Chapter 16

Civil Jurisdiction

Chapter Contents

Introduction

The jurisdiction of the English courts to entertain civil proceedings is now governed primarily by EC Regulation 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, which is commonly known as the Brussels I Regulation.1 The Regulation entered into force on 1 March 2002 in 14 of the 15 states that were then EC member states (the exception being Denmark), on 1 May 2004 for the 10 states that joined the Community on the date, on 1 January 2007 for Bulgaria and Romania, and on 1 July 2007 for Denmark. The Regulation largely replaces the Brussels Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (as amended).2 Although the Regulation deliberately departs from the Convention in a few important respects, much of the substantial case law of the European Court on the interpretation of the Convention remains applicable to the corresponding provisions of the Regulation.3 The traditional English law applies only interstitially, where the Regulation remits jurisdiction to the law of the forum country. Such remission occurs, however, in most cases where the defendant is not domiciled in any EC member state (nor, in view of the Lugano Convention,4 in Switzerland, Norway or Iceland).

The Regulation consists of a Preamble, followed by 76 articles arranged in eight Chapters, and six Annexes.5 The core is contained in Chapter II (Arts 2–31) on direct jurisdiction, and Chapter III (Arts 32–56) on the recognition and enforcement of judgments. Chapter II lays down the rules applicable by a court of a member state, when seised of an action on the merits, for the purpose of deciding its own jurisdiction to entertain the action.To strengthen the legal protection of persons established in the Community, it establishes a general rule that a defendant domiciled in a member state must be sued in that state and harmonises the exceptional cases in which a defendant domiciled in one member state can be sued in another member state. Chapter III seeks to establish the ‘free movement of judgments’, by strictly limiting the grounds on which a judgment given in one member state can be refused recognition or enforcement in another member state and establishing a swift procedure for obtaining a declaration of enforceability or a decision establishing recognition. In view of the harmonisation of direct jurisdiction achieved by Chapter II, a court in which recognition or enforcement is sought under Chapter III is prevented in most cases from reviewing the jurisdiction of the original court.

Chapter I (Art 1) defines the material scope of the Regulation. It applies to civil or commercial matters, as distinct from criminal, revenue, customs, administrative or other public matters.6

1[2001] OJ L12/1. EC Regulation 44/2001 is to be replaced by a revised version, in the form of EU Regulation 1215/2012, which will become applicable on 10 January 2015; [2012] OJ L351/1.

2 For the fifth and final version of the Brussels Convention, see [1998] OJ C27/1.

3Guidance on the interpretation of the Regulation may also be drawn from the various reports on the Convention. See the Jenard Report [1979] OJ C59/1; the Schlosser Report [1979] OJ C59/71; the Evrigenis and Kerameus Report [1986] OJ C298/1; the Jenard and Möller Report [1990] OJ C189/57; and the Cruz, Real and Jenard Report [1990] OJ C189/35.

4Now the Lugano Convention of 30 October 2007 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, [2009] OJ L147/5, which has replaced the Lugano Convention of 16 September 1988, [1988] OJ L319/9. The Lugano Convention 2007 in substance extends the Brussels I Regulation to Switzerland, Norway and Iceland. It governs English jurisdiction where the defendant is domiciled in Switzerland, Norway or Iceland, and its provisions on exclusive jurisdiction, jurisdiction clauses and simultaneous actions apply where they exclude English jurisdiction in favour of that of those countries; see Art 64 of the Lugano Convention 2007.

5The Annexes contain lists of national legislation, rules, courts and procedures, and standard forms for use in connection with enforcement.

6Thus the Regulation does not apply to a dispute between a private person and a public authority that arises out of acts done by the public authority in the exercise of its powers as such, nor where the relevant legal relationship between a public authority and a private person involves the exercise by the state of powers going beyond those existing under the rules applicable to relations between private persons. See Case 29/76: LTU v Eurocontrol [1976] ECR 1541; Case 814/79: Netherlands v Rüffer [1980] ECR 3807; Case C-172/91: Sonntag v Waidmann [1993] ECR I-1963; Case C-167/00: VKI v Henkel [2002] ECR I-8111; Case C-271/00: Gemeente Steenbergen v Baten [2002] ECR I-10489; Case C-266/01: Tiard [2003] ECR I-4867; Case C-433/01: Freistaat

However, certain matters are excluded, such as matters governed by family law,7 succession on death,8 insolvent liquidation9 and arbitration.10

In Chapter II, the basic rules on the existence of direct jurisdiction are specified by Arts 2–4. Where the defendant is domiciled in a member state, Art 2 confers jurisdiction over actions against him on the courts of that state, and Art 3 deprives the courts of the other member states of jurisdiction to entertain actions against him. Where the defendant is not domiciled in any of the member states, the jurisdiction of the courts of each member state is referred to the law of that state.These basic rules are subject to exceptions defined by the remaining provisions of Chapter II.

Articles 5 and 6 derogate from Art 3 by specifying a number of cases in which they confer jurisdiction on courts of one member state over a defendant domiciled in another member state. In such a case, the plaintiff has the choice of suing at the defendant’s domicile in accordance with Art 2, or in another member state in accordance with Arts 5 or 6. The bases of jurisdiction used by Art 5 involve a connection between the cause of action and the territory of the court on which jurisdiction is conferred

– for example, as the place of performance of a contractual obligation, as the place where a tortious event occurred, or as the location of a secondary establishment involved. The bases used by Art 6 involve a connection between the claim and another claim pending in the same court. It deals with co-defendants, third party proceedings and counterclaims. Article 7 deals with admiralty limitation actions. None of these provisions applies where the defendant is not domiciled in any of the member states.

Articles 8–21 lay down particular jurisdictional rules for insurance, consumer and employment contracts. They are based on the assumption that the policyholder, consumer or employee is in a weaker bargaining position than the insurer, supplier or employer, thus meriting special protection. Accordingly, a policyholder, consumer or employee is given a choice of places at which to sue, whereas actions by the insurer, supplier or employer must be brought at the defendant’s domicile, and contrary agreements, concluded before the dispute has arisen, are rendered invalid. However, all of these provisions apply only where the defendant is domiciled in a member state, or where the defendant insurer, supplier or employer has a secondary establishment in a member state and the dispute has arisen from the operations of that establishment.

Article 22 provides for exclusive jurisdiction over certain disputes on account of their subject matter. Thus, exclusive jurisdiction over disputes concerning proprietary rights11 to or tenancies12 of land is conferred on the courts of the member state in which the land is situated;

Bayern v Blijdenstein [2004] ECR I-981; Case C-265/02: Frahuil v Assitalia [2004] ECR I-1543; Case C-292/05: Lechouritou v Germany [2007] ECR I-1519; and Case C-406/09: Realchemie Nederland v Bayer CropScience, 18 October 2011; and Case C-645/11: Land Berlin v Sapir, 11 April 2013.

7See EC Regulation 2201/2003 concerning Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters and the Matters of Parental Responsibility [2003] OJ L338/1; and EC Regulation 4/2009 on Jurisdiction, Applicable Law, Recognition and Enforcement of Decisions and Co-operation in Matters relating to Maintenance Obligations [2009] OJ L7/1.

8 See Re Hayward [1997] Ch 45.

9See Case 133/78: Gourdain v Nadler [1979] ECR 733; Case C-292/08: German Graphics Graphische Maschinen GmbH v Van der Schee [2009] ECR I-8421; Case C-339/07: Seagon v Deko Marty [2009] ECR I-767; and Case C-213/10: F-Tex SIA v Lietuvos-Anglijos UAB JadecloudVilma, 19 April 2012. See also EC Regulation 1346/2000 on Insolvency Proceedings [2000] OJ L160/1.

10See Case C-190/89: Marc Rich v Impianti [1991] ECR I-3855; Case C-391/95: Van Uden v Deco-Line [1998] ECR I-7091; Case C-185/07: Allianz v West Tankers [2009] ECR I-663; The Ivan Zagubanski [2002] 1 Lloyd’s Rep 106; The Hari Bhum [2004] 1 Lloyd’s Rep 206; and National Navigation v Endesa Generacion [2009] EWCA Civ 1397. See also Case C-116/02: Gasser v MISAT [2003] ECR I-14693; and Case C-159/02: Turner v Grovit [2004] ECR I-3565.

11See Case 115/88: Reichert v Dresdner Bank (No 1) [1990] ECR I-27; Case C-294/92: Webb v Webb [1994] ECR I-1717; Case C-292/93:

ˇ

Lieber v Goebel [1994] ECR I-2535; Case C-518/99: Gaillard v Chekili [2001] ECR I-2771; Case C-343/04: Land Oberösterreich v CEZ [2006] ECR I-4557; Lightning v Lightning Electrical Contractors (1998) unreported, 23 April (CA); Ashurst v Pollard [2001] Ch 595 (CA);

Re Hayward [1997] Ch 45; Union de Credit Pour Le Batiment, 22 January 1999 (CA); Griggs v Evans [2004] EWHC 1088 (Ch); and Prazic v Prazic [2006] 2 FLR 1128 (CA).

12See Case 73/77: Sanders v Van der Putte [1977] ECR 2383; Case 241/83: Rösler v Rottwinkel [1985] ECR 99; Case C-280/90: Hacker v Euro-Relais [1992] ECR I-1111; Case C-8/98: Dansommer v Götz [2000] ECR I-393; Case 158/87: Scherrens v Maenhout [1988] ECR 3791; Case C-73/04: Klein v Rhodos Management [2005] ECR I-8667; and Jarrett v Barclays Bank [1997] 2 All ER 484 (CA).

over certain disputes governed by company law, on the courts of the corporate seat;13 over disputes concerning the validity of entries in public registers, on the courts of the country where the register is kept;14 over disputes concerning the registration or validity of patents, trade marks, designs, or similar registrable rights, on the courts of the country of registration;15 and over proceedings concerned with the enforcement of judgments, on the courts of the country of enforcement.16 This provision is overriding: it applies regardless of domicile, agreement or appearance; and even where the defendant is not domiciled in any of the member states.

Articles 23 and 24 provide for submission by agreement or appearance. Article 23 enables parties by an express and sufficiently formal agreement to choose a court of a member state that will have (usually exclusive) jurisdiction to determine disputes concerning a particular legal relationship. This freedom is restricted by Arts 13–14, 17 and 21 in relation to insurance, consumer and employment contracts, and by Art 22 in relation to disputes that are subject to exclusive jurisdiction on account of their subject matter. By Art 24, a court before which the defendant enters an appearance without contesting its jurisdiction becomes competent, unless the dispute falls within Art 22.

The foregoing provisions of Chapter II define the connecting factors on which the existence of jurisdiction depends. They are followed by a group of provisions concerned with the exercise of jurisdiction. Articles 25 and 26(1) require a court to decline jurisdiction of its own motion where it is rendered incompetent by Art 3 or 22. Article 26(2)–(4) requires a court to stay its proceedings until appropriate steps have been taken to notify a defendant who is domiciled in another member state. Articles 27–30 deal with the situation where similar or related proceedings are pending in courts of different member states. They require or permit the court subsequently seised to decline jurisdiction or stay its proceedings in favour of the court first seised. Finally, Art 31 enables a court to grant provisional relief even if it lacks jurisdiction to determine the substance of the dispute.

Chapter III provides for the recognition and enforcement in each member state of judgments given by the courts of the other member states. The obligation to recognise is subject to very limited exceptions relating to public policy, insufficient service or irreconcilability with another judgment. Only in exceptional cases is the court addressed permitted to review the jurisdiction of the original court, and it is never allowed to review the substance or merits of the judgment. A judgment that qualifies for recognition also qualifies for enforcement, provided that it is

13See Case 34/82: Peters v ZNAV [1983] ECR 987; Case C-214/89: Powell Duffryn v Petereit [1992] ECR I-1745; Case C-372/07: Hassett v The Medical Defence Union [2008] ECR I-7403; Case C-144/10: Berliner Verkehrsbetriebe v JPMorgan Chase Bank, 12 May 2011; Grupo Torras v Al-Sabah [1996] 1 Lloyd’s Rep 7 (CA); Speed Investments v Formula One Holdings [2005] 1 BCLC 455 (CA); Choudhary v Bhattar [2009] EWHC 314 (Ch); and Bezant v Rausing [2007] All ER (D) 196 (May).

14See Re Hayward [1997] Ch 45.

15See Case 288/82: Duijnstee v Goderbauer [1983] ECR 3663; Case C-539/03: Roche Nederland v Primus [2006] ECR I-6535; Case C-4/03:

GAT v Lamellen [2006] ECR I-6509; Case C-616/10: Solvay v Honeywell, 12 July 2012; Napp Laboratories v Pfizer [1993] FSR 150; Coin Controls v Suzo International [1997] 3 All ER 45; Fort Dodge v Akzo [1998] FSR 222 (CA); Prudential Assurance Co Ltd v Prudential Insurance Co of America [2003] 1 WLR 2295 (CA); and Griggs v Evans [2004] EWHC 1088 (Ch); and Lucasfilm v Ainsworth, [2011] UKSC 39. Certain EC regulations which create Union-wide intellectual property rights (Regulation 207/2009 on Community Trade Marks [1994] OJ L11/1; Regulation 2100/94 on Community Plant Variety Rights [1994] OJ L227/1; and Regulation 6/2002 on Community Designs [2002] OJ L3/1) contain provisions on jurisdiction which override Regulation 44/2001. On Regulation 207/2009, see

Prudential Assurance Co Ltd v Prudential Insurance Co of America [2003] 1 WLR 2295 (CA), and Case C-235/09: DHL v Chronopost [2011] ECR I-2801.

16See Case 220/84: AS-Autoteile Service v Mahle [1985] ECR 2267; and Case C-261/90: Reichert v Dresdner Bank (No 2) [1992] ECR I-2149. Article 22(5) prevents an English court from enforcing a judgment by garnishment of a debt situated in another member state;

see Kuwait Oil Tanker Co v Qabazard [2004] 1 AC 300. However, after a competent English court has given a judgment in favour of the claimant on the merits of a claim, nothing in the Brussels I Regulation prevents the court from making receiving orders and freezing orders, which operate against the judgment debtor personally and have limited effects on third parties, in respect of assets situated abroad, to pave the way for enforcement of the English judgment on the merits; see Masri v Consolidated Contractors (No 2) [2008] 2 All ER (Comm) 1099 (CA).

enforceable in the original country. The procedure for obtaining a declaration of enforceability is elaborated in detail, and the same procedure may be used to obtain a decision establishing recognition, although recognition may in any event be invoked incidentally whenever it is relevant. Chapter IV (Arts 57–58) provides for the enforcement in a member state of authentic instruments drawn up or registered, and court settlements approved, in other member states.

Chapter V (Arts 59–65) lays down rules for the determination of domicile for the purpose of the Regulation. Whether an individual is domiciled in a member state is governed by the law of that state, but corporate domicile is given a substantive definition referring alternatively to the registered office, central administration or principal place of business. Chapter V of the Regulation also contains a miscellany of minor supplementary or exceptional provisions. Chapter VI (Art 66) contains transitional provisions. Chapter VII (Arts 67–72) deals with the relationship between the Regulation and international conventions17 or other EU legislation.18 Chapter VIII (Arts 73–76) deals with matters such as entry into force, amendment and texts.

The defendant’s domicile

The principal connecting factor used by Chapter II of Regulation 44/2001 is the defendant’s domicile at the institution of the proceedings.The basic rules on direct jurisdiction are laid down by Arts 2–4. Where the defendant is domiciled in a member state, Art 2 confers jurisdiction on the courts of that state, and Art 3 deprives the courts of the other member states of jurisdiction. Where the defendant is not domiciled in any member state, Art 4 remits the jurisdiction of the courts of each member state to the law of that state.19 These basic rules are subject to the exceptions specified in the remaining provisions of Chapter II.

The rationale of the general rule in favour of the defendant’s domicile was considered in Handte v TMCS20 where the European Court explained that the rule reflects the purpose of strengthening the legal protection of persons established within the Community and rests on an assumption that normally it is in the courts of his domicile that a defendant can most easily conduct his defence. Moreover, as the European Court ruled in Group Josi v UGIC,21 the claimant’s domicile is immaterial, except where a provision of the Regulation explicitly refers to it (as do certain provisions on insurance and consumer contracts). Although the Regulation is not explicit on the point,

17On specialised conventions, see Art 71 of the Regulation. These include the Brussels Convention on Certain Rules concerning Civil Jurisdiction in Matters of Collision (1952); the Brussels Convention relating to the Arrest of Seagoing Ships (1952); and the Geneva Convention on Carriage by Road (1956)). See also Case C-406/92: The Maciej Rataj [1994] ECR I-5439; Merzario v Leitner [2001] 1 Lloyd’s Rep 490 (CA); and Sony v RH Freight Services [2007] EWHC 302 (Comm); Hatzl v XL Insurance [2009] EWCA Civ 223; and Case C-533/08: TNT v AXA [2010) ECR I-4107.

18See Art 67 of the Regulation. Other relevant legislation includes Art 6 of Directive 96/71 on the Posting of Workers in the Framework of the Provision of Services [1997] OJ L18/1; and Regulation 207/2009 on the Community Trade Mark [1994] OJ L11/1.

19Where the defendant’s domicile at the commencement of the proceedings is unknown and it is not clear that he is not domiciled within the European Union (EU), jurisdiction must be determined on the basis that he is domiciled within the EU. In such cases, where he is known to have been domiciled in a member state at an earlier time, jurisdiction must be determined on the basis that he is still domiciled at his last known domicile within the EU, and, accordingly, the courts for his last known domicile within the EU will be competent under provisions such as Art 2; and whether or not he is known to have had an earlier domicile within the EU, the competence of any court within the EU, other than the courts for his last known domicile therein, must be determined on the basis that he is domiciled in another member state so that such competence may arise under provisions such as Art 5. See Case C-327/10: Hypotecˇní Banka v Lindner, 17th November 2011; and Case C-292/10: G v De Visser, 15th March 2012.

20Case C-26/91: [1992] ECR I-3967.

21Case C-412/98: [2000] ECR I-5925.

it is settled that the crucial date for determining the defendant’s domicile is that of the institution of the proceedings – in England the issue (rather than the service) of the claim form.22

The effect of Art 2 of the Regulation (taken with supplementary United Kingdom (UK) legislation)23 is, with minor exceptions, to confer jurisdiction on the English courts whenever the defendant is domiciled in England.24 By Art 59(1) of the Regulation, to determine whether an individual is domiciled in the forum state, the court applies its own law.25 By para 9 of Sched 1 to the Civil Jurisdiction and Judgments Order 2001, for this purpose, an individual is domiciled in England if he is resident in England and the nature and circumstances of his residence indicate that he has a substantial connection with England (or with the UK as a whole, but not with any particular part); and there is a rebuttable presumption that an individual who has been resident in England for the last three months or more has a substantial connection there with.

Perhaps surprisingly, these provisions seem to have created little difficulty. In Bank of Dubai v Abbas,26 Saville LJ emphasised that, for this purpose, ‘residence’ requires a settled or usual place of abode with a substantial degree of permanence or continuity, and that the presumption of substantial connection from three months’ residence provides no guidance as to whether the person has become resident. Moreover the significance of the existing duration of a person’s stay in England varies according to the circumstances of the case. Thus, a person who comes to England to retire and who buys a house for that purpose and moves into it, selling all his foreign possessions and cutting all his foreign ties, probably becomes resident here immediately; however, in other circumstances, it may be necessary to balance the length of time that the person has been here with his connections abroad. Somewhat similarly, Sheriff Palmer, in Daniel v Foster,27 and Mance J, in Grupo Torras v Al-Sabah,28 equated ‘residence’ in the present context with ‘ordinary residence’, as defined by Lord Scarman, in Shah v Barnet London Borough Council.29 Thus an individual can have more than one domicile at a given time, and it is enough to make a person domiciled in a part of the UK that he has a place of business or a dwelling place therein which he frequently visits (perhaps for short periods) on a continuing basis, even though his main residence is in another part of the UK or abroad. Accordingly, a man is domiciled in England if he owns a house in England, in which his wife lives, and at which he spends at least a week in each month, even though he spends a considerable amount of time abroad.30 However, one who visits England for a few days, during which he is arrested and then released on bail on conditions preventing his leaving the country, and who then remains in England for the next few weeks because he is so prevented from leaving, will not have acquired an English domicile.31 Nor is a person domiciled in England if he spends the majority of his time in Russia, even though he owns a house in England

22See Canada Trust v Stolzenberg (No 2) [2002] 1 AC 1; Petrotrade v Smith [1998] 2 All ER 346; and Grupo Torras v Al-Sabah [1995] 1 Lloyd’s Rep 374 (Mance J).

23See s 16 and Sched 4 to the Civil Jurisdiction and Judgments Act 1982 (hereinafter the ‘1982 Act’), as amended by the Civil Jurisdiction and Judgments Order 2001 (SI 2001/3929). These provisions allocate jurisdiction between the courts for the various parts of the UK (England and Wales; Scotland; Northern Ireland; and Gibraltar) where the defendant is domiciled in the UK.

24The English courts also have a discretionary jurisdiction over a defendant individual who is not domiciled in any EU member state or Lugano Convention country but who is present in England at the time of service, however brief his visit and even if the dispute has no other connection with England. See Part 6 of the Civil Procedure Rules (CPR) 1998; Maharanee of Baroda v Wildenstein [1972] 2 QB 283 (CA); Barclays Bank of Swaziland v Hahn [1989] 1 WLR 506 (HL); and Chellaram v Chellaram (No 2) [2002] 3 All ER 17 (Lawrence Collins J).

25By Art 59(2), where an individual is not domiciled in the forum state, then, to determine whether he is domiciled in another member state, the court must apply the law of that other member state. See Haji-Ioannou v Frangos [1999] 2 Lloyd’s Rep 337 (CA), applying Art 51 of the Greek Civil Code, whereby for business purposes an individual is domiciled at his place of business.

26[1997] ILPr 308 (CA).

27[1989] SCLR 378.

28[1995] 1 Lloyd’s Rep 374.

29[1983] 2 AC 309.

30See Foote Cone & Belding Reklam Hizmetleri AS v Theron [2006] EWHC 1585 (Ch) (Patten J).

31See Petrotrade v Smith [1998] 2 All ER 346.

that he uses for infrequent, intermittent and fleeting visits, amounting to fewer than 30 nights each year;32 nor if he owns an English football club and a substantial house in England that he uses while making short visits to England, mainly to watch the club's matches, if these stays amount to no more than 110 full days in a year.33

By Art 60(1) of the Regulation, a company or other legal person, or association of natural or legal persons, is domiciled at the place where it has (a) its statutory seat, or (b) its central administration, or

(c) its principal place of business. Article 60(2) adds that, for British and Irish purposes,‘statutory seat’ means the registered office; or, where there is no such office anywhere, the place of incorporation; or, where there is no such place anywhere, the place under the law of which the formation took place.

The concept of central administration was clarified by the Court of Appeal in The Rewia,34 which involved a one-ship company that was incorporated and had its registered office in Liberia, but whose directors were resident in Germany and held their meetings there, and whose ship was managed by agents in Hong Kong. The Court of Appeal held that the company was domiciled for the purposes of the Brussels Convention both in Liberia, as the place of its incorporation and registered office, and in Germany, as the place of its central management and control. Although in practice the company’s agents in Hong Kong had a free hand in the day-to-day management of the vessel, their activities were subject to the control of the directors in Hamburg, which was the centre from which instructions were given when necessary and where ultimate control was exercised. Some subsequent English case-law appears to have applied the concept of central management and control, as explained in The Rewia, both to the concept of central administration and to that of principal place of business, under Art 60 of the Regulation.35 But in Vava v Anglo American South Africa Ltd35a Silber J clearly differentiated the two concepts, holding that the place of the central administration of a company is the place where management and entrepreneurial decisions are taken, rather than simply the place where its board meetings and annual general meetings are held, and irrespective of where its economic activities occur; but that the principal place of business of a company is the place where the most important centre of its economic, industrial or commercial activity is situated, and where most of its employees and business assets are deployed. In any event, it is clear that a merely electronic presence in the form of a web-server does not constitute a domicile.36

The rule conferring jurisdiction over an English defendant on the English courts is subject to very limited exceptions. It applies even if the dispute has no other connection with England. Three exceptions are specified by the Regulation:

(a)where, by reason of its subject matter (such as proprietary rights in land), the dispute falls within the exclusive jurisdiction of the courts of another member state (such as the state in which the land is situated) under Art 22;

(b)where an agreement between the parties confers exclusive jurisdiction on a designated court of another member state under Art 23; and

(c)where a simultaneously pending proceeding in a court of another member state has priority under Arts 27–30.37

32 See Cherney v Deripaska [2007] 2 All ER (Comm) 785.

33 See Yugraneft v Abramovich [2008] EWHC 2613.

34 [1991] 2 Lloyd’s Rep 325.

35See also King v Crown Energy [2003] EWHC 163 (Comm); Royal & Sun Alliance Insurance v MK Digital [2006] 2 Lloyd’s Rep 110 (CA); and Iranian Ministry of Defence v Faz Aviation Ltd [2008] 1 All ER (Comm) 372; and 889457 Alberta Inc v Katanga Mining Ltd [2008] All ER (D) 61 (Nov).

35a [2012] EWHC 1969 (QB).

36 See also Directive 2000/31 on Electronic Commerce [2000] OJ L178/1.

37 There are three similar exceptions in favour of the courts of Switzerland, Norway and Iceland under Arts 16, 17 and 21–23 of the Lugano Convention. There is also an exception, similar to the first exception, in favour of the courts of another part of the UK under r 11 of Sched 4 to the 1982 Act.

Moreover, the doctrine of reflex effect, endorsed by the European Court in Coreck Maritime v Handelsveem,38 enables each member state to extend, by analogy, the exceptions relating to exclusive jurisdiction by subject-matter39 or by agreement,40 but not the exception relating to concurrent proceedings,41 so as to respect similar connections with a non-member state.

However, there is no general exception permitting the English courts to continue to invoke the traditional English doctrine of forum non conveniens (sometimes known as the Spiliada doctrine),42 so as to arm themselves with a discretion to decline jurisdiction over an English defendant in favour of a court of a non-member state whenever they consider it to be a more appropriate or suitable forum for the trial of the action in the light of the interests of all the parties and the ends of justice. As the Schlosser Report emphasises, the Regulation is based on the principle, generally accepted in the laws of the Continental European countries, that a competent court, properly seised of an action, is bound to determine the substantive dispute.43 Moreover, the other member states, whose courts are deprived of jurisdiction by the Regulation, are entitled to expect an English decision on the merits that their courts can recognise under Chapter III. Unfortunately, for more than a decade, a perverse line of decisions of the English Court of Appeal, commencing with Re Harrods (Buenos Aires) Ltd,44 strenuously denied this obvious reality. Eventually, the matter was definitively resolved by the ruling of the European Court in Owusu v Jackson45 that the Regulation precludes a court of a member state from declining the jurisdiction conferred on it by Art 2 on the ground that a court of a non-member state would be a more appropriate forum for the trial of the action, even if the jurisdiction of no other member state is in issue and the proceedings have no connection with any other member state. Conversely, since Art 2 is indifferent to the allocation of jurisdiction between the courts for different parts of the member state in which the defendant is domiciled, it is clear that the English courts retain power to decline jurisdiction over an English defendant in favour of the Scottish, Northern Irish or Gibraltar courts.46

By Art 5(5) of the Regulation, the English courts have jurisdiction over a defendant who is domiciled in another member state but has a secondary establishment in England, as regards disputes arising out of the operations of the English establishment.47 A secondary establishment has been defined by the European Court as an effective place of business, which has the appearance of a permanent extension of a parent body, has a management, and is materially equipped to negotiate business with third parties, so that the latter, although knowing that there will, if necessary, be a legal link with the parent body whose head office is abroad, do not have to deal directly with the

38 Case C-387/98: [2000] ECR I-9337, at para 19, citing the Schlosser Report [1979] OJ C59/71, at para 176.

39 See Arkwright v Bryanston [1990] 2 QB 649; Konkola Copper Mines v Coromin [2005] 2 All ER (Comm) 637; Masri v Consolidated Contractors (No 2) [2008] 2 All ER (Comm) 1099 (CA); and Catalyst Investment Group v Lewinsohn [2009] EWHC 1964 (Ch).

40 See Berisford v New Hampshire Insurance Co [1990] 2 QB 631; Arkwright v Bryanston [1990] 2 QB 649; Konkola Copper Mines v Coromin [2005] 2 All ER (Comm) 637, affirmed [2006] 1 All ER (Comm) 437 (CA); and Winnetka Trading Corp v Julius Baer [2008] EWHC 3146 (Ch) (Norris J).

41 See Catalyst Investment Group v Lewinsohn [2009] EWHC 1964 (Ch). 42 See The Spiliada [1987] 1 AC 460.

43 [1979] OJ C59/71, paras 76–81.

44 [1992] Ch 72. See also The Po [1991] 2 Lloyd’s Rep 206; The Nile Rhapsody [1994] 1 Lloyd’s Rep 382; Nike v Parker (1994) unreported, 31 October; Connelly v RTZ [1996] QB 361; Sarrio v Kuwait Investment Authority [1997] 1 Lloyd’s Rep 113; Lubbe v Cape plc (No 1)

[1999] ILPr 113 and Lubbe v Cape plc (No 2) [2000] 1 Lloyd’s Rep 139; Re Polly Peck International [1998] 3 All ER 812; and Ace Insurance v Zurich Insurance [2001] 1 Lloyd’s Rep 618. Two of these decisions were reversed by the House of Lords, on the ground that, if the discretion existed, it should be exercised in favour of the claimant: see Connelly v RTZ [1997] 4 All ER 335, and Lubbe v Cape plc [2000] 1 WLR 1545.

45Case C-281/02, [2005] ECR I-1383.

46See s 49 of the 1982 Act; Cumming v Scottish Daily Record [1995] EMLR 538; and Lennon v Scottish Daily Record [2004] EMLR 18.

47The same connection creates jurisdiction where the defendant is domiciled in Switzerland, Norway, Iceland, Scotland, Northern Ireland or Gibraltar; see Art 5(5) of the Lugano Convention, and r 3(e) of Sched 4 to the 1982 Act (as amended).