocably submits for all purposes of this Agreement (including any such dispute or claim) to the exclusive jurisdiction of the English courts. Any judgment obtained in the English courts may be enforced in any other jurisdiction. Notwithstanding the foregoing, any claims made by BM against Hipgnosis related to the Purchase Price may be brought by BM in the courts of Los Angeles, California or New York City, New York and solely in connection with such claims, Hipgnosis hereby agrees to submit to the jurisdiction of the courts located in Los Angeles, California and New York City, New York.”

The Appellant company alleged that Mr Manilow and the other respondents failed to pay the royalty payments from Sony despite repeated requests for payment. The Respondents allege that the additional purchase price is due and payable, and that the Appellant has not paid, this is why they have retained the Sony Receipts.

There was some correspondence in the US when the Respondents’ attorney wrote to the Appellant company demanding $1.5 Million. There was also a legal claim initiated by the Respondents in the US.

When the English court considered the jurisdiction clause (above) it seemed to suggest that the clause was one-sided. The judge explained it was “hopeless” to expect the Appellant to bring any counterclaim in California and that the carve-out at sentence four (bold above) was only for the benefit of the Respondents. The court added that it would be “wholly unreasonable” that the Appellant could not bring a claim in any jurisdiction and that the clause was in favour of the Respondents.

The court decided in the appeal that the legal claims could be heard before the English courts, the judge said that the agreement was governed by English law and contains an exclusive jurisdiction provision in the second sentence covering all claims and which provides for irrevocable submission to the jurisdiction for all purposes. The English court is the one court where all the issues between the parties can be determined in a single jurisdiction, and it is the obvious court to determine the overall dispute.

Comment

This case highlights the importance for parties to a contract to be very clear about the governing law and jurisdiction clause. If the jurisdiction clause is one-sided the court will look at the whole clause, sentence by sentence, as was the case in this appeal. In circumstances where one court such as the court of England and Wales is competent to hear all aspects of a claim, there is no reason to add that aspects of a potential claim should be heard in the US or elsewhere.

The parties could have avoided expensive litigation by agreeing to resolve any disputes before the courts of England and Wales using English law when the contract was entered into.