Report on the application of the Brussels I Regulation in the UK (England and Wales)

European Commission Study JLS/C4/2005/03

© BIICL, 2006

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Table of Contents 1. Report of Answers to Questionnaires 1, 2 and 3

Questionnaire 1 (p. 3) Questionnaire 2 (p. 6) Questionnaire 3 (p. 11)

2. ANNEX I – Covering Letter of Professor Gillian Triggs, Director of the

British Institute of International and Comparative Law

(p. 184)

3. ANNEX II – Table showing the Number of Registrations by Country of

Origin in Her Majesty’s Court Service’s Register of Foreign Judgments

(p. 187)

4. ANNEX III – Example Extract from Her Majesty’s Court Service’s

Register of Foreign Judgments

(p. 189)

5. ANNEX IV - Speech of Sir Anthony Clarke to the Society of Advanced

Legal Studies, 26 February 2006

(p. 191)

6. ANNEX V – Note dated 24 April 2006 prepared, at the request of

Professor Peter Schlosser, by Andrew Dickinson, Clifford Chance LLP

and Honorary Fellow at the British Institute of International and

Comparative Law, concerning the Enforcement against Non-parties of

world-wide Freezing Injunctions (including attachment and follow-up

note)

(p. 219)

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Questionnaire No 1: Collection of Statistical Data

The main focus of the statistical evaluation will be on the areas lis pendens, jurisdiction and recognition of judgments.1 Hereby the following inquiries will be carried out:

1. Evaluation of the number of decisions concerning Regulation 44/01/EC proportional to decisions in civil and commercial matters all in all2

It is not possible to give a precise answer to this question. However, searches carried out in a reputable commercial case database (LAWTEL) suggest that of over 6000 recorded decisions of the English courts in the years 2004-2005 (including preliminary decisions, trial decisions and judgments on appeal), less than 50 related specifically to Regulation 44/2001/EC. It should, however, be pointed out that the Regulation is used as a basis for the jurisdiction of the English courts in a much larger number of cases. It is referred to regularly by practitioners specialising in cross-border litigation. As to the volume of commercial litigation in the English courts, figures produced by the Department of Constitutional Affairs showed the total numbers of claims issued in the year 2003-2005 in the divisions of the High Court dealing with such claims were as follows:

2003 2004 2005 Queen's Bench 3815 4177 3930 Chancery Division 4447 3633 4759 Admiralty & Commercial Court 1089 1104 1029 Technology & Construction Court 340 258 373 These figures do not include claims issued in the County Courts. However, relatively few claims issued in these courts involve the Regulation 44/2001/EC.

2. Evaluation of the approximate number of judgments where the courts and tribunals of the Member States concerned retained jurisdiction on the basis of the rules of

1 In general the evaluation shall be based on official statistics. However, if no official data bases exist, an approximate number of decisions should be named, that can be asked for at courts. 2 Due to the short period of application it can be expected that there are only very few decisions concerning the recognition of judgments. Therefore the evaluation shall be expanded, regarding recognition, on decisions concerning the Judgments related to the Convention of 1968 in 2003/2004.

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Regulation 44/2001/EC in 2003/2004 and evaluation of the provisions mostly relied on for that purpose3

See 1 above. Experience suggests that the provisions which appear most commonly in the decided cases as founding jurisdiction are Arts. 2, 5.1, 5.3, 6.1 and 23.

3. Evaluation of the approximate number of applications for a declaration of enforceability on the basis of Regulation 44/2001/EC in 2003/2004

The English High Court does not keep any record of unsuccessful applications. However, one court official estimated that less than 5% of applications for registration were rejected in the first instance. Using figures for 2004/2005 (see 4 below - 2003/2004 figures not available), this suggests an approximate number of 100 applications.

4. Evaluation of the approximate number of declarations of enforceability granted on the basis of Regulation 44/2001/EC in 2003/2004

2004/2005 figures: 92; 2005-2006 figures: 71 (2003/2004 figures not available). These figures relate to judgments from other Member States (excluding Denmark) registered under Part 74 of the Civil Procedure Rules. This includes any judgment registered under the Brussels or Lugano Convention or (in the case of Cyprus and Malta) the Administration of Justice Act 1920, for which separate figures are not available. Our expectation, given the transitional provisions contained in Regulation 44/2001/EC, is that most of the judgments will have been registered under the Regulation. Registered authentic instruments and court settlements are also included in these figures.

5. Evaluation of the approximate number of declarations of enforceability which have been refused already in the first instance in 2003/2004, including the principal grounds for refusal; further evaluation of the number or proportion of cases, where a subsequent improvement of the application has been asked for

See 3 above. Further particulars or documents are commonly requested from the judgment creditor or its legal representatives, although precise figures are not available.

6. Evaluation of the approximate number of revocations of decisions containing a declaration of enforceability after an appeal in 2003/2004, including the principal grounds for revocation

3 All legal proceedings where the defendant is domiciled in a Member State as well as actions according to Article 22 and 23 Regulation 44/01/EC. It is aimed to evaluate the data of the year 2004 – insofar this data is statistically recorded in the Member States. It has to be admitted that the different methods of organisation and documentation within the EU Member States constitute an element of uncertainty. A separate evaluation of court records is – due to the given time and budget frame –, not possible. The evaluation of data will be carried out at the judicial authorities of the Member States by means of the European Judicial Network (EJN). Supplementary, national reporters should selectively address courts and public authorities, which are according to the reporters´ knowledge concerned with the application of the Regulation. If all proceedings concerning declarations of enforceability were concentrated in one senate and had special reference numbers it would be quite easy to determine the number of proceedings by means of the last reference number which has been passed out in the respective year.

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Precise figures are not available (details do not appear on the register), although experience suggests that there are likely to be very few successful appeals in practice.

7. Evaluation of the average amount of time required/accrued for obtaining a decision containing a declaration of enforceability

The Court office aims to review the application documentation within 5 working days. Overall, taking account of the likelihood of further particulars or documentation being requested, the average amount of time would be between 1 and 3 weeks.

8. Compilation of a list of the provisions of Regulation 44/2001/EC that are most frequently applied by the courts and tribunals in the Member States concerned

See 2 above. The lis alibi pendens provisions (Arts. 27 to 30) are also frequently cited.

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Questionnaire No 2: Collection of Empirical Data

1. Survey The second questionnaire covers empirical problems – especially the interfaces between Regulation 44/01/EC and the national laws of procedure. This questionnaire is distributed selectively among groups, who are concerned with the application of Regulation 44/01/EC due to their profession.

2. Questions4

2.1 Are there conditions of recognition and enforcement of judgments, authentic instruments and court settlements which are beyond those permitted under Regulation 44/01/EC?

No

2.2 Are there local focal points, i. e. do cross border litigations accumulate in border regions?

No, although it should be pointed out that litigation and enforcement involving English and Scottish parties appears much more common than litigation involving parties from the UK and other Member States. It may also be noted that the Commercial Court in London is an internationally recognised forum for the resolution of disputes in commercial matters, and that it (or courts in London or England generally) are frequently identified in choice of court provisions.

2.3 From which State of origin do titles that shall be recognized or executed in your State come from?

See attached table showing figures from the financial years 2004-2005, 2005-2006. Germany is, by far, the most common state of origin for registered judgments from other Member States. These figures relate to judgments from other Member States (excluding Denmark) registered under Part 74 of the Civil Procedure Rules. This includes any judgment registered under the Brussels or Lugano Convention or (in the case of Cyprus and Malta) the Administration of Justice Act 1920, for which separate figures are not available. Our expectation, given the transitional provisions contained in Regulation 44/2001/EC, is that most of the judgments will have been registered under the Regulation. Registered authentic instruments and court settlements are also included in these figures.

2.4 Can the handling of the standard form concerning Article 54 be regarded as satisfactory or do similar problems arise as regarding the standard forms concerning Regulation 1348/2000/EC? (See the respective parts of the Mainstrat-study (p. 93–98), which are attached to the questionnaire. Explanation: group 1 =

4 These questions should be put to lawyers as well as judges. However, regarding some questions mainly lawyers are addressed.

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members of state administration, group 2 = judges and attorneys, group 3 = hussiers de justice and other persons providing the service of documents.).

The standard form has given rise to very few problems. Indeed, early experience suggests that the more detailed forms prescribed under Regulation 805/2004/EC are causing greater difficulties in practice.

2.5 Do courts make use of the possibility provided for in Article 55 to dispense with the certificate’s production?

Yes, on occasion.

2.6 Do any language problems arise regarding recognition and enforcement – especially regarding the handling of the standard form concerning Article 54?

No, given the requirement for translation.

2.7 Is the production of translations required (Article 55 (2) Regulation 44/01/EC)?

A translation is normally required.

2.7.1 If yes, will the translation of the operative provisions suffice or is it necessary to translate the whole judgment including the grounds for the decision?

A translation of the whole judgment is normally required, but may be dispensed with by the Master (procedural judge) dealing with the application.

2.7.2 Do the costs for translations lead to less efficiency?

Yes, although those costs are in principle recoverable as part of the application process.

2.8 Which costs result from the recognition of judgments, authentic instruments and court settlements?

Legal costs; Costs of preparing documentation (including translation); Business costs (management time etc.); Court fee (£50)

In particular:

2.8.1 How is Article 52 implemented?

A fixed fee of £50 is charged on an application for a declaration of enforceability.

2.8.2 How are solicitor´s charges calculated?

On the basis of an hourly rate, depending on the experience of the solicitor concerned and the location of his practice. Rates for lawyers practising in the City of London, for example, may range between about £100-£150 per hour for a trainee solicitor to over £500 per hour for a senior partner.

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2.8.3 Are these costs reimbursable?

Yes. Para. 2(1) of Sch. 1 to the Civil Jurisdiction and Judgments Order SI 2001/3929 provides (in relation to non-maintenance judgments) that: "Where a judgment is registered under the Regulation, the reasonable costs or expenses of and incidental to its registration shall be recoverable as if they were sums recoverable under the judgment. " The amount of the award of costs is subject to assessment by the court based on reasonableness (see Civil Procedure Rules, Part 44. Normally, costs will be assessed summarily by the Master at the same time as the application is determined. In practice, a costs figure of £500 is generally regarded as appropriate, and Masters will often assess costs in that amount. Costs estimates of more than £1000 are commonly referred for more detailed assessment.

In particular:

2.8.3.1 Who calculates and verifies the amount of the reimbursable costs, which have been asserted?

See 2.8.3 above.

2.8.3.2 Is it possible to execute the reimbursable costs without bureaucratic formalities?

No special procedure is available for the recovery of costs.

2.8.3.3 Are there any delays in time due to the fact that the costs have to be calculated or due to the fact that the calculation has to be verified?

See 2.8.3. Further delay will occur if detailed assessment of costs is ordered.

2.9 Does the requirement to serve the party against whom enforcement is sought with the declaration of enforceability, which is provided for in Article 42 – or the practice of judicial authorities regarding the dispatch of communications in general – impair the efficiency of enforcement – in particular its surprise effect? Does this virtually obstruct the possibilities of Article 47?5

There is no evidence of such impairment in practice. The judgment credito, rather than the court authorities, is responsible for arranging service of the declaration of enforceability.

2.10 Is there any experience with the granting of legal aid according to Article 50 of the Regulation?

5 Please describe in detail the chronology of all steps that are carried out by the creditor and the court (including its administrative staff). For instance, in Germany the same court clerk is competent to serve the debtor and to notify the creditor. As a consequence of that, the creditor is not informed before the debtor, so that the surprise effect of the first enforcement measure fails. If in your country the court is competent for service: Do similar problems occur? In case your State follows the system according to which the debtor is served by order of the creditor: Does this guarantee the surprise effect?

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No. Legal aid is extremely restricted.

2.11 Is there any experience with the declaration of enforceability of authentic instruments (Article 57), court settlements (Article 58) and appealable judgments (Article 37)? (See also Questionnaire No. 3, part 4.).

Authentic instruments are not uncommonly registered for enforcement (particularly from Germany).

2.12 Do problems arise regarding the references to national procedural laws that are included in Annex I to IV of the Regulation?

No evidence of problems of this kind.

2.13 Do problems arise regarding the application of the standard forms (certificates) that are included in Annex V and VI of the Regulation?

See 2.4 above.

2.14 Do judges have easy access to a version of the printed form concerning Article 54 of the Regulation (Annex V) in their own language, so that a translation of the completed form is dispensable?

Yes. The form is readily accessible online and judges have internet access.

2.15 Are there any possibilities to improve the implementation of the Regulation within the EU? How could guidelines for an improved coordination and cooperation (at a judicial and administrative level) look like?

Overall, at least from the English Courts' point of view, the enforcement procedure under Regulation 44/2001/EC works relatively smoothly. Very few applications for a declaration of enforceability are rejected, and there is little evidence of successful appeals Any proposal which increased the complexity of paperwork required, or required court officials or judges to take on additional resources, would be likely to create concern among the court service and practitioners, given the finite resources available for the administration of justice. However, there would seem to be a case for wider publicity of the possibilities which Regulation 44/2001/EC presents for the cross-border enforcement of claims. The limited number of cases of enforcement (see above) suggests that UK practitioners are not fully aware of these possibilities, or of the relatively straightforward nature of the enforcement process. From the limited information available, it appears that a few firms have taken the lead in encouraging clients from other Member States (particularly Germany) to seek enforcement measures in the UK.

2.16 How much time does it take usually until the first enforcement measure (at least seizure of assets) is carried out – i. e. not only until the judgment – after an application for a declaration of enforceability has been submitted? How much time does it take usually after a judgment has been given in a Member State to collect all documents which are necessary to pursue the application for a declaration of enforceability in another Member State?

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The speed of enforcement depends on the complexity of the case, and the known information regarding the debtor's assets. In England and Wales, the enforcement process is driven by the judgment creditor, not the courts. The principal cause of delay in the collection of the necessary documents (at least in the case of English judgments) occurs in the translation of the judgment.

2.17 Is there any experience with actions raising a substantive objection to the judgment claim?6

English case law recognises both the possibility of set-off and compromise of a disputed claim as precluding enforcement of a judgment debt, although the rules on set-off are not straightforward. Further, para. 2(2) of Sch. 1 to the Civil Jurisdiction and Judgments Order SI 2001/3928 provides: "A judgment registered under the Regulation shall, for the purposes of its enforcement, be of the same force and effect, the registering court shall have in relation to its enforcement the same powers, and proceedings for or with respect to its enforcement may be taken, as if the judgment had been originally given by the registering court and had (where relevant) been entered." (see also para. 3 of the same schedule relating to maintenance judgments). As a result such objections would appear possible at the enforcement stage. As a matter of first impression, however, it seems extremely doubtful whether such grounds could be validlty relied on to oppose the making of or to revoke a declaration of enforceability, unless perhaps they were such as to preclude formal "enforceability" in the Member State of origin (see Arts. 38.1, 41 and 45 and the decision of the ECJ in Coursier v. Fortis Bank SA (Case C-267/97) [1999] ECR I-2543). We are not aware of any English decision which directly addresses this issue.

6 Example: The debtor claims that he has performed in the meantime or has set off his claim against the creditor´s claim or has made a compromise including the arrangement to pay by instalments. This is possible according to an explicit provision in the German implementing statute (§ 12). Does a similar rule exist in your legal system? If yes, did this lead to delays in granting declarations of enforceability?

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Questionnaire No. 3: Legal Problem Analysis

1. General Themes

1.1 Are there any problems in the judicial practice with the autonomous interpretation of „civil and commercial matters“ (Article 1 (1)) practised by the European Court of Justice (ECJ)?

As a general rule, the automonous interpretation given to the phrase "civil and commercial matters" has caused few difficulties in English courts. Indeed, the intervention by the European Court of Justice is a "welcome one" in this regard, as English law does not utilise "civil and commercial matters" as a term of art [see Briggs & Rees, Civil Jurisdiction & Judgments, 4th ed., 2005, London: LLP, para. 2.24]. In Re State of Norway's Application [1987] Q.B. 433, the Court of Appeal praised the clear wording of the Brussels Convention and the caveat (still found in Regulation 44/2001/EC) that it will not apply, in particular, to revenue, customs or administrative matters. Kerr L.J. stated [at 474]: "The Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968, and our Act of 1982 expressly exclude "in particular... revenue, customs or administrative matters" from "civil or commercial matters": see article 1 of the Convention of 1968, as incorporated by Schedule 1 to the Act of 1982. This was done to resolve any doubt about the scope of "civil or commercial matters" in relation to member states which draw no clear distinction between public and private law." The Court of Appeal cited the Schlosser Report to the 1978 Accession Convention as a further reason for the caveat to Article 1(1), without which "civil and commercial matters" could have potentially been far more problematic in English courts: "The distinction between civil and commercial matters on the one hand and matters of public law on the other is well recognised in the legal systems of the original member states and is, in spite of some important differences, on the whole arrived at on the basis of similar criteria.... In the United Kingdom and Ireland the distinction commonly made in the original E.E.C. states between private law and public law is hardly known. This meant that the problems of adjustment could not be solved simply by a reference to these classifications...." In R v Harrow Crown Court ex p. Unic Centre Sarl [2000] 1 W.L.R. 2112, proceedings were brought by a local authority (who had a duty to prosecute under the Trade Marks Act 1994), at the instigation of the trademark proprietor. The magistrates' court granted a forfeiture order, and the defendant appealed, arguing that they had already successfully defended French actions for infringement of trademark, and that the proceedings were civil within the meaning of the Brussels Convention 1968 Art. 1 and the Civil Jurisdiction and Judgments Act 1982, hence the French judgments had to be recognised by the English courts. The local

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authority submitted that the proceedings were either administrative or criminal in nature and were outside the scope of the Convention. In a thorough review of the ECJ's jurisprudence, stemming from the Eurocontrol [1976] case, Newman J. held [at 2122]: "In my judgment Netherlands State v Rüffer (Case 814/79) [1980] ECR 3807 and the two Eurocontrol cases do not support the argument [the local authority] advances. Those cases involve actions taken by public authorities, which were peculiarly the power of the public authority to take by virtue of their status as a public authority and in respect of matters governed by their public authority duties. Although a local authority is bound to prosecute, or has a duty to prosecute, it does not have a duty to bring forfeiture proceedings, nor does it have any exclusive status in bringing such proceedings. The relief it obtains enures to the benefit of the private interests of individuals. In my judgment, the proceedings are predominantly concerned with private interests." English courts have thus interpreted the ECJ's case-law on Article 1(1) as distinguishing between a claim made by (or against) a public law body, which only a public law body could make, then that claim probably does not fall within Regulation 44/2001/EC; if the claim, however, brought by the public law body is one that could theoretically be brought by any legal person, then it will fall within Article 1(1). This approach is affirmed in Grovit v De Nederlandsche Bank & Ors [2005] EWHC 2944 (QB). The defendant Dutch bank and two of its employees (D) sought a declaration that the English court had no jurisdiction to entertain a libel claim brought by the manager (G) of a United Kingdom registered money transfer company on the basis that D was entitled to immunity under the State Immunity Act 1978 or common law or both. G alleged that D had published or caused to be published a letter, in the form of a fax sent to a machine at the offices of an associated UK company, that contained allegedly defamatory statements about G and related to D's intention to refuse G registration for the execution of money transfer transactions. D maintained that the statements had been made by D in the exercise of sovereign authority and it was therefore immune from being sued in the jurisdiction of the English courts pursuant to s. 14(2) of the 1978 Act. G had issued proceedings in the English court in reliance on Council Regulation 44/2001 Art. 5(3). G submitted that the claim was overwhelmingly private in nature and was therefore a civil matter, and therefore within Regulation 44/2001/EC, and that the plea of state immunity was not available following the decision of the Court of Justice in Owusu v Jackson, Case C-281/02, [2005] QB 801 (see discussion in Part 2.2.1below). The questions before the court were, therefore, similar to those before the Court of Justice in the pending reference from the Greek courts in Lekhoritou (Case C-292/05). Tugendhat J. considered that [at para. 52]: "It follows from the judgments in the LTU and Rueffer cases…that such an action falls outside the scope of the Convention only where the author of the damage against whom it is brought must be regarded as a public authority which acted in the exercise of public powers."

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Accordingly, Tugendhat J. held [at para. 60]: "I remind myself that I must interpret the concept of a civil matter by reference, first, to the objectives of the Regulation and, secondly, to the general principles which stem from the national legal systems as a whole. The objectives of the Regulation, as set out in the Recitals, give no support to the view that it was intended to enable claimants to implead natural or legal persons in proceedings relating to anything done by them in the exercise of the sovereign authority of foreign state. And the general principles of law include the principle of state immunity in public international law. In the light of those considerations, and the guidance in para 20 of Sonntag, I have no hesitation in holding that this action, brought on this Intended Decision Letter (which was written against the public law background set out above) is not a civil matter within the meaning of the Regulation." There is little doubt that the decision seems correct in the light of Ruffer, but Grovit v De Nederlandsche Bank & Ors [2005] fails to address the more recent decisions of the ECJ; as one commentator notes, the ECJ has recently "quietly distanced [itself] from Ruffer and its suggestion that characterisation be made by reference to something other than national laws, and have focused instead more clearly on the manner in which the cause of action arises" [see Briggs & Rees, op. cit., para. 2.24.] Cases such as Gemeente Steenbergen v Baten (Case C-271/00) [2002] ECR I-10489; Freistaat Bayern v Blijdenstein (Case C-433/01) [2004] ECR I-981; Frahuil SA v Assitalia SpA (Case C-265/02) [2004] ECR I-1543, and especially Verein fur Konsumenteninformation v Henkel (Case C-167/00) [2002] ECR I-8111, have remoulded the principle to look at, firstly, whether the claim is based on ordinary civil law. If it is, then, regardless of the fact that it has been brought by or against a public law entity, it will nevertheless be a civil or commercial matter. It is the character of the right relied upon, rather than the legal character of the claimant, that determines the impact of Article 1(1). Secondly, if the claim could only be brought by a public body, the focus then turns to the obligations imposed on the defendant - if these are obligations that are a matter of ordinary civil law, then the claim is within Article 1(1), regardless of the method of enforcement. It is arguably only where the obligation imposed on the defendant arises as a matter of public law, and the claim made is one which only a public law entity would have the right to exercise, that the claim is not a civil or comercial one. In the light of these decisions, it is far from clear that Grovit v De Nederlandsche Bank & Ors [2005] was decided correctly; the character of the right relied upon was certainly civil (a libel claim), but plea of sovereign immunity was founded on the exercise of sovereign immunity. In Preservatrice Fonciere TIARD Compagnie d'Assurances v Netherland State (Case C-266/01) [2003] ECR I-4867, however, the ECJ concluded that pleas raised by way of defence were held to be irrelevant to the proper application of Article 1, which is focused solely on the claim advanced. In this connection, reference may also be made to the decision of the Court of Appeal in the earlier (Brussels Convention) case of QRS 1 APS v Frandsen [1999] 1 WLR 2169 to the effect that proceedings brought by an insolvent company against a director at the instigation of Danish tax authorities were "revenue … matters" for the purposes of the Brussels Convention, Art. 1, notwithstanding that they were essentially private law claims for restitution and negligence resulting from alleged

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asset stripping. This decision also seems questionable in light of the recent ECJ case law. Whether or not the English courts got it wrong in Grovit v De Nederlandsche Bank or in QRS 1 v Frandsen, is debatable, but it is clear that technicalities remain over the exact rule to delimit the scope of Regulation 44/2001/EC. The Court of Justice may have the opportunity to consider the application of Art. 1 in cases of state immunity in the Lekhoritou reference referred to above. Commentators have identified potential obstacles with the ECJ's approach; Briggs & Rees, for example, use the example of a utility company to highlight some conceptual difficulties [at p.44]: "In England, water and electricity services are provided by private companies performing the functions which were until recently, and which may in other member states still be, performed by public bodies. A claim against one of these suppliers alleging that it has, in some respect, failed to supply clean water, or power at a steady voltage, is hard to place on one or the other side of the line. The supply is contractual, and in England, the supplier, though subject to statutory regulation, supplies in accordance with a contract. But in other member states, the utiliy supply may be a matter of state monopoly and public law. If one takes seriously the instruction in Netherlands State v Ruffer to survey the corresponding situation in other member states, it is far from clear what the conclusion should be." In practice, however, Art. 1(1) has given rise to relatively few problems. In Tome Rubython v Federation Internationale de l'Automobile [2003] (Gray J) QB (6 March 2003), the Court was confronted with the material scope of the Regulation. The case featured an application by the claimant ('R') for a mandatory injunction against the first defendant ('the FIA'). R set up a company to publish a magazine called Business F1. In order to edit and contribute to the magazine R wished to attend the Australian Grand Prix and have press accreditation in order for him to get into the paddock. The FIA was based in Paris and dealt with the issuing of press accreditation. R made an application to the FIA for press accreditation for the Grand Prix which was refused. By his application R sought an injunction against the FIA and/or M requiring the issuing of press accreditation. The Court held that it did not have jurisdiction in relation to a claim against the FIA as, contrary to R's argument, the FIA was not a public authority nor was it exercising public authority powers when it refused press accreditation to R. The Court stated that the threshold question was whether the court had jurisdiction to grant the injunctive relief sought. The FIA was a legal entity under French law. Its domicile was accepted by R and he needed, therefore, to establish that, notwithstanding foreign domicile, the Court had jurisdiction to grant an injunction against the FIA.

1.2 Do public authorities use the Regulation to assert claims against private persons?

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Apart from R v Harrow Crown Court ex p. Unic Centre Sarl [2000] 1 W.L.R. 2112 (see above at Part 1.1), no English case can be found where it has been held that an action brought by a public authority against a private person comes within the meaning of Regulation 44/2001/EC Article 1. The prospect of such claims is, however, increased by the decision of the Court of Justice in the Henkel case, referred to in Part 1.1 above.

1.3 How is the delineation of the scope of application of the Regulation and other instruments concerning the judicial cooperation in civil matters?

Little need be said of the rules contained in Articles 67-71 of Regulation 44/2001/EC; they work in English courts with reasonable efficiency [for detailed discussion of Article 71 and the relationship with other conventions, please see Part 1.8 below]. On the basis that the Regulation cannot abrogate any pre-existing instrument which relates to jurisdiction and recognition of judgments, Chapter VII gives precedence to: a) The Brussels and Lugano Conventions where they still apply (Article 68) b) Other conventions which govern jurisdiction and recognition of judgments (Article 71) c) Other [community] instruments dealing with specific matters (Article 67) Examples of community legal instruments that displace the jurisdictional provisions of Regulation 44/2001/EC under Article 67 with rules of their own include Council Directive 96/71/EC on the posting abroad of workers within the framework of the provision of services (Article 6), and Directive 93/13/EC on Unfair Terms in Consumer Contracts, which may deprive an arbitration clause (see Oceano Grupo Editorial SA v Quintero (Case C-240/98) [2000] ECR I-4941) or jurisdiction clause of its binding effect. In Standard Bank London Ltd v Apostolakis [2001] Lloyd's Rep Bank 240, the court had to decide whether a jurisdiction agreement was an unfair contract term and accordingly void under the Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair Terms in Consumer Contracts Regulations 1999. Steel J., sitting in the Queen's Bench division of the High Court, held that, having regard to the imbalance of convenience between the parties, the exclusive jurisdiction clause was not binding on the defendant; the potential cost and inconvenience arising from a requirement that he submit to an exclusively English jurisdiction resulted in definite unfairness, particularly having regard to the fact that he was unable to understand English. Recourse to the Directive was, in the event, unnecessary. Council Regulation 40/94 on the Community Trade Mark also modifies the Brussels Convention (and now Regulation 44/2001/EC), as does Council Regulation 6/2002 on Community Designs. It is not thought that there are any problems over overlapping between these instruments and Regulation 44/2001/EC. There are, however, some potential difficulties between the

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instruments identified below and Regulation 44/2001/EC; detailed discussion will take place under each heading..

In particular:

1.3.1 the delineation to Regulation 2201/03/EC (concerning Article 1 (2) lit. a) Regulation 44/2001/EC)? Are there any problems with the assertion of claims concerning maintenance/living costs?

The extent of the matters excluded from Regulation 44/2001/EC is clear enough for practical purposes. Some commentators voice their concern as to whether or not it would extend to, for example, disputes as to whether a spouse who contributed to the purchase price had thereby acquired a share in the ownership of the matrimonial home. It is noted, however, that the "effect of Council Regulations 1347/2000 ("Brussels II") and 2201/2003 ("Brussels IIbis"), with jurisdictional rules based on those found in [Regulation 44/2001/EC], may mean that the practical impact of the exclusion is diminishing as the respective jurisdictional rules are brought into close alignment" (see Briggs & Rees, op. cit., para. 2.27.) Regulation 2201/03/EC has been activated in only a few cases in the English courts since it came into force on 1st March 2005 (for an English perspective on Regulation 2201/03/EC see generally P. McEleavy, "The Communitarization of Divorce Rules: What Impact for English and Scottish Law" (2004) ICLQ 605.) In L-K v K [2006] EWHC 153, the petitioner (W) sought an order for maintenance pending suit in divorce proceedings against her husband (H). W had commenced divorce proceedings in England on the basis that she and H were habitually resident in the country on that date. On the same day H had commenced divorce proceedings in France on the basis that they were both French nationals. A timetable was made in the English proceedings for the determination of the jurisdiction issue. The French proceedings were stayed, pursuant to Council Regulation 2201/2003 Art. 19(1), pending that determination on the basis that the English court had been first seised of the proceedings. W applied for maintenance pending the determination of the jurisdiction issue in order to pay for her living expenses and her legal costs. H's appeal against the French stay was pending. H argued that an English court should not order maintenance pending suit where there was a live issue about which court was first seised, and that until that issue was determined neither court had jurisdiction to order interim relief. H further argued that there were no validly constituted English proceedings of which the English court could be seized because of a failure to lodge a marriage certificate with the divorce petition as required by the Family Proceedings Rules 1991 r. 2. Singer J. held, granting the application, that (1) once a competent court of another jurisdiction had concluded whether to stay or to proceed, so long as that order remained in force and undisturbed the courts of both countries should operate on the same basis. In the instant case Art. 19(1) had spent its force and there was no room for an English judge to say that he did not agree with the findings of the French judge, to arrive at a contrary conclusion, and to then stay the English proceedings, W v W (Preliminary Issue: Stay of Petition) [2002] EWHC 3049 considered. If there was no power to award

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maintenance pending suit in these circumstances a spouse would be deprived of a remedy in both courts. A minor procedural irregularity such as the failure to lodge a marriage certificate with the divorce proceedings did not invalidate all the steps in the proceedings taken thereafter. The rule was administrative rather than substantive, and the court could effectively dispense with the requirement retrospectively. In the circumstances the court did have power to award maintenance pending suit. (2) Although there was a risk of injustice to H if he were ordered to fund W's litigation against him and then succeeded on the jurisdiction issue, W had no other means of paying her legal costs and if no order were made the balance of unfairness would fall more heavily on W. Maintenance pending suit was ordered to include amounts for living expenses and legal costs. In W v W (Foreign Custody Order: Enforcement) [2005] EWHC 1811, the applicant mother (M) applied to enforce an order made in Ireland within the context of Irish judicial separation proceedings that her three children should remain in the joint custody of both parents, with primary care and control passing from the father (F) in England to M in Ireland. F had remained in breach of that and subsequent orders to comply, claiming that to do so was contrary to the welfare and wishes of the children, whose care he had undertaken when his wife was hospitalised with bipolar disorder. Meanwhile, M's condition had stabilised, she had a responsible job, and there was expert psychiatric evidence supporting her claim to be the children's carer. In support of enforcement of the order, M relied on the European Convention on Recognition and Enforcement of Decisions concerning Custody of Children and on Restoration of Custody Children 1980, taking effect pursuant to the Child Abduction and Custody Act 1985, or, if that was inapplicable, on Council Regulation 1347/2000 repealed during the instant proceedings by the revising Council Regulation 2201/2003. Alternatively, she relied on the court's inherent jurisdiction to recognise Ireland as the better forum. F submitted that (1) the Regulations did not apply but, if they did, under Art. 15(2)(a) and Art. 22(a) of the Regulations respectively, recognition of the order was manifestly contrary to English public policy, taking into account the children's best interests; (2) the Convention did not apply in the circumstances but, if it did, enforcement should be refused under of Art. 10(1)(a) and (b) because to enforce the order would be manifestly incompatible with English law principles and because changes in circumstances meant that the order was manifestly no longer in accordance with the children's interests; (3) the court should not use its inherent jurisdiction to effect the children's removal to Ireland, but a full welfare based investigation should be undertaken by the English courts that should conclude that the children ought to stay with him and at their present schools. Singer J. in the Family Division of the High Court held, giving judgment accordingly, that (1) the court could not take a welfare based approach, but had to apply whichever enforcement code proved apt. It was common ground that the order fell within the scope of the Regulations as they related to parental responsibility affecting the children of two spouses. However, on balance, the Irish order failed the transitional provision tests

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for both Regulations because they required that the children be habitually resident in Ireland in order to found jurisdiction in respect of parental responsibility proceedings, whereas Irish law simply required that there be matrimonial proceedings within which parental responsibility orders could be made. If the Regulations had applied, there was no basis upon which recognition of the order, which had been made after consideration of detailed evidence, on express welfare principles, and after a lengthy hearing, could possibly be considered to be contrary to public policy. It was quite the opposite: its non recognition would be contrary to public policy. (2) There was nothing remotely to demonstrate that the order was incompatible with English family law principles. Article 10 of the Convention was to be construed and applied stringently, and the word "manifestly" connoted a very high degree of disparity between the order's effects if enforced and the children's current welfare interests, which disparity had to be caused by the changed circumstances. Any change in circumstances had largely resulted from F's failure to comply with the order, aggravated by the time that the proceedings had taken, that it would be damaging to the policy objectives of the Convention to decline enforcement. The order should be recognised, registered and enforced at the earliest practicable opportunity. (3) If none of the above regimes was applicable, then the court would not exercise its inherent jurisdiction to order peremptory return of the children to Ireland as it would not be sufficiently satisfied that it would currently be in their best interests without some investigation of the merits. Claims concerning maintenance costs are governed by Article 5(2) Regulation 44/2001/EC and are excluded from the scope of Regulation 2201/2003/EC, see recital No. 11 Regulation 2201/2003/EC. Nonetheless, an English court having jurisdiction on the basis of Regulation No. 2201/2003/EC will generally also have jurisdiction to rule on maintenance obligations on the basis of Article 5(2) Regulation No. 44/2001/EC by virtue of the Matrimonial Causes Act 1973, s.23(1), which states: "23 Financial provision orders in connection with divorce proceedings, etc (1) On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may make any one or more of the following orders, that is to say— (a) an order that either party to the marriage shall make to the other such periodical payments, for such term, as may be specified in the order; (b) an order that either party to the marriage shall secure to the other to the satisfaction of the court such periodical payments, for such term, as may be so specified; (c) an order that either party to the marriage shall pay to the other such lump sum or sums as may be so specified; (d) an order that a party to the marriage shall make to such person as may be specified in the order for the benefit of a child of the family, or to such a child, such periodical payments, for such term, as may be so specified;

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(e) an order that a party to the marriage shall secure to such person as may be so specified for the benefit of such a child, or to such a child, to the satisfaction of the court, such periodical payments, for such term, as may be so specified; (f) an order that a party to the marriage shall pay to such person as may be so specified for the benefit of such a child, or to such a child, such lump sum as may be so specified; subject, however, in the case of an order under paragraph (d), (e) or (f) above, to the restrictions imposed by section 29(1) and (3) below on the making of financial provision orders in favour of children who have attained the age of eighteen. (2) The court may also, subject to those restrictions, make any one or more of the orders mentioned in subsection (1)(d), (e) and (f) above— (a) in any proceedings for divorce, nullity of marriage or judicial separation, before granting a decree; and (b) where any such proceedings are dismissed after the beginning of the trial, either forthwith or within a reasonable period after the dismissal. (3) Without prejudice to the generality of subsection (1)(c) or (f) above— (a) an order under this section that a party to a marriage shall pay a lump sum to the other party may be made for the purpose of enabling that other party to meet any liabilities or expenses reasonably incurred by him or her in maintaining himself or herself or any child of the family before making an application for an order under this section in his or her favour; (b) an order under this section for the payment of a lump sum to or for the benefit of a child of the family may be made for the purpose of enabling any liabilities or expenses reasonably incurred by or for the benefit of that child before the making of an application for an order under this section in his favour to be met; and (c) an order under this section for the payment of a lump sum may provide for the payment of that sum by instalments of such amount as may be specified in the order and may require the payment of the instalments to be secured to the satisfaction of the court. (4) The power of the court under subsection (1) or (2)(a) above to make an order in favour of a child of the family shall be exercisable from time to time; and where the court makes an order in favour of a child under subsection (2)(b) above, it may from time to time, subject to the restrictions mentioned in subsection (1) above, make a further order in his favour of any of the kinds mentioned in subsection (1)(d), (e) or (f) above. (5) Without prejudice to the power to give a direction under section 30 below for the settlement of an instrument by conveyancing counsel, where an order is made under subsection (1)(a), (b) or (c) above on or after granting a decree of divorce or nullity of marriage, neither the order nor any settlement made in pursuance of the order shall take effect unless the decree has been made absolute. (6) Where the court— (a) makes an order under this section for the payment of a lump of sum; and (b) directs— (i) that payment of that sum or any part of it shall be deferred; or (ii) that that sum or any part of it shall be paid by instalments,

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the court may order that the amount deferred or the instalments shall carry interest at such rate as may be specified by the order from such date, not earlier than the date of the order, as may be so specified, until the date when payment of it is due." Two further cases provide illustrations of potential difficulties concerning the relationship between Regulation 44/2001 and Regulation 2201/2003. In Wermuth v Wermuth [2003] 1 WLR 942, an application was made for maintenance pending suit under the provisional and protective measures provision of the original Brussels II Regulation (Regulation 1347/2000, Art. 12). The Court of Appeal held, having regard to Brussels Convention, that the relief sought was not a "provisional or protective measure" (for criticism of the approach of Thorpe LJ to this question, see P McEleavy, op. cit., p. 632). One commentator has suggested, however, that Art. 31 of Regulation 44/2001 would have provided the correct jurisdictional basis (P McEleavy, op. cit., p. 331). In Prazic v Prazic [2006] EWCA Civ 497, the claimant wife brought proceedings against her husband claiming a beneficial interest in English properties after her husband had initiated proceedings in France, which involved consideration of questions of ancillary relief. The Court of Appeal stayed the English proceedings on the basis of Art. 28 of Regulation 44/2001, having concluded that the English Court did not have exclusive jurisdiction under Art. 22.1 (following the decision of the ECJ in Webb v Webb (Case C-294/92) [1994] ECR I-1717). No question would appear to have been raised as to whether the French proceedings fell within the scope of Regulation 44/2001 or whether the contrary conclusion would have affected the potential operation of Art. 28. The result appears correct, although the reasoning is incomplete.

1.3.2 the delineation to Regulation 1348/2000/EC (concerning Article 1 (2) lit. b)), particularly: How does the judicial practice treat the delineation of collective and single actions? Are there any problems with the delineation of actions concerning cases of insolvency and those that do not?7

The basic problem in cross-border transaction avoidance has been identified as thus: "Differences in the avoidance provisions and a lack of certainty as to the venue for avoidance may be exploited both by the defendant to the avoidance action, who may seek an anti-suit injunction (see Look Chan Ho, "Anti Suit Injunctions in Cross Border Insolvency: A Restatement" (2003) 52 ICLQ. 697) against the insolvency practitioner, and equally by insolvency

7 In some legal systems the avoidance in insolvency proceedings has to be asserted before another court than the court of origin. Before Regulation 44/2001/EC and Regulation 1346/2000/EC came into force, the proceeding was treated as one ruled by insolvency law, whose jurisdiction was ascertained by national law. Today it is said that the rules of Regulation 44/2001/EC and Regulation 1346/2000/EC concerning the jurisdiction interlock. On the other hand Regulation 1346/2000/EC gives jurisdiction to a court only in the case of opening the insolvency proceedings, not in other cases concerning the law of insolvency. Does this lead to the conclusion that the avoidance of insolvency proceedings is ruled by Regulation 44/2001/EC? The same problem arises with actions concerning the liability of a liquidator. Do such problems arise in your country?

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practitioners, who may forum-shop for the best prospects of recovery in commencing litigation. Disputes as to the appropriate venue for avoidance proceedings may therefore arise in cases where insolvency proceedings have commenced in more than one jurisdiction, or where the debtor has a connection with more than one jurisdiction. The classic example of such a dispute is Maxwell Communications Corp (No.2), Barclays Bank v Homan, Re [1992] B.C.C. 757, where administration proceedings were commenced against the company in the United Kingdom and Chapter 11 proceedings in the United States. The administrator sought to bring preference proceedings against two English banks, including Barclays Bank, and one French bank in the United States, under the US Code. Barclays applied to an English court for an anti-suit injunction to have this action restrained, arguing that the United Kingdom was the jurisdiction that was most closely connected to the company and was therefore the correct jurisdiction for the avoidance claim. Although an injunction was initially granted on an interim basis, Hoffmann J., as he then was, refused to allow it to be continued, and this decision was upheld by the Court of Appeal. The US judge was the appropriate person to decide whether to accept or decline jurisdiction and the English courts should interfere only in exceptional circumstances. The source of the funds by which the payment was made was the United States, and it was considered that this provided a sufficient connection to the United States so that the proceedings could not be regarded as vexatious or oppressive. Ultimately, the judge in the United States decided that the United Kingdom was the appropriate forum. Although an appropriate solution was found in the Maxwell case, it is to be noted that the insolvency proceedings in the United Kingdom and the United States in that case had been closely co-ordinated. Therefore, if the proceedings were to function effectively in parallel, a level of co-operation was required. It would have been disruptive to the harmonisation of the proceedings if the English court had granted an anti-suit injunction. The circumstances were therefore conducive to the decision of the Court of Appeal. This case can be seen as part of a system of "co-operative territoriality", under which the insolvency practitioners responsible for proceedings in different countries may enter into agreements that regulate particular aspects of the insolvency proceedings in each jurisdiction, in order to maximise the amounts distributed to creditors and ensure a principled scheme of distribution. This approach has tended to dominate in cases where the insolvency proceedings are not subject to an existing international convention. Cases approached in this manner may promote a co-operative resolution of disputes as to the appropriate venue for transaction avoidance. However, problems may still arise in future cases where this co-operative territoriality approach is not followed" [R. Parry, "Transaction Avoidance Provisions in International Insolvency" I.C.C.L.R. 2004, 15(2), p. 46, p. 49].

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Many of these problems have potentially been alleviated by the EU Regulation on Insolvency Proceedings. Regulation 1346/2000/EC defines its scope in "positive terms" under Article 1(1), declaring that it "shall apply to collective insolvency proceedings which entail the partial or total divestment of a debtor and the appointment of a liquidator" [see I. Fletcher, Insolvency in Private International Law (Oxford, OUP, 2nd edn, 2005, para. 7.29.] That definition is brought into focus by Article 2(a)-(c), together with Annexes A, B and C which contain a list of those insolvency proceedings, as maintained under the laws of each Member State, which are thereby brought within the ambit of Regulation 1346/2000/EC (note also the supplementary listings under the laws of the 10 new Member States who joined the EU in 2004.) As Fletcher states, "Consequently, the opening of such proceedings in the State in question must take place in conformity with the relevant provisions of the Regulation, and the courts of the State no longer enjoy an unrestricted jurisdictional competence to open such proceedings in any case to which the Regulation is applicable" [ibid]. In the UK, the following proceedings are listed in Annex A (thereby constituting "insolvency proceedings" for the purposes of Regulation 1346/2000/EC): - Winding up by or subject to the supervision of the Court; - Creditors' voluntary winding up (with confirmation by the Court); - Administration, including appointments made by filing prescribed documents with the Court; - Voluntary arrangements under insolvency legislation; - Bankruptcy or sequestration. The essence of Regulation 1346/2000/EC is that it co-ordinates cross-border insolvency proceedings within the European Union by employing a primary jurisdiction where the debtor has its centre of main interests, and secondary jurisdictions where it has establishments. Outside the forms of legal proceedings expressly governed by Regulation 1346/2000 (as listed above), the application of Regulation 44/2001/EC is effectively determined (including in cases of avoidance) "by asking whether the claim is founded on the law of bankruptcy or winding up" (see Briggs & Rees, op. cit., para. 2.28). Article 1(2)(b) has an autonomous meaning (Gourdain v Nadler (Case 133/78) [1979] ECR 733) and the correct question to ask is "whether the claim relates to a legal provision specifically applicable to insolvency or which is intrinsic to, rather than consequential upon, the insolvency, or is instead a claim arising under the general law albeit that this may be advanced in the context of an insolvency" (ibid).

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In Re Hayward [1997] Ch. 45 (a Brussels Convention case), the English court had to decide whether an action by a trustee in bankruptcy to recover from a third-party property which belonged to the bankrupt defendant fell within Article 1(2)(b) of what is now Regulation 44/2001/EC. Rattee J (at 55) held: "The only connection between these proceedings and bankruptcy, it seems to me, is that the title sought to be established by the trustee depends, as a first step, on the fact that, as trustee in bankruptcy under the English statute, the trustee is entitled to whatever property was vested in Mr. Hulse at the date of the bankruptcy. That does not, in my judgment, make bankruptcy the principal subject matter of the proceedings so as to bring the application within the excluding terms of article 1 of the Convention, construed in the light of the comments to which I have referred, made by the European court in Gourdain v Nadler and by Mr. Jenard in the report on the Convention which I am told by section 3(3) of the Civil Jurisdiction and Judgments Act 1982 I have to take into account when construing the Convention. Accordingly, in my judgment, Judge Geddes was entirely correct in his conclusion that the application of the Convention to the proceedings begun by the trustee's originating application was not precluded by the provisions of article 1 of the Convention. The proceedings concerned are not either succession or bankruptcy proceedings within the meaning of that article." The decision on this point has generally been viewed as correct, although doubt has been thrown on the court's methodology in reaching that conclusion: "The contention that this was a claim in bankruptcy had rather more appeal. After all, the trustee sought to bring his claim under the Insolvency Act and would not have had a cause of action at all were it not for Hayward's bankruptcy. Gourdain was again helpfully cited: ""If decisions relating to bankruptcy and winding up are to be excluded from the scope of the Convention ... they must derive directly from the bankruptcy or winding up and be closely connected with the proceedings for the "liquidation des biens' or the "règlement judiciare'." In Gourdain the relief claimed by the liquidator was only available under the relevant French insolvency law. In Hayward, the remedy was to be sought in the bankruptcy court under s.367 of the Insolvency Act 1986. But Rattee J. did not think that this made the claim essentially one in bankruptcy, since (1) the peculiarities of English law are irrelevant, given that an autonomous meaning is given to the word ""bankruptcy" under the Convention; and (2) the action was primarily to recover assets from a third party which allegedly belonged to the bankrupt's estate and thus vested in the trustee. This was certainly not relief only available in bankruptcy law. Its foundation was an alleged property right

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owned by the trustee; it was immaterial how the trustee had come by that interest. However, this is to place exclusive emphasis on the form of relief at the expense of the nature of the claim. Whilst such relief could be sought outside bankruptcy law, it was available to the trustee only because of Hayward's bankruptcy. Indeed, once Hayward was declared bankrupt, it is hard to imagine a remedy available to the trustee which would not be available in other areas of law. In short, the foundation of the claim must be relevant to whether the matter relates to bankruptcy. What is required is rather an appreciation that both the nature of relief and the basis of claim are important and need to be balanced. For it remains true that having been made legal owner, the trustee could have brought his claim outside the Insolvency Act 1986 and that ultimately title to land in a foreign state was in issue. That being so, it would be somewhat pointless for the English court to entertain proceedings, the outcome of which might be disregarded by the courts of the situs on public policy grounds. Accordingly, it is suggested that Rattee J. reached the correct conclusion on the facts, albeit without really attaching due importance to the nature of the claim" [J. Harris, "Rights in Rem and the Brussels Convention" (1997) European Law Review]. As Briggs & Rees note, "the opposite conclusion would presumably be reached if the action were brought by the trustee to recover property transferred by the bankrupt in fraud of his creditors, for such an action is, of its very nature, part and parcel of the law of bankruptcy" [at para. 2.28]. The same conclusion was also reached in Ashurst v Pollard [2001] Ch. 595, another Brussels Convention case. See also Art. 4.2(m) and Art. 13 of Regulation 1346/2000. Mazur Media Ltd v Mazur Media GmbH [2004] EWHC 1566 is a good example of the "division of function" between Regulation 1346/2000 and Regulation 44/2001/EC in English courts [see Briggs & Rees, op. cit., para. 2.28]. Under somewhat complicated facts, the claimants, who were all domiciled in England, sought a declaration that they were the legal and beneficial owners of master recordings under a share sale agreement whereby all the issued shares in the German first defendant were sold by its sole shareholder and the liquidator of the company (the second and third defendants), who were both domiciled in Germany, to the first claimant. All copyright in the sound recordings was assigned by the first defendant to its English subsidiary, one of the claimants, but a dispute arose as to who had title to the master recordings. The share sale agreement provided that the English courts had exclusive jurisdiction in the event of any dispute arising. However, the defendants contended that the English court had no jurisdiction to hear the claim because insolvency proceedings were pending in Germany, and had therefore applied for a stay of the English proceedings. An alleged English creditor had previously brought a claim against it the German company for breach of contract or conversion.

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Collins J, on the basis that the court had jurisdiction under Regulation 44/2001/EC over the claim in conversion, held that the decision whether to allow English proceedings to proceed to judgment was a matter for English law. Collins J. stated [at para. 54]: "The evidence on German law is broadly to the effect that following insolvency proceedings all pending actions in Germany are subject to an automatic stay. A claim for damages is lodged in the insolvency proceedings, and if it is disputed by the liquidator, the claimant may seek recognition of the claim with the court having conduct of the insolvency proceedings. But it is common ground that in the circumstances of this case the effect of the Insolvency Regulation is that it is for English law to determine whether the proceedings against Mazur G.m.b.H. by Mazur Ltd. and Apex should be stayed, and whether Mazur Ltd. and Apex should be required to prove their claims in the German insolvency proceedings." In relation to whether or not the English court should stay in favour of the German insolvency proceedings, Collins J. stated [at paras 67-70]: "In fact the court has an inherent discretion, re-inforced by the Supreme Court Act, 1981, s. 49(3), to stay proceedings, whenever it is necessary to prevent injustice. But the power cannot be used in a manner which is inconsistent with the Judgments Regulation. The Civil Jurisdiction and Judgments Act, 1982, s. 49, provides that nothing in that Act prevents the court from exercising its power to stay, where to do so is not inconsistent with the Brussels or Lugano Conventions. That section has not been amended to refer to the Judgments Regulation, because the Regulation is directly applicable without national legislation. Where the court has jurisdiction under the Judgments Regulation, the power of the court to stay proceedings cannot be used simply because another Regulation State is the forum conveniens: Dicey and Morris, Conflict of Laws, 13th ed. 2000, par. 11-012. It follows that the power should not be used simply because the claim in the English proceedings could be made, or more appropriately made, in the German insolvency. I would accept that there is a power to stay English proceedings in favour of insolvency proceedings in a Regulation State to prevent injustice, but it would require exceptionally strong grounds for the English Court to exercise that power, particularly where (as regards the contractual claim) the parties have conferred exclusive jurisdiction on the English Court. Otherwise, the court would be circumventing the Judgments Regulation by introducing forum non conveniens principles by the back door. In my judgment none of the factors relied on by Mazur G.m.b.H. is such individually or collectively as to amount to such exceptional circumstances as to justify a stay. Each of the factors relied on is a typical forum

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conveniens factor: the cost of proceedings; the limited value of a damages judgment in the German insolvency; the availability of the German court to determine title to the Masters; and the multiplicity of proceedings and danger of inconsistent judgments. I do not consider that these are legitimate considerations in a case where the court has jurisdiction under the Judgments Regulation (especially exclusive jurisdiction in the case of claims under the Assignment). Even if they were legitimate considerations, they would not have *56 justified a stay. The Assignment is expressly governed by English law, albeit that there may be some proprietary issues governed by German law, and (if there is a defence, which seems doubtful) the claim against Mrs. Mazur under the Share Sale Agreement will proceed in England." A different result would occur where the question was whether the insolvency had any effect on the proceedings commenced in accordance with Regulation 44/01//EC after the opening of the insolvency proceedings: in that instance, Regulation 1346/2000 would have applied German law [Regulation 1346/2000, Art. 4]. Another example of the interoperation of Regulation 1346/2000 and Regulation 44/2001/EC is Oakley v Ultra Vehicle Design Ltd (In Liquidation) [2005] EWHC 872 (Ch). The applicant (O) applied for the determination of preliminary issues as to jurisdiction and choice of law in a dispute concerning a motor vehicle. O was the supervisor of a company voluntary arrangement (CVA) entered into by a company (M) in 2001. The first respondent (D) was a wholly owned subsidiary of M. The CVA provided for D to be transferred into the ownership of M and for the business of M to be sold to D. D and the second respondent (B), a company incorporated in Germany, entered into a contract in 2003 which purported to transfer the vehicle from D to B by way of security. B had previously entered into a contract with M in relation to another vehicle in 2002. The 2002 contract was governed by German law. Both M and D went into compulsory liquidation in mid 2003. B took the vehicle to Germany before the commencement of the instant proceedings. The preliminary issues to be determined were whether (i) the court had jurisdiction to determine the issue of ownership and the validity or enforceability of security over the vehicle; (ii) the applicable law was English or German law. Lloyd L.J. held that (1) the CVA did not constitute a main proceeding under Council Regulation 1346/2000 as it came into effect prior to the commencement date of the Regulation. Accordingly, an anomalous situation had arisen whereby the court would have had jurisdiction if the liquidator had applied. However, in the instant case, the Regulation did not apply as O was the applicant supervisor and the liquidator was not a party. O was a trustee claiming an asset from a third party. O's application was proceeding outside the scope of the winding up proceedings. On that basis, the court did not have jurisdiction, NT Gallagher & Son Ltd, Re [2002] EWCA Civ 404 considered. In any event, the Regulation would not have applied to the instant case because O's assertion that the vehicle vested in

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him as trustee and that it belonged to M rather than D was not a claim which could fall within the Regulation. Council Regulation 44/2001 Art. 6 applied to the instant case. Accordingly, the claim was properly brought against B in England and Wales as a co-defendant to proceedings also properly brought against D, which was domiciled in England and Wales. (2) The 2003 contract was governed by German law, by virtue of an agreement to that effect between the parties to it. [See also the decision in the matter of La Mutuelles Du Mans Assurances v In the Matter of Scottish Eagle Insurance Company Ltd [2005] EWHC 1599 (Ch) and In the Matter of DAP Holding NV [2005] EWHC 1602 (Ch) concerning the approval of schemes of arrangement under Companies Act 1985, s. 425 (held to fall outside the scope of Regulation 44/2001 by virtue of Art. 1.2(b) - "judicial arrangements, compositions and analogous proceedings" - and outside Regulation 1346/2000). For further discussion of the relationship between the jurisdiction to approve schemes of arrangement and Regulation 1346/2000, see In the matters of Sovereign Marine & General Insurance Company Limited and others [2006] EWHC 1335 (Ch).] Consequently, the practice of the English Courts supports a narrow construction of Art. 1(2)(b). [For further English analysis of Regulation 1346/2000/EC, see Dicey and Morris on the Conflict of Laws, op. cit., Ch.30 & 31; G. Moss, I. Fletcher & S. Isaacs (eds.) The EC Regulation on Insolvency Proceedings, A Commentary and Annotated Guide (2002); M. Virgos and F. Garcimartin, The European Insolvency Regulation: Law and Practice (2004); J. Omar, European Insolvency Law (2004) Chs. 3, 5, and 6-10; Fletcher, Insolvency in Private International Law (2nd ed., 2005).]

1.4 Is the application of Article 4 of Regulation 1438/71/EC practical for the determination of Article 1 (2) lit. c)?

The United Kingdom Government submitted their opinion on this question before the ECJ in Gemeente Steenbergen v Baten (Case C-271/00) [2002] ECR I-10527. The case concerned an action brought under Dutch law for the recovery from a defendant of sums equivalent to payments of social assistance made by the state to a former spouse. The Court stated (at para. 39-49): "39 The Netherlands, Austrian and United Kingdom Governments, and the Commission, note that the Brussels Convention does not define the concept of 'social security' and refer in that regard to Article 4 of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, in the version as amended and updated by Council Regulation (EC) No 118/97 of 2 December 1996 (OJ 1997 L 28, p. 1, hereinafter .Regulation No 1408/71').

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40 Those governments maintain, none the less, as does the Commission, that the exclusion of social-security disputes from the scope of the Brussels Convention must be strictly construed. It concerns only disputes between the institutions and recipients of benefits and does not extend to actions brought by an institution against a third party. 41 As a preliminary point, it should be observed that a reply to this question is called for only if the public body is acting in accordance with the rules of the ordinary law and where the decision in the action under a right of recourse brought by it may be regarded as a decision in 'civil matters' under the first paragraph of Article 1 of the Brussels Convention. 42 Inasmuch as the concept of 'social security' serves to indicate the area of application of the Brussels Convention, it must, as the Court has stated at paragraph 28 above, be regarded as an independent concept, to be interpreted by reference to the objectives and scheme of the Brussels Convention. 43 In view of the link between the Brussels Convention and Community law (see Mund & Fester (Case C-398/92) [1994] ECR I-467, paragraph 12, and Krombach (Case C-7/98) [2000] ECR I-1935, paragraph 24), regard must be had to the substance of that concept in Community law. 44 By adopting Regulation No 1408/71 on the basis of Article 51 of the EEC Treaty (subsequently Article 51 of the EC Treaty, and now, after amendment, Article 42 EC), the Community legislature laid down rules coordinating national legislation on social security. As the Advocate General noted at paragraphs 46 and 47 of his Opinion, those rules establish a system under which as a matter of principle the exclusive legislative competence of a Member State is matched by the competence of the administrative and judicial authorities of the same State. It follows that legal situations are effectively protected by the designation of a national system competent in its entirety and do not require recognition of judgments relating to that area. 45 It must therefore be held that the substance of the concept of .social security' in the second paragraph of Article 1 of the Brussels Convention encompasses the matters covered by Regulation No 1408/71, as defined in Article 4 thereof and clarified in the Court's case-law. 46 However, irrespective of how, in the light of Article 4 of Regulation No 1408/71, benefits paid by way of social assistance by a public body to persons without resources are to be characterised, the action under a right of recourse brought by that body against a third party, a person governed by private law, as the subject of an obligation to pay maintenance to the persons assisted, is not concerned with the conditions under which the benefits in question are granted but with recovery of the sums paid in that regard.

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47 It follows that, in any event, the subject-matter of the dispute does not concern the application of Regulation No 1408/71. 48 That interpretation is borne out by both the Jenard Report on the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (OJ 1979 C 59, pp. 1, 12 and 13) and the Schlosser Report on the Convention on the accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Brussels Convention (OJ 1979 C 59, p. 71, paragraph 60). According to those reports the exclusion of social security from the scope of the Brussels Convention concerns only litigation in that area, that is to say disputes arising out of the relationship between the administration and employers or employees. Those reports add that the Brussels Convention is applicable where the administration exercises a direct right of action against a third party liable for injury or is subrogated as regards that third party to the rights of a victim insured by it, because it is then acting under the rules of the ordinary law. 49 In the light of the foregoing considerations, the reply to the question submitted must be that point 3 of the second paragraph of Article 1 of the Brussels Convention must be interpreted as meaning that the concept of 'social security' does not encompass the action under a right of recourse by which a public body seeks from a person governed by private law recovery in accordance with the rules of the ordinary law of sums paid by it by way of social assistance to the divorced spouse and the child of that person." As one English commentator notes, the ECJ effectively drew "a distinction between claims by a claimant for social assistance, of a type covered by Council Regulation (EC) 1408/71, which may well fall within Article 1(2)(c) , on the one hand, and claims for reimbursement in respect of sums paid, which are governed by the general law and which are therefore not excluded from the material scope of the Regulation" (see Briggs & Rees, op. cit., para. 2.29.) On this basis, it seems logical for the definition of social security matters for the purposes of Regulation 44/2001/EC, Article 1(2)(c) to be determined by reference to the scope of Regulation 1408/71, as laid down in Article 4. Of slightly more concern, however, is how rigidly the ECJ will follow such a principle. As Advocate-General Tizanno stated in his Opinion in Gemeente Steenbergen v Baten (at para. 43): "It seems reasonable to me as well to proceed on the basis of the notion that, in the absence of an appropriate definition in the Convention itself, the concept of social security within the meaning of the Convention should be construed by reference to the relevant provisions of Community law, in particular Regulation No 1408/71. As I have already pointed out, the concepts employed by the Convention are in principle "independent" concepts and must therefore be interpreted, as the Court of Justice has ruled, by reference to the objectives and scheme of the Convention. But regard must also be had, I should add, to the broader context in which the Convention is set, that is to say Community law in a wider sense. That is

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primarily for reasons of a general nature but also on grounds specifically related to matters of social security." It is, as yet, unknown whether "Community law" will come to distort the application of Regulation 1408/71 and its influence on the meaning of "social security matters" under Article 1(2)(c) of Regulation 44/2001/EC; if the ruling by the ECJ in Gemeente Steenbergen v Baten stands the test of time, there is no reason why English courts would have an issue (after all, the outcome was the same as the UK Government's submission to the Court.); indeed, there has yet to be a reported English case dealing with these questions. Matters may become more problematic if future European decisions take the concept of "community law in a wider sense" further, and remove the definition purely from the realm of Regulation 1408/71.

1.5 Should the scope of application be extended, especially to incorporate arbitration and mediation proceedings?

The unanimous view of those responding to this question was that such extension was undesirable. In particular, it was suggested removal of the arbitration exception would require wholesale changes to the jurisdiction provisions in the Regulation and would be likely to undermine the effective functioning of the 1958 New York Convention, without clear justification given that the 1958 Convention is effective in ensuring the free movement of arbitral awards. Based on English practice, we see no reason to take this step, and good reasons not to do so. Further, we believe that the reference in the question to mediation proceedings makes no sense from an English law perspective, as mediation is viewed by the English courts and legal profession as a consensual, non-judicial form of dispute resolution to which rules of jurisdiction are entirely inappropriate. As the Jenard Report makes clear [at p.13], arbitration was excluded from the original Brussels Convention because "of the other national instruments in force or in contemplation dealing with the subject" [see also Sir Lawrence Collins et al (eds), Dicey & Morris on the Conflict of Laws, Sweet & Maxwell, 13th edn, 2000, para 11-023.] In the negotiations which led to the United Kingdom's accession in 1978, the UK took the view that the exclusion covered all disputes which the parties had agreed should be settled by arbitration, including any secondary disputes connected with arbitration. In contrast, the original Contracting States construed it rather more narrowly - to exclude proceedings in national courts which related to arbitration proceedings which were contemplated, or were in progress, or had concluded. The key suggestion in the Schlosser Report was that the Brussels Convention also did not apply to court proceedings which were ancillary to arbitration proceedings (e.g. the appointment of arbitrators, the fixing of the place of arbitration, or the extension of time limits: [see Dicey and Morris, op. cit., para. 11-024].) Under Regulation 44/2001/EC, it seems equally clear that many legal proceedings relating to arbitration, whether it be supervisory, supportive or enforcement, are excluded from its scope, and that is seen in English eyes as a good thing. As Briggs & Rees, op. cit., state [at para. 2.30], "Nor does the Regulation apply to the

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enforcement of arbitral awards, not even if these are incorporated into and given the force of law by a court judgment. As arbitration is itself covered by the New York Convention, it would be unfortunate if the extent of the exclusion of arbitration from [Regulation 44/2001/EC] were to be drawn so narrowly as to the prejudice the operation of the New York Convention." Such a view is supported by the ECJ's decision in Marc Rich & Co AG v Societa Italiana Impianti PA (Case C-190/89) [1991] ECR I-3855, where it was held that, by excluding arbitration from the scope of the Brussels Convention for the reasons given above. the Contracting States intended to exclude arbitration "in its entirety", including proceedings brought before national courts [see Dicey & Morris, op. cit., para. 11-026.] The test for determining whether the proceedings were outside the scope of the exclusion was the nature of the subject-matter of the proceedings. As Dicey & Morris puts it [at para 11-026], "if the subject-matter of the proceedings was the appointment of an arbitrator, the fact that the court had to resolve a preliminary issue did not justify the application of the Convention; and it would be contrary to the principle of legal certainty for the applicability of the Convention to vary according to whether there was a preliminary issue." [Compare, however, the decision of the ECJ in Van Uden Maritime B.V. v Firma Deco Line (Case C-391/95) [1998] ECR I-7091 concerning provisional or protective measures in support of arbitration proceedings, a decision which has been criticised as unsatisfactory.] In Through Transport Mutual Assurance Association (Eurasia) Ltd, v New India Assurance Co Ltd [2004] EWCA Civ 1598, the Court of Appeal held that an anti-suit injunction to reinforce the integrity of an arbitration agreement was ancillary to that arbitration agreement, and so fell outside of the scope of the Regulation. In deciding whether or not the claim in the proceedings came within the arbitration exception and was thus outside the Regulation altogether by reason of Article 1(2)(d), Clarke LJ stated [at para. 38 et seq]: "In The Ivan Zagubanski Mr. Justice Aikens considered a number of first instance decisions in addition to The Heidberg, including Qingdao Ocean Shipping Co. v Grace Shipping Establishment (The Xing Su Hai), [1995] 2 Lloyd's Rep. 15, Toepfer International G.m.b.H. v Molino Boschi Srl, [1996] 1 Lloyd's Rep. 510, Lexmar Corporation and The Steamship Mutual Underwriting Association (Bermuda ) Ltd. v Nordisk Skibsrederforensig and Northern Tankers (Cyprus) Ltd.("The Lexmar case"), [1997] 1 Lloyd's Rep. 289 and Toepfer International G.m.b.H. v Société Cargill France, [1997] 2 Lloyd's Rep. 98. In The Ivan Zagubanski explosions and fire had caused damage to cargo, which had been shipped under bills of lading containing English arbitration clauses. Cargo interests brought proceedings in Marseille and elsewhere against the shipowners. The claimant shipowners claimed a declaration that there was a valid arbitration agreement between the parties and sought an anti-suit injunction restraining the cargo interests from pursuing court proceedings in Marseille or elsewhere. Mr. Justice Aikens held that the claims were within the arbitration exception and thus outside the Brussels Convention and granted both the declaration and the injunction sought. In reaching his conclusion on the first point he analyzed the opinion of Advocate General Darmon in The Atlantic Emperor and relied both upon

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it and upon the decision and reasoning of the ECJ, part of which we have already set out. Mr. Justice Aikens set out what in our view is an entirely accurate account of the Advocate General's opinion in par. 70 of his judgment as follows: "Mr. Advocate General Darmon's opinion is elaborate and gives a detailed analysis of the structure and scope of the Convention and its relationship with arbitration. The following points in his opinion seem particularly relevant to the present case: (1) Before the Brussels Convention there were already important international conventions governing the enforcement of arbitration agreements and awards, particularly the New York Convention of 1958. (2) Although the application before the English Courts in Marc Rich was for the appointment of an arbitrator, there was a threshold or "preliminary" question that had to be considered: whether an arbitration agreement existed at all. (3) The "principal issue" before the English Court was the appointment of an arbitrator. That is not within the Convention. (4) If the "principal issue" is outside the scope of the Convention, then even if a "preliminary matter" is within the Convention, that cannot bring the whole proceedings within the scope of the Convention. In this case the "preliminary matter" is whether an arbitration agreement exists. (5) In any event a dispute as to the existence of an arbitration agreement falls outside the scope of the Convention. This opinion is reinforced by the view at par. 64 of Professor Schlosser's report on the Accession Convention. (6) Whether or not the existence of an arbitration agreement is a preliminary or principal issue, 'it seems that the principal subject-matter of the dispute before the national court relates to arbitration.' (7) The views of Mr. Schlosser (expressed in an opinion prepared specifically for that case when before the ECJ) that the Convention applied to all proceedings before courts must be rejected. They are contrary to the views expressed in the reports by Mr. Jenard and Mr. Schlosser on the original Convention and the Accession Convention. They stated: (a) The Brussels Convention. . .does not apply for the purpose of determining the jurisdiction of courts and tribunals in respect of litigation relating to arbitration. . .and does not apply to the recognition of judgments given in such proceedings. (b). . .the 1968 Convention does not cover court proceedings which are ancillary to arbitration proceedings, for example the dismissal of arbitrators, the fixing of the judgment determining whether an arbitration agreement is valid or not. . .is not covered by the 1968 Convention.

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(8) The report of Messrs Evrigenis and Kerameus (on the accession of the Hellenic Republic to the Brussels Convention in 1986) also stated that: Proceedings which are directly concerned with arbitration as the principal issue. . .are not covered by the Convention. (9) It is not legitimate to suggest that arbitration awards that are made into judgments must be capable of recognition and enforcement under the Convention. They are enforceable under the New York Conventions as awards or as judgments "under bilateral conventions or by domestic law". Furthermore, there is no reason for it to be "desirable" to apply the Brussels Convention and annul arbitration awards. (10) The Brussels Convention should also not apply to the issue of the recognition and enforcement of judgments concerning the existence and *80 validity of arbitration agreements. That is because there is the danger that such a judgment may be given in a state other than the place of the arbitration. (11) Finally on this aspect of the case he said that the application of the Brussels Convention to determine jurisdiction would undermine international arbitration. That is because arbitration needs the assistance of the courts of the state where the arbitration is to take place in order to aid the arbitration process itself. Yet that Court might not have jurisdiction under the Convention unless a special jurisdiction could be invoked by art. 5(1) or 17. But attempts to use those articles to found a Court's jurisdiction in relation to arbitration were open to strong objection or criticism. In par. 70(5) Mr. Justice Aikens referred to par. 64 of Professor Schlosser's report on the Accession Convention. Paragraph 64(b) is in these terms: 'The 1968 Convention does not cover court proceedings which are ancillary to arbitration proceedings, for example, the appointment or dismissal of arbitrators, the fixing of the place of arbitration, the extension of the time-limit for making awards or the obtaining of a preliminary ruling on the question of substance as provided under English law in the procedure known as "statement of special case" (Section 21 of the Arbitration Act, 1950). In the same way a judgment determining whether an arbitration agreement is valid or not, or because it is invalid, ordering the parties not to continue the arbitration proceedings, is not covered by the 1968 Convention.' The case contemplated in the last sentence is very close to this case on the facts. Mr. Justice Aikens expressed his conclusions derived from the Advocate General's opinion in pars. 71 and 72 in this way: 'In my respectful view the opinion of Mr. Advocate General Darmon is comprehensive and its analysis compelling. The theme and overall conclusion of it is that the Brussels Convention does not apply to any court proceedings or

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judgments in which the principal focus of the matter is "arbitration". That includes proceedings concerning the validity or existence of an arbitration agreement; the appointment of arbitrators; ancillary assistance to arbitration proceedings and the recognition and enforcement of awards.' Based on his opinion and the views of Messrs Jenard and Schlosser on which he relies, I would have no hesitation in saying that proceedings in the English Court for (i) a declaration that arbitration clauses bound the defendants; and (ii) an injunction to restrain proceedings in courts in breach (or threatened breach) of binding arbitration agreements fall within the exception in art. 1(4) of the Convention. That is simply because the principal focus of those proceedings is "arbitration". We entirely agree with that analysis and cannot improve upon it. In par. 73 Mr. Justice Aikens summarized the conclusions of the ECJ, the substance of which we have set out in par. 30 above. We should also refer to par. 18 of the ECJ judgment upon which Mr. Justice Aikens placed some reliance. It is in these terms: The international agreements, and in particular the abovementioned New York Convention on the recognition and enforcement of foreign arbitral awards. . ., lay down rules which must be respected not by arbitrators themselves but by the courts of the Contracting States. Those rules relate, for example, to agreements whereby parties refer a dispute to arbitration and the recognition and enforcement of arbitral awards. It follows that, by excluding arbitration from the scope of the Convention on the ground that it is already covered by international conventions, the Contracting Parties intended to exclude arbitration in its entirety, including proceedings before national courts. Mr. Justice Aikens correctly observed in par. 73 that the ECJ generally followed the view of the Advocate General and in par. 74 he said this: '[Counsel] submitted that the decision of the ECJ was narrow and confined to the single issue of whether litigation for the appointment of an arbitrator was excluded from the Convention under art. 1(4). He is correct about the decision. But that cannot detract from the fact that the Court took a very broad view of the scope of the "arbitration exception" in art. 1(4), as particularly expressed in pars. 18 and 21 of its judgment. Nor is there one word of disapproval of the approach of Mr. Advocate General Darmon or his views.' In the result Mr. Justice Aikens, in our opinion correctly, held that the question in each case is whether the (or a) principal focus of the proceedings is arbitration. That test seems to us to be consistent, not only with The Atlantic Emperor, but also with the first instance decisions to which he referred and we agree with him that the reasoning in those decisions is to be preferred to that in The Heidberg. Another way of putting the same point is to ask the question posed by Mr. Justice Rix in The Xing Su Hai, namely whether the essential subject *81 matter of the claim concerns arbitration. We do not think that that is any different from the test which

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seemed to Mr. Justice Clarke to be correct in The Lake Avery, [1997] 1 Lloyd's Rep. 540, namely whether the relief sought in the action can be said to be ancillary to, or perhaps an integral part of the arbitration process. In our opinion the decisions in The Ivan Zagubanski that both the claim for a declaration that there was a binding arbitration agreement between the parties and the claim for an anti-suit injunction were within the arbitration exception were correct for the reasons given by Mr. Justice Aikens. We see no distinction in this regard between the facts of that case and this. It follows that the Judge was correct to hold on the facts of the instant case both that the claims for declarations that New India was bound to refer its claim to arbitration and that the Finnish proceedings were brought in breach of an agreement to arbitrate and that the claim for an anti-suit injunction were within the arbitration exception in art. 1.2(d) of the Regulation. It follows that the answer to the first question identified in par. 21 above, namely whether the court should decline jurisdiction or stay the proceedings under the Regulation is no, since the Regulation has no application to the claims brought in the English proceedings." [For other English decisions on the point, see The Xing Su Hai [1995] 2 Lloyd's Rep 21; Toepfer International GmbH v Molino Boschi Sarl [1996] 1 Lloyd's Rep 510; Lexmar Corp v Nordisk Skibsrederforening [1997] 1 Lloyd's Rep 289; The Lake Avery [1997] 1 Lloyd's Rep 540; Toepfer International GmbH v Societe Cargill France [1998] 1 Lloyd's Rep 379; Vale do Rio Doce Navegacao SA v Shanghai Bao Steel Ocean Shipping Co Ltd [2000] 2 All ER (Comm) 70; The Ivan Zagubanski [2002] 1 Lloyd's Rep 106; Electronic Arts CV v CTO SpA [2003] EWHC 1020 (Comm).]

1.6 How do the guarantees for the rights of defence provided by the Regulation work concerning jurisdiction on the one hand and recognition and enforcement on the other hand?

The rights of appeal contained in the Regulation (Articles 43-47), by which the losing party may appeal against the order made after the first stage of the procedure (i.e. obtaining an order for registration for enforcement), work effectively enough alongside English procedural rules and the realities of court. The appeal is made to a judge sitting in the High Court (Annex III, as amended by Regulation 1937/2004.) One point to note is that the time limits for making an appeal are "deliberately tight" [Briggs & Rees, op. cit., para. 7.22]. In Citibank NA v Rafidian Bank [2003] EWHC 1950 (QB), Rafidian Bank, an Iraqi state owned bank, applied for an extension of time to appeal against the registration for enforcement in England and Wales of a Dutch default judgment obtained by Citibank, another bank. Rafidian contended that recognition of the judgment would be contrary to public policy since the effect of international sanctions had prevented it from funding legal representation in the Dutch proceedings and it had thereby been denied access to justice and other fair trial rights under the Human Rights Act 1998 Sch. 1 Part I Art. 6. Rafidian further

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contended that it had not been served with the Dutch proceedings in sufficient time to enable a defence to be mounted for the purposes of the Brussels Convention 1968 Art. 27. Citibank contended that (1) the court had no jurisdiction to grant an extension where the application was made outside the period stipulated in the Civil Procedure Rules 1998 Part 74 r. 74.8(3)(b), and (2) alternatively, an extension should be refused as a matter of discretion, having regard to the overriding objective and the factors under Part 3 r. 3.9. Tugendhat J. held, refusing the application, that (1) Art. 36 of the Brussels Convention permitted the granting of an extension of time to appeal against the registration of a foreign judgment and there was nothing in Part 74 r. 74.8 of the Rules which provided otherwise. Consequently, the court had jurisdiction under Part 3 r. 3.1(2)(a) of the Rules to grant an extension notwithstanding that the application was not made within two months of service of the registration order, and (2) even if Rafidian's appeal had a realistic prospect of success, the interests of justice did not weigh heavily in favour of an extension, given the weakness of Rafidian's case under Art. 6 of 1998 Act and the necessity of time limits to protect the opposing party's right to a hearing within a reasonable time. The application was not prompt, there was no adequate explanation for the delay and it had to be inferred that Rafidian's failure to defend the Dutch proceedings, and to make a timely notice of appeal against the registration of the judgment, was intentional. Despite the effect of denying relief to Rafidian, the circumstances dictated that discretion should not be exercised in favour of an extension. In general, "the provisions are not complex" [J. Fawcett, J. Harris & M. Bridge, International Sale of Goods in the Conflict of Laws (Oxford, OUP, 2005), para. 11.18] and have given rise to relatively few problems in proceedings before the English Court. It is, however, important that the rights of defence should not become too technical; otherwise, they might create unjustifiable obstacles to the free movement of judgments and the proper functioning of the internal market. The correct balance must be struck between access to justice and security of legal rights. (See further paras. 39 to 51 of the judgment of Tomlinson J in Tavoulareas v Tsavliris [2006] EWCH 414 (Comm) relating to Art. 34.2 of Regulation 44/2001 and the judgment of the Court of Justice in Vedoliva v Van der Hoeven BV, Case C-3/05, Judgment of 16 February 2006.)

1.7 Are the rules of Articles 32–58 of Regulation 44/2001/EC compatible with national procedural rules? What is still left to be ruled by the Member States? Do special rules exist or do the general rules have to be used?8

The procedural rules for enforcement of judgments in England in this context are contained in the Civil Procedure Rules Part 74, rules 1-11, and have largely been designed to complement Regulation 44/2001 (and its predecessor, the Brussels Convention). As a consequence, the procedural rules in England co-exist peacefully with the rules contained in Articles 32-58 of Regulation 44/2001/EC, i.e. Part 74 does not impose requirements which would seem to be inconsistent with Regulation 44/2001/EC - they are relatively straightforward. For reference purposes, the relevant provisions of the Civil Procedure Rules are set out below:

8 Example: In Germany there is an obligation for the parties of being represented by a solicitor when taking action at the Landgericht. An exception is made for the order of enforcement of a foreign judgment by a rule of the national implementation law (§ 4 (2)).

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I ENFORCEMENT IN ENGLAND AND WALES OF JUDGMENTS OF FOREIGN COURTS 74.2 Interpretation (1) In this Section – (a) ‘Contracting State’ has the meaning given in section 1(3) of the 1982 Act; (b) ‘Regulation State’ has the same meaning as ‘Member State’ in the Judgments Regulation, that is all Member States except Denmark; (c) ‘judgment’ means, subject to any other enactment, any judgment given by a foreign court or tribunal, whatever the judgment may be called, and includes (i) a decree; (ii) an order; (iii) a decision; (iv) a writ of execution; and (v) the determination of costs by an officer of the court; (d) ‘State of origin’, in relation to any judgment, means the State in which that judgment was given. (2) For the purposes of this Section, ‘domicile’ is to be determined – (a) in an application under the 1982 Act, in accordance with sections 41 to 46 that Act; (b) in an application under the Judgments Regulation, in accordance with paragraphs 9 to 12 of Schedule 1 to the Civil Jurisdiction and Judgments Order 20011. 74.3 Applications for registration (1) This Section provides rules about applications under – (a) section 9 of the 1920 Act, in respect of judgments to which Part II of that Act applies; (b) section 2 of the 1933 Act, in respect of judgments to which Part I of that Act applies; (c) section 4 of the 1982 Act; and (d) the Judgments Regulation for the registration of foreign judgments for enforcement in England and Wales. (2) Applications – (a) must be made to the High Court; and (b) may be made without notice. 74.4 Evidence in support (1) An application for registration of a judgment under the 1920, 1933 or 1982 Act must be supported by written evidence exhibiting – (a) the judgment or a verified or certified or otherwise authenticated copy of it; and

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(b) where the judgment is not in English, a translation of it into English – (i) certified by a notary public or other qualified person; or (ii) accompanied by written evidence confirming that the translation is accurate. (2) The written evidence in support of the application must state – (a) the name of the judgment creditor and his address for service within the jurisdiction; (b) the name of the judgment debtor and his address or place of business, if known; 1 S.I. 2001/3929. (c) the grounds on which the judgment creditor is entitled to enforce the judgment; (d) in the case of a money judgment, the amount in respect of which it remains unsatisfied; and (e) where interest is recoverable on the judgment under the law of the State of origin – (i) the amount of interest which has accrued up to the date of the application, or (ii) the rate of interest, the date from which it is recoverable, and the date on which it ceases to accrue. (3) Written evidence in support of an application under the 1920 Act must also state that the judgment is not a judgment – (a) which under section 9 of that Act may not be ordered to be registered; or (b) to which section 5 of the Protection of Trading Interests Act 1980 applies1. (4) Written evidence in support of an application under the 1933 Act must also – (a) state that the judgment is a money judgment; (b) confirm that it can be enforced by execution in the State of origin; (c) confirm that the registration could not be set aside under section 4 of that Act; (d) confirm that the judgment is not a judgment to which section 5 of the Protection of Trading Interests Act 1980 applies; (e) where the judgment contains different provisions, some but not all of which can be registered for enforcement, set out those provisions in respect of which it is sought to register the judgment; and (f) be accompanied by any further evidence as to – (i) the enforceability of the judgment in the State of origin, and (ii) the law of that State under which any interest has become due under the judgment, which may be required under the relevant Order in Council extending Part I of the 1933 Act to that State.

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(5) Written evidence in support of an application under the 1982 Act must also exhibit – (a) documents which show that, under the law of the State of origin, the judgment is enforceable on the judgment debtor and has been served; (b) in the case of a judgment in default, a document which establishes that the party in default was served with the document instituting the proceedings or with an equivalent document; and (c) where appropriate, a document showing that the judgment creditor is in receipt of legal aid in the State of origin. (6) An application for registration under the Judgments Regulation must, in addition to the evidence required by that Regulation, be supported by the evidence required by paragraphs (1)(b) and (2)(e) of this rule. 74.5 Security for costs (1) Subject to paragraphs (2) and (3), section II of Part 25 applies to an application for security for the costs of – (a) the application for registration; (b) any proceedings brought to set aside the registration; and (c) any appeal against the granting of the registration as if the judgment creditor were a claimant. (2) A judgment creditor making an application under the 1982 Act or the Judgments Regulation may not be required to give security solely on the ground that he is resident out of the jurisdiction. 1 1980 c. 11. (3) Paragraph (1) does not apply to an application under the 1933 Act where the relevant Order in Council otherwise provides. 74.6 Registration orders (1) An order granting permission to register a judgment (‘a registration order’) must be drawn up by the judgment creditor and served on the judgment debtor – (a) by delivering it to him personally; (b) as provided by section 725 of the Companies Act 19851; or (c) in such other manner as the court may direct. (2) Permission is not required to serve a registration order out of the jurisdiction, and rules 6.24,

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6.25, 6.26 and 6.29 apply to such an order as they apply to a claim form. (3) A registration order must state – (a) full particulars of the judgment registered; (b) the name of the judgment creditor and his address for service within the jurisdiction; (c) the right of the judgment debtor – (i) in the case of registration following an application under the 1920 or the 1933 Act, to apply to have the registration set aside; (ii) in the case of registration following an application under the 1982 Act or under the Judgments Regulation, to appeal against the registration order; (d) the period within which such an application or appeal may be made; and (e) that no measures of enforcement will be taken before the end of that period, other than measures ordered by the court to preserve the property of the judgment debtor. 74.7 Applications to set aside registration (1) An application to set aside registration under the 1920 or the 1933 Act must be made within the period set out in the registration order. (2) The court may extend that period; but an application for such an extension must be made before the end of the period as originally fixed or as subsequently extended. (3) The court hearing the application may order any issue between the judgment creditor and the judgment debtor to be tried. 74.8 Appeals (1) An appeal against the granting or the refusal of registration under the 1982 Act or the Judgments Regulation must be made in accordance with Part 52, subject to the following provisions of this rule. (2) Permission is not required – (a) to appeal; or (b) to put in evidence. (3) If – (a) the judgment debtor is not domiciled within a Contracting State or a Regulation State, as the case may be, and 1 1985 c. 6. (b) an application to extend the time for appealing is made within two months of service of the registration order

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the court may extend the period for filing an appellant’s notice against the order granting registration, but not on grounds of distance. (4) The appellant’s notice must be served – (a) where the appeal is against the granting of registration, within – (i) one month; or (ii) where service is to be effected on a party not domiciled within the jurisdiction, two months of service of the registration order; (b) where the appeal is against the refusal of registration, within one month of the decision on the application for registration. 74.9 Enforcement (1) No steps may be taken to enforce a judgment – (a) before the end of the period specified in accordance with rule 74.6(3)(d), or that period as extended by the court; or (b) where there is an application under rule 74.7 or an appeal under rule 74.8, until the application or appeal has been determined. (2) Any party wishing to enforce a judgment must file evidence of the service on the judgment debtor of – (a) the registration order; and (b) any other relevant order of the court. (3) Nothing in this rule prevents the court from making orders to preserve the property of the judgment debtor pending final determination of any issue relating to the enforcement of the judgment. 74.10 Recognition (1) Registration of a judgment serves as a decision that the judgment is recognised for the purposes of the 1982 Act and the Judgments Regulation. (2) An application for recognition of a judgment is governed by the same rules as an application for registration of a judgment under the 1982 Act or under the Judgments Regulation, except that rule 74.4(5)(a) and (c) does not apply. 74.11 Authentic instruments and court settlements The rules governing the registration of judgments under the 1982 Act or under the Judgments

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Regulation apply as appropriate and with any necessary modifications for the enforcement of – (a) authentic instruments which are subject to – (i) article 50 of Schedule 1 to the 1982 Act; (ii) article 50 of Schedule 3C to the 1982 Act; and (iii) article 57 of the Judgments Regulation; and (b) court settlements which are subject to – (i) article 51 of Schedule 1 to the 1982 Act; (ii) article 51 of Schedule 3C to the 1982 Act; and (iii) article 58 of the Judgments Regulation.

1.8 Is the meaning of these conventions in relation between the Member States reduced by the application of Regulation 44/2001/EC?

It is understood that the question refers to the Conventions contemplated by Art. 71 of Regulation 44/2001 There had originally been some doubt over the correct application of Article 71. As Briggs & Rees note [at para 2.35]: "…jurisdiction pursuant to Article 71 prevails over, and must precede, the other rules of the Regulation. It was originally unclear whether such cases may be considered to fall outside the scope of the Regulation altogether. The main significance of this question would be that, if jurisdiction taken by virtue of Article 71 fell, holus bolus, outside the scope of the Regulation, Articles 27 to 30, which deprive a court of jurisdiction of there is a lis alibi pendens, would not apply to it; whereas if Article 71 jurisdiction fell within the scope of the Regulation, Articles 27 to 30 would limit it. Although the Schlosser Report chose to leave the question open, once it is recalled that the recognition of such judgments falls within Chapter III of the Regulation, and that Articles 27 to 30 are designed to facilitate the free movement of judgments, the better view was that Article 71 jurisdiction may fall within the scope of the Regulation, and that it may be invoked unless Articles 27 to 30 apply to the particular case. But if they do, the jurisdiction conferred by the particular convention will not be capable of being exercised after all." This was the view taken in The Linda [1988] 1 Lloyd's Rep 175. The case concerned a collision of the coast of Belgium, and the arrest of both ships. Sheen J. held in relation to Article 57 of the Brussels Convention (which is reproduced by Article 71 of what is now Regulation 44/2001/EC) that [at 178]: "Article 7 of the Arrest Convention provides that the Courts of the country in which the arrest was made shall have jurisdiction to determine the case upon its merits if the domestic law of the country in which the arrest is made gives jurisdiction to such Courts. The effect, as is well known, is that the owner of a ship may be sued in a country in which he is not domiciled. The venue or forum will usually be in the country in which the ship is arrested. The provisions set out in art. 57 make it clear that jurisdiction given to a Court in accordance with the Arrest Convention is not

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affected by the 1968 Convention as amended. The general provisions give way to the particular provisions. Thus the general rule that a person must be sued in the Courts of the State in which he is domiciled gives way to the particular provision that the State in which a ship is arrested shall have jurisdiction." The classic treatment of this area of law is found in the reasoning of the ECJ in The Tatry (Case C-406/92) [1994] ECR I-5439. The case has been summarized by one commentator thus: "Proceedings had been commenced in the Netherlands by a shipowner against owners of allegedly-damaged cargo for a declaration that it owed no liability for any loss or damage which had befallen the cargo. Proceedings were then commenced in England, by the arrest of a ship, for compensation for damage to the cargo. It was argued that the claim in England should be allowed to proceed, notwithstanding the earlier Dutch proceedings, on the ground that the jurisdiction of the English court was based on the International Convention relating to the arrest of sea-going ships. It followed, as was argued by the cargo-owners, that, as the Arrest Convention permitted the exercise of jurisdiction where a ship had been arrested, Article 57 of the Brussels Convention permitted the claim to be heard notwithstanding any related or identical proceedings in Holland. Had this argument been accepted, it would have meant, in effect, that a claim brought in accordance with the jurisdictional rules of a particular Convention fell outside the domain of the Brussels Convention, and accordingly outside the control of Articles 21 and 22 of the Brussels Convention. But the Court disagreed, holding that Articles 21 and 22 of the Brussels Convention could still be applied to prevent the English court hearing the case. As a result of this, the argument that if a case falls within the scope of a particular Convention it falls outside the domain of the Brussels Convention, and hence outside the domain of the Regulation, was constructively rejected" [Briggs & Rees, op. cit., at para. 2.36]. Indeed, the ECJ stated [at para. 27]: "Article 57 of the Convention, as amended by the Accession Convention, means that, where a Contracting State is also a contracting party to another convention on a specific matter containing rules on jurisdiction, that specialized convention precludes the application of the provisions of the Brussels Convention only in cases governed by the specialized convention and not in those to which it does not apply." Whilst the decision in The Tatry may be applauded by advocates of legal certainty and the free movement of judgments in Europe, it is less clear how the ECJ can reconcile such a decision with Article 71(2)(a), which states "this Regulation shall not prevent a court of a Member State which is a party to a convention on a particular matter from assuming jurisdiction in accordance with that convention." It is undeniable that a provision internal to the Brussels Convention prevented the English court proceeding to hear a case over which the Arrest Convention gave it jurisdiction, and it is difficult to see how that result can be aligned with the wording of Article 71.

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One criticism of the wording of Article 71 is that it engages only where there is a convention which requires a court to exercise jurisdiction; it does not appear to operate, however, where a court is required to not exercise jurisdiction over a claim. There is no reason why a negative requirement should not be just as compelling, and Article 71 should give effect to that. The current wording of Article 71 means that analysis would be almost impossible to carry out in English courts. Since the ECJ's decision in The Tatry, there has been a relative dearth of cases on Art 71 of Regulation 44/2001/EC (and the corresponding provision of the Brussels Convention.) In Deaville v Aeroflot Russian International Airlines [1997] 2 Lloyd's Rep. 67, an aircraft belonging to Aeroflot crashed killing a number of passengers while on route to Hong Kong. Deaville were relatives and dependants of the victims of that crash who sought damages against Aeroflot and the manufacturer of the aircraft in actions brought in France and England. Aeroflot contended that the matter should be governed by the Warsaw Convention and that the action should be brought in Russia, England or Hong Kong under the terms of Art. 28. On that basis Aeroflot challenged the proceedings in the French courts as being contrary to international law and beyond the jurisdiction of those courts, thus seeking an anti suit injunction. The English proceedings had been commenced in case the French courts were found not to have jurisdiction. Deaville sought to stay proceedings under the inherent jurisdiction of the court further to the Brussels Convention 1968 Art. 21 and Art. 22. However the Brussels Convention Art. 57 provided that it was not to interfere with the terms of any other convention. The court held, allowing the application, that the court had power to stay proceedings in the interests of justice under its inherent jurisdiction, or to stay proceedings under Art. 21 and Art. 22. The Warsaw Convention fell within the terms of the Brussels Convention Art. 57. The Warsaw Convention applied so as to displace Art. 21 and Art. 22. However, the Warsaw Convention was silent on the situation where the manufacturer was also a defendant to litigation. However, on construction of the Warsaw Convention, it was not possible to bring an action against the defendant airline or the manufacturer in France, Sidhu v British Airways Plc [1997] A.C. 430 applied. Dismissing Aeroflot's applications, it was not appropriate for the English court to impose an anti suit injunction until the French court had ruled on jurisdiction, Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] A.C. 871 applied. It would be contrary to principles of comity to grant the declaratory relief sought at an interlocutory stage. Deaville's application for a stay would be granted, pending the outcome of the French litigation. In relation to Article 57, Mr Geoffrey Brice QC stated [at p. 71]: "In the present case the claims for compensation in respect of death or bodily injury against the carrier are governed by the Warsaw Convention: that Convention lays down specific and exclusive jurisdictions (not including France). In my judgment art. 57 governs the situation and arts. 21 and 22 do not apply so as to compel the English Court to decline jurisdiction or exercise its power to stay under either article. That is why the inherent power to stay is of such importance." In The Bergen (No.1) [1997] 1 Lloyd's Rep 380, under bills of lading, goods were to be carried from the USA to Scotland. The vessel caught fire and was towed to

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Aberdeen. The bills of lading provided for disputes to be decided in Germany. The issue arose whether the English court had jurisdiction under the International Convention for Unification of Certain Rules relating to the Arrest of Sea-Going Ships 1952 Art. 7 or whether the matter should be governed by the Brussels Convention 1968 Art. 17. The court held that [at p. 385]: "If art. 17 applies and is relied upon the Court will be bound to hold that it has no jurisdiction and will have no such discretion. In that event the Court would not be applying English domestic law in accordance with art. 7 of the Arrest Convention. It follows that in the absence of authority I would conclude that the claimants are right in their submission that there is a conflict between art. 17 of the Brussels Convention and art. 7 of the Arrest Convention and that, by reason of art. 57 of the Brussels Convention, art. 7 must prevail. That conclusion seems to me to follow logically from the express provisions of art. 57.2 quoted above, namely that: . . .this Convention shall not prevent a Court of a Contracting State which is a party to a convention on a particular matter from assuming jurisdiction in accordance with that Convention . . . This Court has jurisdiction over the claimants' claim under the Arrest Convention. The effect of the defendants' argument is (as I see it) that the Court is being asked to refuse to assume jurisdiction because of art. 17. If it were to do so the Brussels Convention would, by art. 17, be preventing this Court from assuming jurisdiction in accordance with the Arrest Convention, which is the very thing which is expressly prohibited by art. 57.2 of the Brussels Convention." Mr Justice Clarke agrees with the reasoning in The Tatry, in relation to what are now Articles 27 to 30 of Regulation 44/2001/EC [at p. 385-386]: "That being its purpose, Article 57 must be understood as precluding the application of the provisions of the Brussels Convention solely in relation to questions governed by a specialized convention. A contrary interpretation would be incompatible with the objective of the Convention which, according to this preamble, is to strengthen in the Community the legal protection of persons therein established and to facilitate recognition of judgments in order to secure their enforcement. In those circumstances, when a specialized convention contains certain rules of jurisdiction but no provision as to lis pendens or related actions, Article 21 and 22 of the Brussels Convention apply." As Briggs & Rees note [at para. 2.36], "the effect of Articles 27 to 30 of the Regulation is that a court which otherwise had jurisdiction must decline to exercise it…it is certainly arguable that such a decision taken by the court second seised is not inconsistent with Article 71 and/or the particular Convention. Article 27 does not operate to require the court seised second to accept that it did not have jurisdiction at all; it requires the court to decline to exercise its jurisdiction. Indeed, this was the interpretation of The Tatry which was adopted in The Bergen." A distinction, however, was drawn before that situation, and one involving Article 23 (Brussels Convention, Article 17) by Clarke J. in the Bergen [at p.386]

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"There is a conflict between the jurisdiction provisions of the Arrest Convention and the jurisdiction provisions of the Brussels Convention for the reasons already given, namely that the effect of art. 17 of the Brussels Convention would be to deprive the English Court of the jurisdiction conferred upon it by art. 7 of the Arrest Convention to determine the case on its merits if English domestic law gives it jurisdiction to do so. English domestic law does give it jurisdiction, although the Court may stay the action by reason of the exclusive jurisdiction clause. The effect of art. 17 would be to deprive the Court of any jurisdiction at all. It follows that there is a conflict between the jurisdiction provisions of the two Conventions and the jurisdiction provisions of the Arrest Convention must prevail. The Maciej Rataj is thus of no assistance because it is a case involving lis pendens and is not about original jurisdiction at all. In the instant case the defendants are not inviting the Court to renounce a jurisdiction which it has, but are seeking to deny the existence of such a jurisdiction because that is the effect of art. 17." A court would seem to be perfectly entitled to nevertheless consider whether that particular convention or its own national procedural law would permit a stay, but such a result cannot be achieved by the application of Article 23. Particular emphasis can be placed upon Regulation 44/2001/EC's compatibility with maritime conventions, the most significant of which under English law are the 1952 Arrest Convention and the 1952 Collision Convention. Under the Arrest Convention, jurisdiction in relation to certain claims may be founded by the arrest of a ship; "if this arrest takes place, Article 71 of the Regulation thereupon authorises the taking of jurisdiction. But it will still be necessary for jurisdiction actually to be taken as a matter of English law: jurisdiction served in an admiralty action in rem in English law requires the claim form to be served. Arrest does not found jurisdiction in English law (nor is it a precondition for it), but it appears that it is the fact of arrest in accordance with the Arrest Convention which permits the court to exercise jurisdiction upon the basis of service and to be permitted by Article 71 to do so" [Briggs & Rees, op. cit., para. 2.37]. The same conditions apply in essence to the Collision Convention, although it should perhaps be noted that the Collision Convention is not part of the domestic law of the UK; rather, it has been subsumed into the Supreme Court Act 1981. For analysis of the relationship between Regulation 44/2001/EC and the Convention on the Contract for the Carriage of International Goods by Road (CMR), see Royal & Sun Alliance Insurance plc v. MK Digital FZE [2005] 2 Lloyd's Rep. 679, the earlier Court of Appeal decision (dealing with the Brussels Convention) in Andrea Merzario Ltd v Internationale Spedition Leitner Gesellschaft GmbH [2001] 1 All ER (Comm) 883 and the decision of the Court of Justice in Nürnberger Allgemeine Versicherungs AG v Portbridge Transport International BV(Case C-148/03) [2006] 1 All ER (Comm) 893. [On this point generally see The Po [1991] 2 Lloyd's Rep 206; Hartley (1989) 105 LQR 640.]

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2. Provisions of Regulation 44/2001/EC dealing with Jurisdiction

2.1 General Issues

2.1.1 Does the Regulation guarantee, according to its overall objectives, predictability of judicial decisions and legal certainty?

The first reference by the ECJ to legal certainty was Bavaria Fluggesellschaft Schwabe & Co. Kg and Germanair Bedarfsluftfahrt GmbH & Co. Kg v Eurocontrol [1977] ECR 1517 [at para. 4]: "The principle of legal certainty in the Community legal system and the objectives of the Brussels convention in accordance with Article 220 of the EEC Treaty, which is at its origin, require in all Member States a uniform application of the legal concepts and legal classifications developed by the court in the context of the Brussels convention." Subsequently, "legal certainty" has become one of the guiding principles in the ECJ's jurisprudence. Its effect on the interpretation of the Brussels Convention has been profound and, as one practitioner notes, "it seems likely to play an equally significant role in determining the scope and effect of its successor, the 'Brussels I Regulation'" [A. Dickinson, "Legal certainty and the Brussels Convention – too much of a good thing?" in P de Vareilles-Sommieres (ed.), Forum Shopping In The European Judicial Area (Hart Publishing, forthcoming 2006/2007)]. A detailed discussion of Erich Gasser GmbH v MISAT srl (Case C-116/02) [2003] ECR I-14693; Turner v Grovit (Case C-159/02) [2004] ECR I-3565, and Owusu v Jackson (Case C-281/02) [2005] ECR I-1383 is outside the scope of this Member State Questionnaire [for a comprehensive account see A, Dickinson, "Legal certainty and the Brussels Convention – too much of a good thing?" in P de Vareilles-Sommieres (ed.), Forum Shopping In The European Judicial Area (Hart Publishing, forthcoming 2006/2007)]. Emphasis will instead be placed upon how it has affected English proceedings. It is worth, however, reproducing a key passage in modern ECJ case-law on the principle of legal certainty; that of Advocate General Leger in Owusu v Jackson (Case C-281/02), [2005] ECR I-1383. He stated [at paras. 159-162 (footnotes included)]: "[159] In the terms of its preamble, the Convention aims 'to strengthen in the Community the legal protection of persons therein established'. Again according to the preamble, it is for that purpose that the Convention lays down, first, rules concerning the jurisdiction of courts common to the Contracting States and, secondly, rules to facilitate recognition of judgments and to establish an expeditious procedure for their enforcement. [160] The Court has clarified the meaning of that aim of the Convention, in particular with regard to the common jurisdictional rules which it contains. It has taken the view that the strengthening of the legal protection of persons

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established in the Community involves 'enabling the claimant to identify easily the court in which he may sue and the defendant reasonably to foresee in which court he may be sued". [FN85] The Court has also characterised those rules as 'guaranteeing certainty as to the allocation of jurisdiction among the various national courts before which proceedings in matters relating to a contract may be brought'. [FN86] FN85 See, in particular, Effer (Case 38/81) [1982] ECR 825; [1984] 2 C.M.L.R. 667 at [6]; Mulox IBC (Case C-125/92): [1993] ECR I-4075; [1993] ILPr 668 at [11]; Benincasa, cited above at [26]; Tacconi ( C-334/00): [2002] ECR I-7357 at [20]; DFDS Torline ( C-18/02): [2004] I.L.Pr. 10; and Kronhofer, cited above at [20]. FN86 See, in particular, Custom Made Commercial ( C-288/92): [1994] ECR I-2913; [1994] I.L.Pr. 516 at [15]; and Besix (Case C-256/00): [2002] ECR I-1699; [2003] ILPr 8 at [25] (emphasis added). [161] Only jurisdictional rules meeting those requirements are capable of guaranteeing observance of the principle of legal certainty, which is also, according to settled case law, [FN87] one of the objectives of the Brussels Convention. FN87 See, in particular, Effer, cited above, at [6], Owens Bank, cited above, at [32], Custom Made Commercial, cited above, at [18], Besix, cited above, at [24] to [26], and GIE Groupe Concorde ( C-440/97): [1999] ECR I-6307; [2000] I.L.Pr. 626 at [23]; and Italian Leather (Case C-80/00): [2002] ECR I-4995; [2002] ILPr 41 at [51]. [162] In my view, those two aims of the Convention, both that of strengthening legal protection for people established in the Community and that of ensuring legal certainty, mean that the application of Art.2 of the Convention cannot be made conditional on the existence of a dispute displaying connections with different Contracting States." As the current Master of the Rolls (the presiding officer of the Civil Division of the Court of Appeal, and England's third most senior judge) acknowledged in a recent speech to the Institute of Advanced Legal Studies, UK: "It is more than apparent from the judgments and the opinions of the Advocates General in the three cases that the ECJ acknowledges the achievement of legal certainty as a fundamental instrument of interpretation. The commitment to certainty brooks no exceptions and guides the regime's interpretation and application. In so doing it has led the ECJ to accept an interpretation of the Convention which affords territorial range of very considerable scope. Its international jurisdiction now governs not only jurisdictional questions between the 25 member states but equally

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(one might say) their extra-member state relations" [Sir Anthony Clarke, "The differing approach to commercial litigation in the European Court of Justice and the courts of England and Wales" (speech at Institute of Advanced Legal Studies, London, 23 February 2006) -http://www.dca.govuk/judicial/speeches/2006/sp060223.htm]. The eventual decision of the ECJ in Owusu v Jackson has met with considerable criticism in England (see post at Parts 3 & 4 of this Questionnaire). As one commentator has concluded: "In the abstract, predictability of the law is undoubtedly a desirable objective. Yet, the apparent development of 'legal certainty' into an independent, guiding principle in the case law of the Court of Justice on the Brussels Convention and in the Recitals to the Brussels I Regulation is a cause for concern. It must be remembered that the achievement of legal certainty in the application of one rule of jurisdiction may conflict with the achievement of legal certainty in another, and the principle in itself provides no answer as to which rule should take priority. Further, if allowed to operate independently of the requirement of legal protection, the principle of legal certainty is liable to lead to over-rigid application of legal rules and to be a cause of injustice. Thus, although the result in Owusu v Jackson may have been correct, the reasoning must be handled with care" [A. Dickinson, loc. cit., under "Conclusion"; see, for further criticism of Owusu v Jackson, Briggs & Rees op. cit., paras 2.221-2.229.] Another commentator noted, in relation to certainty, that [at p. 185]: "It is somewhat ironic that the ECJ placed emphasis in justifying its decision on the need for the defendant to have certainty in knowing in which jurisdictions it might be sued, given that it is often the defendant which pleads the doctrine of forum non conveniens in seeking to avoid proceedings being maintained against it in its home jurisdiction. That was the position, for instance, in Connelly v RTZ Corp Plc, Lubbe v Cape Plc and in the present case" [A. McKnight, "A Review of Developments in English Law during 2005: Part 2" (2006) Journal of International Banking Law and Regulation 175]. English courts have subsequently cited the principle of legal certainty and its importance in case-law on the Brussels Convention and Regulation 44/2001. In Konkola Copper Mines Plc v Coromin [2005] EWHC 898 (Comm), Colman J summarized the decision in Owusu v Jackson and what it meant for English law [at para. 77]: "The court has thus held that the principle of legal certainty requires, in particular, that the jurisdictional rules which derogate from the general rule laid down in article 2 of the Brussels Convention should be interpreted in such a way as to enable a normally well-informed defendant reasonably to foresee before which courts, other than those of the State in which he is domiciled, he may be sued. Application of the forum non conveniens

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doctrine, which allows the court seised a wide discretion as regards the question whether a foreign court would be a more appropriate forum for the trial of an action, is liable to undermine the predictability of the rules of jurisdiction laid down by the Brussels Convention, in particular that of article 2, and consequently to undermine the principle of legal certainty, which is the basis of the Convention." Colman J. goes on to state that [at para. 98]: "It does not seem to me a persuasive reason for holding that the Convention contemplates or legitimises an additional and discretionary power, based largely on cost and convenience, to stay in favour of a non-Community court against a claimant who has come to a court within the Community to try his dispute in accordance with a right apparently given and a requirement apparently imposed by the Convention on the basis of the defendants' domicile. In this respect I construe the Convention as less concerned with comity than with certainty." Colman J. added [at para. 100]: "I note that it has been held by the Cour d'Appel of Versailles in Bruno v Societe Citibank (1991), referred to in Dicey & Morris, The Conflict of Laws, 13th Edn para 12-090 n 66, that if a defendant is domiciled in a Contracting State, a jurisdiction clause conferring jurisdiction on the courts of a non-Contracting State is ineffective and the domicile rule in article 2 prevails. This approach necessarily involves that because the Convention makes no express provision for such jurisdiction clauses, the only jurisdiction clauses to which effect can be given are those which are within article 17. However, this very formalistic approach cannot be based on the need to avoid uncertainty, so much emphasised by the ECJ in Owusu, supra, but on the implicit assumption that the courts of Contracting States should respect party autonomy only if that is expressed in terms of jurisdiction in the courts of Contracting States, a limitation which, apart from being inconsistent with the passage from Schlosser at para 176, would appear to have no conceptual foundation." In the circumstances, the Judge held that the Owusu decision did not preclude the grant of a stay of proceedings to give effect to an exclusive jurisdiction clause in favour of a non-Convention State. In JP Morgan Europe Ltd v Primacom AG And Others [2005] EWHC 508 (Comm), Cooke J held (at para. 49): "Despite these potential problems, I am driven to the conclusion, by reference to the ECJ decisions that the same cause of action is involved in these two sets of proceedings in relation to interest and that the requirements of legal certainty, comity, and trust in the judicial institutions in

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the Community require me to stay the Declaratory Proceedings under article 27.1 until such time as the Mainz court decides upon its own jurisdiction." The underlying tone of the decision (e.g. "driven to the conclusion") perhaps reveals a reluctance to invoke the "requirements of legal certainty" (as emphasised by the decision of the Court of Justice in the Gasser case) as a key reason for any decision. What cannot be denied, however, is that Regulation 44/2001 (and its predecessor) have introduced legal certainty into this area of law. Of more concern is at what price this goal has been achieved. The benefits of certainty resulting from the Regulation framework, nevertheless, have sometimes been flagged by English courts as an advantage; in Advent Capital Plc v Ellinas Imports-Exports Ltd [2005] EWHC 1242 (Comm), Colman J stated [at para. 1]: "In recent years the Commercial Court has increasingly been called upon to resolve complex jurisdictional issues which have arisen even in the face of binding law and jurisdiction clauses. Such disputes arise because of the apparent inability of the parties even to attempt to apply commonsense to the choice of venue for resolution of their disputes. Parties to the Brussels, Lugano and San Sebastian Conventions and ultimately to EU Regulation 44/2001 have at least established a jurisdictional regime of reasonable certainty for international commercial disputes connected with the courts of Member States. Once outside that regime, the opportunities for disruption of the resolution of substantive claims by time-consuming and costly jurisdictional ancillary litigation are far too often relentlessly and needlessly pursued to the prejudice of all parties. The applications now before this court exemplify the futility of this kind of ancillary litigation and point up the urgent need for an international jurisdiction and judgments convention of the widest possible application."

2.1.2 Do the provisions on jurisdiction deal satisfactorily with the relevant issues, in particular: Do the courts of the Member States comply with the obligation as laid down by the ECJ that exclusively deal with the issues identified by Article 5 constitute a ground of jurisdiction?

After substantial clarification by the University of Heidelberg on the meaning of this question, Part 2.1.2 should be taken as asking, "is it possible to base jurisdiction, concerning the specific grounds of jurisdiction (Art. 5 ff) as exceptions to the general rule of Art. 2 - on grounds other than those stated explicitly in these provisions?" The ECJ has ruled that it is definitely not possible to extend the grounds of special jurisdiction: see Benincasa v Dentalkit Srl (Case C-269/95) [1997] ECR I-3767 [at para. 13]; Reunion Europeenne SA v Spliethoff's Bevrachtingskantoor BV (Case C-51/97) [1998] ECR I-6511 [para. 16].

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This is an uncontroversial point, and there has been no hint of a suggestion that English courts would hold otherwise.

2.1.3 Is the catalogue of fact-specific grounds of jurisdiction sufficient?

Section 2 of Regulation 44/2001, entitled "special jurisdiction", lists a number of "fact-specific grounds" of jurisdiction [see generally Hill (1995) 44 ICLQ 591]. Briggs and Rees point out [at para. 2.122]: "The rules are intricate: Article 5 represents some sort of an attempt to confer jurisdiction in various categories of dispute upon the court which may generally be expected to have a close connection with the individual case. Article 6 deals with jurisdiction over co-defendants, third parties and counterclaimants, and Article 7 with the limitation of liability in shipping claims. It is unlikely that coverage of such large areas could ever be simple. They are important: the existence of Articles 5 and 6 means that defendants domiciled in the United Kingdom will frequently find themselves liable to be sued in another member State, and that those domiciled in other Member States may well be proceeded against in England. They are wide-ranging: they contain many jurisdictional rules applicable in a great variety of circumstances. The Articles have given rise to a considerable amount of case-law and academic analysis." The specific grounds in Arts. 5 and 6 appear generally acceptable. Several consultees, however, criticised the specific focus of Art. 6.1 upon jurisdiction based on one co-defendant's domicile, rather than (for example) a jurisdiction agreement, as being capable of creating fragmentation of litigation. The solution favoured by these consultees is that, as an alternative to Art. 2 and consistently with its place in the hierarchy of the Regulation, a claimant should be able to sue defendants domiciled in Member States in the courts of any place having jurisdiction over any other defendant in the same proceedings under any of the specific rules of jurisdiction contained in the Regulation. In other words, the category of potential "anchor defendants" should be widened, although it is accepted that jurisdiction established with respect to a non-Member State domiciled party under Art. 4 could not be relied on to found jurisdiction under Art. 6.1. It is suggested that this amendment would assist in the efficient conduct of multi-party proceedings and reduce the risk of irreconcilable judgments resulting from the fragmentation of litigation. The same consultees were also critical of the absence of a provision enabling related claims against the same defendant to be joined (e.g. claims in contract and in tort) in circumstances where some of them only fall within one of the heads of Art. 5 (cf. Kalfelis v Bankhaus Schroeder (Case 189/87) [1988] ECR 5565). The narrow construction of Art. 6.1 suggested by the dictum of the Court of Justice in Reunion Europeenne v

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Spliethoff's Bevrachtinskantoor BV (Case C-51/97) [1998] ECR I-6511, para. 50 to the effect that "[i]t follows that two claims in one action for compensation, directed against different defendants and based in one instance on contractual liability and in the other on liability in tort cannot be regarded as connected" (see further Briggs & Rees, op. cit., para. 2.175 and the reference, since understood to have been withdrawn following settlement, by the Court of Appeal in Watson v First Choice Holidays [2001] 2 Lloyd's Rep. 339, a Brussels Convention as well as the recent decision in Andrew Weir Shipping Ltd v Wartsila UK Ltd [2004] EWHC 1284 (Comm) referred to at 2.2.12 below). That criticism would appear well-justified as, even if the construction given to Art. 5(3) in Kalfelis is justifiable, it does not logically follow that Art. 6.1 (in entirely different terms) should be given a parallel construction. Art. 6.1 should, therefore, make clear that claims may be sufficiently related even though they have a different legal basis, provided that there is a sufficient risk of inconsistent findings of fact or law. Similar comments apply with regard to the decision of the Court of Justice (handed down on 13 July 2006 after the consultation period) in Roche Netherland BV v Primus (Case C-539/03), which appears unduly dismissive of the possibility of "irreconcilability" of decisions on issues of fact or law even when the legal basis of the claims are distinct (see paras. 25 to 36). One response to this question also suggested that it would be desirable to include a provision enabling related claims against the same defendant to be joined (e.g. claims in contract and in tort) in circumstances where some of them only fall within one of the heads of Art. 5 (cf. Kalfelis v Bankhaus Schroeder (Case 189/87) [1988] ECR 5565).

2.1.4 Does Article 4 (2) cause a discrimination in fact of third State parties?

Article 4 permits and requires a court to exercise the jurisdiction which its own national or common law permits it to use in relation to a defendant not domiciled in a Member State. As a rule of the Regulation, Article 4 is subject to further conditions imposed in Regulation 44/2001/EC, which of itself makes "discrimination" against third-State parties unlikely. Criticism can be levelled at the Article for not exactly delimiting its hierarchy within the Regulation; although it is expressly subject to Articles 22 and 23, it must also be implicitly subject to the provisions on employment, insurance and consumer cases (Articles 18, 13, and 8 respectively), the rules on entering an appearance (Article 24) and the lis alibi pendens provisions. As one commentator notes: "The Regulation makes specific provision for the supervening of Article 23, but these other respects in which Article 4 gives way to provisions of the Regulation should not be overlooked. It is regrettable that the Regulation did not confirm the role carved out for them as well. It would not have been difficult" [see Briggs & Rees, op. cit., para. 2.189].

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Defendants under Article 4 also keep the protection of the rules in the Regulation governing lis alibi pendens (Articles 27 to 30). Such an approach is confirmed by the ECJ's decision in Overseas Union Insurance Ltd v New Hampshire Insurance Co (Case C-351/89) [1991] ECR I-3317. [Detailed discussion of these rules will be deferred to Part 3 below.] The issue of enforcement of judgments founded on Art. 4 jurisdiction against non-Member State domiciled parties is returned to in 4.1.5 below. Article 4(2) has been uncontroversial in English jurisprudence, and academic authorities tend equally give it a short treatment [see, e.g. J. Fawcett & P.M. North (eds.) Cheshire & North's Private International Law (London, Butterworths, 13th edn, 1999) p.197-198.] The issue of discrimination against third State parties has not arisen in this area, although it has given rise to complex issues in other areas of civil litigation (most notably in relation to security for costs applications - see Nasser v United Bank of Kuwait [2002] 1 WLR 1868 (CA)) and it cannot be ruled out as an issue for the future.

2.1.5 How are Articles 25 and 26 applied in practice? In particular: How does the examination “ex officio” work? Does such examination include grounds of jurisdiction not mentioned in Article 25? Do the courts examine ex officio if there is a valid choice-of-forum clause derogating the jurisdiction seized with the matter by reviewing the entire document of the agreement or do they demand a declaration of claimant that there is no derogation?

According to the Schlosser Report, a court, when examining its own jurisdiction, may not exercise such jurisdiction unless it is sure of those facts which give it jurisdiction; in cases where it is not sure it is required to request from the parties evidence as to those facts which might confer jurisdiction. However, as Briggs & Rees put it, "the entering of an appearance by a defendant will itself confer jurisdiction by reason of Article 24; only in cases subject to Article 22 will the entering of an appearance not to do so; and the duty of a court to examine its jurisdiction under Article 25, where the defendant appears, is confined to those cases where Article 22 may therefore apply" [at para. 2.193]. In cases where the defendant enters an appearance by acknowledging service (otherwise than to dispute the court's jurisdiction), examination is therefore limited to the ground of jurisdiction as stated in Article 25. However, a claimant who wishes to serve a claim form outside the jurisdiction in circumstances where he claims that the English Court has jurisdiction by virtue of Regulation 44/2001 must provide a certificate to the effect that the Court has jurisdiction, including that no proceedings are pending between the parties in Scotland, Northern Ireland or another Regulation State (see Civil Procedure Rules, r. 6.19(1A) and (3) and PD 6 (Service out of the Jurisdiction), paras. 1.3A-1.3D). A similar certification requirement exists where jurisdiction is asserted on the basis of the Brussels or Lugano Conventions. In other cases (principally, where Art. 4 of the Regulation applies), a claimant wishing to serve a claim form outside

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the jurisdiction must seek the court's permission to do so, must apply for such permission in writing giving full disclosure of all material facts and must satisfy the court that England is the proper place in which to bring the claim (see Civil Procedure Rules, r. 6.21). In Coin Controls Ltd. v Suzo International (U.K.) Ltd.and Others [1999] Ch. 33, Laddie J., in a claim for breach of a foreign intellectual property right, discussed Article 19 of the Brussels Convention (the predecessor of Article 25 of Regulation 44/2001/EC) against Art 16 (now Article 22) [at p.50]: "I cannot accept the argument that article 19 is only concerned with claims, meaning the assertions made by the party who initiates the proceedings. It must be concerned with what is in issue before the court. In some patent infringement proceedings it is really only validity which is in dispute. The function of article 19 appears to me to be to ensure that litigation covered by the exclusive jurisdiction provisions of article 16 are determined in the court having exclusive jurisdiction." In Fort Dodge Animal Health Limited v AKZO Nobel NV and Intervet International BV [1998] I.L.Pr. 732, the Court of Appeal held in an action for whether English courts had jurisdiction under Brussels Convention to hear anti suit injunction after proceedings had been brought in the Netherlands for a patent infringement that [at p. 743]: "…since Article 19 obliges the court to decline jurisdiction in relation to claims which are 'principally' concerned with Article 16 issues, it seems to follow that jurisdiction over all of the claim, including that part which is not within Article 16 must be declined. It may well be that if there are multiple discrete issues before a court it will be possible to sever one or more claims from another and to decline to accept jurisdiction only over those covered by Article 16, but I do not believe that that approach applies where infringement and validity of an intellectual property right are concerned. They are so closely interrelated that they should be treated for jurisdiction purposes as one issue or claim." Article 26 obliges a court to examine its jurisdiction if a defendant who is domiciled in a Member State does not appear. The court must stay proceedings if it is not shown that either the defendant has received the document instituting the proceedings in sufficient time to arrange his defence, or that all necessary steps have been taken. Judgment in default of appearance will only be entered where the document instituting proceedings was served in enough time for the defendant to arrange his defences. In England, a defendant seeking default judgment would have to comply with CPR rr 12.10 and 12.11, and para. 4 of the Practice Direction. Rule 12.10 requires the claimant to make a full application to the court for default judgment (as opposed to obtaining judgment by making a formal request to a court officer to enter judgment) in certain cases, including if:

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"he wishes to obtain a default judgment where the defendant has failed to file an acknowledgment of service – (i) against a defendant who has been served with the claim out of the jurisdiction under rule 6.19(1) or (1A); (service without leave under the Civil Jurisdiction and Judgments Act 1982(4)); (ii) against a defendant domiciled in Scotland or Northern Ireland or in any other Convention territory or Regulation State;" Para. 4.3 of the Practice Direction for Part 12 contains requirements as to the evidence which must accompany an application for default judgment, including as follows: "4.3 On an application where the defendant was served with the claim either: (1) outside the jurisdiction without leave under the Civil Jurisdiction and Judgments Act 1982, or the Judgments Regulation, or (2) within the jurisdiction but when domiciled in Scotland or Northern Ireland or in any other Convention territory or Regulation State, and the defendant has not acknowledged service, the evidence must establish that: (a) the claim is one that the court has power to hear and decide, (b) no other court has exclusive jurisdiction under the Act or Judgments Regulation to hear and decide the claim, and (c) the claim has been properly served in accordance with Article 20 of Schedule 1 or 3C to the Act, paragraph 15 of Schedule 4 to the Act, or Article 26 of the Judgments Regulation."

2.1.6 Is the examination of the issue of jurisdiction expensive and time-consuming? Are the same fees for the court and the attorneys to be paid as under the main proceedings? How long does it usually take to obtain a final decision on jurisdiction? Are there any complaints that courts do not decide the issue of jurisdiction separately, but only in connection with the main proceedings? In reverse, are there complaints that a separate decision on jurisdiction results in an unbearable delay of the decision in the main proceedings?

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The examination of the issue of jurisdiction can be expensive and time-consuming, depending on how complex the factual and legal issues that are involved. It is not uncommon for each party's costs in relation to a jurisdiction application to substantially exceed £10000, and not unknown for costs to exceed £100000. In relation to fees, a separate court application fee (currently £100) is payable by the defendant disputing jurisdiction. The general rules on costs are the same for all aspects of civil proceedings (see CPR, Part 44), the general - but not invariable - rule being that the successful party (whether on an application or at trial) is entitled to recover his reasonable costs for that part of the proceedings. If the hearing lasts up to 1 day, the parties' costs are more likely to be summarily assessed (see CPR, PD44, para. 13). The time between the lodging of the application disputing jurisdiction and the (first instance) decision on jurisdiction will vary depending on the particular Court and the complexity of the factual and legal issues involved. The Courts have indicated that submissions on jurisdiction should normally be measured in terms of hours rather than days; in Spiliada Maritime Corporation Appellants v Cansulex Ltd [1987] A.C. 460, Lord Templeman stated that [at p.465]: "I hope that in future the judge will be allowed to study the evidence and refresh his memory of the speech of my noble and learned friend Lord Goff of Chieveley in this case in the quiet of his room without expense to the parties; that he will not be referred to other decisions on other facts; and that submissions will be measured in hours and not days. An appeal should be rare and the appellate court should be slow to interfere." The time lag will obviously be longer if the decision is taken on appeal (with permission of the court) to the Court of Appeal or the House of Lords. In the Queen's Bench and Chancery Divisions (but not the Commercial Court) the first instance decision is usually taken by a Master (procedural judge) with the first appeal (again with the court's permission) to a High Court judge. On the question of the relationship between issues of jurisdiction and the main proceedings, a decision on jurisdiction is necessary before the Court can decide to proceed on the merits, although the jurisdiction application is sometimes coupled with an application for summary judgment by the claimant or (more rarely) the defendant - in this regard, the Court will generally postpone lodgment of evidence and hearing of the summary judgment application until after the jurisdiction application has been decided, unless it takes the view that the jurisdiction application is an unreasonable attempt to delay determination of an apparently unanswerable claim.

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It should be emphasised that this procedure is generally regarded by practitioners and litigants in England as superior to the system in certain other Member States whereby the defendant must plead to the merits of the claim at the same time as disputing jurisdiction. That other (foreign) system is viewed as capable of producing unjust results, particularly in cases where there is a jurisdiction clause in favour of a court other than that seised. Indeed, one could argue strongly that the requirement to plead on the merits at the same time as pleading to the jurisdiction and to proceed to trial of the action before any decision is given on jurisdiction hinders the proper functioning of the Regulation and cannot be justified according to the criteria laid down in Kongress Agentur Hagen GmbH v Zeehaghe BV (Case C-365/88) [1990] ECR I-1845, para. 20. In the view of several consultees (including the working group of the English Commercial Court), a key proposal for updating the Regulation (with a view to ensuring equality of arms between litigating parties) would be to establish a uniform procedure for disputing jurisdiction, along the lines of that set out for the enforcement of judgments in Chapter III of Regulation 44/2001/EC. It is proposed that such procedure should contain the following elements: • Prohibition of any procedural requirement that the defendant on the merits before the jurisdiction issue is determined (while allowing the parties to agree that the court may continue to hear the case on its merits, without prejudice to the defendant's jurisdictional objection). • A requirement that an application disputing jurisdiction (together with particulars) be lodged by the defendant with the court within a specified period (e.g. 2 months) from the date of service of the document initiating the claim, and subsequently served on the claimant. • A requirement that the first instance decision on jurisdiction be given within a specified period (e.g. 6 months from lodgment or service of application, unless the parties agree a longer period). • The appeal against that decision to be limited to a single stage, in accordance with Art. 44 of Regulation 44/2001. • Any appeal decision to be given within a specified period (e.g. 6 months from the date of the original decision). • Suitable provision for references to the ECJ on questions of construction of Regulation 44/2001. In this connection, consultees were strongly critical of the time taken by the European Court of Justice to give judgment on references to it in connection with the Brussels Convention. For example, the two decisions (in the GAT and Roche cases) handed down on 13 July 2006 had originally been made in 2003. In the view of these consultees, such delay is not compatible with the efficient conduct of litigation or the demands of modern business, and can only be exacerbated by any future liberalisation of the conditions for references contained in Article 68 of the

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EC Treaty (e.g. by allowing all Member State courts to refer questions in cases of doubt). These concerns may be capable of being addressed only through institutional reform (for example, by creating a new chamber of the ECJ charged with speedy resolution of references under Title IV instruments, perhaps sitting in smaller formations or adopting procedures designed to ensure swift resolution of references in more obvious or urgent cases. One consultee suggested, for example, a "red light, green light" procedure, whereby a Member State court could make a provisional decision as to the construction of the Regulation in a novel or ambiguous situation and refer that decision to a single European judge to decide whether to support it or to make a full reference to the ECJ.

2.2 Questions regarding the various grounds of jurisdiction

2.2.1 How is the reference in Articles 2 and 59 applied? How is the term “domicile” defined? Are there any cases where the courts held that the Defendant had several domiciles?

Before the term "domicile" is examined, it is worth questioning whose domicile, for the purpose of Article 2, is under the microscope. Although this is usually a simple enquiry, there are more difficulties in respect of admiralty claims in rem. The traditional common law approach was that the action was brought against the vessel upon which the claim form was served [see Briggs & Rees, op. cit., para. 2.111]. In The Deichland [1990] 1 Q.B. 361, however, Sheen J. held that the person being sued, whose domicile is decisive, was the person with an interest in the vessel, and not the vessel itself. Sheen J. stated [at p. 369]: "…while the action is solely in rem there are no 'defendants,' despite the wording of the writ. The demise charterers must decide whether they will submit to the jurisdiction of this court or allow the action in rem to proceed by default." As the House of Lords in Republic of India and Another Appellants v India Steamship Co. Ltd. Respondents (No. 2) [1998] A.C. 878 stated [at p.889]: "[for the purpose of Article 2 of the Brussels Convention] An owner of a vessel sued in rem is himself party to those proceedings." Article 59 of Regulation 44/2001/EC has the effect of applying the law of the United Kingdom to the question of whether an individual is domiciled in the United Kingdom. If an individual is not domiciled in the forum state according to its law, then a court of that state must decide the question whether he is domiciled in another member state by applying the law of the latter state (Article 59(2)). As Clarkson & Hill, op. cit. note [at p.69], "If an English court wishes to determine whether someone is domiciled in France (for the purposes of the Regulation) it must apply French law." Perhaps unsurprisingly, the case-law found in this area focuses on whether an

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individual is domiciled in the United Kingdom (and, by extension, which part of the United Kingdom). The relevant rules (for the definition of the domicile of individuals) are contained in Paragraph 9 of Schedule 1 to the Civil Jurisdiction and Judgments Order 2001 (SI 2000/3929). Under para. 9(2), two conditions must be satisfied in order to be domiciled in the UK: - The individual must reside there; - The nature and circumstances of his residence must indicate he has a substantial connection with the UK. In Bank of Dubai Limited v Fouad Haji Abbas [1997] I.L.Pr. 308, the Court of Appeal defined the term "residence" for jurisdictional purposes [at para. 10]: "…it seems to me that a person is resident…in a particular part of the United Kingdom if that part is for him a settled or usual place of abode." The Court went on to hold that [at para. 11]: "A settled or usual place of abode of course connotes some degree of permanence or continuity. In his judgment Potter J. said that section 41(6) suggested that the threshold for residence under the 1982 Act was low. With respect, I do not find any such suggestion in this sub-section. It is true that the sub-section provides a rebuttable presumption of 'substantial connection' if the residence has lasted for the last three months or more, but it provides no guidance on the question whether or not the person has become resident. Depending on the circumstances of the particular case time may or may not play an important part in determining residence. For example, a person who comes to this country 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, would to my mind be likely to be held to have become immediately resident here. In other cases it may be necessary to look at how long the person concerned has been here and to balance that factor with his connections abroad." [See also Petrotrade Inc v Smith [1998] 2 All ER 346, where it was held that residence by force of bail conditions does not qualify.] If the first condition in para. 9(2) is satisfied, where the residence has lasted for three months or more, the second condition is presumed to be satisfied unless the contrary is proved (para 9(6)). The relevant time at which the defendant's domicile in the relevant part of the UK must be established is when the claim form is issued, rather than when it is served: see Canada Trust Co v Stolzenberg (No. 2) [2002] 1 AC 1 (House of Lords), where Lord Hoffmann stated [at p.22-23]:

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"Neither choice can be wholly satisfactory for both parties and your Lordships must consider where the balance of advantage and disadvantage lies. Who should take the risk of the defendant changing his domicile between the issue and service of the writ? Is it the claimant, who may have sought legal advice and incurred expense in launching proceedings in what was then the defendant's domicile? Or is it the defendant, who may find himself having to defend himself in a jurisdiction which he has already left? It is the claimant who will rely upon the defendant's apparent domicile in deciding whether to sue. He may, in so doing, incur very considerable expense, especially if there are, as in this case, heavy interlocutory proceedings before or together with the commencement of the action. It seems to me no answer to say that provisional measures ordered in England will continue to be effective even if the merits have to be tried elsewhere. The claimant will have made England the centre of gravity of his action. The English lawyers will be in general charge of the proceedings and the *23 documents will be in English. It will be a considerable expense to have the whole action moved elsewhere. The defendant, on the other hand, will not ordinarily have relied upon not being sued in England. Or if he has, it will be because he has deliberately left the jurisdiction to avoid being sued here. This is hardly deserving of sympathy. If he has left for a better reason and finds himself having to defend proceedings which were issued before he left, that may admittedly be a misfortune. But he will have incurred no wasted expense in another jurisdiction and England will be a country in which he was recently domiciled and with which he may be assumed to be familiar. In my view the balance of advantage is in favour of adhering to the traditional English rule." It has been admitted in theory that a case of multiple domicile could arise; "it is a further consequence of the Article that a person may, contrary to the position which obtains under the common law, have a domicile in more Member States than one. Within the context of [Regulation 44/2001/EC, domicile represents a factual connection of sufficient importance to justify the exercise of jurisdiction by the court of that Member State; and a person may certainly have such a connection with two or more Member States at the same time" [Briggs & Rees, op. cit., para. 2.112]. Also note the comment of Clarkson & Hill, who state that: "Through the operation of these rules, it is possible for an individual [to] be regarded as domiciled in more than one member state (where, for example, an individual is domiciled in England under the Civil Jurisdiction and Judgments Order 2001 and domiciled in Germany under German law). It is equally possible for a company to have more than one domicile (where, for example, its central administration is in Italy, but its principal place of business is in Spain). Conversely, it is possible for an individual who is physically present in Europe or a company which does business in Europe

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not to be regarded as domiciled in any of the member states" [C. Clarkson & J. Hill, Jaffey on the Conflict of Laws (London, Butterworths, 2nd edn, 2002), p. 70]. The same test for the United Kingdom applies (mutatis mutandis) to determine whether an individual is domiciled in England: Schedule 1, paras. 9(3) and 9(6). An individual is also to be regarded as domiciled in England if he is domiciled in the United Kingdom and resident in England and the nature and circumstances of his residence do not indicate that he has a substantial connection with any particular part of the United Kingdom: see Schedule 1, para. 9(5). In applying the rules of jurisdiction contained in Regulation 44/2001 (including Art. 2 and Art. 6(1)), the standard of proof required to prove the defendant's domicile is that of a "good arguable case" (see Canada Trust Co. v Stolzenberg (No. 2) [2002] 1 AC 1 (HL). This is a less exacting standard than the normal civil standard of the "balance of probabilities" and generally requires the claimant to establish that he has the better of the argument on the material before the court (which will normally consist of written evidence submitted by the parties) (see, for examples under Brussels Convention, Canada Trust Co. v Stolzenberg (No. 2) [1998] 1 WLR 547, at 555 (per Waller LJ) (Court of Appeal); Haji Iannou v Frangos [1999] 2 Lloyd's Rep. 337, at 348 (Court of Appeal: "We consider, differing from the Judge, that on the facts of this case the claimants do not show a good arguable case on the materials now before us that Mr. Frangos is not a person domiciled in a Contracting State or that he is a person not domiciled in a Contracting State. On the material now available we consider that he has a much better argument on those points.") In Owusu v Jackson, Case C-281/02 [2005] QB 801, the Court of Justice held that the Brussels Convention prevents a court of a contracting state (on the facts of that case, an English court) from declining the jurisdiction conferred on it by article 2 of that Convention on the ground that a court of a non-contracting state would be a more appropriate forum for the trial of the action, even if the jurisdiction of no other contracting state is in issue or the proceedings have no connecting factors to any other contracting state. The decision in Owusu has been heavily criticised by English commentators (see, e.g., A. Briggs, casenote at (2005) 121 LQR 535, see extract at 3.3 below; E. Peel, "Forum non conveniens and European ideals" [2005] LMCLQ 363; A. Briggs, "Forum non conveniens and ideal Europeans" [2005] LMCLQ 378), in particular on the ground that the Court of Justice fundamentally misunderstood the nature of the forum non conveniens doctrine as applied by the English Courts. As one commentator has stated: "it is submitted that the Court's characterisation of the discretion [in para. 41 of its judgment] as 'wide' is (at best) unhelpful and (at worst) misleading, and that the Court was wrong to suggest that the existence of a discretion, in itself, conflicted with the principle of legal certainty"

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"As a matter of first impression the statement in para. 40 is unobjectionable, but curious. In referring only to the position of the "well-informed" defendant, the Court appears to overlook … the obvious point that the doctrine of forum non conveniens actually serves to advance the legitimate expectations of the defendant, by allowing him a means of redress where the claimant chooses an 'inconvenient' forum. Curiosity, however, turns to disbelief on reading para. 42, the second sentence of which shows a fundamental misunderstanding by the Court of the nature of the doctrine, which in practice invariably requires that the defendant apply to stay proceedings in the claimant's chosen forum. As a consequence, forum non conveniens undoubtedly enhances rather than undermines the legal protection available to the defendant by allowing him to challenge the claimant's choice on the basis that the interests of the parties and the interests of justice will be better served in another forum. In contrast, the mandatory application of Art. 2 may weaken the legal protection of the defendant by reason of considerations such as those set out by the Court in para. 44 of its judgment, which the court accepted as 'genuine', if not material … ." [A. Dickinson, "Legal certainty and the Brussels Convention – too much of a good thing?" in P de Vareilles-Sommieres (ed.), Forum Shopping in the European Judicial Area (Oxford: Hart Publishing, forthcoming, 2006/2007)] Since the decision in Owusu, the English Courts have had on more than one occasion to grapple with its implications, including (a) whether the same result applies when the basis of jurisdiction under the Regulation is other than Art. 2, (b) whether the same result applies when there is a connection with a non-Member State which (if that connection had been with a Member State) would have required or entitled the English court to decline jurisdiction (possible "reflexive effect"), and (c) whether the decision in Owusu affects other rules excluding the jurisdiction of the English courts. As to (a), this issue was raised in relation to jurisdiction under Art. 23 by virtue of an English non-exclusive choice of court provision in Antec International Ltd v Biosafety USA Inc. [2006] EWHC 47 (Comm). Gloster J left the point open, stating: "It is clearly a moot point as to whether the ECJ’s decision in Owusu predicates that a jurisdiction clause falling within art 23 has mandatory effect, so that, once a court of a Member State is seised as a result of the invocation of such a clause, the Regulation requires the relevant court to take jurisdiction, so as to exclude any application of the forum non conveniens doctrine, even where the potential alternate jurisdiction involved is not a Member State. It could be argued that different considerations apply in relation to art 23, which is not expressed in the mandatory terms of art 2; and that art 23 does not impose any requirement upon the court which is identified in the non-exclusive jurisdiction clause, to exercise such jurisdiction. It could further be argued that art 23 preserves the concept of party autonomy in choice of court and, accordingly, the application of the forum non conveniens rule, where appropriate. The recognition afforded by

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the Brussels Convention to the freedom of contract is emphasised in decided English cases such as Kurz v Stella Musical Veranstaltungs GmbH [1992] Ch 196, [1992] 1 All ER 630, [1991] 3 WLR 1046 (Hoffmann J) and Insured Financial Structures v Elektrocieplownia Tychy SA [2003] EWCA Civ 110, [2003] QB 1260,[2003] 3 All ER 987. In the latter case the Court of Appeal, affirming the decision of the lower court, held, in effect, that art 17 of the Lugano Convention on Jurisdiction and the Enforcement of Judgments did not preclude the English Court from having jurisdiction, notwithstanding that the courts of Poland (another member state) had been specified in the contract as the court which the parties agreed had non-exclusive jurisdiction." Further, one English judge has also left open the possibility that the reasoning Owusu might rule out the grant of a stay on forum non-conveniens grounds in a situation to which Art. 4 applies: "It is an open question whether the reasoning in that case might be applied or extended to stays in favour of other Contracting States in cases where the jurisdiction is under art 4." (Junior v Macdaniels [2005] EWHC 1323 (Ch.), per Lawrence Collins J) This seems doubtful given the wording of Art. 4. As to (b), and as appears from the discussion at 2.2.25.5 below, one English judge, Colman J, has held that the decision in Owusu does not preclude an English court from granting a stay of proceedings in order to give effect to an exclusive jurisdiction agreement in favour of a non-Member State (not otherwise being a party to the Brussels or Lugano Convention). As to (c), it has been held by the High Court that the decision in Owusu also prevents an English Court from declining jurisdiction on the ground that, as a matter of non-justiciability or comity, the English Court would not review the compatibility of a Finnish law with the EC Treaty, Gloster J stated: "[70] The second reason why, in my judgment, the invocation of principles of comity, or analogous principles, is inappropriate is that this court’s jurisdiction, which is conceded by both Defendants, arises under the Brussels Regulation (Regulation 44/2001). Where jurisdiction is founded on the Brussels Regulation (or on its predecessor, the Brussels Convention) the court has no power to decline to exercise that jurisdiction on the ground that it would be more suitable for the dispute between the parties to be litigated before the courts of another state. Jurisdiction against the ITF, which is domiciled in London, is based on art 2 of the Regulation, which provides that:

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[Text of Article 2 omitted] Jurisdiction against the FSU is based on art 6(1) of the Regulation, which provides: [Text of Article 6(1) omitted] [71] The FSU originally stated that it intended to challenge the jurisdiction of the English court under art 6(1), but later withdrew its jurisdictional challenge. The FSU therefore concedes that this Court has jurisdiction against it under the Regulation. Jurisdiction under the Regulation is mandatory. Where a court has jurisdiction under the Regulation, it cannot refuse to exercise it on the ground that the courts of another contracting state – or, indeed of a non-contracting state – would be a more suitable forum for resolution of the dispute. The common law notion of forum non conveniens has no place in the Regulation, which is based rather on civil law principles which attribute paramount importance to the certainty and predictability of jurisdictional rules; see e.g. Recital 11. I accept Mr Hollander’s submission that the Defendants are wrong to attempt to draw a distinction between jurisdiction and comity, as if those were entirely separate issues; in reality they are intimately bound up together. If I were to accede to the Defendants’ submissions on comity, this Court would in effect be declining to exercise the jurisdiction accorded to it by the Brussels Regulation. [72] In the present case, jurisdiction as against the ITF is based on its domicile in England. If this Court were to decline to exercise jurisdiction in this case on comity grounds, the effect would be to defeat the Claimant’s claim to jurisdiction not only against the FSU, which is domiciled in Finland, but also against the ITF. That would run clearly counter to the principle that jurisdiction based on the Defendant’s domicile must “always” be available, save in well-defined situations mentioned in the Regulation, since no provision is made in the Regulation for declining jurisdiction on the grounds now put forward by the Defendants. Conflicts of jurisdiction can arise under the Regulation. In particular its provisions have the effect in certain cases of conferring jurisdiction on the courts of more than one member state. In the present case, for example, the proceedings could have been brought either in England or in Finland, in either case basing jurisdiction against the ‘home’ Defendant on its domicile (Article 2) and against the other Defendant on its being one of a number of Defendants to the same proceedings (Article 6(1)). The Regulation mechanism for resolving such conflicts is set out in art 27. That Article provides: [Text of Article 27 omitted] [73] The Regulation resolves these conflicts of jurisdiction, therefore, by asking which court was first seised. In the present case the English court is the only court which is “seised”. Its jurisdiction has, furthermore, already

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been established. The effect of art 27 in the present case is therefore that if this court were to decline jurisdiction, the courts of Finland would have no power to hear the case. That would certainly be so if the English court were to stay the proceedings, since it would remain “seised” of them. The position if the English court were to dismiss Viking’s claim is less clear, although the position would appear to be that the order of the English court dismissing the claim would be enforceable as a judgment in Finland and would then have the force of res judicata between the parties. That would equally prevent the Finnish courts from considering the matter. But those are not matters which I need to resolve. As Mr Hollander submits, the fundamental point is however that the Regulation resolves conflicts of jurisdiction by according to the parties a choice of where to sue. In the usual course, it will be the Claimant’s choice. The Regulation therefore recognises the Claimant’s choice, in cases where the courts of more than one member state have jurisdiction, to sue in the court of his election. There is therefore no scope under the Regulation for the Claimant’s choice of jurisdiction to be defeated by the court, either of its own motion or on the application of the Defendant, by declining to exercise its jurisdiction on the ground that it considers that the Courts of the alternative jurisdiction would be more suitable to hear the claim. This is consistent, in my judgment, with the approach taken in cases before the European Court of Justice in which the issue of compatibility of the doctrine of forum non conveniens with the Regulation has arisen; see e.g. the opinion of Advocate General Léger in Andrew Owusu v NB Jackson trading as “Villa Holidays Bal-Inn Villas” & others [2005] 2 WLR 942, [2005] 1 Lloyd's Rep 452 and Turner v Grovit & Others (Case C-159/02, 27 April 2004). In the former case the A-G opined that the application of the doctrine of forum non conveniens is contrary to the Regulation in a case where the clash of jurisdiction is between a member state court and the courts of a non-member state; that view was upheld by the judgment of the Court of Justice handed down on 1 March 2005; see in particular paras 37–46. Mr Hollander submitted that, a fortiori, that must be the case which involves the choice of jurisdiction between the courts of two member states. I agree. ..." (Viking Line ABP v International Transport Workers Federation [2005] EWHC 1222 (Comm); other issues of EC law referred to the ECJ by the Court of Appeal – see [2006] 1 Lloyd's Rep. 303) In contrast, in the case of Grovit v De Nederlansche Bank [2005] EWHC 2944 (QB), referred to at 1.1 above, Tugendhat J held that the decision in Owusu did not prevent an English Court from declining jurisdiction in order to uphold the principle of state immunity (an issue currently before the Court of Justice in the Lekhoritou reference (Case C-292/05). Tugendhat J stated: "[35] The argument of Mr Kennelly for the Claimants is that the words of the Regulation (set out above at para 18) are plain. Both the Bank and the individual Defendants are persons (which is common ground), and if jurisdiction is established under the Regulation, that is the end of the matter. Mr Kennelly did not have to address me on what the position would be if one of the defendants were a state.

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[36] He submits, and there is no dispute, that the provisions of the Regulation are mandatory. He accepts that state immunity is a doctrine of international law, and submits that while EU law has regard to international law, it is not subject to it, except in the cases expressly provided for by the Convention. He cites Owusu v Jackson [2005] ECR I-1383 para 37: 'It must be observed that art 2 of the Brussels Convention is mandatory in nature and that, according to its terms, there can be no derogation from the principle it lays down except in the cases expressly provided for by the Convention ...' [37] Briggs and Rees suggest that it is expressly provided for by the Convention. They suggest precedence may be accorded to the Basle Convention (the European Convention on State Immunity drawn up within the Council of Europe and opened to signature by the member states of the Council in 1972 at Basle: ETS No 074). This results from the express exception in Art 71 of the Regulation: 'This Regulation shall not affect any conventions to which the Member States are parties and which, in relation to particular matters, govern jurisdiction ...' [38] The Basle Convention (which the Act 1978 implements), art 33, provides: 'Nothing in the present Convention shall affect existing or future international agreements in special fields which relate to matters dealt with in the present Convention.' [39] The Brussels Convention was in existence in 1972. Mr Barnes QC referred me to an Explanatory Report prepared by a committee of experts and submitted to the Committee of Ministers of the Council of Europe. The Brussels Convention is not mentioned in the Basle Convention, or in the Explanatory Report (para 118 is the commentary upon art 33), and the Regulation does not in terms mention the Basle Convention. [40] Mr Kennelly accepts that the Basle Convention does govern jurisdiction, but he argues that it is not made clear in Art 71 of the Regulation that precedence is to be accorded to the Basle Convention. [41] Mr Barnes QC submits that the Judgements Regulation does not affect or detract from state immunity. He adopts the suggestion of Briggs and Rees, based on Art 71, only with hesitation. His concern is that the state immunity is a rule of international law which is fundamental, and applies whether or not a state is party to the Basle Convention. The principle of international law existed before any convention. Whether or not reference

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to that Convention might provide a solution to the problem in the present case, it might not always do so. [42] Mr Barnes QC submits that the Judgements Regulation is (like the Brussels Convention before it) to be interpreted subject to international law. The principle he relies on has just been restated by the House of Lords in A (FC) and others (FC) (Appellants) v Secretary of State for the Home Department [2005] UKHL 71 para 29: '29. Article 31 of the Vienna Convention on the Law of Treaties, reflecting principles of customary international law, provides in article 31(3)(c) that in interpreting a treaty there shall be taken into account, together with the context, any relevant rules of international law applicable in the relations between the parties. The European Court has recognised this principle (Golder v United Kingdom (1975) 1 EHRR 524, para 29, HN v Poland (Application No 77710/01, 13 September 2005, unreported, para 75)), and in Al-Adsani v United Kingdom (2001) 34 EHRR 273, para 55, it said (footnotes omitted): ‘55. The court must next assess whether the restriction was proportionate to the aim pursued. It recalls that the Convention has to be interpreted in the light of the rules set out in the Vienna Convention of 23 May 1969 on the Law of Treaties, and that Article 31(3)(c) of that treaty indicates that account is to be taken of “any relevant rules of international law applicable in the relations between the parties”. The Convention, in including Article 6, cannot be interpreted in a vacuum. The court must be mindful of the Convention’s special character as a human rights treaty, and it must also take the relevant rules of international law into account. The Convention should so far as possible be interpreted in harmony with other rules of international law of which it forms part, including those relating to the grant of state immunity.’ The court has in its decisions invoked a wide range of international instruments, including the United Nations Convention on the Rights of the Child 1989 and the Beijing Rules (V v United Kingdom (1999) 30 EHRR 121, paras 76–77), the Council of Europe Standard Minimum Rules for the Treatment of Prisoners (S v Switzerland (1991) 14 EHRR 670, para 48) and the 1975 Declaration referred to in para 31 below (Ireland v United Kingdom (1978) 2 EHRR 25, para 167). More pertinently to these appeals, the Court has repeatedly invoked the provisions of the Torture Convention: see, for example, Aydin v Turkey (1997) 25 EHRR 251, para 103; Selmouni v France (1999) 29 EHRR 403, para 97.' [43] So far as EU law is concerned, Mr Barnes QC relies on the statement in Poulsen and Diva Case C-286/90 [1992] ECR 1-06019 para 9: 'As a preliminary point, it must be observed, first that the European Community must respect international law in the exercise of its powers and

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that consequently Art 6 [of Council Regulation (EEC) No 3094/86 laying down technical measures for the conservation of fish stocks] above mentioned must be interpreted, and its scope limited, in the light of the relevant rules of the international law of the sea.' [44] Mr Kennelly submits that that statement is limited to its context, and in particular to a convention to which the EU was itself a party. I do not so read it. [45] Mr Barnes QC also points to the Civil Jurisdiction and Judgments Act 1982 s 31. He submits that this shows that Parliament assumed that state immunity would continue to apply, including to entities separate from states, after the Brussels Convention became part of English law. It reads: '31(1) A judgment given by a court of an overseas country against a state other than the United Kingdom or the state to which that court belongs shall be recognised and enforced in the United Kingdom if, and only if . . . (b) that court would have had jurisdiction in the matter if it had applied rules corresponding to those applicable to such matters in the United Kingdom in accordance with sections 2 to 11 of the State Immunity Act 1978. (2) References in subsection (1) to a judgment given against a state include references to judgments of any of the following descriptions given in relation to a state – . . . (c) judgments against any . . . [entity which is distinct from the executive organs of government] given in proceedings relating to anything done by it in the exercise of the sovereign authority of the state.' [46] Mr Barnes QC also pointed to the far reaching consequences if it were held that the state immunity could not relied upon by a person sued in accordance with the Regulation, including in particular diplomats, judges and officers of states whose offices have hitherto been accepted as according them the immunity of the state. [47] In my judgment the submissions for the Defendants are to be preferred. The Judgments Regulation (like the Brussels Convention) is to be read subject to the international law of state immunity, and not as precluding reliance upon state immunity." Absent a clarificatory amendment to the Regulation, these questions seem likely to trouble the English Courts for some time, at least until the Court of Justice provides further guidance as to the scope and effect of the decision in Owusu. In this connection, we would suggest that it would be in the interests of legal certainty, at the very least, to make clear that the Regulation shall not affect any immunity or privilege of a state or other international legal person arising by treaty or as a matter of customary international law.

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2.2.2 Does Article 60 with its alternative connecting factors appear feasible?

Article 60 introduces an autonomous definition of corporate domicile in order "to make the common rules more transparent and avoid conflicts of jurisdiction" [Schlosser]. Under Article 60(1), a company (or other association of natural or legal persons) is domiciled at the place(s) where it has its: a) statutory seat b) central administration c) principal place of business In the United Kingdom, "statutory seat" (which is not a term of art at common law) is taken to mean the registered office, or if there is no such office, the place of incorporation, or if there is no such place, the place under the law of which the formation took place: Article 60(2) of Regulation 44/2001/EC. The connecting factors seem feasible enough, although there is some uncertainty as to how the ECJ will define these factors; is "central administration" equivalent to ultimate policy-making, or simple day-to-day management [see Briggs & Rees, op. cit., para. 2.115]? Whilst it has been held in The Rewia [1991] 2 Lloyd's Rep 325 that the place of ultimate authority would be the relevant test, it is unknown whether that approach will be taken at the European level, but the English courts have continued to apply that definition to case governed by the Regulation; in King v Crown Energy Trading AG [2003] EWHC 163, Crown Energy sought to set aside service by King of proceedings for breach of a service agreement and of proceedings for wrongful inducement of breach of contract. Crown Energy submitted that King had not shown a good arguable case that when the action commenced Crown Energy had its central administration and principal place of business within England and Wales within the meaning of Council Regulation 44/2001 Art. 60(1)(b) and Art. 60(1)(c). Mr Chambers Q.C. (sitting as a Deputy Judge) held, refusing the application to set aside service, that "principal " place of business did not mean "main" place of business. Rather, it meant "chief" or "most important" place of business. It was not necessarily the place where most of a company's business was carried out but rather the place at the centre of its operations [Owners of Cargo Lately Laden on Board the Rewia v Caribbean Liners (Caribtainer) Ltd [1991] 2 Lloyd's Rep. 325 applied]. Mr Chambers Q.C. stated [at paras 11-14]:

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"[11] It seems tome to be obvious, both as a matter of law and commercial practice, that the conduct of business will involve management and control, but how does this fit in with the dichotomy between administration and business to be found in Art.60? [12] Administration is clearly an aspect of the conduct of business. That aspect has something of the "back office" about it. Boards decide upon policy and important aspects of its implementation. Employees sell, supply and produce. Administration ensures that all runs smoothly: money is got in, debts are paid, leases and transport are arranged, personnel are looked after. But what of central administration? [13] In a small organisation there may be a considerable blurring of functions because the same person will often discharge a variety of roles. The larger the organisation the easier it should be to discern a division of responsibilities. The location of the company secretary's office in a major organisation might provide a good clue: a clue which seems to be absent in the present case. However, without attempting to be exhaustively precise, I think that in this case a simple listing of those with important responsibilities in Crown Resources will be enough to show where the central administration is to be found. It also seems to me that the same approach shows where one may find the company's principal place of business. [14] Despite their disjunctive appearance in Art.60, I think that there can be a considerable overlap between what constitutes the central administration of a company and the carrying on of its principal business, The Rewia remains an essential tool in deciding what constitutes the latter." [See also Latchin v General Mediterraenan Holidays SA [2002] CLC 330.]]

2.2.3 How does Article 5 No. 1 work? In particular: Article 5 No. 1 lit. b) 1st indent leaves open the place of fulfilment if goods are handed over to a carrier under CIF or FOB. Is the place of delivery the place where the goods are handed over to the carrier or is the place of delivery to the addressee at the latter’s place? In that respect, are there any difficulties known in court practice or contract drafting?

Article 5(1)(b) provides that: "for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be: - in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered."

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[For a general analysis of the provision in English law, see K. Takahashi, "Jurisdiction in Matters Relating to Contract: Art 5(1) of the Brussels Convention and Regulation [2002] ELR 530; Forner, "Special Jurisdiction in Commercial Contracts: From the 1968 Brussels Convention to Brussels-One Regulation" [2002] ICCLR 131.] In a CIF contract, the seller's obligation to deliver the goods themselves is substituted by an obligation to deliver to the buyer a number of documents (comprising the bill of lading, the insurance document and a commercial invoice) [see generally M. Bridge, The International Sale of Goods (Oxford, OUP, 1999) para 1.07]. One must first consider whether this, in fact, a contract for the sale of goods under Article 5(1). It almost certainly is; the 1980 Vienna Convention (CISG) applies to a CIF contract, because the goods themselves are purchased, rather than the documents [see Schlectreim, p.23; J. Fawcett, J. Harris & M. Bridge, International Sale of Goods in the Conflict of Laws (Oxford, OUP, 2005), Ch. 3]. The "place" in a Member State where, under the contract, the goods were delivered or should have been delivered can be difficult to determine, especially in cases involving a carrier. As Fawcett, Harris & Bridge argue [at para. 3.176]: "Even where goods have undoubtedly actually been delivered, the place where this took place is not always clear. This is particularly so where the goods are transported by a carrier. For example, the seller/manufacturer is domiciled in France, the goods are transported form France to England, where the buyer is domiciled, by a carrier. Delivery has undoubtedly occurred, but is the place where goods were delivered in France or in England?" This is substantively the same question being posed in this Questionnaire. It can be argued that it is technically incorrect to state that Article 5(1)(b) leaves open the place of fulfilment where goods are handed over to a carrier under an FOB or CIF contract; Article 5(1)(b) allocates jurisdiction to the place where the goods were or should have been delivered "under the contract." Recourse must therefore be had to the terms of the contract itself to determine the place of delivery. As one commentary notes, "this has an important negative effect in ensuring that recourse cannot be had to the applicable national substantive law" [Fawcett, Harris & Bridge, op. cit., para. 3.177]. It is not too uncommon, however, for parties to not expressly provide for the place of delivery in the contract [e.g. Bulk Trading Corp Ltd v Zenziper Grains and Feed Stuffs [2001] 1 Lloyd's Rep 357 (CA).] But use of internationally accepted Incoterms means that the parties have specified the place of delivery; such factors are inherent in the Incoterm itself. In an FOB contract, the seller must clear customs and deliver on board the vessel named by the buyer, at the named port of shipment. If the goods have been so delivered at this port this will be the place where, under the contract, the goods were delivered. If they have not been so delivered this will be the place where, under the contract, the goods should have been

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delivered [see Bulk Trading Corp Ltd v Zenziper Grains and Feed Stuffs [2001] 1 Lloyd's Rep 357; Fawcett, Harris & Bridge, para. 3.183]. In a CIF contract, the seller must enter into a contract for the carriage of goods by sea, under which the goods will be transported to the destination contemplated by the CIF contract. The seller never delivers the goods to the buyer (or his agent) in a CIF contract; since the documents are seen as a substitute for the goods, the place where the goods were delivered, or should have been delivered must refer to the place where the documents were transferred or should have been transferred [see Fawcett, Harris & Bridge, op. cit., para. 3.183]. [For a comprehensive discussion of Article 5(1) and the international sale of goods, see Fawcett, Harris & Bridge, op. cit., Ch.3.] Finally, it is to be noted that the English Court of Appeal applied Art. 5.1 to an action for a negative declaration, treating the "obligation in question" as the putative contractual obligation which the claimant denied owing (Boss Group Ltd. v Boss Finance SA [1997] 1 WLR 351). That decision has recently been applied to a claim in tort under Art. 5.3 of Regulation 44/2001 (see Equitas Ltd v Wave City Shipping Co. [2005] EWHC 923 (Comm.)).

2.2.4 Do courts have difficulties to determine the place where a service was provided or should have been provided?

The "provision of services" rule potentially arises in a plethora of circumstances outside those dealing specifically with the sale of goods; examples where the rules would apply are an exclusive distributorship agreement; a contract for the carriage of goods by sea, and the separate autonomous contracts under a letter of credit. Despite its potentially wide applicability, the concept of the provision of services is not defined in Regulation 44/2001/EC; nor is the Explanatory Memorandum from the EC Commission of any assistance. That said, it is generally agreed that the same general approach towards determining the place of performance is applied throughout the EC [see Kennett (1995) 15 YEL, pp 193 et seq], and has been noted generally above at Part 2.2.3. Where there is no express stipulation as to the place of performance, the residual rules of the Member States become crucial. In the Scots case of Bank of Scotland v Seitz 1990 SLT 584, a Scots bank sued a German-domiciled guarantor in Scotland in respect of letters of guarantee which were silent on the place of performance. It was held that the place of performance was Scotland. Scots law governed the contract, and according to that law there was an implication that a debtor had to pay a creditor at the latter's place of business [see P.M. North & J.J. Fawcett (eds), Cheshire & North's Private International Law (London, Butterworths, 13th edn, 1999), p.206-207]. In those cases, however, where, for example, CIF or FOB terms have been incorporated into the contract (and thus have "agreed" on a place of

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delivery) the identification of that place for the provision of services becomes much more simple; as Fawcett, Harris & Bridge note [at para. 3.301]: "When it comes to identification of the place in a Member State where, under the contract, the services were provided or should have been provided, the situation is analogous to that of identification of the place in a Member State where, under the contract, the goods were delivered or should have been delivered." The reader is consequently referred to the argument above at Part 2.2.3.

2.2.5 Under Article 5 No. 1 lit. a), how is the place of performance determined in light of the jurisprudence of the ECJ?

In Domicrest lts v Swiss Bank Corpn [1999] AC 548, a Brussels Convention case, the court held that [at p.557]: "In this connection Mr. Dunning relied by way of analogy on the decision in Union Transport Plc. v Continental Lines S.A. [1992] 1 W.L.R. 15, where it was held that the principal obligation in question was that of nominating a vessel and that the subsequent failure to supply a vessel was only the necessary consequence of having failed to nominate in the first place. As the Court of Justice of the European Communities had said in Shenavai v Kreischer (Case 266/85) [1987] ECR 239, 256, para. 19: 'However, in such a case the court before which the matter is brought will, when determining whether it has jurisdiction, be guided by the maxim accesorium sequitur principale; in other words, where various obligations are at issue, it will be the principal obligation which will determine its jurisdiction.' The court went on to hold that [at p. 561]: "…the question which has to be determined is whether the place of performance of that obligation was in Switzerland, as Swiss Bank Corporation alleged, or in England, which was Domicrest's case. That question has to be determined by the law which governs the contract, namely Swiss law: Industrie Tessili Italiana Como v Dunlop A.G. (Case 12/76) [1976] ECR 1473." As Domicrest makes clear, the ECJ's decision in Industrie Tessili Italiana Como v Dunlop A.G. (Case 12/76) [1976] ECR 1473 means that it is for the court before which the question had arisen to determine the place for performance of the relevant obligation in accordance with its rules of private international law. Subsequent ECJ authorities have confirmed this. The effect of the ECJ's jurisprudence on this point can be seen in the Court of Appeal's judgment in another Brussels Convention case, Viskase Ltd. and

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Another v Paul Kiefel G.m.b.H. [1999] 1 W.L.R. 1305. Viskase, a manufacturer of plastic packaging material, brought proceedings against Paul Kiefel, a German company, claiming damages for breaches of contracts between 1989 and 1992 in respect of the supply to Viskase of eight machines for use in the production process. Paul Kiefel's application to set aside Viskase's writ was dismissed and it appealed. The question for the court was whether, in terms of the Brussels Convention 1968 Art. 5(1), the "place of performance" of the contractual obligation which Paul Kiefel had allegedly broken or failed to perform was England or Germany. Viskase contended that the obligation arose under a warranty that the machines would be fit for the process and that the place of performance of that obligation was England. The Court of Appeal held, allowing the appeal (with Evans, L.J. dissenting), that the contractual obligation to supply goods reasonably fit for the known purpose had to be performed at the time the goods were supplied. Therefore the "place of performance" for the purpose of Art. 5(1) was the place of delivery of the machines, i.e. Paul Kiefel's factory in Germany. There was neither a subsequent breach, nor evidence of a guarantee of future performance, sufficient to give the English courts jurisdiction. Chadwick L.J. held [at p.1321]: "That leads to the question: in what place is that obligation to be performed? In the absence of authority I would take the view that there is only one answer to that question. The obligation is to supply a machine which is reasonably fit for the known purpose. That obligation has to be performed at the time when the machine is supplied. There is no other opportunity to perform it. The seller has not undertaken an obligation to do whatever is necessary from time to time to ensure that the machine fulfils the purpose for which it has been purchased. That is not alleged. As Evans L.J. has pointed out, no reliance is placed on the limited contractual guarantee in clause VII of the standard terms. The position, as it seems to me, is that the seller is in breach of the obligation to supply a machine fit for the known purpose if the machine fails subsequently because, as supplied, it was not fit for use in commercial production. But the breach is the breach of the obligation to supply a machine fit for the known purpose; there is no other or subsequent breach. A subsequent failure of the machine in the course of commercial production is evidence of the antecedent breach in supplying a machine which was not fit for such use. If the obligation has to be performed at the time when the machine is supplied, then the place at which it has to be performed is the place of delivery under the contract." In Mora Shipping Inc. v AXA Corporate Solutions Assurance SA [2005] 2 Lloyd's Rep. 769, the Court of Appeal held that Art. 5.1 did not apply where the defendant's obligation was to pay either A (within the jurisdiction) or B (outside the jurisdiction) at his own election. This contrasts with the earlier (Brussels Convention) decision in Chailease Finance Corporation v Credit Agricole Indosuez [2000] 1 Lloyd's Rep. 348 in which Art. 5.1 was applied in circumstances where the claimant was entitled to nominate the place of

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performance of a payment obligation and nominated an account within the jurisdiction. [See also Ferguson Shipbuilders Ltd v Voith Hydro GmbH & Co 2000 SLT 229.]

2.2.6 Under Article 5 No. 1 lit. b), how is the term „provision of services“ defined and how are services localised?

As noted above, Regulation 44/2001/EC does not define the concept of the provision of services. It is known from other provisions of the Regulation that the concept does not include insurance contracts, consumer contracts and individual contracts of employment. Neither, of course, does it cover the sale of goods. The concept of the provision of services should be given an independent community meaning. Guidance can be sought from other EC instruments dealing with services; the draft Council Directive on the liability of suppliers of services (COM (90) 482 final-SYN 308 submitted by the Commission on 9/11/1990) adopts a broad definition of services: "any transaction carried out on a commercial basis or by way of a public service and in an independent manner, whether or not in return for payment, which does not have as its direct and exclusive object the manufacture of movable property or the transfer of rights in rem or intellectual property rights" (Article 2). The objectives and scheme of the Regulation should also be taken into account when giving a community meaning to the concept of services [as in Somafer v Saar Ferngas (Case 33/78) [1978] ECR 2183]. In order to give effect to his objective, provision of services should be given its natural broad meaning [see MBM Loos, "Towards a European Law of Service Contracts" (2001) ERPL 565]. No English case decided under Regulation 44/2001/EC seems to bear directly on this point.

2.2.7 How is the scope of Article 5 No. 1 lit. c) determined?

The operation of Article 5(1)(c) has caused no issues in English courts; Article 5(1)(c) simply provides that of Article 5(1)(b) does not apply then Article 5(1)(a) applies. Clarkson & Hill, op. cit., state this example to illustrate the point [at p.89]: "Consider, for example, a case in which C, an English seller, contracts with D, a German buyer, to deliver goods to premises in New York. If D fails to pay for the goods, can C sue D in England? As Article 5(1)(b) does not apply (because the agreed place of delivery is not in a member state), C is able to rely on Article 5(1)(a). Under Article 5(1)(a) the obligation in question is D's obligation to pay and, if the contract is governed by English law (which is very likely), the place of performance is England (since under English law, as a general rule, the debtor must seek out the creditor at his place of business and pay him there)."

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There are no reported cases on the scope of Article 5(1)(c) (presumably because it can only be interpreted in one way; there is no cause for discussion) and it also receives scant attention from academics for the same reason. Thus, Layton & Mercer, European Civil Practice (2nd ed., 2004) describe it in less than two lines (para. 15.049) as "self-explanatory" and as not requiring further comment.

2.2.8 How is the line drawn between Article 5 No. 1 and Article 5 No. 3?

Article 5 draws a distinction between "matters relating to a contract" (Article 5(1)), and "matters relating to a tort, delict or quasi-delict" (Article 5(3)). The ECJ has ruled that for the purposes of Article 5 both "contract" and "tort" are autonomous concepts which must be interpreted by reference principally to the system and objectives in Regulation 44/2001/EC, rather than in accordance with the law of the forum [see SPRL Arcado v SA Haviland (Case 9/87) [1988] ECR 1539; Kalfelis v Bankhaus Shroder, Munchmeyer, Hengst & Co (Case 189/87) [1988] ECR 5565.] This means that a situation which accordingly to English law would not be regarded as tortious may have to be classified as such for jurisdictional purposes: in Casio Computer Co Ltd v Sayo [2001] EWCA Civ 661, the Court of Appeal held that, in the context of a case involving a breach of trust, a constructive trust claim based upon dishonest assistance is within the scope of Article 5(3) [see also Dexter v Harley (2001) Times, 2nd April]. In Casio Computer, the Court of Appeal stated, citing the House of Lords decision in Kleinwort Benson Ltd v Glasgow City Council [1999] 1 AC 153 [at para. 11]: "What is the scope of Article 5(3)? The European Court of Justice has given little general guidance. The judge found some guidance in what was said in the House of Lords in Kleinwort Benson Ltd v Glasgow City Council (No. 2). In that case the House rejected the argument that a claim for unjust enrichment fell within Article 5(3) because, other than in exceptional circumstances, such a claim did not pre-suppose either a harmful event or a threatened wrong. The judge continued: 'The same cannot be said of constructive trust claims, or at least those based on knowing assistance. in those cases there is scope for describing what happened as amounting to or involving a harmful event within the meaning of Article 5(3). Such a conclusion is supported by the fact that even though the English law of tort is not operating where equity imposes a constructive trust, one can see parallels. A wrong is being committed and loss can be said to be caused or at least contributed to.'" There is some controversy over whether restitutionary claims come within the scope of Article 5(1) and 5(3); in Kalfelis, the ECJ stated that Article 5(3) must be regarded as covering "all actions which seek to establish the liability of a defendant and are not related to a contract within the meaning of Article 5(1)" [at p. 5585, para. 17]. Does this mean that all matters of civil liability are covered collectively by Articles 5(1) and 5(3), or is there room for a claim to fall between the two? In Scotland, it has been held that claims could come within neither of the paragraphs: see Davenport v Corinthian

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Motor Policies at Lloyd's 1991 SLT 774. In Kleinwort Benson Ltd v Glasgow City Council (No. 2) [1999] 1 AC 153, the House of Lords held that a claim for restitution for moneys paid under a purported contract which was void fell neither within Article 5(1) nor Article 5(3). As Millett J stated in the first action: "If a claim cannot be brought within Article 5, it can always be pursued in the courts of the defendant's domicile" [Kleinwort Benson Ltd v Glasgow City Council [1996] QB 678 at 698]. Guidance of the division between contract and tort for the purposes of Regulation 44/2001/EC can be sought from Jacob Handte & Co GmbH v Traitements Mecano-chiminques des surfaces SA [1992] ECR I-3967; the ECJ held that Article 5(1) is "not to be understood as covering a situation in which there is no obligation freely assumed by one party towards another" [at 3994, para. 15]. [See also Hartley (1993) ELRev 506]. In Source Ltd v TUV Rheinland Holding AG [1998] QB 54. Source, a UK company, required a certificate of quality in order to open a letter of credit to pay for goods to be imported from China and Taiwan. Source asked TUV, a German company, to examine the goods and prepare a report, but contended that the inspection had been conducted negligently and that the reports were inaccurate, and sued TUV for breach of its contractual duty to exercise reasonable care and skill and for a similar breach of duty in tort. The question was whether Article 5(1) or 5(3) applied to the claim in tort as well as to the claim in contract. Service of the writ outside the jurisdiction upon TUV was set aside on the grounds that the English court lacked jurisdiction to hear the claims, and Source appealed. The Court of Appeal held dismissing the appeal, that under Art. 5(1), where there had been a breach of more than one contractual obligation, jurisdiction was to be determined with reference to the place of performance of the main obligation, which in the instant case was the inspection of the goods in China and Taiwan, not the presentation of the reports. Further, the meaning of "matters relating to tort” under Art. 5(3) was not to be interpreted by reference to national law, but was to be given an EC law or Convention meaning of all actions which seek to establish the liability of a defendant and which are not related to a "contract " within the meaning of Art. 5(1), Kalfelis v Bankhaus Schroder, Munchmeyer, Hengst & Co (Case 189/87) [1988] ECR 5565 applied. Those words operated to exclude a claim which could be brought on the same facts under a contract or independently of a contract. Both related to the contract and since Source could not bring a contractual claim in the UK under Art. 5(1), it was similarly excluded from bringing a claim in tort. The court held [at p. 63]: "It must therefore be stated in reply to the first part of the second question that the term 'matters relating to tort, delict or quasi-delict' within the meaning of article 5(3) of the Convention must be regarded as an

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independent concept covering all actions which seek to establish the liability of a defendant and which are not related to a 'contract' within the meaning of article 5(1)." It is interesting to note in Source that one underlying assumption is that, where alleged facts give rise to parallel claims in contract and tort (for negligence) Article 5(1) covers the tortious claim as well as the contractual one. This assumption, however, has been strongly questioned. Kleinwort Benson Ltd v Glasgow City Council [1999] 1 AC 153 itself is authority for the proposition that Article 5(1) allocates jurisdiction by reference to the place of performance of a contractual obligation specifically, thus eliminating any non-contractual matters. Raiffeisen Zentralbank Osterreich Aktiengesellschaft v National Bank Of Greece S.A., however, throws considerable doubt on the decision in Source Ltd v TUV Rheinland Holding. The court had to decide whether an implied contractual term could be the principal obligation for purposes of Brussels Convention 1968 Art. 5. Tuckey J. held [at p.411-412]: "But what is the relationship between art. 5.1 and art. 5.3? It is common ground that there is no overlap between the two provisions. Either the claim relates to a contract or to tort. Here NBG submits that the tort claim relates to a contract and so cannot come within art. 5.3. They rely on the decision of the Court of Appeal in Source v TUV Rheinland where quality control inspectors were sued in contract and tort for negligent inspection of goods. The Court held that, where a claim may be brought under a contract, or independently of a contract on the same facts save that the contract does not need to be established, both claims were related to a contract. RZB say that this decision is no longer good law in the light of the House of Lords' decision in Kleinwort Benson Ltd. v Glasgow City Council where the House held that a claim for restitution under a contract which was void ab initio was not a matter relating to contract. Source was not cited to the House and there is no reference to it in the judgment. For reasons which will become apparent later in this judgment the outcome of this summons does not, I think, depend upon whether Source is still good law but, as the point was fully argued, I should say that I do not think it is. The decision in Source involved giving a wide meaning to the words "matters relating to a contract". Lord Justice Leggatt, who gave the only judgment, relied upon what Lord Justice Millett had said in Kleinwort Benson in the Court of Appeal [1996] Q.B. 678 at p. 698 that these words were not to be equated with contractual causes of action, the enforcement of contractual obligation or even claims based on contract. The House emphasized the restrictive meaning to be given to the words and Lord Goff disagreed with what Lord Justice Millett said."

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In Agnew v Lansforsakringsbolagens AB [2001] 1 A.C. 223, the House of Lords held that that (1) having referred to cases concerned with the Brussels Convention before the ECJ, academic opinion and the Schlosser Report, it was apparent that it was contrary to the structure policy of the Lugano Convention, which aimed to defend a weaker insured party, for reinsurance to be included under the term "insurance", and (2) the structure of Art. 5(1) clearly provided that a claim to avoid a contract must be a matter relating to contract. The obligation to disclose required to be performed in London; the place of performance established jurisdiction. Thus Art. 5(1) applied (considering Kleinwort Benson Ltd v Glasgow City Council (No.2) [1999] 1 A.C. 153). Agnew was entitled to avoid the reinsurance contract by virtue of Lansforsakringsbolagens's failure to perform the contractual obligation in London, namely, to make a fair representation of the risk. The obligation did not give rise to an action in tort or deceit under Art. 5(3). Whilst it would be accurate to state that, in the vast majority of cases, the delineation between Article 5(1) and 5(3) causes no substantial difficulties, there have sporadically been some issue of interpretation with the guidelines set by the ECJ. There are also conceptual uncertainties about the correct application of the paragraphs to claims based on restitution. [A general discussion of the ECJ cases surrounding this area of law is beyond the scope of this Questionnaire; for further analysis of matters relating to a contract and those to a tort, see Briggs & Rees, op. cit., 2.124 et seq, and 2.144 et seq.; Layton & Mercer, op. cit., paras. 15.005-15.017; 15.078-15.083]

2.2.9 Does it provoke any problems that the ECJ does not accept annex grounds of jurisdiction? In particular: Do the courts of the Member States manage to draw a line between contractual and matters of offence in a way other than their own law?

See above, esp. at 2.1.3 and 2.1.8 [this question also relates, after clarification from Heidelberg, to the judgment in Kalfelis. Full discussion of that case in English law lies above.]

2.2.10 What falls within the scope of the term „matters relating to tort“ under Article 5 No. 3?

The autonomous definition of "matters relating to a tort" under Regulation 44/2001/EC means, of course, that its scope does not exactly parallel the English law of tort. The general understanding of the term comes from the ECJ's dictum in Kalfelis v Bankhaus Schroder Muchmeyer Hengst & Co (Case 189/87), [1988] ECR 5565, where it was held that "matters relating to a tort" must be taken to mean "all actions which seek to establish the liability of a defendant and which are not related to a contract within the meaning of Article 5(1)."

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There is an inherent flaw in defining Article 5(3) by the those matters not within Article 5(1); as Briggs & Rees note, "to the extent that the content of the autonomous meaning of matters relating to a contract is uncertain, the meaning of matters relating to tort will be correspondingly uncertain" [para. 2.145]. Despite the potentially all-encompassing approach of the ECJ in Kalfelis, English courts have attempted to place some fetters on the application of Article 5(3) by confining it to those cases in which English law would recognise a claim in tort. In Barclays Bank Plc. v Glasgow City Council Kleinwort Benson Ltd. v Same [1993] Q.B. 429, Hirst J. held, in relation to the judgment in Kalfelis [at p. 442-443]: "In my judgment, the word 'liability' in paragraphs 17 and 18 [of the Kalfelis judgment] must be interpreted as connoting liability within the scope of the article 5(3) categories, i.e. liability in tort, delict or quasi-delict. On this construction, which I do not think does violence to paragraphs 17 and 18, the judgment as a whole is completely consistent. I should add that the court's answer in paragraph 19 to question 2(b), which referred to claims in 'tort and contract and for unjust enrichment ' (emphasis added) would seem to have the effect of ruling out the third heading since it is a restitutionary claim not based on tort. This construction of article 5(3) is, I think, reinforced, as Mr. Tecks submitted, by the consideration that the words,'"harmful event,' while completely appropriate for claims in tort or delict or quasi-delict, seem most inappropriate for restitutionary claims. For these reasons I have come to the conclusion and I hold, that the banks have failed to bring their case within article 5(3)." It is arguable whether this approach is warranted in view of the fairly clear ruling from the ECJ; as one commentator states: "There is no obvious room for the further, limiting argument that, nevertheless, the claim must be in the nature of a tort claim according to English (or some other) domestic law; and assertions that it must, nevertheless, be so limited, are inconsistent with the text of the judgment in Kalfelis" [Briggs & Rees, op. cit., para. 2.146]. There have, however, been few complexities since Regulation 44/2001/EC came into force; in the last four reported English cases on Article 5(3) of the Regulation, no real difficulties as to the scope of the provision have arisen [see London Helicopters Limited v Heliportugal LDA-INAC [2006] EWHC 108 (QB); Grovit v De Nederlandsche Bank [2005] EWHC 2944; Bank of Tokyo-Mitsubishi Ltd v Baskan Gida Sanayi Ve Pazarlama AS [2004] EWHC 945]. In all probability, it will be the ECJ who will further build on the judgment in Kalfelis, and will ultimately decide whether, for the purposes of Article 5(3), a matter relating to a tort, delict or quasi-delict has to be founded on a cause of action, or come within an autonomous definition,

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that is based on a concept of wrongfulness [see generally Briggs & Rees, op. cit., para 2.146]. In the meantime, English courts have held that claims for infringement of patents are within Article 5(3) of the Brussels Convention: Molnlycke AB v Proctor & Gamble Ltd [1992] 1 WLR 1112; and so too are claims asserting equitable liability for dishonest assistance of another's breach of trust: Casio Computers Co Ltd v Sayo [2001] EWCA Civ 661. Claims alleging breach of trust are also probably within the scope of Article 5(3): Kitechnology BV v Unicor GmbH Plastmaschinen [1995] FSR 765. A claim for the return of money paid under a void contract, however, was held to not fall within Article 5(3), as the claim was in restitution rather than tort: Kleinwort Benson Ltd v Glasgow City Council [1999] 1 AC 153. It remains to be seen whether English law is compatible with the concept of a matter relating to a tort for the purposes of Regulation 44/2001/EC.

2.2.11 Taking into consideration the case law of the ECJ, how is the jurisdiction determined under Article 5 No. 3, in particular in the case of distance and multistate offences? Is the ratio of the decision of the ECJ in “Shevill” workable?

It is settled law that the phrase "the place where the harmful event occurred" is imbued with an autonomous definition, and that the phrase can encompass both the claimant's choosing to sue in the courts for the place where the damage occurred, or in the courts for the place of the event giving rise to that damage: Handelskwekerij GJ Bier NV v SA Mines de Potasse d'Alsace (Case 21/76) [1976] ECR 1735. The "damage" suffered has also been given an independent meaning, so that damage means that which was the immediate consequence of the harmful event, as opposed to consequential damage: Dumez France SA v Hessische Landesbank (Case 220/88) [1990] ECR I-49. In Henderson v Jaouen [2002] EWCA Civ 75, Jaouen appealed against a decision that the English courts had jurisdiction to try a claim by Henderson, an English citizen, arising out of a deterioration in his condition following a road accident in France for which Jaouen was to blame. Damages had been awarded by the French court and, in awarding damages, the French court had expressly given Henderson the right to seek a further award if his condition were to deteriorate. Henderson contended that since the deterioration had occurred in England, the harmful event for the purposes of the Brussels Convention 1968 Art. 5(3) had occurred in England. In refusing Jaouen's application to strike out the claim for want of jurisdiction, the master had considered himself bound to apply French law and the ECJ decision in Handelskwekerij GJ Bier NV v SA Mines de Potasse d'Alsace (Case 21/76) [1976] ECR 1735. The Court of Appeal held, allowing the appeal, that the term "harmful event" was an autonomous Convention concept, not to be determined by national law and the master had erred by considering himself bound by French law. The harmful event was the original tort which had given rise to Henderson's injuries. The subsequent

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deterioration in his condition was not a fresh wrong but derived from the original tort. It was irrelevant that it caused a fresh cause of action in French law. Consequently, the exception in Art. 5(3) did not apply, and Bier was distinguished. The Court of Appeal stated [at para. 15]: "It is common ground that the term "harmful event" is an autonomous Convention concept, not to be determined by reference to national law." The Court went on to hold that [at paras. 19-21]: "We are unable to accept the senior master's conclusions for a number of reasons. First and foremost, we are satisfied that for the purposes of article 5(3) of the Convention the "harmful event" in this case was the original "tort, delict or quasi-delict", which occurred in France on 8 July 1978. The aggravation, in our judgment, is not a fresh wrong done to the claimant: it is a worsening of his condition deriving directly from the original wrong. The fact that in French law it constitutes a fresh cause of action is, in our judgment, at best procedural. We see nothing in this process which requires the court to equate the aggravation with a new and different "harmful event" for the purposes of article 5(3). Secondly, we do not agree with the senior master that the instant case is "on all fours" with the Bier case, nor do we think that the subsequent European jurisprudence is neutral on the point: in our view it supports a restrictive interpretation of the Bier case which is unhelpful to Mr Henderson. Thirdly, we think there is considerable force in the point made by the defendants that the senior master's statement that he was "bound to apply French substantive law" led him to overlook the fact that "the place where the harmful event occurred" is an autonomous Convention concept, which is not to be identified by reference to national law." The Court concluded by saying [at para. 44]: "Whilst we cannot but have sympathy for Mr Henderson, whose life has been blighted by his injuries sustained in the accident, we think there is some force in the submission made by the defendants, that the definition of "harmful event" for which Mr Brooke argues could result in forum shopping at will simply by a claimant moving to live in a different jurisdiction. Were a choice of jurisdictions genuinely open to Mr Henderson, he would plainly be well advised to choose that which was likely to give him the greater award. The fact that he would get more in England than in France cannot otherwise, however, be a good reason for conferring jurisdiction on England."

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Clearly, indirect damage is irrelevant for the purposes of Article 5(3), but it may not always be straightforward to identify damage which is direct, and damage which is indirect. As Briggs & Rees point out [at para. 2.157]: "Suppose a defendant broadcasts a statement on national radio to the effect that the claimant's products are defective, with the result that the claimant also suffers a drop in business in other countries, or suffers a sharp drop in its share price, or suffers financial strain as creditors panic and demand the repayment of loans. Are any of these to be seen as an instance of indirect or consequential damage? Or should the answer be that the place where those losses occur has jurisdiction in relation to them, even though they may be seen as the consequences of other damage which direct but different effect elsewhere? It may be thought that , in the end, the distinction, between where the damage occurred and where it was suffered may offer a clearer guide than notions of the directness and immediacy of damage. But it cannot be denied that there will be many cases where it is difficult to say whether the damage to which a claimant points is that jurisdictionally-significant damage, directly done to the immediate victim of the tort. But that is what the law requires to be pin-pointed." In the case of "multi-state" offences, an English court, will have jurisdiction over only so much of the claim as concerns such damage as did occur within the territorial jurisdiction of the court (although it should be noted that a court will have special jurisdiction under second limb of Bier if that is where the event giving rise to the damage is located.) In Shevill v Press Alliance SA (Case C-68/93) [1995] ECR I-415, a French newspaper published a story which defamed the claimant. Copies of it were sold in several of the Member States; the claimant, who was domiciled in England, sought to sue in England. It was held that she was entitled to do so to the extent that she complained of sales of newspapers in England, for the damage had, to that extent alone, occurred in England. In the subsequent English proceedings (see [1996] AC 959) the claimant amended her claim to sue only on those newspaper sales in England, and this was not disagreed with by the English court. Certainly the "ratio in Shevill is workable", but there is some question over whether a claimant should rely on all the sales, not just those in England, when submitting the claim, or whether the claimant should do as Miss Shevill did, and only apply for the damage caused by the newspapers in that Member State. As to the second limb of Bier, it seems reasonably certain that, "as a result of there being this fear of inconsistent and unpredictable results in the operation of the Judgments Regulation, it is probable that there is an autonomous identification of the event giving rise to the damage" [Briggs & Rees, para. 2.160]. This may be welcomed in principle, but until jurisprudence of the ECJ expands on this point, it may be difficult to apply this autonomous definition to more difficult torts (e.g. economic torts.) In Waterford Wedgwood plc v Nagli [1999] 3 All ER 185, the court held that the event giving rise to the damage was where the misstatement originated,

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rather than where it was received (see also Domicrest v Swiss Bank Corporation, referred to above, and London Helicopters Limited v Heliportugal LDA-INAC [2006] EWHC 108 (QB)). Questions also arise in respect of multi-state torts under the second limb of Bier; will it follow the reasoning laid down as under the first limb, or will the ECJ move to a "centre of gravity" approach? Finally, it may be noted that Art. 5.3 has been applied to a claim for a negative declaration (see Equitas Ltd v Wave City Shipping Co. Ltd [2005] EWHC 923 (Comm.) (Christopher Clarke J)).

2.2.12 Functioning and practical relevance of Article 6 No. 1 and No. 2 Regulation 44/2001/EC: Are there any doubts as to the compatibility of Article 6 No. 1 Regulation 44/2001/EC with Article 6 European Convention on Human Rights?

The ECJ in Kalfelis held that Article 6 must be given a narrow interpretation (so as not to prejudice the operation of Article 2). Whilst this is an understandable precaution in respect of Article 5, it is less clear why Article 6 must be subject to the same restriction; it is concerned with the avoidance of (irreconcilable) judgments arising from co-defendants, third party proceedings and counterclaims - it is a cornerstone of the European desire to secure the free movement of judgments throughout the Member States. Thus, English courts have historically given Article 6 a rather wider scope than their European counterparts. In Kinnear v Falconfilms NV [1996] 1 W.L.R. 920, Kinnear, an actor, was injured in falling from his horse during the shooting of a film and died in hospital in Madrid. The administrators of Kinnear's estate commenced proceedings in England against Falconfilms, the film company, alleging that Kinnear's death was caused by their negligence. Falconfilms obtained leave to issue a third party notice claiming an indemnity or contribution from the hospital and surgeon in Spain, contending that Kinnear's death was due to medical malpractice. The third parties applied to strike out the third party proceedings. The master granted the application on the ground that the English court had no jurisdiction to entertain the third party claim because it did not fall within "any other third party proceedings" within Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 Art. 6(2) as incorporated by s. 2(1) of the 1982 Act and set out in Sch. 1. Philips J., sitting in the Queen's Bench Division of the High Court, held, allowing D's appeal, that (1) where domestic procedure permitted a third party to be joined in proceedings it was likely to be on the ground of a sufficient nexus between the claimant's claim against the defendant and the defendant's claim against the third party; (2) in the case of English domestic procedure the nexus required for bringing third party proceedings under Ord. 16, r. 1(1) was likely to be sufficient to satisfy the special jurisdiction granted by Art. 6(2) of the 1968 Convention. Accordingly, on the facts, the application of Art. 6(2) was justified; (3) in a case arising under the 1968 Convention, it was proper for an English court, in the exercise of its discretion to decline jurisdiction, to have regard to the

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implications on the litigation of adding to the proceedings a claim which should more appropriately be pursued abroad; but (4) although on the facts it was not more convenient to try the matter in England, the court would not exercise its discretion to decline jurisdiction since the issue would in any event be raised in the English proceedings and there was no alternative forum available to the defendants in which to seek contribution from the third parties [see also Gascoine v Pyrah [1994] I.L.Pr. 82.] A good example of the problems created by a more restrictive application of Article 6 can be found in Jordan Grand Prix Ltd v Baltic Insurance Group [1999] 2 A.C. 127. One commentator summarises it thus: "An English insured sued his insurer, a Lithuanian company, in respect of sums which he had had to pay to another and in respect of which he claimed to be insured. The insurer refused to pay, alleging all manner of misconduct by the insured, with the result that the insured sued it in England. A second insured, an Irish company, then notified a claim against the insurer in respect of the same set of facts; and the insurer made the same initial response. But the Irish insured did not commence legal proceedings; instead, the insurer, when sued in London by the English insured, counterclaimed against both the English insured and the Irish insured. The House of Lords held that the counterclaim against the Irish insured had to be held in Ireland, and that the counterclaim provisions of Article 6 of the Brussels Convention could not be used to found special jurisdiction. The result was that allegations of fraud, conspiracy, non-disclosure , and so on, made by one insurer against two insureds, believed by the insurer to be concerted, would have to be heard and determined in two separate proceedings: the Lithuanian insurer defending in England and claiming in Ireland. If this is what the rules of the Regulation provide, it is far from satisfactory" [(1998) British Yearbook of International Law 345; Briggs & Rees, para. 2.173]. No doubts have been noted in respect of Article 6(1) of Regulation 44/2001/EC and its compatibility with Article 6 of the European Convention on Human Rights (enacted into English law by virtue of the Human Rights Act 1998). A detailed discussion of Article 6 in the context of English law is beyond the scope of this Questionnaire. The following are some of the key points to note: a) There must be a "real claim" against the anchor defendant is the court of his domicile: The Rewia [1991] 2 Lloyds' Rep 325. There is, however, no need to show a good arguable case on the merits against the anchor defendant: Et Plus SA v Welter [2005] EWHC 2115; Masri v Consolidated Contractors International (UK) Ltd [2005] EWHC 944; Casio Computer Co Ltd v Sayo (No.3) [2001] EWCA Civ 661.

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b) The date for testing the domicile of the anchor defendant is that of the institution of proceedings against him, which will mean the date of issue of the claim form which names him as defendant: Canada Trust Co v Stolzenberg (No.2) [2002] 1 AC 1. c) There must be a proper basis for making a claim against the co-defendant: Messier Dowty Ltd v Sabena SA [2000] 1 WLR 2040. d) If there is an agreement on choice of court between claimant and co-defendant, it will not be possible to rely on Article 6(1) unless the co-defendant waives his right to reply on the jurisdiction agreement by appearing and submitting in the proceedings: Hough v P & O Containers [1999] QB 834. e) It has been argued that if there is a potential risk of conflict between decisions on an important issue of fact (instead of conclusions of law), Article 6(1) could be replied upon to invoke special jurisdiction over the co-defendant: Gascoine v Pyrah [1994] I.L.Pr. 82. This must now be doubted in the light of the ECJ's decisions in Reunion Europeenne SA v Spliethoff's Bevrachtingskantoor BV (Case C-51/97) [1998] ECR I-6511 and (more recently) in Roche Nederland BV v Primus (Case C-539/03), Judgment of 13 July 2006, although consultees were strongly critical of the line taken in Reunion Europeenne and have recommended a more generous approach be taken to facilitate the efficient administration of justice (see 2.1.3 above). In this connection, in Andrew Weir Shipping Ltd v Wartsila UK Ltd [2004] EWHC 1284 (Comm), Cooke J stated: "66. Recent decisions in this country have recommended a broad approach to the determination of the risk of irreconcilable decisions including inconsistent findings of fact or law but issues arise out of the decision of the European Court in Reunion Europeene SA v Splietthoff’s Bevarachtingskantoor BV (Case C-51/97) [1998] ECR 1-6511. The point raised by paragraph 50 of the judgment in the Reunion decision is that claims in contract and tort are not sufficiently connected to fall within Article 6(1), so that the existence of a proper claim in tort against WUK does not found jurisdiction for a claim in contract against WFI. Here, I have held that there is a proper claim against WUK in contract as well as in tort, namely under the Overhaul Spare Parts Contract but this is a different contract from those upon which AWSL seeks to pursue WFI, namely the Supply Contract and the Servicing Contract, where I have found that there is no proper case to be made against WUK. 67. It is in my judgment clear, nonetheless, that the claim under the Servicing Contract against WFI and the claim under the Overhaul Spare Parts Contract against WUK are closely connected with one another as well as with the tort claim against WUK and WFI. It is also clear in my judgment that there would be a risk of irreconcilable decisions if separate proceedings took place in relation to them. Self-evidently, there would be a

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risk of irreconcilable judgments on the causation of the fire and the impact of a copper washer, 200 NM of torque and the absence of a securing wire. There could also be inconsistencies in findings as to the provenance of the copper washer. In my judgment therefore the problem raised in Reunion does not arise because there are “valid claims” against WUK in both contract and tort which are sufficient to found jurisdiction against WFI in contract and tort, albeit that the contract claims are based upon different contracts. 68. If I had to make any decision about the application of Article 6(1) to a situation where there was only a 'valid claim' against WUK in tort and AWSL wished also to pursue contract claims against WFI, I would accept the reasoning of the Irish Court in Daly v Irish Group Travel Limited [2003] ILPr 38. I do not consider that paragraph 50 of the European Court’s Judgment in Reunion can be treated as laying down a broad principle in all cases properly falling under Article 6(1) since the Court did not so say and the factual situation in that case involved a primary defendant which was not domiciled in a Convention country, but over which the national Court assumed jurisdiction by virtue of its national jurisdictional rules. 69. I am not technically bound by the European Court decision (see Vaughan & Robertson- Law of the European Union section 2 paragraph 360) and the only part of the ruling which is even arguably binding is the answer given to the questions posed by the national court (See References to the European Court 2nd Edition -Anderson & Demetriou 2003 at pp 334-339), although that has to be understood by reference to the reasoning given by the Court. I do not consider that paragraph 50 is part of the necessary reasoning of the Court for paragraph 3 of the dispositive rulings, in answer to the fourth question posed. In my judgment, Briggs & Rees in Civil Jurisdiction and Judgments Third Edition at page 175 are right in saying that if the intention was to lay down a general principle applicable to Article 6.1, it is simply wrong. I am reinforced in these conclusions by the broad based approach to the question of the risk of irreconcilable decisions taken in Watson v First Choice Holidays [2001] 2 Lloyd’s Rep 339 and Bank of Tokyo-Mitsubishi Ltd v Baskan Gida [2004] EWHC 945 (Ch). 70. It was argued that I was bound by the decision of the Court of Appeal in Watson where the Court of Appeal said that it could not ignore the decision in Reunion and referred the matter to the ECJ for clarification, rather than dismissing the appeal. As the matter was withdrawn from the ECJ before any decision was made it is said that I should treat myself as bound by Reunion as that is what the Court of Appeal appears to have done. I do not consider this to be right. The Court refused to make a decision, preferring to refer the matter to the ECJ, whilst considering the decision unjustifiable - see paragraphs 37-39. I am not bound by their decision to refer nor by the Reunion decision and would, if necessary hold that there is so close a connection that it is expedient to hear and determine the outstanding claims together to avoid the risk of irreconcilable judgments and that the characterisation of the claim as contractual or tortious is only one element

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to be taken into account in assessing that connection." (these comments must now, of course, be read in light of the decision of the Court of Justice in the Roche case, referred to above) f) Article 6(2) may not be invoked where there is an agreement on choice of court between defendant and third party, such that the claim against the third party falls within its scope and excludes the jurisdiction of the court in which the defendant is being sued. As Article 23 jurisdiction appears higher in the hierarchy of rules, it cannot be overridden by Article 6(2), which is of lower importance: Craft Enterprises (International) Ltd v AXA Insurance Co [2004] EWCA Civ 171. As noted above (see 2.1.3), one respondent has criticised the inability to rely on Article 23 as the "anchor" for jurisdiction under Art. 6.1. g) An English court's discretion to decline to exercise jurisdiction in respect of Article 6(2), following the ECJ's ruling in Kongress Agentur Hagen GmbH v Zeehage BV (Case 365/88) [1990] ECR I-1845, is governed by the procedural rules found in the Civil Procedure Rules Part 20 - as wide an a approach as possible in seeking to take jurisdiction, within that allowed by the spirit of Regulation 44/2001/EC, is advocated by English courts [Kinnear v Falconfilms NV [1996] 1 WLR 920]. h) Art. 6(1) has recently been held to be capable of applying to found jurisdiction in separate proceedings from those commenced against the defendant domiciled within the jurisdiction (see Masri v Consolidated Contractors International (UK) Ltd [2006] 1 WLR 830 (CA)). [For a detailed discussion of Article 6 in English law, see Dicey & Morris, op. cit., 11R-286, Briggs & Rees, op. cit., para. 2.174, and Layton & Mercer, op. cit., 15.125-15.157].

2.2.13 How broad is the scope of the grounds of jurisdiction for consumer issues?

Section 4, as with Article 5, serves as an exception to the general rule that a defendant may be sued in the court of his domicile (Article 2), and thus it has been held that interpretation of the rules contained in Articles 15-17 of regulation 44/2001/EC should not go beyond the cases expressly set out in the Articles themselves [Gruber v Bay Wa AG (Case C-464/01) ECR I-439, 20 January 2005, at para. 32; Benincasa v Dentalkit SrL (Case C-269/95) [1997] ECR I-3767. English courts have not expressed a differing view. One theoretical point has been raised: "there is doubt whether a claim by a consumer against a supplier who is alleged to have caused loss by failing to negotiate with the consumer in good faith would fall within the scope of Article 15. As the Court of Justice has held [referring to Fonderie Officine Mecchaniche Tacconi SpA v Heinrich Wagner Sinto Maschienenfabrik GmbH (Case C-334/00) [2002] ECR I-7357] that claims which are founded

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on such legal obligations do not raise matters relating to a contact, but are instead matters relating to a tort, it would be arguable that the text of Article 15 could not encompass them. This would be unwelcome, to least for the manner in which it would appear to allow the wrongdoer to take (jurisdictional) advantage of his wrong. Whether the opening words of Article 15 may be given a wider scope than those of Article 5(1) must be open to doubt, but there can be little doubt that it would be desirable for such a teleological construction to be adopted, no matter the problem with the actual wording of the Article" [Briggs & Rees, para. 2.76]. A similar doubt remains as to whether claims for restitution of benefits conferred under a void consumer contract fall within Art. 15 in view of the decision of the House of Lords in Kleinwort Benson Ltd. v City of Glasgow DC [1999] 1 AC 153 to the effect that such claims fall outside Art. 5.1 of the Brussels Convention.

2.2.14 Determination of defendant’s quality, of a consumer in the sense of Article 15 (1) (in light of the case law of the ECJ).

Generally speaking, the definition of a consumer is governed by the jurisprudence of the ECJ, and would seem to apply only to the buyer in a contract. In England, the definition of a consumer can include middle class investors, and similar private individuals (although the contract itself must still fall within the definition of a consumer contract.) In Standard Bank London ltd v Apostolakis [2001] Lloyd's Rep Bank 240, Apostolakis and his wife, who were both Greek nationals, entered into an agreement with Standard Bank to undertake foreign exchange margin trading in precious metals on the recommendation of a financial adviser. The agreement was in English and contained an exclusive English jurisdiction clause. Apostolakis was not fluent in English and his requests for a translation were ignored. Following devaluation of the Greek drachma, Standard Bank utilised USD 1.1 million, previously deposited by Apostolakis , in settlement of the close out on Apostolakis' positions. Apostolakis commenced proceedings in Greece asserting that Standard Bank had, by its actions, behaved unlawfully, arbitrarily and in breach of contract. Standard Bank responded by issuing proceedings in England seeking an injunction preventing Apostolakis from prosecuting the Greek action on the basis that Apostolakis had submitted to an exclusively English jurisdiction pursuant to the terms of the agreement. At an earlier hearing (Standard Bank London Ltd v Apostolakis (No.1) [2002] C.L.C. 933) the court had determined by way of preliminary issue that there was an exclusive jurisdiction clause and that the Brussels Convention Art. 17 was therefore applicable, and further, that the agreement was a consumer contract for the purposes of Art. 13 of the Convention (now Article 15 of Regulation 44/2001/EC). The court was concerned to determine two preliminary issues raised by Apostolakis by way of challenge to the English proceedings, namely (1) the agreement had been preceded by advertising and/or a specific invitation addressed to Apostolakis and accordingly, since Apostolakis had concluded the agreement in the state of his domicile, he was entitled to pursue a claim against Standard Bank in Greece pursuant to Art. 13, and (2) the

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jurisdiction agreement was an unfair contract term and accordingly void under the Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair Terms in Consumer Contracts Regulations 1999. The English courts declared that they lacked jurisdiction on the basis that the investors had made consumer contracts; the Greek courts, however, held that the investors were not contracting for the satisfaction of their private needs, but instead were engaged in an entrepreneurial activity. The contract was a business venture (see Polymeles Protodikeio, Athens, 8032/2001, [2003] Euro CL May 109). This produced a rather unsatisfactory jurisdictional stand-off. In Rayner v Davies [2003] I.L.Pr. 14, Davies, a marine surveyor who was domiciled in Italy, appealed against the refusal of his application to have proceedings alleging breach of contract and negligence brought against him by Rayner stayed pursuant to the Brussels Convention 1968. Rayner had wished to buy a yacht located in Italy. He met Davies and asked him to carry out a survey of the yacht. Davies sent a fax to Rayner in England setting out the terms of the retainer and Rayner faxed the document back stating that Davies' terms were acceptable. Rayner alleged that he had bought the yacht on the strength of the survey and that the survey failed to mention a number of defects which became apparent after the yacht had been brought back to the United Kingdom. Morison J. held, allowing the appeal, that (1) the issue under Art. 13 of the Convention was whether the defendant had been marketing his services in England. What was required was the solicitation of business in England. The facts of the instant case clearly showed that the business had not been solicited by Davies at all. Davies had been sought out in Italy and negotiations had taken place there. Accordingly, Art. 13 did not apply, Standard Bank London Ltd v Apostolakis (No.2) [2001] Lloyd's Rep. Bank. 240 considered; (2) it was the performance of the obligation on Davies to carry out the survey with care and skill which gave rise to the dispute between the parties, and a breach of that contractual obligation founded the cause of action in contract relied on by Rayner. Accordingly, for the purposes of Art. 5(1) of the Convention, the "place of performance" of that obligation, namely Italy, was the proper forum for Rayner's claim in contract, and (3) for the purposes of Art. 5(3), the place where the "harmful event" had occurred was Italy. It was there that, assuming that Davies had acted negligently, the breach of duty giving rise to the cause of action had occurred. In the circumstances, the appropriate forum for the trial of the issues between the parties was Italy. Morison J. stated [paras. 12-13]: "The reason why I consider that the claimant's argument is wrong is that it loses sight of an essential feature of the operation of Art.13, namely that a contract for services (in this case) is procured by an initial approach (but not necessarily the very first step) amounting to a solicitation made to an individual or company here. The argument loses sight of the wood for the

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trees. The wood in this case is to be seen in the first sentence of the second paragraph of the two professors' report cited above: The first indent relates to situations where the trader has taken steps to market his goods or services in the country where the consumer resides. The fact that, as a matter of language, one could describe the offer document as a "business proposal" does not lead to the conclusion contended for. The question is whether the defendant has been marketing his services in this country. What the Convention is looking for is the solicitation of business here. The facts in this case show, clearly I think, that the business was not solicited by the defendant at all: he was sought out in Italy and negotiations took place there, the fruits of which were transposed into a written agreement as a result of the two faxes. The consumer has not been solicited in this country by the service provider; rather the service provider's business has been solicited by the consumer. In this case, therefore, there has been no marketing of the defendant's services here and the offer letter cannot properly be described as such. That being the case, and using the guidance provided by the two professors, I am of the view that Art.13, and thus Art.14, does not apply. If Steel J. in Standard Bank London Ltd v Apostolakis & Another was saying that it was irrelevant whether the business was initiated by the provider or the consumer then I beg to differ. His decision was, on the facts of the case, obviously right."

2.2.15 How is the concept of an activity „directed to one or several Member States“ under Article 15 (1) lit. c) applied in practice? How is the provision construed in case of internet business?

The new wording pf Article 15(1)(c) was specifically influenced by electronic commerce concerns [see Fawcett, Harris & Bridge, op. cit., para. 10.36]; it is designed to make it clear that point (c) applied to consumer contracts concluded via an interactive website accessible in the state of the consumer's domicile: see the Explanatory Memorandum in the Proposal for a Council Regulation COM (1999) 348 final, 16. The actual application of this provision in internet cases is at such an embryonic stage that little can yet be deduced - clearly Article 15(1)(c) is meant to apply in some form, but it is unsure how [see Oren (2003) 52 International & Comparative Law Quarterly 665]. Thus, one commentator advocates a broad view: "Take for example the case of a seller who has a website to which consumers have access, such as an internet bookseller. It remains to be seen whether this website needs to be hosted in the United Kingdom in order for a contract with it to fall within this rule, or whether it is instead sufficient that it can be accessed, wherever it may be, from the spare bedroom of a computer-literate English consumer. The latter is thought to be more in keeping with the protective spirit of the rule, for all that it widens the scope of the rule more than may be necessary. The reaction of e-suppliers to this new Article suggested that the entire industry would close down overnight, from which it may be deduced that some of them also consider that Article 15(1)(c) will extend to every case in which

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the consumer has access to a website from his home, wherever the website is. As the consumer may have no idea where the website is, this may well be the correct approach to take; and why not, one may ask? The signpost to evasion, if all that is required is a website in a non-Member State, would be too clear to be misread. True, this is likely to mean that those offering to deal with consumers on the internet may find they are subject to the jurisdictional rule of Article 15(1)(c)" [Briggs & Rees, para. 2.79]. But one respondent, with considerable experience in this field, has argued that this view does not take sufficient account of the Council and Commission declaration and the concerns of online businesses.

2.2.16 Taking into consideration the case law of the ECJ, how is the term of „establishment“ in the sense of Article 15 (2) interpreted?

The term "establishment" under Article 15(2) is essentially given the same meaning as that under Article 5(5). The definition of domicile in the UK, for the purposes of this rule, is spelt out in Schedule 1, para. 1, of the Civil Jurisdiction and Judgments Order 2001, SI 2001/3929, which states: "11. - (1) This paragraph applies to (a) proceedings within Section 3 of Chapter II of the Regulation (insurance contracts), (b) proceedings within Section 4 of Chapter II of the Regulation (consumer contracts), and (c) proceedings within Section 5 of Chapter II of the Regulation (employment contracts). (2) A person who, for the purposes of proceedings to which this paragraph applies arising out of the operations of a branch, agency or other establishment in the United Kingdom, is deemed for the purposes of the Regulation to be domiciled in the United Kingdom by virtue of - (a) Article 9(2) (insurers); or (b) Article 15(2) (suppliers of goods, services or credit to consumers), or (c) Article 18(2) (employers), shall, for the purposes of those proceedings, be treated as so domiciled and as domiciled in the part of the United Kingdom in which the branch, agency or establishment in question is situated."

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The independent meaning of "establishment" is an established one; the body must have a fixed place of business, it must have the appearance of permanence, and must be under and subject to the direction and control of the defendant. One significant point is whether the body has been invested with the power to make contracts which bind the principal, and ECJ case-law [Shearson Lehmann Hutton Inc v TVB (Case 89/91) [1993] ECR I-139, at para. 36] in this area is in line with common law authorities [Adams v Cape Industries Plc [1990] Ch. 433; Latchin v general Mediterranean Holidays SA [2002] CLC 330.] English courts, in essence, have little trouble in applying the dicta laid down by the ECJ.

2.2.17 How do the provisions on individual contracts of employment (Articles 18–21) apply and how do they interrelate with the respective choice of law rules (in particular Article 6 Rome Convention)?

The jurisdictional rules in Articles 18-21 apply in English courts, it would seem, exactly according to the guidance laid down by the ECJ in the leading cases on employment (a discussion of the ECJ case-law, and the general application of Articles 18-21, is outside the scope of this Questionnaire.) Only two reported cases can be found on the operation Articles 18-21 of Regulation 44/2001/EC. In Financial Times Ltd v Bishop 2003 WL 23014808, F appealed against an employment tribunal's decision that it had jurisdiction to consider a complaint of unfair dismissal brought by B, a former employee. B had worked in a number of F's overseas offices and at the time of his dismissal was working in an office provided by F's associated US corporation, "I". Although B was treated as an employee of I's and participated in its bonus scheme his terms and conditions of employment were those which he had enjoyed throughout his employment with F. B was dismissed by I and B brought a claim for unfair dismissal against F who, it was accepted, was B's employer at the time of his dismissal. F argued that the tribunal was wrong to conclude that there was jurisdiction under the Council Regulation 44/2001 Art. 19 to consider B's claim. The Tribunal held, allowing the appeal, that the tribunal erred in holding that there was jurisdiction to entertain B's complaint. Article 19 did not assist in deciding whether the right to claim unfair dismissal under the provisions of the 1996 Act existed where the employment was beyond the territorial limits of the UK jurisdiction, Lawson v Serco Ltd (Unreported, March 11, 2003) considered. In Swithenbank Foods Ltd v Bowers [2002] EWHC 2257, F, a former employee of S, sought an order of the English court that it lacked jurisdiction to try claims brought by S where F was domiciled in France and the claim form had been served on F without leave of the court in reliance upon the Civil Procedure Rules 1998 Part 6 r. 6.19. The two claims against F alleged conspiracy to injure S's contractual relations with a supplier and a claim that F had breached the implied duty of fidelity in his contract of employment with S. F contended that the English court lacked jurisdiction where the claims were related to his contract of employment with the result

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that jurisdiction lay with the French courts by virtue of his domicile, pursuant to Council Regulation 44/2001 Art. 20. McGonigal J. held, allowing the application, that the English court had jurisdiction over the conspiracy claim. Section 5 of the Regulation did not apply since the conspiracy claim was not made under F's contract of employment. However, S's second claim referred to an implied term of F's contract of employment, and therefore the claim came within Section 5 and was one that could only be brought in a French court on the basis of F's French domicile, as stipulated by Art. 20. Since the English court had jurisdiction over one, but not both of S's claims, service of the claim form should not have been made without leave under the Civil Procedure Rules 1998 Part 6 r. 6.19, and accordingly service of the claim form would be set aside. The provisions in Articles 18-21 have been criticised for being "untidy" [Briggs & Rees, op. cit., para. 2.85], but it would seem that (to date) this has done little to impair their practical effectiveness.

2.2.18 How is the term „rights in rem” in the sense of Article 22 construed?

The claimant must have a title to immovable property that is good against the whole world. Nor does it extend to a claim in which the claimant alleges to have rights in personam against the defendant. These are the conclusions from the ECJ's decision in Webb v Webb (Case C-294/92) [1994] ECR I-1717. The facts of Webb will not be discussed here, but the attitude of English courts and commentators will be addressed. It is argued that the proposition that the claim of the father in Webb, so far as he relied upon his existing equitable title to land, had as its object only a right in personam is rather hard to support. Whilst English mediaeval law utilised a legal fiction that equitable rights operate only in personam, this is irrelevant in today's world; "any student of land law will know that the equitable owner of land has a claim which can be enforced against everybody, against all third parties. save for the bona fide purchaser or a legal estate in the land for value without notice or his modernised equivalent. The idea that the equitable owner has a single right in personam, or has a vast bundle of single rights in personam, but nothing more, flies in the face of legal sense" [Briggs & Rees, para. 2.43]. And yet the ECJ cannot be fully held accountable for confusion over rights in rem and in personam; "in personam" conjures up nothing more than vague concept for most English lawyers, and is used rather loosely to describe a whole array of rights. The decision in Webb nevertheless means that only a claimant who asserts that he is already a holder of legal title to the land will be able to bring proceedings which have as their object rights in rem in immovable property. An English court in Ashurst v Pollard [2001] Ch 595 cited Webb to explain why a trustee in bankruptcy, bringing proceedings against the bankrupt and his wife, registered proprietors of an estate in Portugal, was able to obtain an order that they do what was necessary to enable the trustee to sell the land with vacant possession. The Court of Appeal held [at p.595-596]:

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"that proceedings had as their object rights in rem for the purposes of article 16(1) of the Convention if such rights were their principal subject matter; that in considering whether article 16(1), which was to be construed restrictively, applied to a particular case it was material to have regard to the article's underlying rationale and consider whether the proceedings involved a factual investigation best carried out by the courts of the state in which the property was situated or raised questions of local law or practice; that the proceedings before the court involved no such investigation nor any question of Portuguese law or practice and did not assert any property right against third parties or seek to establish, protect or perfect a property right, but rather raised personal issues between the trustee and the husband and wife as to the beneficial interests in the villa; that the proceedings therefore did not have as their object rights in rem or changes in the public records relating to the Portuguese property, and so article 16 did not confer exclusive jurisdiction on the Portuguese court; and that, accordingly, the English court had jurisdiction to hear and determine the trustee's application." [See further Briggs & Rees, loc. cit.; Layton & Mercer, op. cit., paras. 19.014 to 19.020]

2.2.19 Determination of the national practice in respect to the exclusive grounds of jurisdiction under Article 22 No. 2, in particular: In which types of cases is the provision most frequently applied in practice?

Actions brought in respect of companies and partnerships are obviously within the scope of Article 22(2) - see Phillips v Symes [2002] 1 WLR 853. In Speed Investments Ltd v Formula One Holdings Ltd (No.2) [2005] 1 WLR 1936, the appellants (B) appealed against a decision ([2004] EWHC 1827, [2004] I.L.Pr. 46) of an English court that it had exclusive jurisdiction to entertain a dispute in respect of the appointment of directors of a company registered in England and Wales (F). The respondents (S) were F's parent companies. B, F and S, who were based in various jurisdictions, were privy to an agreement concerning the appointment of the directors of F. It was common ground that the terms of the agreement (including a jurisdiction provision in favour of the Courts of Switzerland) could be displaced by the exclusive jurisdiction provisions of Council Regulation 44/01 and the Lugano Convention 1988. Accordingly, S brought proceedings in England to determine jurisdiction. Prior to S serving the claim, B had commenced proceedings in Switzerland. The English court had held that it had exclusive jurisdiction to entertain the claim. The main issue on appeal concerned the application of Art. 16 of the Convention which was, for practical purposes, in the same terms as Art. 22 of the Regulation. B argued that (1) as the subject matter of the dispute, the composition of the board of directors, did not fall within Art. 16(2) of the Convention, the English court did not have exclusive jurisdiction to entertain the claim; (2) as the Swiss court had been first seised of the matter, the

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English court was required to stay its proceedings in accordance with Art. 21 of the Convention. The Court of Appeal held, dismissing the appeal, that (1) the dispute concerned the interpretation of the agreement, which fell within the scope of Art. 16(2) of the Convention. The appointment of the directors was a matter which clearly concerned the validity of the constitution of a company. In interpreting Art. 16 of the Convention the phrase "proceedings which have as their object " referred to the subject matter of the dispute, Grupo Torras SA v Al-Sabah (No.1) [1996] 1 Lloyd's Rep. 7 applied. It was irrelevant that the matter might extend beyond the strict limits of the company's constitution in the technical sense, Ashurst v Pollard [2001] Ch. 595 applied. Accordingly, it followed that the judge had been correct to hold that the English court had exclusive jurisdiction to entertain the claim. (2) There was powerful and authoritative academic literature which supported the view that Art. 16 constituted an implied derogation from the mandatory provisions of Art. 21 and that the court with exclusive jurisdiction took precedence over a first seised court with non-exclusive jurisdiction. To hold otherwise would result in first seised courts without exclusive jurisdiction giving judgments which were not recognised by other signatory states. If the Convention was construed in a purposive manner it could be seen that requiring the English court to stay proceedings would serve no purpose and would simply increase delay and expense. The decision of the Court of Justice in Gasser v MISAT Srl , Case C-116/02 [2005] QB 1 was held not to prevent that conclusion in a case to which Art. 16 of the Brussels Convention (Art. 22 of Regulation 44/2001) applied. In the earlier (Brussels Convention) decision in Grupo Torras SA v Sheikh Fahad Mohammed Al-Sabeh [1996] 1 Lloyd's Rep 7, the claimants were a Spanish company, G, and its English subsidiary, T, who claimed damages against 22 defendants for conspiracy, monies due under constructive trusts, and damages for breach of directors' duties. The defendants applied for English proceedings to be stayed in favour of the courts of Spain further to the Brussels Convention 1968 Art. 16(2). The defendants contended that the matter concerned the decisions of organs of G which should be determined in Spain. It was also contended that the English court should stay its proceedings on the basis that it might conflict with the decision of the Spanish court and that G and T had failed to establish a good arguable case. Stuart-Smith J. held that the objective of Art. 16(2) was to confer exclusive jurisdiction concerning matters of the internal management of companies on the courts of the contracting state in which the company had its seat. Whether an action fell within Art. 16(2) depended upon the nature of the dispute and not the relationship between the parties. The object of these proceedings was not the internal management of G and therefore the Spanish proceedings did not fall within Art. 16(2). Consequently, the Spanish proceedings did not bar the English courts from assuming jurisdiction. According to Spanish law, the proceedings before the Spanish

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court were not pending at the date on which the English proceedings had been commenced by service of writ. The English court was the court first seised of the matter. The court stated that Article 16(2) confers exclusive jurisdiction to determine questions concerning [at p.15]: "the capacity of the company, the composition and powers of various organs of the company, the formalities and procedures laid down for them, the extent of an individual member's liability for the debts and liabilities of the company, and other matter of that kind." As Briggs & Rees note [at para. 2.52]: "[Article 22(2)] does not encompass all disputes between shareholder and company, or office and company, even if these are inward-looking and do not involve third parties. Rather than its being determined by the identity of the litigants, it is the nature of the dispute, or perhaps the identity of the substantive law that will be applied which dictates the application of Article 22(2)." [See also Dicey & Morris, op. cit., Rule 154; Briggs (2004) 75 BYBIL 537, at 545; Layton & Mercer, op. cit., para. 19.041] The definition of where a company has its seat (which Article 22(2) allows to be governed by the court's rules of private international law) can be found in the Civil Jurisdiction and Judgments Order 2001, Schedule 1, para. 10, which states: "Seat of company, or other legal person or association for purposes of Article 22(2) (section 43) 10. - (1) The following provisions of this paragraph determine where a company, legal person or association has its seat for the purposes of Article 22(2) (which confers exclusive jurisdiction over proceedings relating to the formation or dissolution of such bodies, or to the decisions of their organs). (2) A company, legal person or association has its seat in the United Kingdom if and only if - (a) it was incorporated or formed under the law of a part of the United Kingdom; or (b) its central management and control is exercised in the United Kingdom. (3) Subject to sub-paragraph (4), a company, legal person or association has its seat in a Regulation State other than the United Kingdom if and only if - (a) it was incorporated or formed under the law of that state; or

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(b) its central management and control is exercised in that state. (4) A company, legal person or association shall not be regarded as having its seat in a Regulation State other than the United Kingdom if - (a) it has its seat in the United Kingdom by virtue of sub-paragraph (2)(a); or (b) it is shown that the courts of that other state would not regard it for the purposes of Article 22(2) as having its seat there."

2.2.20 Are there any positive or negative conflicts of competence?

We understand that "positive conflict of competence" refers to a situation in which more than one Member State court (or a Member State and non-Member State courts) asserts jurisdiction in relation to identical, mirror image or related claims. Such conflicts regularly arise and are considered by the English Courts in their application of the lis alibi pendens provisions of Regulation 44/2001 (see Section 3 below) and in the exercise of the power to stay proceedings on the ground of forum non conveniens (considered and restricted by the Court of Justice in its decision in Owusu v Jackson. For an example of a negative conflict of competence, which suggest that the something has gone wrong in the application of the provisions of the Regulation, see the reference at 2.2.14 above to the decisions of the English and Greek Courts in Standard Bank v Apostolakis.

2.2.21 To what extent does the provision comply with the ECJ’s decisions on the freedom of establishment (Centros/Überseering)?

No English decision considers this question, which raises an extremely complex issue of EC law. As to the competence of the EC to legislate in the area of private internatinal law under EC Treaty Arts. 61 and 65, one commentator notes that "if a low threshold is adopted, the EC's competence under Art 65 to legislate in matters of private international law is unlikely to be materially hindered by the internal market requirement. Conversely, if a high threshold is adopted, the internal market requirement would constitute a potentially significant obstacle to Community legislation laying down uniform rules of private international law. Although rules of private international law are capable of constituting a restriction on the free movement of goods, person, services and capital under the EC Treaty, it is submitted that this is unlikely to be true in most cases" [A. Dickinson (2005) 1 J. Priv Int. Law 197, 212]. Dickinson goes on to argue that, "many rules operating in cross-border situations are of a procedural character, being inextricably linked with the

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process of litigation, and their effect can be strongly argued to be too uncertain and indirect to be regarded as liable to hinder trade between Member States. It is submitted that rules of jurisdiction, which define the circumstances under which national courts may determine legal rights and obligations in accordance with national law, fall into this category. That is not to cast them as being unimportant (for that would be plainly absurd, given the dominant role which they play in modern private international law), but simply to assert that they do not directly regulate cross-border trade." It is submitted that this analysis falls squarely on the question of whether Article 22(2) complies with the freedom of establishment; one does not directly impinge on the other. Further discussion of the ECJ's decisions, and a discussion of PIL generally in the area of companies in Europe can be found at: Robert Drury, “The `Delaware Syndrome’: European Fears and Reactions,” [2005] Journal of Business Law 709-744; Eddy Wymeersch, “The transfer of the company’s seat in European company law,” 40(3) CMLRev 661-695 (2003); C. Kersting and C.P.Schindler, “The ECJ’s Inspire Art Decision of 30 September 2003 and its Effects on Practice,” German Law Journal Vol. 4 No.12 – 1 December 2003; Christian Joerges, On the Legitimacy of Europeanising Private Law: Considerations on a Justice-making Law for the EU Multi-level System, vol 7.3 ELECTRONIC JOURNAL OF COMPARATIVE LAW, (September 2003); Kilian Baelz & Teresa Baldwin, “The End of the Real Seat Theory (Sitztheorie): the European Court of Justice Decision in Ueberseering of 5 November 2002 and its Impact on German and European Company Law,” German Law Journal Vol. 3 No. 12 - 01 December 2002, URL: John Lowry, “Eliminating Obstacles to Freedom of Establishment: the Competitive Edge of UK Company Law,” [2004] C.L.J. 331; Mathias M. Siems, “Convergence, Competition, Centros and Conflicts of Law: European company law in the 21st century,”27 E.L.Rev 47-59 (2002); Anne Looijestijn-Clearie, “Centros Ltd. A Complete U-Turn in the Right of Establishment for Companies?,” 49 I.C.L.Q. 621 (2000); McCahery & Vermeulen, “Does the European Company Prevent the Delaware Effect?,” 11 E.L.J. 785 (2005); Stephan Rammeloo, Corporations in Private International Law – A European Perspective (Oxford: OUP 2001).

2.2.22 How do you draw the line between Article 5 No. 3 and Article 22 No. 4 in respect to litigation on patents? How do the national courts deal in infringement proceedings with the argument of patent invalidity?

In Duijnstee v Goderbauer (Case 288/82) [1983] ECR 3663, the Court held [at 3677] that actions for infringement of patents are governed by the general rules [of the Regulation] and not by Article 22(4) (formerly Article 16(4) of the Brussels Convention) [see, for an English court's confirmation, Molnlycke AB v Proctor & Gamble Ltd [1992] 1 WLR 1112.] Neither is an action for a declaration of non-infringement within the provision (Chiron Corp v Evans Medical Ltd and Others [1996] FSR 863 at 866).

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It is a common occurrence for the validity of a patent to be raised as a defence to a claim for infringement, on the basis that a person cannot have infringed an invalid intellectual property right that should never have been granted. It had been argued by commentators that the courts of a Member State which has jurisdiction to try the infringement action are not prevented from doing so where the defence of invalidity is raised [see Dicey & Morris, op. cit, p.386; Wadlow (1985) 10 ELRev 305, 313-314]. This view appeared to receive support from the approach of the Court of Justice, denying the relevance of matters pleaded by way of defence in cases such as Preservatrice Fonciere TIARD Compagnie d'Assurances v Netherland State (Case C-266/01) [2003] ECR I-4867 (Brussels Convention, Art. 1) and Gantner Electronic GmbH v Basch Exploitatie Maatschappij BV (Case C-111/01) [2003] ECR I-4207 (Brussels Convention, Art. 21), but has now been decisively rejected by the Court of Justice in its recent decision (handed down on 13 July 2006 after the consultation period) in GAT v Lamellen (Case C-4/03). Despite the views of commentators referred to above, the English Courts have adopted a construction of Art 16(4) which appears consistent with the decision of the ECJ in the GAT case. In Coin Controls Ltd v Suzo International (UK) Ltd and Others [1997] 3 All ER 45, there was an action brought in England for the infringement of three European patents from the UK, Spain and Germany. Validity was to be put in issue. Laddie J. held that the English court had no jurisdiction, not only in relation to the validity part but over the entire claim, including the infringement. The approach of Coin Controls has been confirmed by the Court of Appeal in Fort Dodge Animal Health Ltd and Others v Akzo Nobel NV and Another [1998] FSR 222. The Court also made a reference to the ECJ on the point, but the claim was settled and the reference withdrawn.

2.2.23 Are any of the exclusive grounds of jurisdiction in the catalogue of Article 22 too broad or too narrow?

No suggestion can be found, either in the courts or in the literature, that Article 22 is either too broad or too narrow.

2.2.24 What is the relation between the respective national remedies against enforcement and the freedom of judgments (Articles 22 No. 5, 32)? In particular: What remedy does the obligor rely on if he argues that the claim has changed since the judgment or the title to enforce rendered outside courts does not base on a respective payment on the claim?

Enforcement of judgments have a sufficiently close connection with the state in which enforcement in being sought that they fall within the exclusive jurisdiction provisions [see Owens Bank Ltd v Bracco (Case C-129/92) [1994] ECR I-117]. For the purposes of Article 32, Reichert v Dresdner Bank (No. 2) (Case C-261/90) [1992] ECR I-2149 held that it had no application to measures sought prior to the obtaining of judgment, even

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"if the purpose in applying for these would be to pave the way to a later enforcement of a judgment" [Briggs & Rees, op. cit., para. 2.60]. Under the Civil Procedure Rules Part 72, an English court can order a person, within its jurisdiction who owes money to the judgment debtor, to pay the money in the alternative to the judgment creditor (called a "third-party debt order"). The third party debt order is typically relied on against banks. In Kuwait Oil Tanker SAK v Qabazard [2004] 1 AC 300, however, the House of Lords held that Art. 16(5) of the Lugano Convention (equivalent to Art. 22(5) of Regulation 44/2001) precluded the grant of a third party debt order against a bank with a presence in the jurisdiction in respect of a bank account located in Switzerland. Lord Hoffman stated: "It is not correct to characterise the garnishee or third party debt order as a claim in personam made against the third party in England. It is enforcement of the judgment in rem against the debt, which in this case is situated in Switzerland. Article 16(5) therefore confers exclusive jurisdiction on Switzerland and it is understandable that UBS's Swiss law expert should have said that a Swiss court would regard the order as an infringement of its sovereignty. Indeed, the judgment of the Court of Appeal produces the extraordinary result that the courts of any member state in which UBS maintains a branch have exclusive jurisdiction under article 16(5) to make a garnishee or similar order in respect of a debt in Switzerland--a strange form of exclusivity." In Babanaft v Bassatne [1990] Ch. 13, Article 16(5) of the Brussels Conention was held not to apply to a post-judgment order freezing the defendant's assets worldwide, a decision which appears consistent with the Court of Justice's decisions in Reichert v Dresdner Bank (No. 2) (Case C-261/90) [1992] ECR I-2149 and Webb v Webb (Case C-294/92) [1994] ECR I-1717, but more difficult to reconcile with the approach to characterisation in the Court of Justice's more recent decision in Turner v Grovit (Case C-159/02) [2005] 1 AC 101, esp. paras. 27-28 (anti-suit injunction). As one commentator notes: "In conclusion, the balance of authority is finely weighted, and, until an opportunity arises for further judicial consideration of the issue, all that one can say is that it is not as clear cut as the Court of Appeal in Babanaft appeared to think" [see A. Dickinson in Andenas, Hess and Oberhammer (ed.), Enforcement Agency Practice in Europe (London: BIICL, 2005), p. 291]

2.2.25 Questions relating to the applicability of Article 23

[See below]

In particular:

2.2.25.1 Implementation in practice of the decisions of the ECJ by the courts of the Member States?

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In 7E Communications v Vertex Antennentechnick GMBH CA [2006] QB (29 March 2006) the appellant (7E) appealed against the decision in the Business List of the Central London County Court that the court should give effect to an exclusive jurisdiction clause in the standard terms of the respondent German company (V). V manufactured satellite antennae and related equipment at Duisberg in Germany. It had offered to supply antennae to 7E in England. 7E had responded with a purchase order. The antennae were supplied and 7E claimed that they were defective and issued proceedings. V disputed the jurisdiction of the English court on the ground that V's quotation for the antennae incorporated the company's standard terms, which included a jurisdiction clause giving exclusive jurisdiction to the courts of Duisberg. The court of appeal held that the purchase order was to be treated as an acceptance of the quotation and the terms set out in the quotation had to be incorporated to give the contract efficacy. The quotation referred to the standard terms, but the terms had not been enclosed with the quotation and this being the first dealing between the parties 7E had no knowledge of V's terms and had never seen them. Therefore, the court found that for the purposes of Article 23 Regulation 44/2001/EC a party was bound by a term expressly incorporated into a signed contract by reference in that contract to general terms that included the particular term as to jurisdiction, since it was then made sufficiently clear that the party agreed to that term. What he had signed and made his document expressly referred to the terms. A different approach was to be taken when the reference was in a document that he had not signed and had not made his (the court refers to Estasis Salotti di Colzani Aimo et Gianmario Colzani v Rüwa Polstereimaschinen GmbH (Case 24/76) [1976] ECR 1831. In this case the signed contract was the purchase order and not the purchase order together with the quotation. Therefore, the jurisdiction clause was not effective for the purpose of Article 23. Further discussion of the decisions of the ECJ, and how English courts implement them will take place below, to which the reader is referred.

2.2.25.2 Except for the issue of formal requirements, are conclusion and validity of choice-of-forum agreements determined according to the lex causae or the lex fori?

It should be immediately noted that, technically, it is neither the lex causae nor the lex fori that should determine the substantive validity of a choice-of-forum agreement; Article 23 is viewed by the ECJ as a complete set of rules for establishing validity, and no reference to any national law is needed [see MSG v Les Gravieres Rhenanes Sarl (Case C-106/95) [1997] ECR I-911, at para. 15; Coreck Maritime GmbH v Handelsveem BV (Case C-378/98)

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[2000] ECR I-9337, at para. 13]. Indeed, the ECJ in Transporti Castelletti Spedizioni Internazionali SpA v Hugo Trumpy SpA (Case C-159/97) [1997] ECR I-1597 held that [at paras. 49 and 51]: "the choice of court in a jurisdiction clause may be assessed only in the light of considerations connected with the requirements laid down by Article [23]..for the same reasons, in a situation such as that in the main proceedings, any further review of the validity of the clause and of the intention of the party which inserted it must be excluded and the substantive rules of liability applicable in the chosen court must not affect the validity of the jurisdiction clause." If this is to be taken seriously, then there is no room for any national law to decide questions of substantive validity. On the assumption, however, that some law must be used in order to assess, for example, whether there has been duress, or fraud, or mistake, three possibilities would seem to exist: 1) the national conflicts rules of the court seised; 2) the national conflicts rules of the court chosen; 3) an autonomous European definition of "agreement". In I.P. Metal Ltd v Ruote O.Z. SpA [1994] 2 Lloyd's Rep 560, the court held that consensus as to the validity of the jurisdiction clause "in the light of community law" was required. This would seem to be the best evidence in favour of the third possibility, and that is the one most favoured by academics too [see, for example, Briggs & Rees, op. cit., para. 2.105]. The fullest consideration of these issues by an English judge to date is contained in the judgment of Aikens J in Roche Products Ltd v Provimi [2003] EWHC 961 (Comm). Aikens J stated as follows: "78. Discussion: (1) relevance of national law to the validity of the clauses. In my view it is clear from the ECJ decisions in Benincasa v Dentalkit Srl[143] and Transporti Castelletti Spedizioni Internazionale SpA v Hugo Trumpy SpA[144] that questions concerning the 'formal validity'[145] of jurisdiction clauses are to be determined exclusively by what is now Article 23 of the Regulation. Principles of national law as to formal validity are irrelevant.

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79. But Mr de la Mare's argument was, in effect, that all issues as to the 'material validity'[146] of a jurisdiction clause are also to be determined exclusively by the rules laid down in Article 23, making national law irrelevant on that issue as well. He pointed in particular to passages at paragraphs 49 to 51 of the ECJ's judgment in the Hugo Trumpy case. 80. In that case the ECJ was concerned with the effect of a jurisdiction clause set out on the reverse of bills of lading. Claims were brought by the receivers of the goods which had been shipped from Buenos Aires to Savona, Italy. The receivers had brought proceedings for compensation against Hugo Trumpy in the Genoa courts. Trumpy relied on a jurisdiction clause on the reverse of the bills of lading and claimed that the proceedings should have been brought in the High Court in London. The Corte Suprema di Cassazione posed fourteen questions to the ECJ. The only relevant ones for present purposes are the seventh and sixth questions. These are summarised in paragraph 46 of the ECJ's judgment as being: '…whether the court seised may review the validity of the clause as well as the intention of the party which inserted it and whether the fact that the substantive provisions applicable before the chosen court tend to reduce that party's liability may affect the validity of the jurisdiction clause' . 81. The Court stated, in paragraphs 48 to 51 of its judgment: '[48]…..In Benincasa, at paragraphs 28 and 29, the Court explained that the aim of securing legal certainty by making it possible reliably to foresee which court will have jurisdiction has been interpreted, in connection with Article 17 of the Convention, by fixing strict conditions as to form, since the purpose of that provision is to designate, clearly and precisely, a court in a contracting State which is to have exclusive jurisdiction in accordance with the consensus between the parties. [49] It follows that the choice of court in a jurisdiction clause may be assessed only in the light of considerations connected with the requirements laid down by Article 17. [50] (There is no need for any relationship between the dispute and the court selected). [51] For the same reasons, in a situation such as that in the main proceedings, any further review of the validity of the clause and of

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the intention of the party which inserted it must be excluded and substantive rules of liability applicable in the chosen court must not affect the validity of the jurisdiction clause'. 82. As I read those passages they state that the material validity of a jurisdiction clause has to be determined exclusively by reference to the terms of Article 23. Thus there has to be an "agreement conferring jurisdiction" which is one to settle any disputes 'which have arisen or which may arise in connection with a particular legal relationship'. 83. In Powell Duffryn plc v Wolfgang Petereit[147] the ECJ held that the phrase 'agreement conferring jurisdiction' had an autonomous meaning, so was not to be interpreted according to national laws.[148] However, in the same case the ECJ has also held that there is still scope for national laws to determine two particular questions concerning an 'agreement conferring jurisdiction'. The first is whether the dispute in issue arose out of the legal relationship in connection with which the jurisdiction agreement was made. That 'is a question of interpretation which is a matter for the national court to resolve'.[149] The second question is whether the scope of the jurisdiction agreement applied to the dispute before the court. The ECJ held that 'it is for the national court to interpret the clause conferring jurisdiction invoked before it'.[150] 84. Given these pronouncements of the ECJ I must conclude that when a jurisdiction clause is subject to Article 23, then the court seised of the issue of whether it is valid and applicable in the instant case must not apply national laws at all to the issue of the validity of the clause. So national laws are irrelevant to the issue of whether a clause can be valid at all if invoked in a dispute where fraud is alleged or it is alleged that the dispute concerns a tort of intent. 85. However the ECJ's judgment in the Powell Duffryn case establishes that relevant national laws will determine two issues. The first is whether the dispute concerned arises out of the legal relationship in connection with which the jurisdiction agreement was made. The second is the scope of the jurisdiction agreement when applied to the dispute before the court. In relation to the German jurisdiction clauses, there was no dispute that German law should be considered on those two issues if there were any relevant German law principles involved." Note 143 [1997] ECR I-3767, particularly paras 28 and 29. Note 144 [1999] ECR I – 1597, particularly para 48.

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Note 145 That is: what formal requirements have to be fulfilled to make the jurisdiction clause valid and enforceable. Note 146 That is: issues concerning the nature of the contract to which they relate or the nature of the dispute which are said to affect the validity of the jurisdiction clause: Note 147 [1992] ECR I –1745. Note 148 Para 14 of the judgment. Note 149 Paras 32 and 33 of the judgment. Note 150 Para 36 of the judgment. [For contrasting views as to the correct solution, Carnoustie Universal SA v International Transport Workers' Federation [2002] 2 All ER (Comm.) 657, at [107]-[108] (Richard Siberry QC); J. Hill, International Commercial Disputes in the English Courts (Oxford: Hart Publising, 2005), paras. 5.3.37 et seq.; Briggs & Rees, op. cit., [INSERT PARA. REFERENCE]; Layton & Mercer, op. cit., paras. 20.035 et seq.]

2.2.25.3 Are choice-of-forum clauses in standard form contracts subjected to judicial control?

Most certainly; indeed, at least outside the sphere of consumer contracts there seems no reason to differentiate between those clauses contained in so-called standard form contracts and those in contract drawn up for a specific transaction [see The Tilly Russ (Case 71/83) [1984] ECR 2417], except insofar as the standard form nature of the contract is material to compliance with the formal requirements of Art. 23.1 of Regulation 44/2001/EC.

2.2.25.4 National practice in determining „usages“ of international trade or commerce in the sense of Article 23 (1) lit. c)?9

Regardless of whether an English court can rule, as a matter of fact, on whether a commercial practice falls within Article 23(1)(c), it can only do so by reference to an independent definition. As the ECJ stated in Mainschiffahrts-Genossenschaft eG (MSG) v Les Gravieres Rhenanes SARL (Case C-106/95) [1997] ECR I-911 [at paras 21-24]:

9 The problematic point lies with written confirmations of orders that are issued by the provider of the non-cash contribution with reference to general conditions that encompass a clause-stipulating jurisdiction. According to the opinion of the ECJ (“Segoura”) this was not possible without written confirmation by the client. This was the reason for the implementation of today’s Article 23 (1) c) in the adapting negotiations with Denmark, Ireland and the United Kingdom. According to the leading decision of the ECJ (“Mainschiffahrtsgenossenschaft”), the meaning of “commercial customs” used by Article 23 (1) c) is a matter of fact that has to be finally decided upon by national courts. Did the courts of your State express their opinion regarding this point – in particular with regard to confirmations of orders to which general conditions are attached? Are there any complaints from representatives of the economy who claim that there are no workable and reliable possibilities anymore to achieve choice of forum agreement for certain kinds of business?

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"Whilst it is for the national court to determine whether the contract in question comes under the head of international trade or commerce and to find whether there was a practice in the branch of international trade or commerce in which the parties are operating and whether they were aware or are presumed to have been aware of that practice, the Court should nevertheless indicate the objective evidence which is needed in order to make such a determination. 22 It should first be considered that a contract concluded between two companies established in different Contracting States in a field such as navigation on the Rhine comes under the head of international trade or commerce. 23 Next, whether a practice exists must not be determined by reference to the law of one of the Contracting Parties. Furthermore, whether such a practice exists should not be determined in relation to international trade or commerce in general, but to the branch of trade or commerce in which the parties to the contract are operating. There is a practice in the branch of trade or commerce in question in particular where a particular course of conduct is generally and regularly followed by operators in that branch when concluding contracts of a particular type. 24 Lastly, actual or presumptive awareness of such practice on the part of the parties to a contract is made out where, in particular, they had previously had commercial or trade relations between themselves or with other parties operating in the sector in question or where, in that sector, a particular course of conduct is sufficiently well known because it is generally and regularly followed when a particular type of contract is concluded, with the result that it may be regarded as being a consolidated practice." The definition of international trade for the purposes of the Regulation has also been extended to associated insurance [Standard Steamship Owners' Protection & Indemnity Ass (Bermuda) Ltd v GIE Vision Bail [2004] EWHC 2919 Comm]. In Standard Steamship Owners Protection & Indemnity Association (Bermuda) Ltd v GIE Vision Bail [2004] EWHC 2919, the defendant (L) sought a declaration that the English court had no jurisdiction over it, arguing that it was not bound by a jurisdiction agreement provided under the rules of the claimant insurer (S). L had operated duty free concessions on cruise ships owned and operated by F and had needed employers' liability cover for its employees. F had agreed to obtain such cover under

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its own policy with S. F and its brokers had agreed to the inclusion of L on S's policy as a "joint entrant". S's rules provided that its members submit to the jurisdiction of the English court. S maintained that L was liable to it in respect of premiums for insurance cover. The issue was whether L was bound by the agreement concluded by F and S that it would be insured as a joint entrant. On Article 23(1)(c), Cooke J. held [at para. 43-44]: "43. So far as Article 23.1(b) and (c) are concerned, if insurance is considered a matter of international trade or commerce, the issuing by a Mutual Insurance Company of endorsements to Certificates and of Certificates of insurance which refer in terms to the Club Rules (which themselves contain the relevant jurisdiction clause) constitutes an agreement in a form which accords with a usage of which Ferrari were well aware and which is widely known and regularly observed by parties to contracts of mutual insurance with a Club. Although it was suggested in argument that liability cover was not a matter of international trade or commerce, it was accepted that shipping and other forms of insurance fell into this category so that bills of lading and other insurances might be covered by this subparagraph. (Article 23.1(c) developed out of the decision regarding bills of lading in the Tilly Russ [1984] ECR 2417). 44. In my judgment, insurance, including liability insurance in respect of maritime matters is a matter of international trade or commerce. It is so closely allied to the trading and shipping of goods that it is part and parcel of international trade and the price of goods is regularly expressed by reference to it -- in terms such as "C & F" or "CIF". P & I insurance is so intimately connected with the carriage of goods and commerce that it forms part of it for the purposes of Article 23, whether or not there is urgency in concluding contracts, which LDFS suggested was the rationale for the subparagraph. Since the cover here is akin to crew cover and involved the joint entry of LDFS on a much wider form of cover for Festival, the usage in question is one which relates to Club covers as a whole and, in my judgment is undoubtedly one which is well recognised in international trade or commerce and is certainly one of which, on the evidence, Ferrari was well aware." English courts have not yet had occasion to express their opinion on "confirmation of orders to which general conditions are attached" under Regulation 44/2001/EC, although decisions are in line with the general principle stated in Segoura; in Lafarge Plasterboard Ltd v Fritz Martin Peters Bauunternehmung GmbH & Co KG [2000] 2 Lloyd's Rep 689, following the service of a claim form by LP, an English company, on FP, a German company, FP applied for a declaration that the English courts did not possess jurisdiction by virtue of the Brussels Convention on Jurisdiction

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and Enforcement of Judgments in Civil and Commercial Matters 1968 Art. 2. LP maintained that the English courts did possess jurisdiction by virtue of Art. 17 under which Art. 2 did not apply if the parties had agreed otherwise. LP contended that (1) LP's standard terms and conditions, which had been printed on the reverse of each EC purchase order submitted to FP, had formed part of the contract agreed between the parties, and (2) the continuing trading relationship between the parties had been based upon LP's conditions. Peter Bowsher QC held, granting the application and setting aside the claim form, that (1) the requirement for an "agreement in writing" as provided for by Art. 17 would not be satisfied by the mere printing of a jurisdiction clause on the reverse of an order form since there would be no guarantee that the other party had actually consented to the clause. Article 17 would only be satisfied if a contract signed by both parties made specific reference to the conditions, Estasis Salotti di Colzani Aimo e Gianmario Colzani v RUWA Polstereimaschinen GmbH (Case 24/76) [1976] ECR 1831 applied, and (2) LP's reliance upon Segoura was misplaced since in Segoura the agreement in question had been an oral one and the relationship could not be said to have been based upon the conditions of a single party because LP's conditions differed in their EC purchase orders and their consignment notes. Furthermore, upon receipt of an order, FP would dispatch an order confirmation containing details of FP's own terms and conditions. It was not contrary to good faith for F to deny the existence of a jurisdiction agreement.

2.2.25.5 Applicability of Article 23 vis-à-vis third states?

Article 23 of Regulation 44/2001/EC, of course, applies only to the Courts of Member States. English Courts are commonly called upon to consider situations in which (a) the parties have agreed to the jurisdiction (exclusive or non-exclusive) of the courts of a non-Member State (not otherwise a party to the Brussels or Lugano Conventions), or (b) the defendant argues that the claim would more appropriately be resolved in a non-Member State notwithstanding an English choice of court agreement meeting the requirements of Art. 23. Prior to the decision of the Court of Justice in Owusu v Jackson, Case C-281/02 [2005] QB 801, the practice of the English Courts in situation (b) was to grant a stay of the English proceedings if, but only if, strong reason was shown for doing so. In light of the Owusu decision, it is extremely doubtful whether the English Court retains that power, although the point was left open by Gloster J in Antec International Ltd v Biosafety USA Inc. [2006] EWHC 47 (Comm.) The power of the English Courts to suspend proceedings against a defendant domiciled in a Member State to give effect to a non-Member State choice of court provision was recently considered by Colman J in Konkola Copper Mines v Coromin [2005] EWHC

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898 (Comm.) (approved, without addressing this point, at [2006] 1 Lloyd's Rep. 410). Colman J stated: "85. Owusu: Discussion 86. The present case shares with Owusu two important features. 87. First, the material choice as to jurisdiction was between the courts of a Convention State and the courts of a non-Convention State. Secondly, the methodology for resolving that choice was either the strict jurisdictional regime of the Convention (Article 2) or the discretionary regime of the Common Law. The ECJ rejected the latter methodology in Owusu because (i) there was no principle of application of the Convention which confined it to resolving jurisdictional location as between the courts only of the states of Contracting Parties but extended to situations where the choice involved the courts of non-Contracting Parties. Second, the discretionary methodology of the Common Law was disallowed because it was inconsistent with the objectives underlying the Convention to the effect that jurisdiction should be certain and predictable. This second consideration goes to the intrinsic character of the methodology and is strongly identified in the Opinion of Advocate General Leger thus: 'First, by allowing the court seised the opportunity to decline – in a purely discretionary manner – to exercise the jurisdiction which it derives from a provision of the Convention, such as Article 2, the doctrine of forum non conveniens seriously affects the predictability of the effects of the jurisdiction rules laid down by the Convention, in particular the rule in Article 2. As already pointed out, that predictability of the jurisdiction rules constitutes the only way of ensuring observance of the principle of legal certainty and ensuring greater legal protection for people established in the Community, in accordance with the objectives pursued by the Convention. Any impact of that kind on the predictability of the jurisdiction rules laid down by the Convention, in particular in Article 2 (which is a general jurisdiction rule) thus ultimately detracts from the effectiveness of the Convention. In that connection, it is important to bear in mind that the Convention is largely inspired within the civil law system, which attaches particular importance to the predictability and inviolability of rules on jurisdiction. That dimension has a lower profile in the common law system, since the application of the rules in force is approached in a somewhat more flexible manner and on a case-by-case basis. In that way, the forum non conveniens doctrine fits easily within the common law system, since it grants the court

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seised the power to exercise a discretion in considering whether or not it is appropriate to exercise the jurisdiction vested in it. It is therefore clear that that doctrine is hardly compatible with the spirit of the Convention.' 88. There is, however, a difference between the Convention methodology potentially applicable in circumstances where the defendant is domiciled in a Member State but there is no applicable jurisdiction clause and it is only forum non conveniens which would provide a basis for any other forum in a non-Contracting State and that potentially applicable where there is a foreign jurisdiction clause relating to a non-Contracting state. In the former case there is simply no provision in the Convention that deals with forum non conveniens, whereas in the latter case there is Article 17 (Convention)/Article 23 (Judgments Regulation) which provides for the court in a member state selected by the jurisdiction clause to have exclusive jurisdiction. It could therefore be said that those provisions reflect an underlying policy to give effect at least to jurisdiction agreements relating to courts within Member States in preference to the domicile rule. The question therefore arises why Article 2 should not also yield to an analogous rule in relation to jurisdiction clauses which do not relate to the courts of Member States. 89. There is authority in support of the proposition that the court of a Member State can give effect to a jurisdiction clause in favour of the court of a non-Member State provided that such clause is valid so as to deprive the Member State of jurisdiction in accordance with that State's own conflicts rules. Thus in the Schlosser Report at paragraph 176 it is stated: '(a) In cases where parties agree to bring their disputes before the courts of a State which is not a party to the 1968 Convention there is obviously nothing in the 1968 Convention to prevent such courts from declaring themselves competent, if their law recognises the validity of such an agreement. The only question is whether and, if so, in what form such agreements are capable of depriving Community courts of jurisdiction which is stated by the 1968 Convention to be exclusive or concurrent. There is nothing in the 1968 Convention to support the conclusion that such agreements must be admissible in principle. However, the 1968 Convention does not contain any rules as to their validity either. If a court within the Community is applied to despite such an agreement, its decision on the validity of the agreement depriving it of jurisdiction must be taken in accordance with its own lex fori. In so far as the local rules of conflict of laws support the authority of provisions of foreign law, the latter will apply. If, when these tests are applied, the agreement is found to be invalid, then the jurisdictional provisions of the 1968 Convention become applicable.'

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90. The sense of this observation appears to be that, in cases where there has been an agreement to refer disputes to a court in a non-Member State, the court seised should apply its own conflicts rules to determine two aspects of such an agreement. i) whether it is valid in the sense of being enforceable; ii) whether effect should be given to it in the case in question. 91. Although this passage speaks of the "decision on the validity" of such an agreement, the last two sentences refer to applicability and do appear to relate to the conflict rules which decide when such an agreement, having been held to be valid, should be enforced. However, it is further indicated that, if the court seised holds that effect should not be given to the agreement, then the jurisdictional rules of the Convention must be applied. These clearly primarily include the domicile rule. 92. This passage was referred to by the ECJ in Coreck Maritime Gmbh v Handelsveem BV [2000] ECR I-9337. In that case the holders of bills of lading and cargo owners and their insurers brought claims against the shipowners and time charterers of a vessel in the Rotterdam court for damage to a cargo of groundnut kernels. The shipowners were domiciled in Russia and the time charterers, Coreck, were domiciled in Hamburg. The bills of lading contained a jurisdiction clause – 'any dispute arising under this Bill of Lading shall be decided in the country where the carrier has his principal place of business …' Coreck submitted that the Rotterdam court should decline jurisdiction on two distinct grounds: (i) Article 2 and (ii) Article 17. As to (i) it was domiciled in Hamburg where it had its principal place of business and, as to (ii), there was a binding agreement in the bills of lading as to jurisdiction. The Rotterdam court refused to decline jurisdiction and its decision was upheld on appeal. The Dutch court held that because there were two possible carriers it was uncertain which was the relevant principal place of business. This conclusion was upheld on appeal but the Dutch High Court on appeal put a number of questions to the ECJ including: '(2) Does Article 17 of the Brussels Convention also govern the validity, as against a third party holding a bill of lading, of a clause which specifies as the forum having jurisdiction to settle disputes 'under this Bill of Lading' the courts of the place where the carrier has his 'principal place of business' and which is laid down in a bill of lading also containing an 'identity of carrier' clause, that bill of lading being issued for the purposes of the carriage of the goods, where

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(a) the shipper and one of the possible carriers are not established in a Contracting State and (b) the second possible carrier is indeed established in a Contracting State but it is not certain whether his 'principal place of business' is situated in that State or in a State which is not a party to the Convention?' 93. The ECJ decided that it was for the Dutch court to determine the validity and effect of the jurisdiction clause by reference to its own conflicts rules. Specifically it said this: 'As the wording of the first sentence of the first paragraph of Article 17 of the Convention itself makes clear, that provision only applies where the twofold condition is satisfied that, first, at least one of the parties to the contract is domiciled in a Contracting State and, secondly, the jurisdiction clause designates a court of the courts of a Contracting State. So, that rule, which owes its existence to the fact that the Convention is intended to facilitate the mutual recognition and enforcement of judicial decisions, lays down a requirement as to precision which the jurisdiction clause must satisfy. In relation to the first condition, the first paragraph of Article 53 of the Convention provides that the seat of a company is to be treated as its domicile for the purposes of the Convention. Under that provision, the court seised must, in order to determine that seat, apply its rules of private international law. Consequently, the criteria for identifying the seat of a legal person and particularly for determining the significance of the principal place of business in that process must be established by the national law which is applicable under the conflict of laws rules of the court seised. As to the second condition, Article 17 of the Convention does not apply to clauses designating a court in a third country. A court situated in a Contracting State must, if it is seised notwithstanding such a jurisdiction clause, assess the validity of the clause according to the applicable law, including conflict of laws rules, where it sits (Report by Professor Schlosser on the Convention of 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on Jurisdiction and the enforcement of judgments in Civil and Commercial matters and to the Protocol on its interpretation by the Court of Justice, OJ 1979 C 59, p71, paragraph 176).'

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94. It is to be observed that no question was addressed to the ECJ as to whether effect should be given to the domicile rule (relied on by Coreck) if it were decided that (i) there was a valid jurisdiction clause and (ii) Article 17 did not apply because the designated jurisdiction was in a non-Member State. 95. Accordingly, this decision does not go far enough to solve the problem in the present case. 96. In Arkwright Mutual Insurance Co v Bryanston Insurance Co Ltd [1990] 2 QB 649 Potter J. had to consider an argument that in the judgment of Hobhouse J. in Berisford (S&W) Plc v New Hampshire Insurance Co [1990] 2 QB 631 at p642-643, that judge had illogically considered that where the Convention provided grounds for jurisdiction there was no discretion to stay on the grounds of forum non conveniens whereas there was a discretion to stay on the grounds of a foreign jurisdiction clause. Hobhouse J. had observed: 'Further the Convention does not preclude the courts of a contracting state from applying principles such as those stated in the Aratra Potato Co, case (The El Amria) [1981] 2 Lloyd's Rep 119 where its jurisdiction is being sought to be excluded in favour of a non-contracting state. Professor Schlosser says, at para 176: 'If a court within the Community is applied to despite such an agreement, its decision on the validity of the agreement depriving it of jurisdiction must be taken in accordance with its own lex fori.'' 97. At p.660 Potter J in considering this observation in the course of deciding whether similar reasoning applied to a stay on the grounds of lis alibi pendens, stated: 'Third, Mr Ruttle suggests that Hobhouse J. overlooked the illogicality of recognising (as he did) a discretion to stay on the basis of a foreign jurisdiction clause while refusing (as he did) to recognise a general discretion to stay on grounds of forum non conveniens. This criticism does not seem to me to be justified. While the judge did not deal with it in terms, it seems clear that he took the view that, far from being logical, the distinction is to be found within the Convention itself. The Convention clearly recognises the concept of jurisdiction by consent (see Article 17). Further, the report of Professor Schlosser (see Official Journal 1979, No. C59, pp 123 and 124, paras 174 and 176) indicates the logic and propriety of giving effect to pre-dispute agreements of the parties which deprive community courts of jurisdiction (whether stated by the convention to be exclusive or concurrent), according to the lex fori and/or local rules of conflict of laws; however it gives

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no indication in favour of discretionary stays on other grounds. The only indication which can be gleaned from the Schlosser report seems to me to be unfavourable towards the exercise of such a discretion, albeit it is not specifically dealt with: see paras 176 et seq of the Schlosser report, discussed by Hobhouse J. at p643.' 98. At p663 Potter J. further distinguished between the approach of the Convention to broad discretionary concepts such as forum non conveniens and that to the more certain character of jurisdiction clauses: 'In the case of articles 16 and 17, the Convention deals with particular features of the action concerned in respect of which it recognises as a matter of principle that (a) the status and/or nature of the subject matter of the action and (b) the free agreement or consent of the parties as to forum, transcend and otherwise mandatory system and structure of the Convention founded on the defendant's domicile and make it appropriate for one particular jurisdiction only to hear the case. In the case of article 21 (lis pendens), the Convention does not identify the peculiar suitability of any particular court to hear the action by reference to its subject matter or the choice of the parties; nor does it identify any discretion based on cost, convenience or "real connection". It simply requires any Community court to decline jurisdiction or stay an action where another Community court is already seised of it. This seems to me no more than a simple order of priority, imposed as a necessary aspect of the certain and orderly regime of jurisdiction and enforcement in and between the courts of the Community. It does not seem to me a persuasive reason for holding that the Convention contemplates or legitimises an additional and discretionary power, based largely on cost and convenience, to stay in favour of a non-Community court against a claimant who has come to a court within the Community to try his dispute in accordance with a right apparently given and a requirement apparently imposed by the Convention on the basis of the defendants' domicile. In this respect I construe the Convention as less concerned with comity than with certainty.' 99. This characteristic of cases involving foreign jurisdiction clauses is, in my judgment, an important feature of such cases which distinguishes them from forum non conveniens cases. The Convention by Article 17 recognises that character of certainty and party autonomy by superimposing it on the domicile rule. The Schlosser Report contemplates that the Convention will continue to apply unless the effect of the conflicts rules of the court seised leads to the application of a jurisdiction agreement relating to a non-Member State. However, it does not suggest that the methodology of the local conflicts rules for deciding whether to give effect to the jurisdiction agreement must have any particular

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characteristic. In particular, there is nothing in Schlosser which suggests that it is necessary to evaluate the intrinsic quality of those rules by reference to certainty or predictability of application or to the general objectives of the Convention. It may be that Professor Schlosser had not directed his mind to the fact that under English conflicts rules there was residual discretion whether to enforce perfectly valid and binding jurisdiction agreements in accordance with the principles in The El Amria, supra, by reference to considerations in some respects similar to those applicable to the forum non conveniens doctrine. Nevertheless, I do not consider that it is now open either to the English courts or to the ECJ to re-write Schlosser so as to import ground rules analogous to the considerations in Owusu which should govern the methodology of the conflicts rules of the court seised. In as much as the Convention is to be interpreted in accordance with the Schlosser Report, it is by reference to that construction alone that the English courts need be concerned. 100. I note that it has been held by the Cour d'Appel of Versailles in Bruno v Societe Citibank, (1991), referred to in Dicey & Morris, The Conflict of Laws, 13th Edn para 12-090 n.66, that if a defendant is domiciled in a Contacting State, a jurisdiction clause conferring jurisdiction on the courts of a non-Contracting State is ineffective and the domicile rule in Article 2 prevails. This approach necessarily involves that because the Convention makes no express provision for such jurisdiction clauses, the only jurisdiction clauses to which effect can be given are those which are within Article 17. However, this very formalistic approach cannot be based on the need to avoid uncertainty, so much emphasised by the ECJ in Owusu, supra, but on the implicit assumption that the courts of Contracting States should respect party autonomy only if that is expressed in terms of jurisdiction in the Courts of Contracting States, a limitation which, apart from being inconsistent with the passage from Schlosser at para 176, would appear to have no conceptual foundation. 101. I therefore hold that Owusu has not disturbed the approach to the applicability of foreign jurisdiction clauses explained in The El Amria confirmed in Donohue v Armco, supra. The view expressed in Dicey & Morris, 13th Edn, para 12-090, is therefore, in my judgment, correct." This decision reflects commercial common sense (giving effect to the fundamental principle of party autonomy) and has been welcomed by practitioners and commentators alike. It is, therefore, a matter of great concern that the recent opinion of the Court of Justice as to the competence of the Community to conclude the new Lugano Convention (7 February 2006) might be taken to suggest that, except in the case of an international

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convention, derogation from jurisdiction based on the defendant's domicile under Art. 2 of Regulation 44/2001/EC is not possible even in cases analagous to Arts. 22 and 23 of the Regulation (see Opinion, Art. 153). Although the possible future accession by the European Community to the Hague Choice of Court Convention may resolve this issue, that statement is difficult to reconcile with the approach of the Schlosser Report and of the Court of Justice in Coreck (as well as the Court's approach to an arbitration clause in the Van Uden (Case C-391/95) [1998] ECR I-7091, para. 24.

2.2.26 How does Article 26 function, in particular in comparison with Article 19 of Regulation 1348/2000/EC?

Article 26.2 of Regulation 44/2001/EC will, in the near future, be completely superseded by Article 19 of Regulation 1348/2000/EC (the "Service Regulation), which entered into force on 31 May 2001. The provisions of both are relatively uncontroversial, and the changes made by Article 19 (i.e. where the document has to be served within the territory of a Member State) are dealt with by paras. A1 and 3 of Practice Direction (Service Out of the Jurisdiction) of the Civil Procedure Rules, PD6B. Article 26 of Regulation 44/2001/EC (formerly Article 20 of the Brussels Convention) has been a rare sight in English litigation. EMI Records Ltd v Modern Music Karl-Ulrich Walterbach GmbH [1992] Q.B. 115 was concerned with whether an ex parte application granted by a foreign (German) court without prior notice or service of documents on the defendants was a judgment within the Brussels Convention. In relation to the provisions of Article 20 of the Brussels Convention, Hobhouse J. stated [at p.119-120]: "Titles I and II deal with the scope of the Convention and the jurisdiction of courts in Convention countries. Part of Title II is article 20 which makes provision for the protection of parties who are not present before the court. The first paragraph of article 20 deals with questions of jurisdiction which either were or should have been present to the mind of the court in Berlin and are matters solely for them and I will say no more about it. The second paragraph says that the court shall stay the proceedings so long as it is not shown that the defendant has been able to receive the document instituting the proceedings or an equivalent document in sufficient time to enable him to arrange for his defence and that all necessary steps have been taken to this end. I mention this because this dovetails in with part of the provisions of Title III and also because it was treated as significant by Mr. P. Jenard of the Belgian Ministry of Foreign Affairs and External Trade in his report on the Convention of 1968 and the Protocol of 1971 in the Official Journal of the European Communities, vol. 22, 5 March 1979 (O.J.) 1979 C59(1). There, dealing with article 27, he said:

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'Looking at the second paragraph of article 20 which lays down that the court of the state in which judgment is given must stay the proceedings if the document instituting the proceedings is not served on the defendant in sufficient time it might be assumed that article 27(2) would apply only in exceptional cases. It must not be forgotten, however, that the second paragraph of article 20 requires the court of the state in which judgment is given to stay the proceedings only when the defendant is domiciled in another contracting state.' He also stresses that this is one of the features of the Convention which justifies the summary procedure for registration which exists under Title III and the requirement that contracting states give effect to that summary procedure. It goes without saying that this order of the German court was not made in proceedings which met the requirements of article 20 because the German court did not stay proceedings even though the defendant had not received any document instituting the proceedings. There was no document instituting the proceedings which was served or attempted to be served upon the relevant defendant, let alone a document which was served in sufficient time to enable him to arrange his defence to the application that was made. That of course is not a comment which outlaws ex parte proceedings but it does indicate that ex parte proceedings are outside the contemplation of the scheme of the Convention."

2.2.27 Effect and functioning of Article 31

[See below]

In particular:

2.2.27.1 Term of „provisional measures“. According to the practice of the courts of your Member State, do measures resulting in the provisional fulfilment of the claim fall within the ambit of “provisional measures”?10

Three limitations on the nature of the orders applied for have been read into the provisions of Article 31: 1) Orders must be those which are "intended to preserve a factual or legal situation so as to safeguard rights the recognition of which is otherwise sought from the court having jurisdiction as to the substance of the case" [Van Uden, para. 37].

10 According to the rulings of the ECJ (“van Uden”, “Mietz”) a provisional measure according to Article 31 can only be assumed when the repayment of the granted amount is guaranteed to the claimant for the case of the claimant being defeated in the proceedings of the main action. Are there any opinions of the judicial practice or legal writers concerning the meaning of “guaranteed”? Does it only mean the existence of a substantive claim for a payment or does it mean the obligation of the claimant to grant sufficient securities?

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2) There must be a "real connecting link" between England and the subject matter of the measures sought (see below at 2.2.27.2)[Van Uden, para. 40]. 3) For the measure to be counted as provisional, it must include a guarantee of repayment in the event of a substantive claim being unsuccessful, and the measure itself must be restricted to specific assets located within the jurisdiction of the English courts [ibid In England, this third requirement necessarily entails an obligation on the claimant to guarantee, in the strict sense of the word, repayment. Wermuth v Wermuth [2003] EWCA Civ 50 (already referred to at 1.3.1 above) is a case on the now defunct "Brussels II" Regulation 1347/2000/EC, Article 12 of which is identical in substance to Article 31 of Regulation 44/2001/EC, and so bears directly on the point. In relation to Article 12 (on an application for maintenance pending suit), the Court of Appeal discussed its effect on English law in detail [at paras 21-25]: "21 So what then is the extent and the effect of article 12? 22 I come now to the rival submissions. Mr Mostyn took us through the terms of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters ("Brussels I") (both in its old form as adopted by the then six member states in 1968 and in its modern replacement, namely Council Regulation (EC) No 44/2001) and particularly articles 21 and 24 of the Convention and articles 27 and 31 of the Regulation which are the provisions matching articles 11 and 12 of Brussels II. The relevance of the mirror provisions in Brussels I is twofold: first Brussels I and not Brussels II is concerned with jurisdiction and enforcement in relation to maintenance. Second the report of Dr Borras confirms that article 12 was modelled on article 24 of the 1968 Convention and accordingly decisions on the construction of article 24 are directly in point. He prefaced his review of decided cases by reference to a published work of Lawrence Collins J, The Civil Jurisdiction and Judgments Act 1982 (1983), where, at p 99, critical comment is directed to excessive claims to jurisdiction founded on the provisional measures exception. He also derives support from Jaffey on the Conflict of Laws, 2nd ed (2002), p 139 where the authors state that article 31 of the Brussels I Regulation. 'applies to measures which are intended to preserve a factual or legal situation in one member state so as to safeguard rights which are the subject matter of litigation in the court of another member state which has jurisdiction as to the substance of the matter.' 23 On the same page the authors write:

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'A measure does not come within the scope of article 31 if its provisional character is not guaranteed; a court order requiring the defendant to make an unconditional interim payment cannot be a provisional measure for the purposes of article 31 unless, if the claimant is unsuccessful, the defendant can obtain repayment.' 24 The authorities for these propositions are first Reichert v Dresdner Bank AG (Case C-261/90) [1992] ECR I-2149. In that authority Mr Mostyn relies upon p 2184, paras 32 and 34: '32. The court has already declared in the judgment in de Cavel v de Cavel (Case 143/78) [1979] ECR 1055, 1066, para 8, that as provisional or protective measures may serve to safeguard a variety of rights, their inclusion in the scope of the Convention is determined not by their own nature but by the nature of the rights which they serve to protect. It *949 added, at p 1067, para 9 of that judgment, that the provisions of article 24 of the Convention cannot be relied upon to bring within the scope of the Convention provisional or protective measures relating to matters which are excluded therefrom' '34. The expression 'provisional, including protective, measures' within the meaning of article 24 must therefore be understood as referring to measures which, in matters within the scope of the Convention, are intended to preserve a factual or legal situation so as to safeguard rights the recognition of which is sought elsewhere from the court having jurisdiction as to the substance of the matter.' 25 The authority for the second proposition is Van Uden Maritime BV (trading as Van Uden Africa Line) v Kommanditgesellschaft in Firma Deco-Line (Case C-391/95) [1999] QB 1225. From this authority it is sufficient to cite only pp 1257-1258, paras 46 and 47: '46. However, an order for interim payment of a sum of money is, by its very nature, such that it may pre-empt the decision on the substance of the case. If, moreover, the claimant were entitled to secure interim payment of a contractual consideration before the courts of the place where he is himself domiciled, where those courts have no jurisdiction over the substance of the case under articles 2 to 18 of the Convention, and thereafter to have the order in question recognised and enforced in the defendant's state, the rules of jurisdiction laid down by the Convention could be circumvented.' '47. Consequently, interim payment of a contractual consideration does not constitute a provisional measure within the meaning of

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article 24 unless, first, repayment to the defendant of the sum awarded is guaranteed if the claimant is unsuccessful as regards the substance of his claim and, secondly, the measure sought relates only to specific assets of the defendant located or to be located within the confines of the territorial jurisdiction of the court to which application is made.' Lawrence Collins J. went on to remark that [at para. 42]: "Ever since Brussels I came into force in 1973 there has been controversy over whether orders for provisional payments (especially of damages) are within the scope of article 24. The principal objections to them were (a) that they involved a preliminary determination of the merits of the case by the court purporting to exercise jurisdiction under article 24, when ex hypothesi the jurisdiction to determine the merits was vested in the court with jurisdiction over the substance; and (b) that in substance such orders granted the party some or all of the relief which he was only entitled to seek in the country with jurisdiction over the substance. The second objection, but not the first, has been met (at least in cases relating to contractual claims) by the ruling in the Van Uden Maritime BV case [1999] QB 1225, 1258, para 47 (confirmed in Mietz v Intership Yachting Sneek BV (Case C-99/96) [1999] ECR I-2277) that the court taking provisional measures must impose conditions or stipulations so as to guarantee their provisional or protective character, it must ensure that repayment to the defendant is assured if the claimant is ultimately unsuccessful in the main proceedings abroad, and so not pre-empt the effect of the ultimate decision of the court with jurisdiction over the substance." In Comet Group PLC v Unika Computer SA [2003] ILPr 1 QB the court ruled on an application by the claimant ('C') for a declaration that an order made by a French court was not entitled to recognition or enforcement in the English courts and an injunction requiring the defendant ('U') to apply to the French court for the order to be discharged. C, an English company, contracted to purchase computers from U, a French company. The contract was governed by English law and the parties submitted to the exclusive jurisdiction of the English court. C considered that the computers supplied by U were defective and sent them back to U. C did not pay U invoices totaling over £500,000 because it claimed a set-off of a larger sum in respect of the defective computers. U disputed C's right to a set-off and claimed that C was in breach of contractual conditions regarding the return of goods. C's case was that under the contract U was obliged to collect returned products. U threatened French proceedings. C argued that the French courts had no jurisdiction because of the exclusive jurisdiction clause. U issued a French claim form and after a hearing the French court

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gave a provisional judgment in favour of U relying on Article 31 Regulation 44/2001/EC. C claimed a declaration that the order of the French court was not entitled to recognition or enforcement in England and an injunction requiring U to apply to discharge the order. It was common ground that the English court had exclusive jurisdiction over the substance of U's claim. The issue was whether the French judgment was a provisional or protective measure under Article 31. The court reasoned that the effect of the decision Van Uden Maritime BV v Kommanditgesellschaft In Firma Deco-Line & Anor (Case C-391/95) [1998] ECR I-7091 was that a national court should not grant provisional or protective measures under Article 31 consisting of an order for interim payment of contractual consideration unless repayment was guaranteed if the claimant was ultimately unsuccessful and the measures sought related only to specific assets of the defendant located within the jurisdiction of the national court. The court found that the order of the French court did not satisfy those requirements. It contained no guarantee of repayment and did not relate to specific assets of C in France. The order had to provide for a guarantee and the failure so to provide could not be cured by the offer of a guarantee outside the order. The court concluded that because the measure was thus not to be regarded as a provisional measure within the meaning of Article 31 it could not be the subject of an enforcement order under the Brussels I Regulation, with reference to Mietz v Intership Yachting Sneek BV (Case C-99/96) [1999] ECR I-2277, and the court granted a declaration to that effect.

2.2.27.2 Territorial connection with the State where the measure was rendered11

One question which has been raised by commentators following the Van Uden case, although not yet resolved in any decision of the English Courts, is whether a worldwide freezing injunction (preventing the defendant from disposing or dealing with his assets worldwide) is capable of satisfying the territorial connection requirement. Thus, one commentator suggests: "Worldwide freezing orders granted in support of proceedings between Contracting States to the Brussels or Lugano Convention have been upheld by the Court of Appeal on more than one

11 In the judgments quoted above, the ECJ has set up the requirement that a provisional measure issued by a court that has no jurisdiction on the proceedings of the main action must have a territorial connection to the State of the forum. The question is, whether this criterion is also capable in cases, where the provisional measure shall impose or interdict an action to the opponent, e. g. not to distribute goods, which have been produced by infringements of the legal protection of industrial property. Are there any experiences concerning such cases in your State?

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occasion. But no English case since Van Uden has directly addressed the point whether the reasoning in that case deprives the English courts of the power to grant worldwide freezing injunctions in support of proceedings in other Member or Contracting States. The answer would appear to depend on whether one should look at the form or effect of the freezing injunction … the balance of authority and argument looks to be evenly weighed (sic) and the continued use of the worldwide freezing injunction in this context may be open to question." [A. Dickinson in Andenas, Hess, Oberhammer (ed.), op. cit. (see 2.2.24), at 296] Nevertheless, JP Morgan v Primacom Ltd [2005] EWHC (Comm.), Cooke J (in upholding interim injunction restraining a German defendant from disposing of a Dutch company) appeared to adopt a less restrictive approach to the requirement of territorial connection. He stated: "69] As I have refused a stay of the injunction proceedings, the interim injunctions already granted in relation to the disposal of assets, and in particular Multikabel, remain in being. [70] If I had been persuaded that the injunction proceedings should be stayed the issue would then have arisen as to whether or not this court should continue the interim injunctions as protective measures under art 31. In Van Uden Maritime BV (t/a Van Uden Africa Line) v Kommanditgesellschaft in Firma Deco-Line [1999] 1 All ER (Comm) 385, [1999] QB 1225 the ECJ considered the basis upon which a court might grant protective measures. At para 19 the point is made that, where a court has jurisdiction as to the substance of the case under the terms of the convention (now the Regulations) it also has jurisdiction to order any provisional or protective measures which may prove necessary. On this basis JP Morgan argues that the protective measures are available because the English court retains substantive jurisdiction and thus jurisdiction to order protective measures, even if it stays the matter and that it should, in the circumstances of this case, exercise that jurisdiction. Alternatively, if the court has no jurisdiction over the substance of the case, there are sufficient links to justify the granting of protective measures in accordance with decided authority. Primacom resists the maintenance of injunctions on both bases. [71] The terms of art 27.1 and 27.2 draw a distinction between the situation before the court first seised decides on its own jurisdiction and the position thereafter. Under art 27.1, the court second seised must stay its proceedings until such time as the court first seised makes its own decision on jurisdiction. Under art 27.2 however, once the jurisdiction of the court first seised is

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established by that court, any court seised thereafter must decline jurisdiction. [72] In my judgment this distinction is significant with the result that, until the court first seised does decide upon its own jurisdiction, proceedings are stayed by the court second seised, even though it maintains convention jurisdiction until the first court’s decision. If the court first seised then declines jurisdiction, the court second seised can exercise the convention jurisdiction which it already had. Jurisdiction lies with the English court here by virtue of the exclusive jurisdiction clause and convention jurisdiction is thus not lost until it declines jurisdiction on the basis of the first court’s decision that it has convention jurisdiction. It follows therefore that the English court can grant protective measures. [73] Regardless of substantive jurisdiction resting in the English court, art 31 provides that this court can order protective measures even if the courts of another member state have jurisdiction as to the substance of the matter. The decision in the Van Uden case [1999] 1 All ER (Comm) 385 at 414, [1999] QB 1225 at 1257 (para 40) sets out the need for the existence of a real connecting link between the subject matter of the measures sought and the territorial jurisdiction of the state of the court before which the measures are sought. The decision is based upon the premise that this is an exorbitant jurisdiction which is to be exercised with great caution. The courts of the place where the assets subject to the measures sought are located are usually the courts best able to assess the circumstances which might lead to the grant or refusal of the measures sought. [74] In Motorola Credit Corp v Uzan (No 2) [2003] EWCA Civ 752, [2004] 1 WLR 113, a case not involving convention jurisdiction, the Court of Appeal considered the circumstances in which a worldwide freezing injunction might be granted by the English courts where there was no substantive jurisdiction in relation to the underlying claims. Potter LJ referred (at [115]) to five considerations which appear to me to be of relevance to the exercise of jurisdiction under art 31. Those factors are as follows. (i) First, whether the making of the order will interfere with the management of the case in the primary court e.g. where the order is inconsistent with an order in the primary court or overlaps with it. As there is no contrary order in Germany, the point does not arise here. (ii) Second, whether it is the policy in the primary jurisdiction not to make orders of the kind sought. On that point there is no evidence in the present case. (iii) Third, whether there is a danger that the orders made will give rise to disharmony or confusion and/or risk of conflicting, inconsistent or overlapping orders in other jurisdictions, in particular in the court of the state where the

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person enjoined resides or where the assets affected are located. For much the same reasons that I have already given in relation to the arguments under arts 27 and 28, it does not seem to me that there is any real danger of this in the present case. (iv) Fourth, whether at the time the order is sought there is likely to be a potential conflict as to jurisdiction, rendering it inappropriate and inexpedient to make a worldwide order. As applied to the present case, this consideration is said to militate in favour of Primacom, in as much as there is a conflict on jurisdiction in both the English and German courts. (v) Fifth, whether in a case where jurisdiction is resisted and disobedience is to be expected, the court would be making an order which it could not enforce. There was no evidence here that Primacom would disobey any order of the English courts. [75] Multikabel is situated in the Netherlands whilst Primacom is in Germany. The SSLs consist of a number of banks in various jurisdictions. There is however a major connecting link to England in the SSFA itself and in its provisions relating to English law, exclusive English jurisdiction and England as the forum conveniens. This provides a strong link to the English courts which entitles this court to order protective measures, even though the threatened sale is by a German company of a Netherlands asset outside the territorial jurisdiction. Although, on the hypothesis under which art 31 falls to be considered, there is a conflict over jurisdiction, the conferring of jurisdiction on this court by agreement of the parties is a very strong factor in the consideration of the link to this court and the appropriateness of injunctions until the German courts have decided on their own jurisdiction. The existence of injunctions would in no way interfere with the German courts’ decision-making processes and would merely preserve the position until the German courts made their jurisdiction decisions, whereas, if the injunctions were lifted, there remains the possibility of a disposal in breach of the SSFA before the German courts have decided the position. [76] If therefore it had been necessary to consider an order under art 31, I would have made such an order and continued the injunctions already granted in respect of disposal of assets (and Multikabel in particular) until the determination by the German courts of their own jurisdiction. "

2.2.27.3 Problems in applying autonomous provisions on jurisdiction in cross-border transactions

The restrictions, designed to ensure the "provisional and reversible quality" of the measure itself that are subject to autonomous definitions are not unduly problematic; in England the grant of interim relief will generally require cross-undertakings in damages to be given in any event [see Briggs & Rees, op. cit., para. 6.09].

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For specific answers in relation to Article 31, see the other parts of 2.2.27.

2.2.27.4 Relation between interim protective measures and main proceedings

See above at 2.2.27.1.

2.2.27.5 Enforcement of provisional measures under national law12

Non-compliance by a party to proceedings with an interim order in the form of an injunction is a contempt of court, punishable by sequestration of assets, imprisonment or a fine (see, generally, D. Bean, Injunctions (London: Thomson Sweet & Maxwell, 8th ed., 2004, paras. 6.08 et seq.) A freezing injunction is in the form of an order made against defendants to the action; a non-party who is notified of the injunction, however, will be in contempt of court, on the ground that he has interfered with the course of justice, if he assists the respondent in the disposal of his assets [A-G v Times Newspapers [1992] 1 AC 191]. As Briggs & Rees note -at para. 6.03]: "For this reason, banks are commonly notified of the injunction before the ink is dry on the order. But because of the difficult position which this may put them in, the injunction and the manner in which it is to affect a non-party will be spelled out in the order in as much detail as possible." The Civil Procedure Rules, Part 25 contains a Practice Direction on Interim Injunctions, and attached to it is an example form on Freezing Injunctions (see below). Of course, a court holding in contempt a non-party, outside and not subject to the jurisdiction of the English court, for having been notified of the injunction but failing to act to prevent the defendant from breaching the order, would be extra-territorial, and therefore wrong. To make it clear to the extent that English courts have jurisdiction, the example notice, in addition, to several other grounds, significantly states that the terms of the order do not affect or concern anyone outside the

12 The provisional measures provided by the national legal systems are very different. The rules regarding the enforcement in the Member States are not applicable regarding provisional measures unknown to the national law. The problem has become a practical one in connection with the freezing order (Mareva Injunction) of the English law. This instrument prohibits the opponent from disposing over his assets. Infringements cause penalties because of contempt of court – even for third persons (e. g. banks running the account) that take part in these infringements. British courts add a clause to the world wide freezing order that persons who are not subject to the court’s jurisdiction are only covered, when this special order is declared enforceable abroad. What are the results of such a declaration of enforceability? Is there a possibility of enforcement in your State, when an English freezing order has been declared enforceable? To the national reporter of the UK: Do English courts demand to impose “contempt of court”-penalties on foreign banks because of account dispositions in the State of question after the declaration of enforcement of the freezing order?

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jurisdiction of the court until it is declared enforceable by or is enforced by a court in the relevant country, and then they are to affect him only to the extent that they have been declared enforceable or have been enforced. The full text of Part 16 of the example notice is set out below: "PARTIES OTHER THAN THE APPLICANT AND RESPONDENT 16. Effect of this order It is a contempt of court for any person notified of this order knowingly to assist in or permit a breach of this order. Any person doing so may be imprisoned, fined or have their assets seized. 17. Set off by banks This injunction does not prevent any bank from exercising any right of set off it may have in respect of any facility which it gave to the respondent before it was notified of this order. 18. Withdrawals by the Respondent No bank need enquire as to the application or proposed application of any money withdrawn by the Respondent if the withdrawal appears to be permitted by this order. [For worldwide injunction] 19. Persons outside England and Wales (1) Except as provided in paragraph (2) below, the terms of this order do not affect or concern anyone outside the jurisdiction of this court. (2) The terms of this order will affect the following persons in a country or state outside the jurisdiction of this court – (a) the Respondent or his officer or agent appointed by power of attorney; (b) any person who – (i) is subject to the jurisdiction of this court; (ii) has been given written notice of this order at his residence or place of business within the jurisdiction of this court; and (iii) is able to prevent acts or omissions outside the jurisdiction of this court which constitute or assist in a breach of the terms of this order; and (c) any other person, only to the extent that this order is declared enforceable by or is enforced by a court in that country or state.

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[For worldwide injunction] 20. Assets located outside England and Wales Nothing in this order shall, in respect of assets located outside England and Wales, prevent any third party from complying with – (1) what it reasonably believes to be its obligations, contractual or otherwise, under the laws and obligations of the country or state in which those assets are situated or under the proper law of any contract between itself and the Respondent; and (2) any orders of the courts of that country or state, provided that reasonable notice of any application for such an order is given to the Applicant’s solicitors." For further discussion of the position regarding enforcement of freezing injunctions against third parties, see note prepared by Andrew Dickinson, Solicitor Advocate, at the request of Professor Schlosser [attached].

2.2.28 Is there any case law relying on Article 24 Brussels I Convention (jurisdiction by appearance)?

The defendant, who wishes to contest the jurisdiction but to be held not to have entered an appearance under Article 24, may make his defence upon the merits of the claim at the same time. All that is required of him is that he raise the challenge to the jurisdiction at the first opportunity which is given to him under the procedural law of the court seised: see IBS Technologies (Pvt) Ltd v APM Technologies SA (No. 1), 7 April 2003. Continuing to appear and participate in the proceedings while still contesting jurisdiction does not amount to submission by appearance: Harada v Turner [2003] EWCA Civ 1695. As one commentator notes, "it is difficult to believe that this provision should now give rise to any practical difficulty" [Briggs & Rees, op. cit., para. 2.68]. This is borne out by a search of reported cases in England since Regulation 44/2001/EC came into force; none can be found dealing with Article 24.

3. Lis Pendens and Similar Proceedings

3.1 How does Article 27 work concerning the principle of lis pendens, particularly in the light of the case law of the ECJ and the courts of the Member States?

Cases before the English Courts raising issues in relation to Art. 27 of Regulation 44/2001/EC and its predecessor Art. 21 of the Brussels Convention are not uncommon. In general, the English Courts strive to give effect to the case law of the ECJ, however much they may be reluctant to do so. A prime example of this is provided by the decision of the High Court in JP Morgan v Primacom [2005]

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EWHC (Comm). In that case, the defendant Primacom issued proceedings seeking negative declaratory relief in the German Courts in apparent open disregard of an English choice of court provision in a loan facility agreement. Cooke J stated: [33] There is only one issue between the parties in relation to the application of this Article and that is the question whether or not the English and German proceedings involve the same cause of action. If they do, the German Courts are the courts first seised and it is incumbent upon the English Court to stay its proceedings until such time as the German Courts have decided upon their own jurisdiction, as provided by art 27.1. Once a decision has been reached by the German Courts, then if they decide that they have jurisdiction, the English Court is bound to decline jurisdiction in favour of those courts under art 27.2. [34] It is difficult to see how the German Courts could find that they are entitled to exercise jurisdiction in the face of the exclusive jurisdiction clause in the SSFA. It is common ground between the parties that clauses of this kind have an existence independent of the balance of the contract so that issues relating to the unenforceability of the substantive provisions of the SSFA do not affect the validity of the exclusive jurisdiction clause, as is plain from the decisions in Case C-269/95 Benincasa v Dentalkit Srl [1997] ECR I-3767, [1998] All ER (EC) 135 (at paras 28 and 29) and Case C-159/97 Transporti Castelletti v Trumpy [1999] ECR I-1597 (at para 48). Mr Ali Malek QC on behalf of Primacom maintained that it was clear that Primacom did contest the applicability of the jurisdiction clause from the very fact that proceedings had been commenced in Germany. He also suggested that there might be some public policy argument against the effectiveness of the clause but there was no German Law evidence of any kind suggesting that there were any arguments available to Primacom in this respect. [35] Nonetheless Mr Malek maintained that the German Courts were the courts first seised and that the principles enunciated by the European Court of Justice (ECJ) meant that this court must stay the three sets of English proceedings until the German Courts had determined their own jurisdiction in Mainz and Frankfurt. [36] Despite the arguments of Mr Carr QC for JP Morgan, I hold that this is the effect of the decision of the ECJ in Case C/116/02 Erich Gasser GmbH v MISAT Srl [2005] 1 QB 1, if the causes of action in the English and German proceedings are the same. The terms of paras 41-54 set out the rationale of art 27. Articles 27 and 28 are intended, in the interests of the proper administration of justice within the Community, to prevent parallel proceedings before the courts of different contracting states and to avoid conflicts between decisions which might result there from”. The rules are therefore 'designed to preclude, so far as possible and from the outset, the possibility of a situation arising such as that referred to in arts 27(3) of the Convention [art 34 (3) of the Regulation], that is to say the non recognition of a judgment on account of its irreconcilability with a judgment given in the proceedings between the same parties in the state in which recognition is sought.'

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[37] In para 51 reference is made to the possibility of disputes, which could arise as to the existence of an exclusive jurisdiction agreement of the kind found in the present case. If there is such a dispute so that there is doubt whether an agreement complies with the terms of art 23, such a dispute must be determined in the court first seised. In para 53 however reference is made to the situation where there is in truth no genuine argument to be raised with regard to the applicability of the exclusive jurisdiction clause in the following terms: 'Finally, the difficulties of the kind referred to by the UK Government stemming from delaying tactics by parties who, with the intention of delaying settlement of the substantive dispute, commence proceedings before a court which they know to lack jurisdiction by reason of the existence of a jurisdiction clause, are not such as to call into question in the interpretation of the Brussels Convention, as deduced by its wording and its purpose. The ECJ went on to find that the equivalent provision in the Brussels Convention to art 27 in the Regulation had to be interpreted as meaning that a court second seised, whose jurisdiction was claimed under an agreement conferring jurisdiction, had nonetheless to stay its proceedings until the court first seised had declared that it had no jurisdiction.' [38] It is therefore clear that the only issue which arises for me to decide under art 27 is the question whether or not the same cause of action is involved in one or more of the English and German proceedings. [39] The term 'cause of action' in art 27 is an independent autonomous term which is not to be confused with the use of the same term in English legal jargon. As pointed out in Case C-406/92 The Tatry [1994] ECR I-05439 at para 38, [1995] All ER (EC) 229, [1999] 2 WLR 181 and by Rix J in Glencore International AG v Shell International Trading and Shipping Co Ltd [1999] 2 Lloyds Reports 692 at p 694, [1999] 2 All ER (Comm) 922 the French and other versions of art 27 refer not simply to 'the same cause of action' but to two concepts – 'la meme objet et la meme cause'. The latter 'comprises the facts and the rule of law relied on as the basis of the action' whilst the former means 'the end the action has in view' according to paras 39 and 41 of the Tatry decision and as reinforced by the Court of Appeal in Haji Ioannou v Frangos [1999] 2 Lloyds Reports 337 at p 351. [40] Rix J in the Glencore decision stated that the court’s task in identifying the objet of any action was to identify objectively the essential issue raised between the parties to that action. [41] Mr Malek QC for Primacom contends that the facts and the rule of law relied on are the same in each of the different sets of proceedings, as is the end in view in each. All, he says, turn upon the question of the enforceability of the SSFA and that is enough for the purposes of art 27.

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[42] Mr Carr QC argued that the English and German proceedings did not involve the same cause, as neither the same facts nor the same rule of law were involved. He relied on the decision of the ECJ in Maersk Olie and A/S v Firma M De Haan (case C-39/02) [2005] 1 Lloyds Reports 210. At para 38 the court distinguished between the legal rule invoked as the basis of a claim for damages for a tortious act in damaging a pipeline and the legal rule which formed the basis of a limitation action and the establishment of a limitation fund under the International Convention relating to the Limitation of the Liability of Owners of Sea-Going Ships 1957 and the Netherlands legislation which gave effect to it. The expression “legal rule” or “rule of law” appears to mean the juridical basis upon which arguments as to the facts will take place so that, in investigating “cause” the court looks to the basic facts (whether in dispute or not) and the basic claimed rights and obligations of the parties to see if there is co-incidence between them in the actions in different countries, making due allowance for the specific form that proceedings may take in one national court with different classifications of rights and obligations from those in a different national court. With regard to the objet, the search is for “the end the action has in view” or the “essential issue raised between the parties.” [43] If consideration is given to the Declaratory Proceedings in England, it is clear that JP Morgan seeks a declaration that cl 7 of the SSFA is binding, that there has been an event of default in failure to pay interest and that a valid default notice has been served with the result that it is open to PAG to accelerate repayment of the entire loan. In the Mainz proceedings, Primacom is attempting to persuade the court that the interest provisions are unenforceable and that capital repayment cannot be accelerated in consequence. When looking at the objet, the end that both actions have in view is identical inasmuch as the essential issue raised between them on an objective basis is the enforceability of the interest provisions and its consequent effect upon other provisions in the agreement relating to default and the repayment of capital. [44] The only basis for distinguishing between the German proceedings and the Declaratory Proceeding is the issue of the “legal rule” or “rule of law”. The Declaratory proceedings will self-evidently proceed on the basis of applicable English law, where Primacom have not as yet put forward any answer to JP Morgan’s claim. The Mainz proceedings will however proceed on the assumption that the provisions of the contract are valid under English law but will consider issues of German public policy, in the light of German domestic law relating to immoral or unconscionable agreements. The question is whether or not the “legal rule” of each set of proceedings is the same or different in such circumstances. [45] Fundamentally, it is the rights and obligations of the parties in relation to the same facts which, in my judgment, matters here. Each court will be concerned with the respective rights and obligations of the parties, however those are classified and determined by the national courts of each country. I consider therefore that, notwithstanding the different approach to the question of enforceability of the interest provisions and the consequent effect, the Declaratory Proceedings and the Mainz proceedings do involve the same cause of action within the meaning of art 27.

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[46] If I had applied the test set out in Briggs and Rees, Civil Jurisdiction and Judgments at para 2.189, I would have come to a different conclusion, because it is there suggested that another way of determining this point is to ask whether a decision in one set of proceedings would be a conclusive answer to the questions raised in the other. A decision in the English Court would not answer the question which the German Courts have to consider as a matter of public policy. Equally, a decision by the German Courts will assume the validity of the SSFA under English law which, in the absence of any argument advanced to the contrary, is the conclusion which the English Court seems bound to reach. [47] It appears to me however that this is too narrow an approach, since otherwise it would be possible to argue that art 27 did not apply to proceedings where a national court’s decision, based on the application of its domestic law (which it found to be applicable under its rules of private international law) did not answer the question determinable by a different national court under its own law (which it regarded as applicable under its own rules of private international law). The way the claim is framed and the arguments in support of it may fall to be taken into account, but ultimately, the question must be seen broadly in terms of the judgment sought and not in terms of the issues raised on the way (see The Happy Fellow [1998] 1 Lloyd’s Reports 13 at pp 17-18 and, by way of example, The Sennar no 2 [1985] 2 All ER 104, [1985] 1 WLR 490, [1985] 1 Lloyd’s Reports 521). [48] I am mindful, in coming to my conclusion, of the possibility, however remote, that Primacom might succeed in maintaining German jurisdiction and that the Mainz Court might ultimately decide, in accordance with its Ordre Public that the interest provisions are unenforceable to a greater or lesser extent. Although Primacom would not seek to export the order as such, if faced with an action in England for damages for breach of the exclusive jurisdiction clause, it would undoubtedly argue that the Mainz Court’s decision ought to be recognised here. Issues would then arise under art 34.1 as to whether recognition of the Mainz Court’s decision, reached in breach of the exclusive jurisdiction clause as a matter of English law, and based on German public policy and contrary to the provisions of English law should be enforced or whether recognition of such an order or judgment would be manifestly contrary to public policy in this jurisdiction. [49] Despite these potential problems, I am driven to the conclusion, by reference to the ECJ decisions that the same cause of action is involved in these two sets of proceedings in relation to interest and that the requirements of legal certainty, comity, and trust in the judicial institutions in the Community require me to stay the Declaratory Proceedings under art 27.1 until such time as the Mainz court decides upon its own jurisdiction." Cooke J went on to hold that other English proceedings commenced by JP Morgan fell outside Art. 27 and refused to grant a stay under Art. 28, relying (inter alia) on the fact that the German proceedings appeared to have been brought in breach of contract.

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The decision in Primacom, involving a straightforward application of the Court of Justice's decision in the Gasser case, provides a good illustration of the determination of English judges to apply the lis alibi pendens provisions of Regulation 44/2001/EC in line with their understanding of the case law of the Court of Justice on this subject. That said, the decision provoked much concern among English practitioners, particularly those working in the financial markets, and was identified by several consultees as highlighting a perceived flaw in the Regulation framework, unduly diminishing party autonomy and the efficient implementation of commercial transactions. It should also be noted that Sir Anthony Clarke, the Master of the Rolls, recently commented on the Gasser decision in a speech on "The Differing Approach to Commercial Litigation in the European Court of Justice and the Courts of England and Wales" (Institute of Advanced Legal Studies, 23 February 2006) to the following effect: "[Lord] Jonathan Mance recognises that the decision in Gasser is imbued with pure European principle but observes that it promises problems for legitimate claimants and opportunities for those unwilling to meet their obligations. Article 21 (now article 27) adopts a simple test of chronological priority for the court first seised. The effect of Gasser is to give that court priority over the agreed jurisdiction, so that, until the court first seised has decided that there is indeed a binding jurisdiction clause in favour of the courts of another member state, the latter must decline jurisdiction in favour of the former and the former must accept jurisdiction. He says: 'It is at the practical efficacy of Art.17 (now Art.23) that the European Court's decision in Erich Gasser seriously strikes. London is one important elective jurisdiction. However, the decision is of far from parochial concern, and may even affect commercial parties' willingness to agree to litigate (as distinct from arbitrate) in Europe.' Jonathan Mance then contrasts the views of Advocate General Leger with those of the ECJ as follows: 'The Advocate General was M. Philippe Léger. In a comprehensive and nuanced Opinion he drew the analogy between exclusive jurisdiction under Art.16 (now Art.22) and Art.17 (now Art.23). In paras [57], [62] and [66]-[68], he pointed out that, if Art.21 prevailed, it would "seriously compromise" the utility of Art.17 and the legal certainty to which it contributed. He went on: "67... In effect, ... the party who, in violation of his obligations resulting from the agreed choice of jurisdiction, has first initiated proceedings before a tribunal which he knows to be incompetent could abusively delay the resolution of the dispute on the merits when he knows this would be unfavourable to him ... 68. This consequence is shocking as a matter of principle and risks encouraging delaying tactics...'

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The Advocate General also noted that the basic problem was one of tactical manoeuvring, not simply delay in some judicial systems. A party commencing proceedings in a country (State A) other than the country agreed (State B) would "use every internal means to delay the moment when the decision that this jurisdiction is incompetent becomes definitive" (para.[69]). The solution was to allow the court second seised to continue to exercise jurisdiction provided that it could establish the existence and application of the agreed choice of jurisdiction clause in a rigorous manner and beyond any possible doubt—any risk of contradictory decisions being thereby largely avoided) paras. [81-83]. The European Court reached very different conclusions: see [2004] 1 Lloyd's Rep. 222. As to question two, the court second seised must under Art.21 always defer to a court first seised, unless and until that court declares itself incompetent. There should be a clear and precise rule, in view of "the disputes which could arise as to the very existence of a genuine agreement between the parties" within Art.17. A court second seised is "in no case ... in a better position than the court first seised to *360 determine whether the latter has jurisdiction" (para. [48]). Practical implications were summarily dismissed: '53...the difficulties ... stemming from delaying tactics ... are not such as to call in question the interpretation of any provision of the Brussels Convention as deducted from its wording and purpose'. The court answered question three even more shortly, though with the Advocate General's support. An exception to Art.21 based on excessive delay was contrary to the letter, spirit and aim of the Convention (para. [70]). The Convention was necessarily based on mutual trust, and sought to ensure legal certainty (para. [72]. The court impliedly rejected the United Kingdom's fall-back suggestion that the court of State B could determine jurisdiction under and exclusive clause where (i) suit was issued in state A in bad faith to block any suit in State B and (ii) the court in State A had failed to adjudicate upon its own jurisdiction within a reasonable time. It may comfort theoreticians that the Community has rules of ideological purity and logical certainty. But the result can only be practical uncertainty with large scope for tactical manoeuvring. The irrebutable assumption that all national systems operate for the best shows the barrier on the Rhine between Strasbourg and Luxembourg concerns and thinking. Jonathan Mance expresses the view that the reasoning of the ECJ is in five critical respects unpersuasive: see pages 360-2. I will refer briefly to only three. His first point is that the ECJ's judgment seems ambivalent whether article 21 is subject to any exceptions. What about article 16? He asks the question: 'If Art. 16 is an exception, why should Art. 17, resting on party autonomy, be different? .... According to the Schlosser Report (para 22), not mentioned by the court, a court must "also of its own motion consider whether there exists an agreement on jurisdiction which excludes the court's jurisdiction and which is valid in accordance with article 17'.'

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His third point is that, whereas in some circumstances the court first seised may be better placed to rule on the question of jurisdiction, the reverse applies where the parties have chosen a jurisdiction. His fourth point (which is closely related to his third) is this: 'Fourthly, the 'legal certainty' so esteemed by the court consists apparently in knowing 'clearly and precisely which of the two national courts is to establish whether it has jurisdiction under the rules of the Convention' (paras 51 and 72). But the parties' commitment, when contracting, was that the chosen court should assume its exclusive jurisdiction without delay and without either party having to engage in litigation elsewhere to achieve this.' In conclusion Jonathan Mance suggests that in contrast to the ECJ's absolutist approach, the Advocate General's careful opinion offered a measured compromise. I must say that I agree with that." Based on responses during consultation, an amendment to Regulation 44/2001/EC to address the decision in Gasser would attract more support from English practitioners than any other proposal. The decision is seen as being out of touch with commercial and judicial reality. • The adoption of a uniform procedure for challenging jurisdiction, with short and uniform time limits (see 2.1.6 above). • A simple amendment to Art. 25 (by inserting the words "or Article 23" after "Article 22") to emphasise the duty of Member State courts to give effect to the derogating effect of exclusive jurisdiction agreements, consistently with the approach taken by the Hague Choice of Court Convention and (in relation to arbitration agreements) by the 1958 New York Convention. Short of an outright reversal of the Gasser decision (which consultees recognised would be liable to increase the risk of jurisdictional conflict and irreconcileable judgments), consultees suggested that the following developments would ameliorate the current position: In Tavoulareas v Tsavliris [2005] 2 CLC 848, Andrew Smith J held that Art. 27 was concerned with concurrent proceedings at the time when the court which was not first seised made its determination and where judgment had been given in the Greek court as the court first seised Art.27 no longer applied and the English court did not have to decline jurisdiction. [See also Briggs & Rees, op. cit., paras. 2.197 to 2.2.200; Layton & Mercer, op. cit., paras. 22.002 et seq.]

3.2 Does the principle of lis pendens (“first seized”) cause an incentive to “race to the court room” in the judicial practice?

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Cheshire and North have observed that Brussels Convention Article 21, predecessor to Regulation 44/2001 Article 27, “could lead to a race between the parties, the winner being the one who can show that the court where he brought the action is first seised of jurisdiction.” (North & Fawcett, Cheshire and North's Private International Law, 13th ed. 1999, p 254.) And in a 2005 judgment, Mann J indicated: “[Defense counsel] drew attention to the fact that a scramble to get a national court first seised of a given matter is not an unknown effect of the Brussels and Lugano Conventions, but that fact of life does not seem to me to make it commercially sensible to introduce it is a rationale of what seems to me to be an otherwise very artificial construction.” (The Law Debenture Trust Corporation Plc v Elektrim Finance B.V. and others, High Court Chancery Div 1 July 2005, [2005] EWHC 1412, paragraph 45.) Also in reference to the Brussels and Lugano conventions, Professor Herzog has written: “If two claims involving the same parties and the same ‘cause of action,’ as that term has been broadly interpreted by the Court of Justice, are pending in different Member States, then the party that does not wish the action that it has brought dismissed on the basis of (Brussels Convention) Article 21 must certainly be particularly diligent and fast. . . . . The same suggestion would also seem appropriate where the claims are merely related. Great diligence will also be useful when, in spite of the rules on the dismissal (or in the case of merely related claim, usually stay) of suits two actions involving the same parties have proceeded to judgment in different Member States. Recognition or enforcement of a judgment from another Member State will be impossible if the request for such recognition or enforcement is made after an inconsistent local judgment has been rendered. The priority of the judgment to be recognized is not material. In other words, where parallel litigation is pending, it is not enough to try to obtain a judgment quickly; one must also seek to have it recognized or enforced with great dispatch in the Member State where the parallel suit is pending.” (footnote omitted) (P.E. Herzog "Brussels and Lugano, Should You Race to the Courthouse or Race for a Judgment?" 43 Amer. J. of Comp. Law [1995] 379, 398-399). As a practical matter, English practitioners are generally both well aware of the effect of the lis pendens rules in Regulation 44/2001/EC and of the need to issue proceedings first in their client's chosen forum, even as a tactical measure designed purely to frustrate the opponent's choice of jurisdiction (the so-called "Italian torpedo"). This commonly leads to the issue of proceedings without prior warning, thereby reducing the opportunity to settle claims before litigation (see, e.g., Molins plc v GD SpA [2000] 1 WLR 1741). This is rarely edifying, and (particularly in the context of the Brussels and Lugano Conventions) has led to a proliferation of technical disputes concerning seisin (see, e.g., Nussberger v Phillips [2006] EWCA Civ 654; Tavoulearas v Tsavliris [2004] 2 All ER (Comm) 221), but it is among the first lessons to be learned by lawyers dealing with cross-border cases in the English Courts. The tendency of the lis alibi pendens rules in Arts. 27 to 30 to accelerate the "race to court", to the exclusion of negotiated

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settlement of claims, was strongly criticised by consultees, particularly with regard to situations in which the issue of proceedings is used as a tactic to frustrate an otherwise valid choice of court agreement (see 3.1 above). In this connection, the proposals referred to in 3.1 above are again relevant.

3.3 Are there any frictions between Civil Law- and Common Law-systems caused by the different procedural cultures?

The word “friction” as used in this question might be taken as a kind of rubbing of elbows in the course of attempting to perform the objectives of the EC treaties which could sometimes generate unpleasantness. The “procedural culture” of civil law courts is perhaps associated with judges who are mostly life-time professionals that generally apply and carry out legislative commands contained in codes which they have to interpret by placing themselves in the position of the legislator at the time of enactment (cf. Austrian General Civil Code, Articles 6 and 7). The numbers of such judges are vastly greater, about 6.000 in France and almost 20.000 in Germany, than the numbers of English judges, in the neighbourhood of 1.300. (Legg, Judges for the New Century in Public Law 2001, SPR 62-76.) The latter are typically appointed without direct government control from the ranks of more successful practitioners in mid-to-later stages of their careers as advocates, mostly due to the experience and standing required for English judicial office. (Legg, supra.) As to the role of common law judges in fashioning law in individual cases, which is not limited to statutory interpretation, a common law judge has commented; “I am not so naive (nor do I think our forebears were) as to be unaware that judges in a real sense ‘make’ law. But they make it as judges make it, which is to say as though they were ‘finding’ it--discerning what the law is, rather than decreeing what it is today changed to, or what it will tomorrow be.” (James B. Beam Distilling Co. v Georgia, 501 U.S. Reports 529, 549 (US Supreme Court, 1991), per Scalia, J. concurring.) Further, the part of common law known as rules of equity were directly fashioned in the course of deciding issues in cases put before the judges in the English Court of Chancery and their successors without the rationale of any legal fiction. Such law-making has been said to occur in the course and presence of disputation between skilled adversaries, rather than in reliance on commentary by academic authors and without as much emphasis on deductive, a priori reasoning. As to that kind of disputation, a common law judge once remarked: “The author, no doubt, has the benefit of a broad and comprehensive survey of his chosen subject as a whole, together with a lengthy period of gestation, and intermittent opportunities for reconsideration. But he is exposed to the peril of yielding to preconceptions, and he lacks the advantage of that impact and sharpening of focus which the detailed facts of a particular case bring to the judge. Above all, he has to form his ideas without the aid of the purifying ordeal of skilled argument on the specific facts of a contested case. . . . Today, as of old, by good disputing shall the law be well known.” (Cordell v Second Clanfield Properties Ltd.

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[1969] 2 Chancery 9, 16-17, per Meggary, J. more recently cited in the course of deciding Commerzbank AG v Price-Jones, [2004] 1 P.&C.R. DG 15, 36-37, Court of Appeal 2003.) For the most part, the rules of procedure for English common law courts were formulated by judges, under authority from Parliament. Currently, section 2 of the Civil Procedure Act 1997, as amended, authorizes the formulation of such rules by a committee consisting mostly of judges and other with active experience in the practice of law in the courts. The most recent rules have been the Civil Procedure Rules 1998 (Statutory Instrument 1998/3132) that were laid before Parliament as a sequel to the 1996 report entitled Access to Justice. That report, which was extensively compiled under Lord Woolf’s direction, proceeded on the basis of stated principles that a civil justice system should: be just in the results it delivers; be fair in the way it treats litigants; offer appropriate procedures at a reasonable cost; deal with cases with reasonable speed; be understandable to those who use it; be responsive to the needs of those who use it; provide as much certainty as the nature of particular cases allows; and be effective: adequately resourced and organized (Access to Justice, p 2). Although it may be doubted whether the objectives of the report have been fully achieved, this suggests the emphasis of common law procedural culture is on the need to efficiently serve the needs of all litigants who become drawn into it, rather than on anxieties about interests of state’s sovereignty that could in some future time become embroiled in decisions whether or not to enforce “irreconcilable” judgments. Further, notably for present purposes, the balance between the needs of litigants in particular cases is often struck by the exercise of discretion rather than by hard and fast rules. Despite the introduction of greater case management powers by the Civil Procedure Rules, English civil proceedings remain adversarial in nature. Subject to supervision by the court, prosecution of claims and defences, the introduction of evidence and enforcement of any resulting judgment remains the responsibility of the parties. It would normally not be a great surprise if differences in cultures such as the above were to cause friction, and it cannot be denied that the rules of jurisdiction which Regulation 44/2001/EC and its predecessor the Brussels Convention contain are (unsurprisingly, given the history of the Convention) closer to the former rules of civil law systems than the pre-existing common law rules. Most recently, however, friction between the Convention/Regulation regime and the common law system has resulted from the trio of decisions described by a common law scholar, Professor Adrian Briggs in the following terms: “In 15 months the court has struck three blows against international commercial litigation in the United Kingdom and beyond. First, in Erich Gasser GmbH v MISAT Srl (Case C-116/02) [2005] Q.B. 1 it refused to allow that a court, given jurisdiction by a valid and binding contractual agreement between the parties, was entitled to exercise that jurisdiction where one of the parties had brought proceedings, jurisdictionally unfounded but liable to be extremely slow and costly to see off, in the courts of another Member State. The wrecking tactic ironically known as the "Italian torpedo" was allowed to defeat the enforcement of contractual agreements

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on jurisdiction. Then in Turner v Grovit (Case C-159/02) [2005] 1 A.C. 101 it denied that a court may defend the integrity of its proceedings, under collateral attack from proceedings brought mala fide before the courts of another Member State, by the granting of an anti-suit injunction against a wrongdoer. These cases have already been lamented in these pages: (2004) 120 L.Q.R. 357 and 529. And now the court has ruled that though an English court has been satisfied, clearly and distinctly, that a court in a non-Contracting State is more appropriate for the trial of the action, and has further determined that no injustice would be done to the claimant if the English proceedings were stayed, a defendant domiciled in the United Kingdom may not seek, and a court may not grant, a stay on the ground of forum non conveniens. The reference in Owusu v Jackson (Case C-281/02) [2005] 2 W.L.R. 942 arose from personal injuries sustained in a holiday swimming accident at a beach resort in Jamaica. The claimant issued proceedings against six defendants, five Jamaican and one English, Mr Jackson. Jackson applied for a stay of proceedings on the basis that the claim belonged in Jamaica: a submission which did not seem at all far fetched. On a reference from the Court of Appeal, and reported at [2002] I.L.Pr. 813, the European Court stated that, where jurisdiction over the English defendant was conferred by Article 2 of the Brussels Convention, it was "mandatory in nature and ... according to its terms, there can be no derogation from the principle it lays down except in the cases expressly provided for by the Convention" (at [37]). It followed, according to the ruling, that the English doctrine of forum non conveniens was inapplicable "even if the jurisdiction of no other Contracting State is in issue or the proceedings have no connecting factors to any other Contracting State". Re Harrods (Buenos Aires) Ltd [1992] Ch. 72 has therefore been overruled, and an issue which had been discussed and debated for a generation was despatched by barely a page of conclusory assertion.” (Briggs, A. Case Comment: The Death of Harrods: Forum Non Conveniens and the European Court, 121 Law Qtly Rev [2005], 535, 535-536): [For further discussion of the decisions in Gasser, Turner and Owusu, see the answer to question 2.1.1 and further references there]. See also Professor Trevor Hartley in The European Union and the Systematic Dismantling of the Common Law of Conflict of Laws, 54 ICLQ (2005) 813; G. Cuniberti, Forum Non Conveniens and the Brussel Convention, 54 Int’l & Comp. L. Qtly. (2005) 973; A. Dickinson, "European Private International Law: Embracing New Horizons or Mourning the Past" (2005) 1 JPIL 197, at 197-200, 230-231; Rt Hon Sir Anthony Clarke, "The Differing Approach to commercial litigation in the European Court of Justice and the Courts of England and Wales" (Speech to Institute of Advanced Legal Studies, 23 February 2006), concluding: "I am sure that these three decisions [i.e. Gasser, Turner and Owusu] have not provided a fatal blow to commercial litigation, where in England or elsewhere but they have certainly not helped. I hope that the ECJ will bear some of these considerations in mind when deciding future questions of this kind."]

3.4 How does Article 28 work with actions that have close connections to each other? Would a positive differentiation by hard criteria be useful?

Unlike under Article 27, the parties and cause of action need not be the same for Article 28 to apply. The actions in question only have to be “related”, which means so “closely connected” that in order to avoid a risk of irreconcilable judgments it would be “expedient” to hear and decide them together.

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As pointed out by Advocate General Lenz’s opinion in reference to the predecessor of Article 28, namely Brussels Convention Article 22 in Owens Bank Ltd v Fulvio Bracco (Case C-129/92) [1994] ECR I-00117, the closer the connection between the actions in question, the more necessary it would appear for the court second seised to stay its proceedings under Article 28, but if other factors are of some relevance to the proceedings pending before the court first seised, it may be appropriate for the court second seised not to stay its proceedings (For this, Lenz AG cited Oberlandesgericht Karlsruhe of 4 August 1977, RIW 1977, p. 718 et seq. from the Digest of case-law relating to the European Communities, D Series, I-5.3 - B 8). Lenz AG listed three factors that might be relevant to the exercise of the discretion vested in national courts by Convention Article 22: - the extent of the relatedness and the risk of mutually irreconcilable decisions; - the stage reached in each set of proceedings; and - the proximity of the courts to the subject-matter of the case; but this listing would not mean that other considerations might not be important, and it would also appear sensible, for example, for a court to decline to stay its proceedings on the grounds that only an interim measure can be taken in those proceedings and that there is therefore no risk of irreconcilable decisions (citing Hof van Beroep te Antwerpen of 18 October 1979, Belgische Rechtspraak in Handelszaken 1980, pp. 181, 187 in the Digest at I- 22 - B 2). The more the proceedings are related, however, and the greater the risk of the courts arriving at irreconcilable decisions, the more likely it will be that the court second seised should stay its proceedings in accordance with Convention Article 22. It is also legitimate for the court second seised to have regard, when reaching its decision regarding a possible stay, to the stage reached in the parallel proceedings. The proceedings before the court first seised should of course have reached a more advanced stage than the proceedings before the court subsequently seised of a related action. Where this is not the case, however, and where there is no prospect of a decision in the first set of proceedings, there is nothing to prevent the court subsequently seised from taking account of this when arriving at its discretionary decision. It goes without saying that in the exercise of such discretion regard may be had to the question of which court is in the best position to decide a given question. In October 2005, the Court of Appeal of England and Wales, rendered a judgment that was decided under Article 6, an article which also uses the “closely connected” standard contained in Article 28 (3), Masri v Consolidated Contractors Group SAL, et al. [2006] 1 Lloyd’s Rep. 391, per Sir Anthony Clarke, Master of the Rolls; leave to appeal that judgment to the House of Lords has been granted. That judgment decided that, since the underlying purpose of EC Regulation 44/2001 Article 6(1) is the prevention of irreconcilable judgments, as the ECJ stated in reference to Brussels Convention Article 6 in Kalfelis v Bankhaus Schröder

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Münchmeyer Hengst and Co, [1988] ECR 5587, the words “defendants” and “claims” as used in that Article are wide enough to encompass defendants and claims in separate actions. The factual situation in that case illustrates that Article 6 and Article 28 Regulation 44/2001 complement each other in encouraging the determination by the same court of claims that are “closely connected” in the case of Article 6 and actions that are “closely connected” which Article 28 (3) provides “may” be stayed when they are not in the court first seized of such an action. Unlike Kalfelis, which concerned just one proceeding, in Masri two separate actions each alleged breach of a written agreement with the claimant Mr. Masri, which was executed in London on 6 November 1992. The various defendants in one or the other of the two actions were: Mr. Khouri, who was domiciled in Greece, and four corporations in which he had a direct or indirect interest, namely: (1) Consolidated Contractors Group SAL, a holding company incorporated in Lebanon; (2) Consolidated Contractors International Company, a Lebanese subsidiary of the holding company, having its principal place of business in Greece; (3) Consolidated Contractors Oil and Gas, another Lebanese subsidiary of the holding company; and (4) Consolidated Contractors International UK Ltd., an indirect subsidiary of the holding company, which was incorporated in England. The agreement, signed by Mr. Khouri with no indication that he had signed on behalf of any company, was written on note paper of the fourth company. It provided that claimant was to receive 10 percent of the oil entitlements from a fractional interest in an oil field in Yemen, which was stated in the agreement to be owned by “CCC”. While the expression “CCC” was not defined, claimant contended that it referred to the entire group. (The oil interest in question had initially been held by the second company, but by written assignment dated 25 October 1992 it had been transferred to the third company.) The claimant's first action, filed in February 2004, was against the fourth company, which was served with the claim form in England, and alternatively the third company. His second action, filed in October 2004, was against Mr. Khouri and the first, second and third companies. Mr. Khouri and the second company were served in Greece, where they were both domiciled, and the first and third companies were served in Lebanon pursuant to the Court’s permission for extraterritorial service under Civil Procedure Rule 6.20. The English corporation contended that there was no prospect of a finding that it was a party to the agreement. Mr. Khouri and the second company contended that EC Regulation 44/2001, Article 2, required that they be sued in Greece and that Article 6(1) authorizing jurisdiction when a claim is closely connected to a claim against a domiciliary of the forum did not apply to them because the proceeding against the English corporation was not the same proceeding as the one against them. The first and third companies contended that the permission for extraterritorial service under Civil Procedure Rule 6.20 had been improper because it was not established that England was the appropriate forum for the claim against them, and because forum conveniens required that any claim against them be tried in Greece together with the claims against Mr. Khouri and the second company. In upholding the trial judge’s rejection of all these contentions the Master of the Rolls also observed that how actions are initiated, constituted and prosecuted are

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matters for individual national procedures and have no bearing on the operation of the overriding purpose of Article 6 to prevent irreconcilable judgments. While this decision illustrates how the “closely connected” criterion has been applied, it must be cautioned that further appellate review of that case, which might possibly include a referral by the House of Lords to the ECJ, will be forthcoming. While the broad approach to “claims” and “defendants” that have a close connection, as used in the Masri judgment will facilitate putting Article 28 into application and should not diminish legal certainty, positive differentiation to determine which cases are or are not covered by Article 28 using hard criteria would potentially interfere with a court’s determination of what is “expedient” within the meaning of 28 (3). Expediency implies that there should be a degree of flexibility in dealing with a variety of individual situations that may not be foreseeable to anyone.

3.5 Within the Articles 27 to 30, how is it determined whether pending actions concern the same claim between the parties, particularly taking into consideration the case law of the ECJ?

See 3.1 above. At the outset, it must be noticed that the sameness requirement applies to claims and not to defences (see Gantner Electronic GmbH v Basch Exploitatie Maatschappij BV (Case C-111/01) [2003] ECR I-4027). Use of the term “cause of action” in the Regulation’s English language version can be a source of confusion because that term and its application has a long and complex history in English common law. See, for example, Republic of India and Another v India Steamship Co. Ltd. [1993] A.C. 410 House of Lords. However, the concept of a “cause of action” in English common law is not, in concept, co-extensive with “cause of action” under the Regulation. Under the latter, the test cannot be formal, and a court must look to the substance of each claim so the technical and procedural differences are not used to support invoking separate jurisdictions in different states (The owners of the cargo lately laden on board the ship “Tatry” v The owners of the ship “Maciej Rataj (Case C-406/92) 1994, [1994] ECR I-05439; Gubisch Maschinenfabrik v Giulio Palumbo (Case 144/86) [1987] ECR 4861).

3.6 Do practical problems arise regarding the application of Articles 27 to 30 with actions of several parties? If yes, please indicate which problems arise in your State.

In a basic scenario, the cause of action might be the same, but not the parties, or vice versa (See Gubisch Maschinenfabrik v Giulio Palumbo (Case 144/86) [1987] ECR 4861). Then, there may be multi-party actions where parties in the court first seised and in courts subsequently seised may not be the same, either actually or constructively as for example, when there is an insurance carrier for a party who is in the same interest because of subrogation rights (See Drouot Assurances SA v Consolidated Metallurgical Industries (CMI industrial sites), et al. (Case C-351/96) ECR I 3075), but where the same basic situation is in issue, say an airliner crash,

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an oil tanker accident, or a series of major frauds involving widely held investment securities where the parties are mostly different and there are many insurance carriers, there might be no clear-cut, across-the-board Article 27 grounds for a stay in favor of a court first seized while avoidance of irreconcilable judgments in the future might or might not justify having all related proceedings before the same court (Article 28’s discretionary provisions are discussed more in the above response to question 3.4). On the other hand, there could be cases where a few of many parties are the same and the claims concerning such parties overlap in certain respects so that they could be said to be the same under the Article 27 requirement, but the great majority of the claims and parties in the different cases are different and the risk of irreconcilable judgments is minimal. Carrying out the Article 27 requirements in such situations could cause substantial disruptions in the progress of an entire complex case. So, the answer to the question put must be yes. Since London, as one of the world’s most active centers of trade, finance and insurance, has courts to which major international litigation gravitates, all of the above problems can at one time or another be expected to arise, which they frequently do in practice (for a particularly complicated example, which illustrates the points made above, see the "Metro" litigation described by Moore-Bick J in Glencore International AG v Metro Trading International Inc. [1999] 2 All ER (Comm.) 899).

3.7 Is there a loss of efficiency because of the tactics of taking negative actions for a declaratory judgment at courts without jurisdiction (“torpedos”)? Please give a short description of these tactics.

The blunt answer to this question is yes, as illustrated by the parallel proceedings before the German and English Courts in the Primacom case (see 3.1 above). In the event, JP Morgan (the English claimant) was successful in challenging the jurisdiction of the German Courts but (it is understood) only after a substantial delay and having been required to respond to the German proceedings on the merits, thereby depriving the claimants of one of the principal benefits of a "one stop shop" dispute resolution clause. This result is generally viewed by English commentators and by respondents as objectionable need of reform (see the proposals for addressing these concerns at 3.1 above).

3.8 Or could the client with an action taken quickly for a declaratory judgment turn away an oppressive action of a claimant in a foreign country (for example in a country with extremely high costs)?

Procedures for challenging jurisdiction vary between Member States. As noted above (see 2.1.6) the procedure in England tends to be relatively expensive, but is also relatively quick and does not require the defendant to respond to the claim on the merits as a condition of proceedings. The reputation of other Member States' procedures among English practitioners' is less secure. Further, the decision of the Court of Justice in Turner v Grovit (Case C-159/02) [2005] 1 AC 101 excluding the power of English Courts to grant anti-suit injunctions restraining the conduct of civil proceedings in other Member States falling within the scope of the Brussels Convention, even where those proceedings were designed to frustrate English

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proceedings, means that the English Court can no longer police the issue of oppressive actions abroad (see, e.g., A. Dickinson [2004] LMCLQ 273).

3.9 Are there any cases of actions concerning the infringement of a patent that were delayed by the objection of nullity of the patent?13

Preliminarily, it may be noted that is quite possible for a patent to have been issued by an appropriate examining body when the fact that the invention did not meet all the requirements of patentability had not come to light and such facts did not come to light until a dispute arises and the patent not meeting these requirements is alleged in a lawsuit to be infringed. Because the right to recover for infringement only concerns a valid patent, an alleged lack of patentability or, if you will, its nullity may be raised in opposition to any claim for recovery. As stated by Lord Woolf, Master of the Rolls, in a 1997 judgment: Article 64 of the European Patent Convention states that a European patent confers on its proprietor the same rights as those of a national patent and that infringement shall be dealt with by national law. . . . They are rights which apply only so long as the patent is in force. In proceedings for infringement, validity of the patent is often disputed and, if the attack on the patent is successful, it will be revoked pursuant to section 72 of the 1977 Act. Such revocation has the effect of revoking the grant of the patent and therefore its registration as a patent, and is the reason for the view held in the United Kingdom that it is not possible to infringe an invalid patent. (Fort Dodge Animal Health Ltd v Akzo Nobel NV, [1998] F.S.R. 222; [1998] I.L.Pr. 732, para. 25 on 741, Court of Appeal.) It may be recalled that patentability requirements, as set forth in European Patent Convention [“EPC”] Article 52(1), are that the invention must be susceptible of industrial application, it must be new, and it must involve an inventive step. An invention is: (1) susceptible of industrial application if it can be made or used in any kind of industry, including agriculture (EPC Article 57); (2) new if it does not form part of the state of the art, which shall be held to comprise everything made available to the public anywhere by means of a written or oral description, by use, or in any other way, before the date of filing of the European patent application (EPC Article 54(1) & (2) ); and (3) involves an inventive step if, having regard to the state of the art, it is not obvious to a person skilled in the art (EPC Article 56). Although central examination of patent applications can be done in the EPO, the actual registration of such a patent by each member country is done in, and under the law of, that country. (EPC Articles 66 & 67.) And the right to prosecute a claim for patent infringement arises under national laws, which may entail differing procedures for determining the requirements of validity. In this regard, it must be

13 In Germany the judgment of an action concerning the nullity of a patent does not ascertain the nullity of the patent, but furthermore abolishes it. In such cases only the special court for patents has jurisdiction. The objection of the nullity of the patent cannot be raised in an action concerning the infringement of the patent. So the action of infringement must be suspended until a decision is made in the action concerning the nullity of the patent, when such an objection is raised. How far is the court that is concerned with the action of infringement of the patent able to decide whether the announced action concerning the nullity of the patent in the foreign country is serious?

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noticed that there is a difference between the European Patent Office [“EPO”] examination for the third, i.e. inventive step, requirement for patentability and the approach under United Kingdom law. The UK approach, required by the Court of Appeal ruling in Windsurfing International Inc. v Tabur Marine (GB) Ltd. [1985] RPC 59, should be done by: (1) identifying the inventive concept embodied in the patent; (2) imputing to a normally skilled but unimaginative addressee what was common general knowledge in the art at the priority date; (3) identifying the differences if any between the matter cited and the alleged invention; and (4) deciding whether those differences, viewed without any knowledge of the alleged invention, constituted steps which would have been obvious to the skilled man or whether they required any degree of invention. This differs from the EPO approach under which the requirement of inventive step is examined “by starting out from the objectively prevailing state of the art, in the light of which the problem is determined which the invention addresses and solves from an objective point of view . . . , and consideration is given to the question of the obviousness of the disclosed solution to this problem as seen by the man skilled in the art and having those capabilities which can be objectively expected of him.” (EPO Case No. T 0024/81 – 3.3.1, 13 Oct. 1982, on BASF Application No. EP79101414. Para. 4.) The EPO examination is done by: (1) identifying the closest prior art, i.e. the most relevant prior art; (2) determining the objective technical problem, i.e. determining, in the view of the closest prior art, the technical problem which the claimed invention addresses and successfully solves; and (3) examining whether or not the claimed solution to the objective technical problem is obvious for the skilled person in view of the state of the art in general. (Idem.) Also, an EPO examination is conducted according to a “could-would approach” under which it is questioned whether there any teaching in the prior art, as a whole, that would (not could) have prompted the skilled person, faced with the objective technical problem formulated when considering the technical features not disclosed by the closest prior art, to modify or adapt said closest prior art while taking account of that teaching (the teaching of the prior art, not just the teaching of the closest prior art), thereby arriving at something falling within the terms of the claims, and thus achieving what the invention achieves. (EPO Case No. T 002/83 – 3.3.1, 14 March 1984, on Rider Application No. EP79105188, Para. 7.) Moreover, elements in a patent claim are often not literally the same as in the allegedly infringing product. To deal with this situation most countries have developed the so-called doctrine of equivalence. When using this doctrine, the courts determine if the feature in the allegedly infringing product is an equivalent of the element in the claim. Whether something is an equivalent is something that strongly depends on the wording of the patent and the language used and the state of the case law at the time. The more well-known it is that certain elements have equivalents, the less likely it is that a court will accept infringement under the doctrine of equivalence. Thus, a nail is functionally equivalent to a screw, and the accepted general term is 'fastening means'. If a claim then nevertheless mentions the use of a nail to connect two elements, the chance that a court will rule the use of a screw to be equivalent is small. After all, when the patent does not use the

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general term, the author must have had a reason to use the specific term. The concept of equivalence and how it is applied varies greatly from country to country and from patent to patent. Sometimes new laws or case law significantly change the scope of a patent. Furthermore, Brussels Convention Article 16(4) and EC Council Regulation 44/2001 22(4), provide for exclusive jurisdiction in proceedings concerned with the registration or validity of patents in the courts of the Member State in which the registration has been applied for, has taken place, or is under the terms of a Community instrument or an international convention deemed to have taken place, regardless of domicile. In addition, the Regulation provides that: “Without prejudice to the jurisdiction of the European Patent Office under the Convention on the Grant of European Patents, signed at Munich on 5 October 1973, the courts of each Member State shall have exclusive jurisdiction, regardless of domicile, in proceedings concerned with the registration or validity of any European patents granted for that State . . . .” Article 22 (4) exclusive jurisdiction of the Member Country of registration over proceedings concerned with the registration or validity of a patent is only significant where such validity or registration is a substantial issue in the proceedings, and not when the patent is only tangential to the dispute, such as when the claimant is claiming a lien on a patent. However, when nullity is raised in opposition to an infringement action, the choice of the court seized is either to stay the action pending determination of the validity of the patent by the court having exclusive jurisdiction, or to dismiss the action on the ground that the court having exclusive jurisdiction would also have jurisdiction over the alleged infringement. These consequences encourage litigation of patent infringement actions in the countries where the patent is registered, and the separate litigation in each of such countries of the patent validity an infringement issues, even though a European patent is a subject of the dispute. Other factors that encourage such litigation in the countries where the patent is registered, as described in the response to 3.9 above, include the differences in national laws on patentability and the differences in language used in the national claims for the same patent, which can result in subtle differences in such aspects as the doctrine of equivalence. So, if the rights under a European patent registered in another Member State are infringed along with the patent rights granted by the forum state and nullity is asserted by the alleged infringers, exclusive jurisdiction as to registration of the foreign Member State patent is in the foreign Member State court, and the case will necessarily have to be delayed. See Coin Controls Ltd. v Suzo International (UK) Ltd. [1999] Ch. 33, 26 March 1997, an English case in which this consequence occurred. See also the discussion at 2.2.22 above, with reference to the recent ECJ decision in GAT (Case C-4/03) (13 July 2006).

3.10 In the case of a European patent: Can a consistent action of infringement be asserted in your country when the objection is raised that several elements of this European patent are infringed by a consistent strategy of marketing?

Relevant characteristics of a European patent are described in the above response to question 3.9.

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A patent whose application is examined by the EPO must still be issued separately by each of the Member States (and some other EPC members, such as Turkey) under each of the Member State’s national laws. An infringer employing a consistent strategy of marketing will probably not limit his strategy according to the legal differences that occur by reason of national boundaries, and although the infringement may occur in one basic way (a marketing strategy), in an action alleging infringement of a European patent that was, in fact, issued by more than one Member State, the variations in different national law consequences would have to be accounted for and respected. The question seems to be: can this phenomenon prevent the practical prosecution of one or more court actions directed at the infringer’s Europe-wide marketing strategy? Initially, it may be noted that the infringer may very well be a parent corporation whose activities are those of a joint tortfeasor-infringer acting in concert with each separate subsidiary corporation incorporated in each of the separate countries where parts of the overall scheme of infringement (i.e. the consistent marketing strategy) are being perpetrated. If lawsuits based on the same cause of action for patent infringement are brought against the parent and the relevant subsidiary in each of the separate countries, Article 27 may prevent the actions against the parent in all of the courts except the action in the court first seized because the parent is the same party in all of them to a basic “cause of action” which, as broadly construed under ECJ rulings, is considered to be the same despite the differing national laws. If the nullity defense is raised as to each such country’s patent, each such country has exclusive jurisdiction over local registration and validity issues (Regulation 44/2001 Article 22 (4)). But that Regulation does not similarly provide for exclusive jurisdiction over related infringement issues (See Jenard Report p. 36 which makes reference to the draft EEC Patent Convention being discussed during its time - 1968). On the other hand, suing in one court to attack an entire, Europe-wide marketing strategy that has resulted in the patents granted by each country being infringed may run the risk that all of the subsidiary companies, except the one in the forum, could successfully maintain that they had not committed any delict in the forum country that was connected to any action by them in their own countries, since as EPC Article 64(3) provides the patent rights and law of infringement in each country are the law of each country, which can be different from the others. As summarized by Terrell on Patents, section 8-79: “Since the specification and claims of a European patent will ordinarily be identical for all contracting states, a decision as to infringement arguably needs to be made only once in one national court. The Dutch court, in particular, has therefore been willing to grant cross-border injunctions, at least in those cases where the defendants were a group of companies selling in various national markets and whose head office was domiciled in the Netherlands. [Expandable Grafts v Boston Scientific [1999] F.S.R. 352, Court of Appeal of the Hague.] In the UK, the court has not been prepared to do so, on the basis that patent actions here involve interrelated issues of validity and infringement, and validity of a patent can only be litigated in the court of the contracting state in which it has been granted. [See Coin Controls v Suzo [1997] F.S.R. 660.] The Dutch court has considered and

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declined to follow this reasoning, pointing out that it could encourage infringers to commence invalidity proceedings elsewhere, solely to remove jurisdiction and thus frustrate effective enforcement of the patent. [See, e.g. Palmaz v Boston Scientific [1998] F.S.R. 199, District Court of the Hague.] “The issue came to a head in Fort Dodge Animal Health v Akzo Nobel, [1998] F.S.R. 222.] in which the petitioners for revocation of the UK patent in suit sought an injunction from the English court to restrain the patentees for bringing or maintaining legal proceedings in the Netherlands by reason of any act committed within the jurisdiction of the English court. The Court of Appeal considered that the construction of the relevant parts of the Brussels Convention was not acte claire and thus made a reference to the European Court of Justice. The case was however settled before the reference was heard.” So, this response must rely on Terrell on Patents, a recognized UK work on the subject, which indicates that maintaining such a consistent action of infringement would not be practical in England at this time, unless it turned out that the defendants chose not to raise any defence of nullity. See also the discussion at 2.2.22 above, with reference to the recent ECJ decision in GAT (Case C-4/03) (13 July 2006).

4. The Recognition and Enforcement of Judgments, Authentic Instruments and Court Settlements According to Regulation 44/2001/EC

4.1 Questions regarding the free movement of judgments

4.1.1 How does the procedure regarding the recognition and enforcement of judgments, authentic instruments and court settlements work?

As to enforcement proceedings, Article 40(1) of Regulation 44/2001 provides, “The procedure for making the application shall be governed by the law of the Member State in which enforcement is sought.” As noted above (see 1.7) the English procedural rules supplementing Regulation 44/2001/EC are contained in Part 74 of the Civil Procedure rules. The relevant rules are set out in that response. Applications for a declaration of enforceability are assigned to the Queen's Bench Division of the High Court and are processed by the Foreign Enforcement section. An application must be made in writing using the prescribed form for applications under Part 23 of the Civil Procedure Rules accompanied by the documentation required by the Regulation. A court officer will carry out an initial review of the documentation lodged (usually within 5 working days) and raise any queries with the judgment creditor or his legal representative (usually a solicitor). After any queries have been resolved, the application is determined (on the basis of the written papers)

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by a Master (procedural judge) of the Queen's Bench Division. If a declaration of enforceability is made, an entry is made to this effect in the (paper) register maintained by the Queen's Bench Division and the order is sealed and returned to the judgment creditor/his legal representative for service. The Queen's Bench Division's sector for foreign judgment enforcement has kindly provided the BIICL with an example extract from the (paper) register it maintains. This example extract is attached to this report for reference.

4.1.2 Are the establishment of additional standard forms, e. g. for applications for a declaration of enforceability, desirable?

As a general rule, the preparation of the relevant documentation is left to the parties and (as noted above) checked by a court official before being submitted to the procedural judge. Interestingly, the member of the court staff dealing with applications under Regulation 44/2001/EC and also with issues relating to the European Enforcement Order (Regulation 805/2004/EC) indicated that the more detailed forms in relation to the latter appeared to be creating greater difficulties for practitioners than the more flexible requirements of Regulation 44/2001/EC. From a UK viewpoint, the introduction of additional standard forms would not necessarily be desirable.

4.1.3 Did the term “judgment” in Article 32 lead to difficulties in your State?

Rule 74.2(1) (c) of the England & Wales Rules of Civil Procedure mirrors the terminology of Regulation 44/2001 Article 32, as follows: “(c) ‘judgment’ means, subject to any other enactment, any judgment given by a foreign court or tribunal, whatever the judgment may be called, and includes (i) a decree; (ii) an order; (iii) a decision; (iv) a writ of execution; and (v) the determination of costs by an officer of the court;" however, that Rule adds a qualification, "subject to any other enactment.[*/] “*/ As to other enactments, the official Practice Directions have explained: "In rule 74.2(1)(c), the definition of 'judgment' is 'subject to any other enactment'. Such provisions include - (1) section 9(1) of the 1920 Act, which limits enforcement under that Act to judgments of superior courts; (2) section 1(1) of the 1933 Act, which limits enforcement under that Act to judgments of those courts specified in the relevant Order in Council;

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(3) section 1(2) of the 1933 Act, which limits enforcement under that Act to money judgments.” The 1920 Act [Administration of Justice Act 1920, and particularly Part II thereof] concerns agreements for reciprocal judgment enforcement with Commonwealth of Nations countries. The 1933 Act [Foreign Judgments (Reciprocal Enforcement) Act 1933] applies when there is an agreement with another country on reciprocal enforcement of judgments, approved by an Order in Council. Any such agreements with States signatory to the Brussels (or Lugano) Conventions were superseded by those conventions. No other enactments are referred to in the Practice Direction, although use of the term “include” would leave such a possibility open. Reference to a “writ of execution” without further specification could result in some confusion, since in English practice a writ of execution is issued as a matter of course after an enforceable judgment has been entered by the court. Of course, for a foreign “writ of execution” to constitute a “judgment” it must have been issued by a judicial body in the course of making its decision. On the surface of the above-quoted and identically-worded definitions in Regulation 44/2001 and the English Civil Procedure Rules, difficulties would not seem likely; however, these definitions consciously do not limit the judicial decisions that they cover to judgments that are final and on the merits (cf. Nouvion vs. Freeman [Estate of William Henderson deceased], [1890] L.R. 15 Appeals Cases 1, House of Lords.) and they do, by omission, intentionally cover many orders that can be interlocutory. They also cover an order for periodic payments by way of a penalty for non-compliance with a court order, although the latter may not be enforced until the sum has been liquidated by the courts of the state in which it was handed down (Regulation 44/2001 Article 49.) Also, on the surface it appears that they could cover ex parte court orders, but the ECJ has indicated that the Brussels Convention does not apply when the parties have not been given an opportunity to be heard (Denilauler v SNS Couchet Freres (Case 125/79) [1980] ECR 1553.) It may very well be that the latter requirement should be made explicit in the Regulation and that additional delineation about kinds of interlocutory orders that are included would make it easier for courts and practitioners to decide which particular court orders that are not intended to be registered and enforced.

4.1.4 Please describe the status of the accessibility of courts by electronic means.

For accessibility to the High Court, Her Majesty's Court Service and related court agencies provide: A.) Online information about Crown Court hearings via the "xHIBIT" Crown Court list;

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B) A service (and user guide) for making money claims and for responding to money claims and for making claims for possession of residential property based on non-payment of rent or non-payment of the mortgage by electronically filling out and electronically submitting to pilot courts a great number of routine civil court forms, including the following official Civil Procedure Rules forms: N1 Claims form (CPR Part 7), N1A Notes for Claimant, N1C Notes for Defendant, N1(FD) Notes for Defendant (Consumer Credit Act Claim), N2 Claim form (Probate Claim), N2A Probate Claim - Notes for Claimant on completing a claim form, N2B Probate Claim - Notes for the defendant, N3 Acknowledgment of service (Probate claim), N5 Claim for Possession of Property, N5A Claim Form for Relief Against Forfeiture, N5B Claim for Property (Accelerated Procedure) (Assured Shorthold Tenancy), N5C Notes for the Claimant (Accelerated Procedure), N6 Claim form for demotion of tenancy, N7 Notes for Defendant - Mortgaged Residential Properties, N7A Notes for Defendant - Rented Residential Premises, N7B Notes for Defendant - Forfeiture of the Lease (Residential Premises), N7D Notes for defendant - demotion claim, N9 Response pack/Acknowledgement of Service, N9A Form of Admission (Specified Amount), N9B Defence and Counterclaim (Specified Amount), N9C Admission (Unspecified Amount & Non Money Claim), N9D Defence and Counterclaim (Unspecified Amount & Non Money Claim), N11 Defence Form, N11B Defence Form (Accelerated Possession Procedure) (Assured Shorthold Tenancy), N11D Defence form (demotion of tenancy), N11M Defence Form (Mortaged Residential Premises), N11R Defence Form (Rented Residential Premises), N16A Application for Injunction (general form), N20 Witness Summons, N21 Order for Examination of Deponent (Before the Hearing), N119 Particulars of Claim for Possession (Rented Residential Premises), N119A Notes for Guidance on Completing Particulars of Claim Form (Rented Residential Premises), N120 Particulars of Claim for Possession (Mortgaged Residential Premises),

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N121 Particulars of Claim for Possession (Trepassers), N122 Particulars of Claim for demotion of tenancy, N130 Application for possession including application for interim possession order, N133 Affidavit to occupier to oppose the making of an interim possession order, N134 Interim posession order, N136 Order for possession, N150 Allocation Questionnaire, N161 Appellant's Notice, N161A Guidance notes on completing the appellant's notice, N161B Important notes for respondents, N162 Respondent's Notice, N162A Guidance notes for completing the respondent's notice, N163 Skeleton Argument, N164 (Small Claims Appellant's Notice), N170 Listing questionnaire (Pre-trial checklist), N208 Claim form (CPR Part 8), N208A Notes for Claimant (CPR Part 8), N208C Notes for Defendant (CPR Part 8), N210 Acknowledgement of service (CPR Part 8), N210A Acknowledgement of service (CPR Part 8 - costs only claim), N211 Claim Form (CPR Part 20), N211A Notes for Claimant (CPR Part 20), N211C Notes for Defendant (CPR Part 20), N213 Acknowledgement of Service (CPR Part 20), N215 Certificate of Service, N218 Notice of Service on Partner, N225 Request for Judgment and Reply to Admission (Specified Amount), N227 Request for Judgment by Defendant (Amount to be decided by the court), N228 Notice of Admission - Return of Goods (hire purchase or conditional sale), N235 Certificate of Suitability of Litigation Friend, N242 Notice of payment into Court (under order - Part 37), N242A Notice of payment into court (in settlement), N243A/Form 201 Notice of acceptance and request for payment (Part 36), N243B Notice of instruction to Court Funds Office, N244 Application Notice, N251 Notice of Funding of Case or Claim, N252 Notice of Commencement of Assessment of Bill of Costs, N253 Notice of Amount allowed on Provisional Assessment,

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N254 Request for a Default Costs Certificate, N255CC Default Costs Certificate (County Court), N255HC Default Costs Certificate (High Court), N256CC Final Costs Certificate (County Court), N256HC Final Costs Certificate (High Court), N257 Interim Costs Certificate, N258 Request for Detailed Assessment Hearing (general form), N258A Request for a Detailed Assessment (Legal aid / Legal Services Commission only), N258B Request for Detailed Assessment Hearing (Costs payable out of a fund other than the Community Legal Service Fund), N258C Request for Detailed Assessment Hearing (pursuant to an order under Solicitors Act 1974 Part III), N260 Statement of Costs (summary assessment), N265 List of documents: standard disclosure, N266 Notice to Admit Facts, N268 Notice to Prove Documents at Trial, N279 Notice of Discontinuance, N292 Order on settlement on behalf of child or patient, N293A Combined certificate of judgment and request for writ of fieri facias or writ of possession, N294 Claimant's Application for a Variation Order, N316 Application for order that debtor attend court for questioning, N316A Application that officer of company attend court for questioning, N322A Application to enforce an award, N322H Request to register a High Court Judgment or Order for enforcement, N342 Request for Judgment Summons, N344 Request for Warrant of Committal, N349 Application for third party debt order, N379 Application for a charging order on land or property, N380 Application for charging order on securities, N434 Notice of Change of Solicitor, N461 Judicial Review claim form, N461 Notes Guidance Notes on completing the Judicial review claim form (PD 54), N462 Judicial Review acknowledgement of service, N463 Judicial Review - application for urgent consideration, EX80A Legal aid/ Legal Services Commission assessment certificate, EX140 Record of Examination (individual), EX141 Record of Examination (officer of company or corporation), N1(CC) Commercial Court Claim Form,

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N1C(CC) Commercial Court Notes for defendant, N9(CC) Commercial Court Acknowledgement of service, N208(CC) Commercial Court Claim form (Part 8), N208C(CC) Commercial Court Notes for defendant N210(CC) Commercial Court Acknowledgement of service (Part 8), N211(CC) Commercial Court Claim form (Part 20), N211C(CC) Commercial Court Notes for Part 20 defendant, N213(CC) Commercial Court Acknowledgement of service (Part 20), TCC/CM1 Case management information sheet (Appendix A - Technology and Construction Court), TCC/CMD Case management directions form (Appendix B - Technology and Construction Court), TCC/PTR1 Pre-trial review questionnaire (Appendix C - Technology and Construction Court), ADM1 Claim form (Admiralty claim in rem), ADM1A Claim form (Admiralty claim), ADM1C Notes for defendant on replying to an admiralty claim form, ADM2 Acknowledgment of service (Admiralty claims), ADM3 Collision statement of case, ADM4 Application and undertaking for arrest and custody, ADM5 Declaration in support of application for warrant of arrest, ADM6 Notice to consular officer of intention to apply for warrant of arrest, ADM7 Request for caution against arrest, ADM9 Warrant of Arrest, ADM10 Standard directions to Admiralty Marshal, ADM11 Request for caution against release, ADM12 Request and undertaking for release, ADM12A Request for withdrawal and caution against release, ADM13 Application for judgment in default, ADM14 Order for sale of a ship, ADM15 Claim form (Admiralty limitation claim), ADM15B Notes for defendant on replying to an admiralty limitation action, ADM16 Notice of admission of right of claimant to limit liability, ADM16A Defence to admiralty limitation claim, ADM16B Acknowledgment of service (admiralty limitation claim), ADM17 Application for restricted limitation decree, ADM17A Application for general limitation decree, ADM18 Restricted limitation decree, ADM19 General limitation decree, ADM20 Defendant's claim in a limitation, ADM21 Declaration as to inability of a defendant to file and serve statement of case under a decree of limitation,

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N8 Claim form (arbitration), N8A Notes for claimant, N8B Notes for defendant, N15 Acknowledgement of service (arbitration claim); and C.) online copies of all House of Lords judgments and many other judgments selected by the concerned judges from 14 November 1996 forward, online copies of United Kingdom statutes and online copies of England & Wales Civil Procedure Rules, Practice Directions, and Court Guides. D.) Further information about the Courts in England (including Daily Lists) and guidance notes in relation to particular aspects of civil proceedings is available on the Court Service website (see http://www.courtservice.govuk/

4.1.5 Are the reasons for objection that are laid down in Articles 34 and 35 appropriate? Is there a possibility to decrease the number of reasons for objection or is it – on the contrary – necessary to increase this number?

The reasons for refusal of recognition and enforcement in Articles 34 and 35 appear generally appropriate in cases where jurisdiction is based on the rules of jurisdiction contained in the Regulation, with the qualification that the Article 35(1) provision, having reference to special jurisdictional provisions in sections 3, 4 and 6 of Chapter II, can be removed because they are not consistent with the general principle that the jurisdictional determination of the court of origin must not be reviewed by the state requested to enforce. In the original six countries of the Brussels Convention, matters for which that Convention laid down special rules of jurisdiction for insurance, consumer-contract, and exclusive jurisdictional subjects were “either a matter of a binding character or matters of public policy” (P. Jenard, “Report on the Convention on jurisdiction and the enforcement of judgments in civil commercial matters”, Chapter V, B. section 1 (1968)) In view of the remainder of Articles 34 and 35 that generally prohibit review of the jurisdiction of the court of origin, and in view of the “mutual trust” factor so often emphasized by the ECJ in recent years, and in view of the ECJ’s narrowing of the scope of the public policy exception, which would still be available for extreme incursions into insurance, consumer or exclusive jurisdiction areas, retention of these exceptions would lack continued justification. There is good reason to decrease the number of reasons for objection in this manner. On the other hand, one respondent argued that subjecting non-Member State domiciled judgment debtors to the full rigour of the Regulation enforcement regime, without review of jurisdiction, in circumstances where jurisdiction is based on Art. 4 is "a disgrace", and requires urgent attention

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(one possible revision being to allow enforcement only if jurisdiction would have existed under the Regulation rules as against a person domiciled in a Member State). The same respondent warned against a further narrowing or exclusion of the public policy exception (such as that resulting from the European Enforcement Order procedure in Regulation 805/2004/EC) on the ground that such exception is essential if the United Kingdom (and other Member States) are to be able to comply with their obligations under Art. 6.1 of the European Court of Human Rights. Mutual trust is one thing, but Member States cannot delegate or disown performance of their obligations to ensure a fair trial. For one recent example of an English case refusing enforcement under Art. 34, see Tavoulareas v Tsavliris [2006] 1 CLC 466 (Tomlinson J) (Art. 34.2). See also Maronier v Larmer [2003] QB 620 (Court of Appeal) (Brussels Convention, Art. 27.1), discussed at 4.1.7 below.

4.1.6 What is the criteria regarding the requirement of clarity and definiteness of foreign titles have to comply with according to Article 38?

The meaning of this question is unclear. It is noted that Art. 38.1 merely requires that a judgment be enforceable in the Member State of origin.

4.1.7 How often is the reservation of public policy (Article 34 No. 1) referred to and with which result?

Such a reservation has seldom been applied to prevent recognition in England of judicial decisions under the Brussels Convention and Regulation 44/2001. In an unusual case, Maronier v Larmer, [2003] QB 620, Mr. W. Maronier had in 1984 sued Bryan Larmer, a dentist, in the District Court of Rotterdam, Netherlands for damages caused by alleged improper dental treatment. In 1986, the lawsuit was stayed because Mr. Maronier became bankrupt. In 1991, Larmer moved to England, but before moving, he left his new address in England with the Rotterdam City Hall and the Dutch Association of Dentists. In 1998, twelve years after he obtained the stay, Mr. Maronier took steps to reactivate his lawsuit. Mr. Larmer’s attorney then declared himself “incapable”, indicated that his client was living in England, and withdrew with the permission of the Court. In 1999, the Rotterdam Court entered a judgment for Mr. Maronier in the amount of 17.864 Dutch guilders with interest and costs. The judgment recited that Mr. Larmer was living in Rotterdam. Then on 14 July 2000 the judgment was registered in England. Service of the notice of the registration on Mr. Larmer was the first actual notice of the re-activation of the lawsuit that he received. His right to appeal in the Netherlands had expired three months after the judgment was entered, and the judgment had become “unassailable” in the Netherlands. On Larmer’s application, a Deputy Master of the English Court set aside the registration of the judgment, and the matter came before the Queen's Bench Division, which ruled that enforcement of the judgment would contravene English public policy because of denial of the right to an effective opportunity to defend oneself in civil proceedings, as protected by Articles 6 of the European Convention on Human Rights.

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On the further appeal as to the point of law, the Court of Appeal, per Lord Phillips, Master of the Rolls, observed that court procedures ”differ from one State to another and the Courts of this Country should apply a strong presumption that the procedures of other signatories of the Human Rights Convention are compliant with Article 6. What we cannot accept is that we must apply an irrebuttable presumption that the judgment given in another Member State cannot have resulted from a violation of Article 6.” The Court of Appeal noted that the ECJ had expressly recognized the general principle of Community law that everyone is entitled to fair legal process, as inspired by European Convention on Human Rights Article 6 (Krombach v Bamberski (Case C-7/98) [2000] ECR I 1935). The Court of Appeal also noted that the facts of the case had some similarities to those considered in Dabaecker and Plouvier v Bouwman (Case 49/84) ECR [1985] 1779, where the ECJ held that the Convention did not impose an obligation on the claimants to take steps to alert the defendant to the proceedings once service had been effected; however, the failure to take such steps is in reality a factor which had to be taken into account in order to establish whether service was effected in sufficient time. Similarly, the behaviour of Mr. Maronier at the time he reactivated his suit was relevant. If he had notified Larmer at his new address, he would have ensured that the court in which enforcement is sought would not have to decide whether the change of address was an exceptional circumstance. The Court of Appeal then stated: “this is not, however, a normal case. We feel sure that a stay lasting 12 years of a simple claim for medical negligence must be quite extraordinary. On the basis of the facts before us, we are driven to the conclusion that Mr. Larrmer was denied a fair trial in Rotterdam because he was unaware that proceedings had been reactivated even until the time for an appeal had passed.” The circumstances put Mr. Maronier’s lawyers on notice that Mr. Larmer was probably unaware of the fact that the action had then re-activated.” The Court of Appeal concluded, “on the, happily, unusual facts of this case we are in no doubt that the Judge was correct to conclude that it would be contrary to the public policy of this country to enforce Mr. Maronier’s judgment.” In enforcement of judgment cases other than those covered by the Brussels Convention and the Regulation, English courts have used the public policy ground for non-recognition sparingly. (See generally Briggs & Rees, op. cit., para. 7.52) But use of the public policy ground was not necessarily limited to cases where "recognition is manifestly contrary" to

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public policy. Examples of non-recognition of judgments based on the Nuremberg laws of the Nazi era might be in point; however, they would be consistent with the decision in Maronier, supra by having a basis in the European Convention on Human Rights. An additional potential use of the public policy ground in Regulation cases might occur where there was substantial evidence that the judgment had been obtained by fraud on the foreign court (cf. Owens Bank Ltd vs. Bracco [1992] 2 AC 443). Fraud is a separate ground of non-recognition in the English common law of foreign judgment recognition such that invocation of public policy had not been necessary; however, since it is not provided for in the Regulation, it could be held to be a public policy ground, unless the court of the other Member State had already ruled that no fraud had occurred.

4.1.8 Did the non-recognition of judgments given in your State (in particular due to incompatibility with the public policy in the respective Member State) lead to amendments of laws?

This question appears to refer to the situation reported in Phillip Alexander Securities & Futures Ltd. v Bamburger [1997] I.L.Pr. 73, Court of Appeal, July 12 1996, which concerned the later amended provisions of the English Consumer Arbitration Act, then in force, which had allowed a court to not apply an arbitration clause in a consumer arbitration if the parties were domestic. So, a party to a consumer arbitration who was not British but was a national of, or resident in, an EC member state would potentially be at a disadvantage in not being able to seek such an order from the court. (Under section 9 of the English Arbitration Act 1996, the court must grant a stay of court proceedings and allow the arbitration to proceed on the application of one of the parties, unless the arbitration agreement is null and void, inoperative or incapable of being performed, while sections 85-87 do in fact vest discretion in the English courts to refuse a stay of litigation in favor of arbitration, provided the arbitration is a domestic arbitration.) So, this authority to refuse a stay of litigation did not apply to Mr. Bamburger. (see generally, Netherway, S. “The Arbitration Act 1996 and its Potential Impact on Insurance and Reinsurance Dispute Resolution”, International Insurance Law Review 1997, 5(9), 276, 281-282.) These English Arbitration Act sections repeated what had formerly been section 4 of the 1950 Arbitration Act, but it was not brought into force with the rest of the new Act. It was reported that this was then done following the recommendation of the Departmental Advisory Committee, which was in response to the Court of Appeal decision in Phillip Alexander v Bamberger (cited above) which concluded inter alia that such a distinction between domestic and non-domestic proceedings could be a contravention of the EC treaties. That decision also concerned an English anti-suit injunction in favor of the English international commercial arbitration and against commencement by securities firm customers (Mr. Bamburger and others) of suit in Germany to enforce his rights as a consumer and thereby prevent the international arbitration.

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The “non-recognition” referred to in the question may have consisted of a refusal by German authorities to serve the anti-suit injunction under the Service Convention and the upholding of that refusal by the regional appellate court in Dusseldorf on 10 January 1996 (Case 3 V 11/95), reported at [1997] I.L.Pr. 320. In its July 1996 decision, the English Court of Appeal suggested that characterization of the anti-suit injunction as directed against the litigant and not the German court might need to be re-examined because of the indirect effect of such an order on the foreign court and the potential perception that such orders are an interference with the process of justice in the foreign court ([1997] I.L.Pr. 73, at 104). It may be noted that the German decision in the case also entailed unaddressed legal consequences by interfering with an order enforcing an arbitration agreement, as authorized by Article II of the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (N.Y. Convention), to which Germany and the UK are parties and under which Germany had already yielded the relevant “sovereignty”. Since these decisions, the Court of Justice has considered (and greatly circumscribed) the practice of the English Courts of granting anti-suit injunctions to restrain the commencement or continuation of proceedings in other Member States within the scope of the Brussels Convention (see Turner v Grovit, discussed above).

4.1.9 What kind of interrelation exists between the rule of public policy and the general objection of abuse of the process of the court?

As illustrated by the judgment in Maronier v Larmer, discussed above in response to question 4.1.7, an abuse of process may under certain circumstances be in contravention of public policy if it has resulted in serious injustice to one of the parties. In Tavoulareas v Tsavliris, a question arose as to whether the judgment creditors conduct in failing to inform the foreign (Greek) court as to the existence of English proceedings rendered enforcement of the Greek judgment contrary to English public policy. Tomlinson J stated: 51. Article 34.1 52. Here as it seems to me different considerations may obtain in the two actions. So far as concerns the first action, in which the English court is first seised, what is said on behalf of Mr Tavoulareas is that it was the Tsavliris interests which invoked the procedure in this court to establish that the Greek court was first seised. However having obtained from the Court of Appeal an answer which they did not like they deliberately chose not to tell the Greek Court about it. That the decision was deliberate is clear. Mr Dickinson for the Tsavliris interests puts it this way at paragraph 12(c) of his Witness Statement of 1 February 2006: - 'The Tsavliris parties were entitled to take the view that the Court of Appeal was wrong in its approach to the question of whether or not the Greek

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proceedings were definitively pending before the initial English proceedings were served.' What has occurred therefore is that the Greek court has been prevented from considering whether, in the light of the decision of the English court that it was first seised, it the Greek court should decline jurisdiction. It would, submits Mr Goldstone, be entirely within the scheme of the Convention and the Regulation or within their respective spirits to deny recognition to a judgment so obtained. So to do will promote the purposes of the Convention and of the Regulation by encouraging litigants to notify courts second seised of judgments rendered by the court first seised. 53. Mr Irvin for his part rested his opposition to this approach on the consideration that there was nothing in the Convention or in the Regulation which prevented the Tsavliris interests from proceeding as they did and that Andrew Smith J has already concluded that their having done so ought not to be visited with sanctions. Mr Irvin also pointed out that Mr Tavoulareas could had he so wished have drawn to the attention of the Greek court the decision of the English Court of Appeal. 54. Underlying this debate is the question whether for this court to deny recognition to the Greek judgment would 'imply an assessment of the appropriateness of bringing proceedings before a court of another Member State,' an assessment which this court ought not to undertake in the light of the strictures of the European Court in Turner v Grovit, above, at p.113. 55. The exercise with which I am here concerned is not the same as that which faced Andrew Smith J in deciding whether to impose conditions upon the setting aside of the English default judgment. A failure to afford recognition to the Greek judgment does not necessarily imply any criticism of the conduct of the Tsavliris interests in either invoking the Greek jurisdiction or pursuing their action to judgment. Non-recognition pursuant to Article 34.1 could be said to reflect a view simply that this court should ensure, as best it can without interference, direct or indirect, in the jurisdiction of other Member States that the regime of the Convention and the Regulation is observed. It could be said that the regime has not been observed if the court second seised has not, for whatever reason, had the opportunity to consider the implications, if any, flowing from the order of seisin of courts in more than one Member State of actions involving the same cause of action and between the same parties. I am not persuaded, although I do not need to decide, that for the English court to deny recognition to the Greek judgment in the first action would "[run] counter to the principle of mutual trust which….. underpins the Convention and prohibits a court, except in special circumstances….. from reviewing the jurisdiction of the court of another Member State." At paragraph 30 of its judgment, p.114, the European Court explained why the grant of anti-suit injunctions did not in its judgment contribute to the attainment of the objective of the Convention, which is to minimise the risk of conflicting decisions and to avoid the multiplicity of proceedings. The Court said this: -

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'First, recourse to such measures renders ineffective the specific mechanisms provided for by the Convention for cases of lis alibi pendens and of related actions. Secondly, it is liable to give rise to situations involving conflicts for which the Convention contains no rules.' As Mr Goldstone points out neither objection applies here. The specific measure provided by the Convention, and now by the Regulation, namely Articles 21 and 28 respectively, have failed because of the deliberate omission by the Tsavliris interests to draw to the attention of the Greek court the judgment of the English Court of Appeal. Nor, submits Mr Goldstone, would a refusal to grant recognition give rise to any conflict for which the Convention contains no rules. Although he did not spell it out, the basis of that submission is, I imagine, that either ex hypothesi there is such a rule contained within the Regulation, viz Article 34.1, or, alternatively, it might be said that it is not non-recognition which gives rise to a situation involving a conflict but rather the failure to afford to the Greek court the opportunity itself to consider whether such a conflict should be avoided. 56. However in that latter regard I am troubled by the consideration that, as it seems to me and as it seemed to Andrew Smith J, there is no good reason why Mr Tavoulareas should not himself have drawn to the attention of the Greek court the existence of the English judgment. The only evidence before me which bears upon the alleged constraints upon Mr Tavoulareas in that regard is contained in paragraphs 41 and 42 of Mr Keates' ninth Witness Statement which read: - '41. Once that step had been taken [viz participation in the joint agreed application to the Greek court on 17 January 2003 to request an adjournment] the Claimant did not take any further part in the Greek proceedings because it became apparent from advice that he received, and the expert evidence of Greek law in the London proceedings, that it was not possible to challenge jurisdiction as a preliminary issue under Greek procedure. The Claimant would have had to deal with the merits of the case as well as the jurisdiction defence. In these circumstances the Claimant has never been in a position to draw any matters to the attention of the Greek court and had no reason to do so. 42. It was not correct, as Mr Justice Smith says at paragraph 40 of his judgment of 12 October 2005, that the Claimant could have brought the decision of the Court of Appeal to the Greek court's attention: if he had done so he ran the risk that the Greek court would find that he had submitted to its jurisdiction.' 57. Just as Andrew Smith J regarded the evidence before him on this topic as insufficient to be a satisfactory basis for a dispositive conclusion, so I regard the evidence before me as insufficient to enable me to conclude that in the unusual circumstances of this case it would be manifestly contrary to

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public policy to afford recognition to the judgment of the Greek court. The evidence is insufficient to enable me to conclude that there was a real impediment to Mr Tavoulareas drawing to the attention of the Greek court the existence of the English judgment. Without such a finding, I have to conclude that both parties before the court share responsibility for the situation which has arisen. That does not detract from the fact that in the result the regime of the Convention and the Regulation has not been observed, but it does to my mind make it difficult to conclude that recognition of the Greek judgment would be manifestly contrary to public policy. This renders it doubly unnecessary to consider the position in the second action where the Greek court is first seised. "

4.1.10 How does Article 49 work with regard to the enforcement of foreign decisions, which are aimed at the payment of an administrative fine to the creditor and what is the practical significance of this provision?

According to the Report on the 1978 Convention for the accession of Denmark, Ireland and the UK to the Brussels Convention by Professor Schlosser (para. 211 – 213), Brussels Convention Article 43, which is restated in Regulation 44/2001 Article 49, concerns a fundamental difference among different Member States in systems for enforcing court orders that require the performance of a specific act. For example in England, when an injunction for performance of an act is disobeyed, the court may act directly through a public officer to compel the act or it may act indirectly by means of continuing daily fines or imprisonment for contempt of the court or a set a fixed fine or period of imprisonment, and in Germany fines or imprisonment would be employed; however, in France, Belgium and Luxembourg the defendant is ordered to perform the act and at the same time to periodically pay sums of money to the claimant as a pre-established consequence of possible non-compliance, so that in cases of non-compliance a separate judgment as to the latter is required, but the separate judgment is hardly ever as high as fine originally threatened. Regulation 44/2001 Article 49 also addresses these differences, and difficulties which they could cause, by providing that if the sanction takes the form of a fine (‘astreinte’), the originating court should itself fix the amount finally owed, and cross-border enforcement will then be limited to that amount. Such orders can be enforced in, among other states, the UK if the originating court has proceeded on that basis, as long as the astreinte is adjudged to be paid to a party. If it should happen that the astreinte were to be ordered to be paid to the state in its sovereign capacity, it would raise an issue under the basic applicability of the Regulation (Article 1) whether the judgment in question was in a civil or commercial matter because traditional English recognition and enforcement of foreign judgments does not extend to fines and penalties imposed and to be collected by foreign states. It is noted in addition that the Article 49 requirement for a final determination of the amount to be paid means only that determination, and not that the judgment or order must be “final” in the sense of “final and on the merits” as

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discussed in Nouvion vs. Freeman [Estate of William Henderson deceased], [1890] L.R. 15 Appeals Cases 1 House of Lords.

4.1.11 Is there any practical experience or is there a theoretical discussion among legal writers regarding the enforcement of titles which are aimed at the specific performance of an obligation or which are framed as a prohibitory injunction by means of penalties for contempt of court?

A theoretical discussion regarding such enforcement appeared in the Report on the 1978 Convention for the accession of Denmark, Ireland and the UK to the Brussels Convention by Professor Schlosser (para. 211 - 213) and briefly in the Jenard Report on the 1968 Brussels Convention (Chapter V, B. Section 2(c) of the Report). A recent article by Richard Garnett, “Cross-Border Internet Trade Mark Litigation: Towards a Model of Co-Existence and Parallel Use” in the European Intellectual Property Review 2006, 28(4), 213-219 examines the rise of transnational trade mark infringement actions involving the internet and mentions the definition in the Brussels Convention of “enforceable foreign judgment” that includes judgments for coercive and declaratory relief, which that article notices to be unlike the position in almost all national laws on the recognition and enforcement of foreign judgments, which limit enforcement to awards for a sum of money. Garnett points out (at 216): “This is an important provision in the present context because it enables claimant trade mark owners to obtain injunctive relief in one European country and then enforce such an order in the country of residence of the defendant with only a very limited range of defences available.”

4.1.12 Does the inadmissibility of “anti-suit injunctions” which has been stated by the ECJ have any consequences for the efficiency of legal protection?

An injunction is a prophylactic measure for the purpose of bringing about a prompt cessation of an ongoing activity that interferes with another party’s rights. Bad faith or malicious abuse of process that could be halted by an injunction may also constitute delictual conduct by the party engaging in it and by other parties knowingly assisting that party, which may include the attorneys who make the abuse of process possible. Money damages proximately caused by such an abuse and incurred in the UK may be recoverable, as may penalties for the malicious wrongdoing (Jonathan Steinberg v Pritchard Englefield & Another, [2005] EWCA Civ 824, Court of Appeal 2003). For purposes of the efficiency of legal protection, the time to prosecute such a case will predictably entail substantial additional expense and time for the injured party, as well as for the courts that will have to try (possibly with a jury for malicious abuse of process) and decide the claim and any appeals.

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The decision of the Court of Justice in Turner v Grovit has been criticised by English commentators (see 3.3 above), but practitioners appear to accept that it is unlikely to be reversed.

4.1.13 How does the practical implementation of appeals work in your State (costs, duration, mandatory representation by lawyers)?

An appeal by either party from an order of a Master granting or denying registration of a judgment of another Member State under Regulation 44/2001 Article 43(1) is to the High Court, (as provided in Annex III to Regulation 44/2001/EC), and it shall be dealt with under the rules governing procedure in contradictory matters (as provided in Regulation Article 43(3) ). The time within which to appeal is, for a party domiciled in the State requested to enforce, one month from the notice of registration and, for a party domiciled in another State, two months from the notice of registration (Regulation Article 43(5) ). From the High Court, a further appeal on a point of law may be taken to the Court of Appeal of England and Wales or directly from the High Court to the House of Lords in accordance with Administration of Justice Act 1969 (1969 c. 58) Part II, in accordance with Annex IV of the Regulation. The Regulation requires that on appeal the reviewing court shall give its decision “without delay” and that the foreign judgment may be refused enforcement only on one of the grounds specified in Regulation Articles 34 and 35. Under no circumstances shall the appellate court review the foreign judgment as to its substance (Regulation, Article 45). These restrictions should be observed by the English Courts. The procedure for appeals is that set out in Part 52 of the Civil Procedure Rules for appeals generally, except that the court's permission is not required (as would usually be the case) to appeal or to but in evidence and the time limits are amended to take account of the provisions of Chapter III of the Regulation (Civil Procedure Rules, r. 74.8).

4.2 Provisional Measures according to Article 47

4.2.1 How does Article 47 work?

Article 47(1) of Regulation 44/2001 is European Community law that authorizes a judgment creditor to apply for measures to secure assets of the judgment debtor for future execution prior to making application to register his judgment in England. The measures available under this Article 47 authorization are those provided by national law, which in England might include a freezing injunction (formerly called “Mareva” injunction) restraining a debtor over which the English court has assumed personal jurisdiction from disposal of or dealing in its assets where ever they may be and ordering it to provide information relevant to such assets. Such an application may be made without prior notice to the judgment debtor. And under Article 47 the declaration of enforceability – in England is the order

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for registration - very arguably leaves no room for discretion of the national court whether to grant or deny such measures because, as Article 47(2) provides, such registration “shall carry with it the power to proceed to any protective measures.” (See the ECJ decision in Capelloni v Pelkmans (Case C-119/84) [1985] ECR 3147 and contrast the views of Layton & Mercer, op. cit., paras. 9.012, 27.082-27.083 (no discretion, at least as to grant) and Briggs & Rees, op. cit., para. 7.21 (discretion). See also G. Hogan "The Judgments Convention and Mareva Injunctions in the United Kingdom and Ireland (1989) 14 EL Rev 191, 200-2004. There appears to be no English decision directly in relation to this point, although it is understood that the Irish courts have held that no jurisdiction exists - Elwyn (Cottons) Ltd v Pearl Designs Ltd. [1990] IL Pr. 40.) Under Article 47(3), until any appeal has been determined or until the time to appeal has expired, no enforcement measures other than those authorized by Article 47 may be pursued. Since Article 4 of the Regulation extends to claimants domiciled in a contracting state whatever their nationality and they have the benefit of existing rules of national jurisdiction such as that provided by French Civil Code Article 14, it is not inconceivable that an American with French domicile could sue and obtain a judgment in France against another American having no domicile in any EC State and that the judgment could be registered in England, which would authorize, under the working of Article 47, ex parte application for, and issuance of, an order freezing assets that the American defendant has been keeping in England and, if there are circumstances under which English courts could assume personal jurisdiction under Civil Procedure Rule 6.20, an order freezing any such assets and requiring disclosure about their location.

4.2.2 Do law enforcement authorities consider – within the scope of Article 47 – the reasons to refuse recognition that are laid down in Articles 34 and 35?

Applications for the use of English law measures that are the functional equivalent of the provisional measures authorized by Article 47 are made to the appropriate Court. English law enforcement authorities, including the sheriffs and those acting under them who carry out writs of execution and other procedures for executing judgments and ensure the performance of provisional measures, have no authority to apply the grounds for objection laid down in Articles 34 and 35. Their function is to carry out the executions and provisional measures authorized by orders of the Court in conformity with the law. It is for the judgment debtor to challenge the declaration of enforceability on which such execution is based.

4.2.3 If yes, on the basis of which factual criteria?

Not applicable.

4.2.4 Does the judge who is competent for declarations of enforceability have competence for provisional measures (Article 47) as well?

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Not necessarily. Certain types of orders (including search orders and, most importantly, freezing injunctions) may be made only by a Judge and not by a Master (see Practice Direction - Allocation of Cases to Levels of Judiciary, para. 2.1(a) and see also paras. 2.2 to 2.4 limiting the power of a Master to grant injunctions generally).

4.3 Cross-border Enforcement of Court Settlements and Notarial Deeds

4.3.1 How do Articles 57 and 58 work?

The instruments described in Articles 57 and 58 may be registered by use of the procedures described in the response to question 4.1.1 above, which should be considered to be repeated as though fully set forth in this response.

In particular:

4.3.1.1 Is there any experience regarding the interpretation of the term “authentic instrument” in Article 57?

The authentic instrument (French: acte authentique) produced for registration must satisfy the conditions necessary to establish its authenticity in the Member State of its origin (Article 57(3) ); however, if it is accompanied by the certificate authorized by Article 57(4), that certificate will be evidence that the instrument is an executable authentic instrument. By reason of English law, such an instrument issued from an English notary would have no effect under the Regulation. It is not known whether in any individual cases it has turned out that such a certificate was improperly issued.

4.3.1.2 Is there any experience regarding the interpretation of the term “settlement approved by a court” in Article 58? Did the wrong English version (“court approved” instead of “conclus devant le juge”) lead to difficulties?

Similar to the above response to 4.3.1.1, the certificate authorized by Article 57(4) would normally prevent any misunderstanding about whether the foreign instrument would qualify for registration under Article 58.

4.3.1.3 Are the standardised forms sufficient?

As recommended in the above response to question 4.1.2, a standardized form for the order of registration could result in some saving of time and expense.

4.3.1.4 To which extent are Articles 34 and 35 applied?

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In England, Article 34(1) was applied in the judgment in Maronier v Larmer, [2002] EWCA 774, [2002] ILPr 39, Court of Appeal, 2002, more fully described in response to question 4.1.7 above.

4.3.2 Please describe the practical significance of Article 57 and Article 58

Although an order for registration of an authentic instrument, as defined in Article 57, or a settlement approved by a court, as defined in Article 58, may be appealed as provided in Articles 43 to 46, the only grounds would be a contention that enforcement would be manifestly contrary to English public policy. While the grounds of English public policy may not be as extensive as in many other EC countries, it is not unimaginable that an authentic instrument directly arising out of transactions permitted in certain EC countries but contra bonos mores in England might encounter this difficulty. The possibility of encountering such a ground of appeal could be eliminated by the use of Regulation (EC) No 805/2004 (see response to no. 4.3.3 below).

4.3.2.1 Did the situation occur that declarations of enforceability against the debtor have been applied for in several States at the same time?

If the debtor were subject to a large judgment and was generally known to have property in several Member States, but the detailed locations were not available, such a situation would not be beyond the limits of good sense. However, if such a tactic were to result in assets in a given state becoming unavailable to satisfy other debts, while enough assets were available for the enforcing judgment creditor in still another state, marshalling remedies should be applied. The most effective measure in such a case would be an involuntary petition for insolvency, which is beyond the scope of this inquiry. For the answer to this question, no specific information about such a situation in fact has been discovered.

4.3.2.2 For creditors` lawyers: Was it possible to achieve a higher efficiency of legal protection by means of this?

See first sentence of the above response to question 4.3.2.1.

4.3.2.3 For debtors` lawyers: Did oppressive situations arise out of this? Did this lead in particular to the result that excessive enforcement measures have been carried out?

See second sentence of the above response to question 4.3.2.1.

4.3.3 Specific problems regarding court settlements, enforceable instruments and provisionally enforceable judgments

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While Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims has overlapping provisions, they do not appear to entail a specific “problem” other than duplication of legal provisions. Those provisions are in pertinent part: “Article 24 Court settlements 1. A settlement concerning a claim within the meaning of Article 4(2) which has been approved by a court or concluded before a court in the course of proceedings and is enforceable in the Member State in which it was approved or concluded shall, upon application to the court that approved it or before which it was concluded, be certified as a European Enforcement Order using the standard form in Annex II. 2. A settlement which has been certified as a European Enforcement Order in the Member State of origin shall be enforced in the other Member States without the need for a declaration of enforceability and without any possibility of opposing its enforceability. 3. The provisions of Chapter II, with the exception of Articles 5, 6(1) and 9(1), and of Chapter IV, with the exception of Articles 21(1) and 22, shall apply as appropriate. “Article 25 Authentic instruments 1. An authentic instrument concerning a claim within the meaning of Article 4(2) which is enforceable in one Member State shall, upon application to the authority designated by the Member State of origin, be certified as a European Enforcement Order, using the standard form in Annex III. 2. An authentic instrument which has been certified as a European Enforcement Order in the Member State of origin shall be enforced in the other Member States without the need for a declaration of enforceability and without any possibility of opposing its enforceability. 3. The provisions of Chapter II, with the exception of Articles 5, 6(1) and 9(1), and of Chapter IV, with the exception of Articles 21(1) and 22, shall apply as appropriate. “Article 27 Relationship with Regulation (EC) No 44/2001 This Regulation shall not affect the possibility of seeking recognition and enforcement, in accordance with Regulation (EC) No 44/2001, of a judgment, a court settlement or an authentic instrument on an uncontested claim.” Unlike the Regulation 44/2001 with its objection to enforceability on grounds that it is manifestly contrary to public policy (Article 34(1)), the

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above-quoted Articles eliminate any possibility of opposing EEO enforceability in the Member State addressed.

4.3.3.1 Are there any known cases, where a court of a higher instance has reversed a foreign judgment after enforcement measures had been carried out? How can enforcement measures be set-aside in such a situation?

To our knowledge, there are no cases of this kind. If an English Court were to set aside a declaration of enforceability, it would also make further orders to adjust the position between the parties in light of any enforcement measures that may have been carried out. Under Civil Procedure Rules, r. 52.10(1) the appeal court has all the powers of a lower court in relation to an appeal.

4.3.3.2 Are there – from the debtor’s point of view – any problems with documents that are not valued?14

This question appears to refer to cases concerning authentic instruments, which are not used in England and Wales. In the case of an authentic instrument for which an order of registration was obtained, seeking to enforcement for an amount that was not actually owed could entail an abuse of process, and since the enforcement for a sum not actually owed was being pursued it could be subject to an objection on appeal that it is manifestly contrary to public policy. However, see also the above response to question 4.3.3. It is generally left to the judgment debtor to challenge the authenticity of any document on which the judgment creditor relies.

5. Proposals for Improvements Do you see, based on your experience with Regulation 44/2001/EC, any necessity to improve the regulation, in particular regarding the rules on jurisdiction, lis pendens, provisional measures and recognition and enforcement? If yes, please make proposals. 1.1 It is clear that technicalities remain over the exact rule to delimit the scope of Regulation 44/2001/EC. In practice, however, Art. 1(1) has given rise to relatively few problems in the UK. Although the Court of Justice may have the opportunity to consider the

14 In some States, as for instance in Germany, notarial deeds are only enforceable if the debtor has submitted to enforcement explicitly. The submission is abstract. The debtor can submit to enforcement for a sum that he does not owe at all or does not owe to the stated amount. If the creditor pursues the enforcement nevertheless, the debtor is entitled to claim restitution of the unjust enrichment – if necessary in a separate legal proceeding. Therefore, there is a risk that the enforcement is carried out first for a much higher amount than the debtor has to pay (especially regarding interests). In Germany there exists – regarding cases without a foreign element – a very differentiated system of provisions of security and provisional stay of execution or limitations in its contents (only seizure of assets), which ensures a balance between the interests of both sides – the creditor as well as the debtor. Does the problem of titles that are not valued exist also in other States? Are cases known, where an excessive enforcement has taken place and the debtor was unable to obtain judicial remedy in time?

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application of Art. 1 in cases of state immunity in the Lekhoritou reference, we propose that the relationship between the Regulation and international privileges and immunities should be clarified (see 2.2.1 below). 1.2 No English case can be found where it has been held that an action brought by a public authority against a private person comes within the meaning of Regulation 44/2001/EC Article 1. The prospect of such claims is, however, increased by the decision of the Court of Justice in the Henkel case. 1.3 Arts. 67-71 work in English Courts with reasonable efficiency. 1.3.1 The delineation between Regulation 2201/2003/EC and Regulation is reasonably clear, although the limited case law available suggests that areas of uncertainty may arise in the future. 1.3.2 The practice of the English Courts supports a narrow construction of Art. 1(2)(b) Brussels I Regulation, although its scope on the basis of the autonomous meaning given to it in Gourdain v Nadler 133/78, [1979] ECR 733 has given rise to some discussion. [p 11] 1.4 If the ruling by the ECJ in Gemeente Steenbergen v Baten stands the test of time, there appears no reason why English courts would have an issue with the reasoning (after all, the outcome was the same as the UK Government's submission to the Court). There has yet to be a reported English case dealing with these questions. Matters may become more problematic if future European decisions take the concept of "community law in a wider sense" further, and remove the definition purely from the realm of Regulation 1408/71. 1.5 The retention of the arbitration exception in its present form has been strongly supported by consultees. From an English law viewpoint, the suggested exception to mediation proceedings makes little sense. Recent case law of the English Courts relating to the arbitration exception has concluded that the grant of an anti-suit injunction to restrain proceedings in another Member State in breach of an arbitration provision falls within the arbitration exception and, accordingly, outside the scope of the Regulation. 1.6 The rights of appeal contained in the Regulation (Articles 43-47), by which the losing party may appeal against the order made after the first stage of the procedure (i.e. obtaining an order for registration for enforcement), work effectively enough alongside English procedural rules and the realities of court. In general, "the provisions are not

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complex" and have given rise to relatively few problems in proceedings before the English Court. It is, however, important that the rights of defence should not become too technical; otherwise, they might create unjustifiable obstacles to the free movement of judgments and the proper functioning of the internal market. The correct balance must be struck between access to justice and security of legal rights. 1.7 The Civil Procedure Rules (Part 74) governing enforcement of judgments under the Regulation co-exist peacefully with the rules contained in Arts. 32 to 58 of the Regulation. These rules are fairly straightforward. 1.8 Since the ECJ's decision in The Tatry, there is a relative dearth of English authority in relation to the functioning of Art. 71. There is no reason to think that the English Court would not follow the principles laid down in that case, although there remains a question mark as to its compatibility with Art. 71(2)(a). The failure of Art. 71(2) to deal adequately with the situation where an international convention removes jurisdiction has also been criticised by English commentators. 2.1.1 The decision of the ECJ in Owusu v Jackson, and its reliance on the principle of legal certainty, has met with considerable criticism among UK commentators. What cannot be denied, however, is that Regulation 44/2001 (and its predecessor) has introduced greater legal certainty into this area of law. Of more concern is at what price this goal has been achieved. The benefits of certainty resulting from the Regulation framework, nevertheless, have sometimes been flagged by English courts as an advantage. 2.1.3 The specific grounds in Arts. 5 and 6 appear generally acceptable. Several consultees, however, criticised the specific focus of Art. 6.1 upon jurisdiction based on one co-defendant's domicile, rather than (for example) a jurisdiction agreement, as being capable of creating fragmentation of litigation. As an alternative to Art. 2 and consistently with its place in the hierarchy of the Regulation, it is proposed that a claimant should be able to sue defendants domiciled in Member States in the courts of any place having jurisdiction over any other defendant in the same proceedings under any of the specific rules of jurisdiction contained in the Regulation. In other words, the category of potential "anchor defendants" should be widened, although it is accepted that jurisdiction established with respect to a non-Member State

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domiciled party under Art. 4 could not be relied on to found jurisdiction under Art. 6.1. It is suggested that this amendment would assist in the efficient conduct of multi-party proceedings and reduce the risk of irreconcileable judgments resulting from the fragmentation of litigation. The narrow construction of Art. 6.1 supported by the ECJ decisions in Reunion Europeenne and Roche is an undesirable restriction in terms of the efficient conduct of multi-party litigation and the objective of avoiding conflicting judgments. Art. 6.1 should, therefore, make clear that claims may be sufficiently related even though they have a different legal basis, provided that there is a sufficient risk of inconsistent findings of fact or law. It has also been suggested that it would be desirable to include a provision enabling related claims against the same defendant to be joined (e.g. claims in contract and in tort) in circumstances where some of them only fall within one of the heads of Art. 5. 2.1.4 Criticism can be levelled at the Article for not exactly delimiting its hierarchy within the Regulation; although it is expressly subject to Articles 22 and 23, it must also be implicitly subject to the provisions on employment, insurance and consumer cases (Articles 18, 13, and 8 respectively), the rules on entering an appearance (Article 24) and the lis alibi pendens provisions. The issue of discrimination against third State parties has not arisen in this area, although it has given rise to complex issues in other areas of civil litigation (most notably in relation to security for costs applications) and it cannot be ruled out as an issue for the future, particularly given its consequences in terms of the enforcement of judgments (see 4.1.5 below). 2.1.5 The application of Arts. 25 and 26 is supported by procedural requirements contained in the Civil Procedure rules governing service of process outside the jurisdiction and the entry of default judgments. 2.1.6 The examination of the issue of jurisdiction can be expensive and time-consuming, depending on how complex the factual and legal issues that are involved. On the question of the relationship between issues of jurisdiction and the main proceedings, a decision on jurisdiction is necessary before the Court can decide to proceed on the merits. It should be emphasised that this procedure is generally regarded by practitioners and litigants in England as superior to the system in certain other Member States whereby the defendant must plead to the merits of the claim at the same time as disputing jurisdiction. That other (foreign) system is viewed as capable of producing unjust results, particularly in cases where there is a jurisdiction clause in favour of a court other than that seised.

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Indeed, one could argue strongly that the requirement to plead on the merits at the same time as pleading to the jurisdiction and to proceed to trial of the action before any decision is given on jurisdiction hinders the proper functioning of the Regulation and cannot be justified according to the criteria laid down by the Court of Justice in the Hagen case by the Court of Justice. A key proposal for updating the Regulation (with a view to ensuring equality of arms between litigating parties) is, therefore, to establish a uniform procedure for disputing jurisdiction, along the lines of that set out for the enforcement of judgments in Chapter III of Regulation 44/2001/EC. It is proposed that such procedure should contain the following elements: • Prohibition of any procedural requirement that the defendant on the merits before the jurisdiction issue is determined (while allowing the parties to agree that the court may continue to hear the case on its merits, without prejudice to the defendant's jurisdictional objection). • A requirement that an application disputing jurisdiction (together with particulars) be lodged by the defendant with the court within a specified period (e.g. 2 months) from the date of service of the document initiating the claim, and subsequently served on the claimant. • A requirement that the first instance decision on jurisdiction be given within a specified period (e.g. 6 months from lodgement or service of application, unless the parties agree a longer period). • The appeal against that decision to be limited to a single stage, in accordance with Art. 44 of Regulation 44/2001. • Any appeal decision to be given within a specified period (e.g. 6 months from the date of the original decision). • Suitable provision for references to the ECJ on questions of construction of Regulation 44/2001. As to ECJ references, consultees were strongly critical of the time taken by the European Court of Justice to give judgment on references to it in connection with the Brussels Convention. In the view of these consultees, such delay is not compatible with the efficient conduct of litigation or the demands of modern business. These concerns may be capable of being addressed only through institutional reform (for example, by creating a new chamber of the ECJ charged with speedy resolution of references under Title IV instruments, perhaps sitting in smaller formations or adopting procedures designed to ensure swift resolution of references in more obvious or urgent cases.

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A "red light, green light" procedure, whereby a Member State court could make a provisional decision as to the construction of the Regulation in a novel or ambiguous situation and refer that decision to a single European judge to decide whether to support it or to make a full reference to the ECJ is suggested as one possible solution. 2.2.1 The decision in Owusu v. Jackson has been heavily criticised by English commentators in particular on the ground that the Court of Justice fundamentally misunderstood the nature of the forum non conveniens doctrine as applied by the English Courts. Since the decision in Owusu, the English Courts have had on more than one occasion to grapple with its implications, including (a) whether the same result applies when the basis of jurisdiction under the Regulation is other than Art. 2, (b) whether the same result applies when there is a connection with a non-Member State which (if that connection had been with a Member State) would have required or entitled the English court to decline jurisdiction (possible "reflexive effect"), and (c) whether the decision in Owusu affects other rules excluding the jurisdiction of the English courts. Further, one English judge has also left open the possibility that the reasoning Owusu might rule out the grant of a stay on forum non-conveniens grounds in a situation to which Art. 4 applies. Absent a clarificatory amendment to the Regulation, these questions seem likely to trouble the English Courts for some time, at least until the Court of Justice provides further guidance as to the scope and effect of the decision in Owusu. In this connection, we would suggest that it would be in the interests of legal certainty, at the very least, to make clear that the Regulation shall not affect any immunity or privilege of a state or other international legal person arising by treaty or as a matter of customary international law. 2.2.2 The adoption by Art. 60 of alternative connecting factors is feasible enough, although there is uncertainty as to how they will be applied. 2.2.3 Art. 5(1) appears to have given rise to few problems in practice. 2.2.4 Although uncertainty surrounds the precise meaning of "services", there appear to have been few problems in practice. 2.2.5 Again, the task of the place of performance for the purposes of Art 5(1)(a) appears to have caused few problems for the English Courts. 2.2.6

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See 2.2.4. 2.2.7 The operation of Art. 5(1)(c) appears self-evident and has caused no problems in the English Courts. 2.2.8 In the vast majority of cases, the delineation between Article 5(1) and 5(3) causes no substantial difficulties, there have sporadically been some problems in applying the guidelines set by the ECJ (e.g. to claims in the tort of negligence founded on a "voluntary assumption of responsibility". There are also conceptual uncertainties about the correct application of the paragraphs to claims based on restitution. 2.2.9 As noted above (see 2.1.3), the absence of the ability to join claims against the same defendant on different legal grounds has been criticised. 2.2.10 There have, however, been few complexities since Regulation 44/2001/EC came into force; in the last four reported English cases on Article 5(3) of the Regulation, no real difficulties as to the scope of the provision have arisen. In all probability, it will be the ECJ who will further build on the judgment in Kalfelis, and will ultimately decide whether, for the purposes of Article 5(3), a matter relating to a tort, delict or quasi-delict has to be founded on a cause of action, or come within an autonomous definition, that is based on a concept of wrongfulness. See, however, the comments at 2.2.8 above. 2.2.11 The decisions in Bier and Shevill may be welcomed in principle, but until jurisprudence of the ECJ expands on certain outstanding points, there is likely to be difficulty in applying the autonomous concepts of "damage" and the "event giving rise to damage" to more complex torts (e.g. economic torts). 2.2.12 It has been argued that if there is a potential risk of conflict between decisions on an important issue of fact (instead of conclusions of law), Article 6(1) could be replied upon to invoke special jurisdiction over the co-defendant. This must now be doubted in the light of the ECJ's decisions in Reunion Europeenne SA v Spliethoff's Bevrachtingskantoor BV and (more recently) in Roche Nederland BV v Primus, although consultees were strongly critical of the line taken in Reunion Europeenne and have recommended a more generous approach be taken to facilitate the efficient administration of justice. The inability for the claimant to rely on Article 23 and other grounds of jurisdiction under the Regulation) as the "anchor" for jurisdiction under Art. 6.1 has been strongly criticised

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by several consultees, and amendment of the Regulation to achieve this result is proposed (see 2.1.3). 2.2.13 Doubt remains as to whether Art. 15 can apply to claims (e.g. for breach of a duty of good faith or restitution) in circumstances where no contract has resulted between the parties fall within the scope of Art. 15. 2.2.14 In England, the definition of a consumer can include middle class investors, and similar private individuals (although the contract itself must still fall within the definition of a consumer contract). See also 2.2.20 below. With a view to the importance of insurance contracts, and the prominence of insurance litigation, in cases before the English courts (particularly the commercial courts), the rapporteurs and the consultees involved in the project were quite surprised that no specific questions were asked about the insurance contract provisions in any one of the study questionnaires. As regards the provisions on insurance (Chapter II, Section 3, Articles 8-14) it is proposed that the meaning of the terms used in the Section, e.g. "insured", "policyholder" and "beneficiary", and the respective rights and obligations of each be clarified in a prospective revision of the Regulation in light of the (not particularly accommodating) decision of the ECJ in the Peloux case. 2.2.15 Despite the joint Council-Commission communication, commentators disagree as to how Art. 15(1)(c) should be construed in the case of internet business. There appears to be no directly relevant English case law. 2.2.16 The term establishment under Art. 15(2) is essentially given the same meaning as for the purposes of Art. (5) 2.2.17 The provisions in Articles 18-21 have been criticised for being "untidy", but it would seem that (to date) this has done little to impair their practical effectiveness. The jurisdictional rules in Articles 18-21 apply in English courts, it would seem, exactly according to the guidance laid down by the ECJ in the leading cases on employment. 2.2.18 The decision of the Court of Justice in Webb, although criticised, has been followed by the English Courts. 2.2.19 The view has been expressed that Article 22(2) does not encompass all disputes between shareholder and company, or office and company, even if these are inward-

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looking and do not involve third parties. Rather than its being determined by the identity of the litigants, it is the nature of the dispute, or perhaps the identity of the substantive law that will be applied which dictates the application of Article 22(2). 2.2.20 Positive conflicts commonly occur, requiring application of lis alibi pendens rules. An example of a negative conflict of competence, which suggest that the something has gone wrong in the application of the provisions of the Regulation, is to be found in English case-law in relation to jurisdiction in consumer contracts. In one of these cases the English courts declared that they lacked jurisdiction on the basis that investors had made consumer contracts; Greek courts, however, held that the investors were not contracting for the satisfaction of their private needs, but instead were engaged in an entrepreneurial activity. The contract was a business venture. This negative conflict situation produced a rather unsatisfactory jurisdictional stand-off. 2.2.21 No English decision considers this complex question. 2.2.22 The English Courts have adopted a construction of Art 16(4) which appears consistent with the decision of the ECJ in the GAT case. 2.2.25.5 Decisions by English courts in this regard reflect commercial common sense (giving effect to the fundamental principle of party autonomy) and have been welcomed by practitioners and commentators alike. It is, therefore, a matter of great concern that the recent opinion of the Court of Justice as to the competence of the Community to conclude the new Lugano Convention (7 February 2006) might be taken to suggest that, except in the case of an international convention, derogation from jurisdiction based on the defendant's domicile under Art. 2 of Regulation 44/2001/EC is not possible even in cases analogous to Arts. 22 and 23 of the Regulation (see Opinion, Art. 153). Although the possible future accession by the European Community to the Hague Choice of Court Convention may resolve this issue, that statement is difficult to reconcile with the approach of the Schlosser Report and of the Court of Justice in Coreck (as well as the Court's approach to an arbitration clause in the Van Uden). 2.2.27.1 The practice of the English Courts appears consistent with the requirement laid down in the Van Uden case. 2.2.27.2

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One question which has been raised by commentators following the Van Uden case, although not yet resolved in any decision of the English Courts, is whether a worldwide freezing injunction (preventing the defendant from disposing or dealing with his assets worldwide) is capable of satisfying the territorial connection requirement. No English case since Van Uden has directly addressed the point whether the reasoning in that case deprives the English courts of the power to grant worldwide freezing injunctions in support of proceedings in other Member or Contracting States. Nevertheless, English courts has upheld interim injunction restraining a German defendant from disposing of a Dutch company and thus appear to adopt a less restrictive approach to the requirement of territorial connection. 2.2.27.3 The requirements are not generally problematic. 2.2.27.4 See above 2.2.27.1 2.2.27.5 See the more detailed description of English practice on enforcement of provisional measures. 3.1 Based on responses during consultation, an amendment to Regulation 44/2001/EC to address the problems resulting from decision in Gasser would attract more support from English practitioners than any other proposal. The decision is seen as being out of touch with commercial and judicial reality. The Institute therefore firstly encourages – with particular emphasis - the adoption of a uniform procedure for challenging jurisdiction, with short and uniform time limits (see also the suggestion with regard to question 2.1.6). In addition the Institute strongly supports a simple amendment to Art. 25 (by inserting the words "or Article 23" after "Article 22") to emphasise the duty of Member State courts to give effect to the derogating effect of exclusive jurisdiction agreements, consistently with the approach taken by the Hague Choice of Court Convention and (in relation to arbitration agreements) by the 1958 New York Convention. The English Courts consider Art. 23 to be concerned merely with concurrent proceedings at the time when the court which was not first seised made its determination. Therefore, where judgment has been given in the court first seised Art.27 no longer applies so that the court subsequently seised does not have to decline jurisdiction.

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3.2 As a practical matter, English practitioners are generally both well aware of the effect of the lis pendens rules in Regulation 44/2001/EC and of the need to issue proceedings first in their client's chosen forum, even as a tactical measure designed purely to frustrate the opponent's choice of jurisdiction (the so-called "Italian torpedo"). This commonly leads to the issue of proceedings without prior warning, thereby reducing the opportunity to settle claims before litigation. This is rarely edifying, and (particularly in the context of the Brussels and Lugano Conventions) has led to a proliferation of technical disputes concerning seisin, but it is among the first lessons to be learned by lawyers dealing with cross-border cases in the English Courts. The tendency of the lis alibi pendens rules in Arts. 27 to 30 to accelerate the "race to court", to the exclusion of negotiated settlement of claims, was strongly criticised by consultees, particularly with regard to situations in which the issue of proceedings is used as a tactic to frustrate an otherwise valid choice of court agreement (see the suggestions in respect of question 3.1). In this connection, the proposals referred to in 3.1 are again relevant. 3.3 Such frictions are perhaps inevitable given the difference in legal cultures, and have arisen most acutely in relation to the three Court of Justice decisions in Gasser, Turner v. Grovit and Owusu v. Jackson which have transformed the practice of common law courts, and have been heavily criticised for their reasoning. 3.4 While the broad approach taken by the English courts to identify “claims” and “defendants” that have a close connection will facilitate putting Article 28 into application and should not diminish legal certainty, positive differentiation to determine which cases are or are not covered by Article 28 using hard criteria would potentially interfere with a court’s determination of what is “expedient” within the meaning of 28 (3). Expediency implies that there should be a degree of flexibility in dealing with a variety of individual situations that may not be foreseeable to anyone. 3.5 Use of the term “cause of action” in the Regulation’s English language version can be a source of confusion because that term and its application has a long and complex history in English common law. However, the concept of a “cause of action” in English common law is not, in concept, co-extensive with “cause of action” under the Regulation. Under the latter, the test cannot be formal, and a court must look to the substance of each claim so the technical and procedural differences are not used to support invoking separate jurisdictions in different states. 3.6 Practical problems do arise regarding the application of Articles 27 to 30 with actions of several parties. The response identifies basic scenarios which might assist in making the potential problems more clear.

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3.7 The use of tactics of taking negative actions for a declaratory judgment at courts without jurisdiction (“torpedos”) indeed results in a worrying loss of efficiency in the operation of Regulation 44/2001/EC. The Institute therefore urges the Commission to redress these negative effects by means of a revision of the Regulation, proposals for which have been put forward in the response to question 3.1. 3.8 The decision of the Court of Justice in Turner v. Grovit has removed the English Courts' ability to police the commencement of oppressive actions in other Member States. 3.9 If the rights under a patent registered in another Member State are infringed along with the patent rights granted by the forum state and nullity is asserted by the alleged infringers, exclusive jurisdiction as to registration of the foreign Member State patent is in the foreign Member State court, and the case will necessarily have to be delayed. Such, indeed, appears the inevitable consequence of the Court of Justice decision in GAT. 3.10 A leading English work indicates that maintaining such a consistent action of infringement would not be practical in England at this time, unless it turned out that the defendants chose not to raise any defence of nullity. 4.1.1 See response for a detailed description of the UK enforcement procedure. 4.1.2 From a UK viewpoint, the introduction of additional standard forms would not necessarily be desirable. Interestingly, the member of the court staff dealing with applications under Regulation 44/2001/EC and also with issues relating to the European Enforcement Order (Regulation 805/2004/EC) indicated that the more detailed forms in relation to the latter appeared to be creating greater difficulties for practitioners than the more flexible requirements of Regulation 44/2001/EC. 4.1.3 On the identically-worded definitions in Regulation 44/2001/EC and the English Civil Procedure Rules. It is, however, suggested that the exclusion of orders made without notice the defendant (Denilauer) should be made explicit in the Regulation and that additional delineation about kinds of interlocutory orders that are included would make it easier for courts and practitioners to decide which particular court orders that are not intended to be registered and enforced. 4.1.4

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The (limited) accessibility of English courts by electronic means is described in the response. 4.1.5 It is suggested that the limited review of jurisdiction allowed by Art. 35(1) may no longer be necessary. On the other hand, the limited review allowed by Arts. 34 to 36 appears capable of causing injustice to defendants not domiciled in a Member State and it is proposed that its application in such cases should be reviewed. 4.1.7 The public policy exclusion has rarely been applied in English practice. 4.1.8 In one case, non-recognition by the German Courts of an anti-suit injunction under the Brussels Convention led in one subsequent case to greater sensitivity as to the grant of relief. 4.1.9 The relationship between public policy and abuse of process has been considered in one recent English case, but is complicated by the ECJ decision in Turner v. Grovit. 4.1.10 Art. 49 appears to have caused few (if any) difficulties in English practice, although If it should happen that the astreinte were to be ordered to be paid to the state in its sovereign capacity, it would raise an issue under the basic applicability of the Regulation (Article 1) whether the judgment in question was in a civil or commercial matter because traditional English recognition and enforcement of foreign judgments does not extend to fines and penalties imposed and to be collected by foreign states. 4.1.11 There has been some discussion of this complex issue among commentators, but (as yet) not in English court practice. 4.1.12 As noted above (see 3.8), the decision in Turner v. Grovit has removed one weapon in policing actions brought abusively or in bad faith. This has inevitable consequences in terms of diminishing the efficiency of legal protection. The decision in Turner has been criticised by commentators, although practitioners accept that it is unlikely to be reversed. 4.1.13 See response for a description of the appeals process in the English courts. 4.2.1

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See response for a description of the English practice. 4.2.2 It is for the judgment debtor, and not persons concerned with the execution of judgments, to challenge the declaration of enforceability on which such execution is based. 4.2.4 Not necessarily – see response for a description of the English practice. 4.3.1 There is very little English case law on the points raised, although the responses draw some conclusions as to the application of Art. 57 in practice. 4.3.2 There appears to be no English case law on the points raised, although the responses draw some conclusions as to the practical significance of Arts. 57 and 58. 4.3.3 See response for discussion of relationship with Regulation 805/2004/EC.

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ANNEX I – Covering Letter of Professor Gillian Triggs, Director of the British Institute of International and Comparative Law

Dear Professor Hess On behalf of the British Institute of International and Comparative Law I am very pleased indeed to present you with the responses to the study’s questionnaires, as far as the application in the UK of the Brussels I Regulation (Regulation (EC) No. 44/2001) is concerned. Please treat this covering letter as an integral part of the Institute’s response to the study’s questionnaires. The preliminary draft responses to questionnaire number 3 (legal problem analyis) were prepared by Martin George (University of Birmingham) (parts 1 and 2) and Dr Robert Murphy (Groningen University) (parts 3 and 4). These draft responses were then reviewed by the BIICL project team consisting, principally, of Andrew Dickinson (BIICL honorary fellow and project consultant) and Jacob van de Velden (BIICL European law research fellow). A working draft of the responses was sent to a broad group of interested parties for consultation purposes and their views were taken into account in preparing the final version. The consultation process also involved members of the BIICL Private International Law Discussion Group who were invited by email to express their views. Finally, the BIICL project team met with representatives of the Queens’ Bench Division of the High Court responsible for the registration and enforcement of foreign judgments, of the Court Service (part of the Department of Constitutional Affairs), and of the Commercial Court’s working group on the Regulation (chaired by Mr Justice Tomlinson). Overall the process of drafting the UK responses has proved a relatively intricate process for the following reasons. First, the UK comprises three separate legal systems, specifically (a) England and Wales, (b) Scotland, and (c) Northern Ireland. Given the limited resources available and the specialist knowledge of the project team, BIICL, as UK rapporteur, has necessarily focused on the practice of the English and Welsh Courts. Wherever possible, however, the responses also take into account views expressed from Scotland.

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Secondly, as you have recognised, the prominence of the UK as a commercial and financial centre means that there is a comparatively large body of relevant national case-law presented in the UK (particularly in England and Wales) addressing the Regulation. Further, on many occasions the questions required reference to national cases involving the application of the Brussels and Lugano Convention, as well as the relevant interpretative case-law of the European Court of Justice, in order to satisfactorily provide answers, as many of the issues are not yet dealt with in the national cases on Brussels I, which is still in its early stages of development. We have not, however, sought (and could not hope) to provide a comprehensive account of the considerable body of relevant case law of England and Wales, let alone the UK as a whole, concerning the Conventions. Thirdly, in relation to the study’s questionaires, we would observe that in several instances it has been difficult to relate the enquiries to the legal practice in England and Wales, as they referred to legal concepts unfamiliar to common law lawyers or to issues which do not arise here. To similar effect, in relation to the questionnaires in general, but in particular part 1 and 2 of questionnaire 3, the BIICL project teamwere confronted with some inclarities and inaccuracies, which further complicated their work. Moreover, a number of areas of legitimate concern to UK practitioners and commentators were not addressed in the questions, although we have sought to take account of these in the responses wherever possible. Fourthly, the resources made available to BIICL to carry out the work requested have proven unrealistic given the length and complexity of the questionnaires. In the circumstances, I believe that the project team has prepared responses to the questionnaires to a high standard. I trust that you will agree. Finally, although BIICL wishes to assert copyright in the responses it is submitting, it is of course content for you to provide a copy of the responses to the European Commission in conjunction with any final report that you might prepare. If you or the Commission would like to use the responses for any wider purpose, e.g. publication in book form or by means of a website, please do not hesitate to contact Jacob van de Velden (j.vandevelden@biicl.org, tel. +44(0)2078625169). Please also contact Jacob if you have any questions or comments on the responses. I conclude by stating my wish that the cooperation between our Institutes may continue and may result in further valuable studies being carried out jointly in the very near future. With kind regards Gillian Triggs

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Director

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ANNEX II – Table showing the Number of Registrations by Country of Origin in Her Majesty’s Court Service’s Register of Foreign Judgments Regulation 44 2001 - Register of Foreign Judgments

2004-5 2005-6 Country Number Number Austria 8 2 Belgium 12 3 Cyprus 2 3 Czech Republic Estonia Finland 1 France 7 9 Germany 44 30 Greece 1 Hungary Ireland 3 4 Italy 7 6 Latvia Lithuania 1 Luxembourg 3 Malta Netherlands 4 8 Poland Portugal 1 Slovakia Slovenia Spain 2 Sweden 1 1 TOTAL 92 71 Non money Judgments

1 1

Highest Value Judgment € 40,630,241.33 452,702,147.95 kr (approx £ value) £28,115,868.33 £34,184,259.45

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Lowest Value Judgment (Swedish) € 609.80 € 499.81 (approx £ value) £421.98 £345.87 No details of stays/strike outs on EU cases were found in the Register for these two years. QB Judgments & Orders Section, RCJ. 13th July 2006

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ANNEX III – Example Extract from Her Majesty’s Court Service’s Register of Foreign Judgments

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ANNEX IV – Speech of Sir Anthony Clarke to the Society of Advanced Legal Studies, 26 February 2006

Sir Anthony Clarke

Master of the Rolls

The differing approach to commercial litigation in the European Court of

Justice and the courts of England and Wales

Institute of Advanced Legal Studies, Russell Square, London

London

23 February 2006

Introduction

I must begin with a word of thanks and a word of apology. The thanks are due to David Gladwell, who of course runs the Court of Appeal (and thus all our lives). He is a member of the Friends of the Institute of Advanced Legal Studies and about six months ago asked me if I would address this august body. So here I am, although I am not sure if thanks is quite the right word. It is one thing to agree to give a talk and quite another to prepare it. Fortunately I have had the great help of John Sorabji in doing so, although he has sensibly gone on holiday rather than listen to me. Present or not, my thanks are due to him. The good bits are his, the errors are mine.

The word of apology is that the title to this lecture does not give any very clear picture of what it will contain. Its purpose is to highlight the differing approaches taken by the English courts on the one hand and the European Court of Justice ("the ECJ") on the other to the exercise of its jurisdiction in civil and commercial matters. In particular recent decisions in the ECJ have shown that its approach to anti-suit injunctions is markedly different from the approach adopted here, especially by the Commercial Court and the Admiralty Court. The cases are well known. They are of course Erich Gasser GmbH v MISAT Srl [2005] QB 1, Turner v Grovit [2005] 1 AC 101 and Owusu v Jackson (t/a Villa Holidays Bal Inn Villas) [2005] QB 801. These decisions and the rationale that underlies them to my mind have important implications for the future.

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Before turning to an analysis of them and their implications I shall first say a word about the traditional English approach to questions of jurisdiction and its exercise, then turn to review the background and rationale underlying the Brussels Convention regime and its aims in an attempt to put the latest case developments in context and to highlight the different approach taken here and in Europe.

Approach of the English courts

I have spent much of my professional life both at the Bar and as a judge dealing with cases in which parties, usually defendants, have done their utmost to avoid having the dispute tried on the merits in England. Arguments of every kind have been deployed over the years to persuade courts that the interests of justice lie in the issues being determined elsewhere, although in very many cases the true position is that the defendant's real interest is to ensure (if at all possible) that the issues will in practice never be determined at all.

The English courts have drawn a distinction between due service of process, which is necessary to confer jurisdiction on the court and the exercise of that jurisdiction. Thus the court may decline to exercise its jurisdiction and grant a stay on a number of different bases, depending upon the circumstances.

As to jurisdiction, the English courts have traditionally accepted jurisdiction, at least in so far as actions in personam are concerned, on four bases: presence in the jurisdiction, consent, exercise of the discretionary power to assume jurisdiction over parties out of the jurisdiction under what was RSC Order 11 and is now CPR 6.20 and 6.21 and international convention.

As to presence, it is to be noted that it was traditionally presence and not domicile which founded jurisdiction. As to consent, many commercial parties have consented to the jurisdiction of the English courts. Such consent can of course be given in a number of ways. For example, litigants domiciled outside England may voluntarily submit to the court's jurisdiction by appointing an agent in England to accept service on their behalf: see Tharsis Sulphar Co v Société des Metaux (1889) 58 LJQB 435. In such cases where jurisdiction was established as of right, the court would only grant a stay of an action where the defendant could show that the proceedings were in some way vexatious of oppressive: see eg McHenry v Lewis (1882) 22 Ch D 397 at 408 and Lord Morris's excellent summary of the development of this line of authority in The Atlantic Star [1974] AC 436 at 455ff.

It was objected that this led to plaintiffs looking for a forum which would be most favourable to them and to undesirable forum shopping. Lord Denning's answer to that suggestion is to be found in his judgment in The Atlantic Star [1973] QB 364 at 381 - 382:

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" No one who comes to these courts asking for justice should come in vain. ... This right to come here is not confined to Englishmen. It extends to any friendly foreigner. He can seek the aid of our courts if he desires to do so. You may call this 'forum shopping' if you please, but if the forum is England, it is a good place to shop in, both for the quality of the goods and the speed of service."

That has a certain ring to it, perhaps particularly appealing to those practising commercial law in London. However, it did not last. Due mainly to the efforts of Lord Goff, who had, as counsel, argued for their introduction in The Atlantic Star, the principles forum non conveniens as understood in Scots law were introduced into English law: see The Abidin Daver [1984] AC 398. As I am sure all present are fully aware, this doctrine seeks to ascertain which country is a dispute's 'natural forum' and to resolve an application for a stay or anti-suit injunction accordingly: see Spiliada Maritime Corporation v. Cansulex Ltd [1987] A.C. 460 per Lord Goff at 478. Where one party has brought proceedings in England concerning, for instance, the performance of a contract in the United States or Hong Kong it will try to ascertain which is the most appropriate forum to decide that dispute.

Why did the English courts adopt the Scottish approach? The answer is I think clear. It is an expression of the fundamental principle of doing substantial justice to the parties in litigation. This was recognised by Lord Goff in Spiliada. He said at page 474:

" In cases where jurisdiction has been founded as of right, i.e. where in this country the defendant has been served with proceedings within the jurisdiction, the defendant may now apply to the court to exercise its discretion to stay the proceedings on the ground which is usually called forum non conveniens. That principle has for long been recognised in Scots law; but it has only been recognised comparatively recently in this country. In The Abidin Daver [1984] A.C. 398, 411, Lord Diplock stated that, on this point, English law and Scots law may now be regarded as indistinguishable. It is proper therefore to regard the classic statement of Lord Kinnear in Sim v. Robinow (1892) 19 R. 665 as expressing the principle now applicable in both jurisdictions. He said, at p. 668: "the plea can never be sustained unless the court is satisfied that there is some other tribunal, having competent jurisdiction, in which the case may be tried more suitably for the interests of all the parties and for the ends of justice""

It is perhaps an example of the application of the principle stated by Lord Mansfield CJ as long ago as 1768 in Alderson v Temple (1768) 4 Burr. 235, where he said:

"The most desirable object in all judicial determinations, especially in mercantile ones, (which ought to be determined upon natural justice, and not upon the niceties of law,) is, to do substantial justice."

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See also per Lord Diplock in Bremer Vulcan v South India Shipping Corporation [1981] AC at 977.

The English courts thus adopted an approach, rooted in the jurisprudence of a civil law jurisdiction, which sought to ensure that cases were tried in the most appropriate forum in which their dispute can be resolved. This is a pragmatic approach exercised on a case by case basis. However, as is of course well known, the framers of the Brussels Convention rejected it in favour of a simpler and more certain approach, to which I will return in a moment.

In cases where there is no exclusive jurisdiction clause and English jurisdiction is established as of right and the principles of forum conveniens apply, it is for the defendant to persuade the court that the interests of justice require a stay of proceedings in favour of proceedings elsewhere. In cases where there is no exclusive jurisdiction clause and the permission of the court is necessary in order to permit service of the proceedings out of the jurisdiction, the claimant must satisfy the court first that the case falls within one of the categories of case set out in CPR 6.20 and, secondly, that the English court is "the proper place in which to bring the claim": see CPR 6.21(1) and 2A. The burden is thus on the claimant and not on the defendant. This is consistent with the principles in Spiliada.

The position is somewhat different if there is an exclusive jurisdiction clause in an agreement between the parties. This is an area in which there is a stark difference between our approach and that of the ECJ. In this class of case (and indeed in the case where there is an exclusive arbitration clause) the English approach has traditionally been that, where the parties have agreed a particular jurisdiction or arbitration in a particular place, the court will refuse or grant a stay (or anti-suit injunction) in favour of litigation or arbitration in the agreed forum unless there are strong reasons for not doing so: see eg The El Amria [1981] 2 Lloyd's Rep 119 and many other cases. I have often wondered why the courts conferred on themselves a discretion to allow a party to proceed in breach of an agreed jurisdiction or arbitration clause in a contract. There are, after all, no other terms of a contract which the court can disapply by the exercise of a discretion. In all other types of case the courts would (at any rate in the old days) simply have said pacta sunt servanda. However, that is by the by.

Until dealt what may be a fatal blow in Gasser and Turner (at any rate in the European context), the English courts adopted a robust approach to applications for anti-suit injunctions. They were willing to grant injunctions to restrain proceedings by claimants in other proceedings in breach of English exclusive jurisdiction or arbitration clauses. There are now many examples of this. It is sufficient to refer to Continental Bank NA v Aekos Compania Naviera SA [1994] 1 WLR 588 and The Angelic Grace [1995] 1 Lloyd's Rep 87. In the first case the English court granted an anti-suit injunction restraining proceedings brought before a Greek court in breach of an exclusive jurisdiction clause. It considered

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the question whether the procedural rule set out in Article 21 of the Convention overrode Article 17. It held it did not. In doing so the Court of Appeal relied upon the principle that substantive law takes precedence over procedural law. That approach was identified as being embodied in Article 17, which gives precedence to the courts of the agreed jurisdiction and thus enunciates the principle of party autonomy: see [1994] 1 WLR at 598. Thus parties should be held to their bargains so far as jurisdiction agreements are concerned, just as they should be held to other parts of their agreements.

The Court of Appeal took the view that to take any other view would lead to what were described as 'ludicrous' consequences. The consequences which the court had in mind no doubt included a device that we all now know by the name of the Italian Torpedo, to which I will return in a moment. It is the device whereby, for purely tactical purposes, a litigant deliberately rushes to institute proceedings (perhaps for a declaration of non-liability) in a forum other than the one which has exclusive jurisdiction under a contract. The forum chosen is usually one which is renowned for slow moving civil process, which offers a wide scope for procedural skirmishing. The tactical purpose is of course to cause undue delay, unnecessary costs and thereby pressurise the other party to settle at an unduly low level. Its purpose is clearly antipathetic to the achievement of justice.

In The Angelic Grace the court was not faced with the breach of an exclusive jurisdiction clause, but rather with the breach of an arbitration clause. The court concluded that there was nothing in principle to distinguish the two types of breach. It thus concluded that the Brussels-Lugano regime did not preclude the court from granting an anti-suit injunction. Again the English court adopted an approach which gave greater importance to holding the parties to their bargain than to the operation of a formal procedural rule.

Perhaps the clearest and typically incisive and robust statement of this principle is to be found in the judgment of Millett LJ in The Angelic Grace. I quote it in detail because it is the high water mark of the English approach. He said at page 96:

"In my judgment, the time has come to lay aside the ritual incantation that this is a jurisdiction which should only be exercised sparingly and with great caution. There have been many statements of great authority warning of the danger of giving an appearance of undue interference with the proceedings of a foreign Court. Such sensitivity to the feelings of a foreign Court has much to commend it where the injunction is sought on the ground of forum non conveniens or on the general ground that the foreign proceedings are vexatious or oppressive but where no breach of contract is involved. In the former case, great care may be needed to avoid casting doubt on the fairness or adequacy of the procedures of the foreign Court. In the latter case, the question whether proceedings are vexatious or oppressive is primarily a matter for the Court before which they are pending. But in my judgment there is no good reason for diffidence in granting an

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injunction to restrain foreign proceedings on the clear and simple ground that the defendant has promised not to bring them. The Courts in countries like Italy, which is a party to the Brussels and Lugano Conventions as well as the New York Convention, are accustomed to the concept that they may be under a duty to decline jurisdiction in a particular case because of the existence of an exclusive jurisdiction or arbitration clause. I cannot accept the proposition that any Court would be offended by the grant of an injunction to restrain a party from invoking a jurisdiction which he had promised not to invoke and which it was its own duty to decline. ...

We should, it was submitted, be careful not to usurp the function of the Italian Court except as a last resort, by which was meant, presumably, except in the event that the Italian Court mistakenly accepted jurisdiction, and possibly not even then. That submission involves the proposition that the defendant should be allowed, not only to break its contract by bringing proceedings in Italy, but to break it still further by opposing the plaintiff's application to the Italian Court to stay those proceedings, and all on the ground that it can safely be left to the Italian Court to grant the plaintiff's application. I find that proposition unattractive. It is also somewhat lacking in logic, for if an injunction is granted, it is not granted for fear that the foreign Court may wrongly assume jurisdiction despite the plaintiffs, but on the surer ground that the defendant promised not to put the plaintiff to the expense and trouble of applying to that Court at all. Moreover, if there should be any reluctance to grant an injunction out of sensitivity to the feelings of a foreign Court, far less offence is likely to be caused if an injunction is granted before that Court has assumed jurisdiction than afterwards, while to refrain from granting it at any stage would deprive the plaintiff of its contractual rights altogether.

In my judgment, where an injunction is sought to restrain a party from proceeding in a foreign Court in breach of an arbitration agreement governed by English law, the English Court need feel no diffidence in granting the injunction, provided that it is sought promptly and before the foreign proceedings are too far advanced. I see no difference in principle between an injunction to restrain proceedings in breach of an arbitration clause and one to restrain proceedings in breach of an exclusive jurisdiction clause as in Continental Bank N.A. v. Aeakos Compania Naviera S.A., [1994] 1 W.L.R. 588. The justification for the grant of the injunction in either case is that without it the plaintiff will be deprived of its contractual rights in a situation in which damages are manifestly an inadequate remedy. The jurisdiction is, of course, discretionary and is not exercised as a matter of course, but good reason needs to be shown why it should not be exercised in any given case.

As appears later, the contrast between the views of Millett LJ (and the other members of the court, namely Neill and Leggatt LJJ) on the one hand and those of the ECJ on the other is striking (to put it no higher). The approach taken by the

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English court in these cases places greatest weight on what commercial parties have agreed between themselves in arriving at the conclusion that it had the jurisdiction to impose anti-suit injunctions. Its interpretation of the regime in both cases rested on a case by case analysis of the merits of the particular case. The court in both cases was implicitly asking the question as to what justice, substantive justice, required it to do. Should it consistently with substantive law hold the parties to their bargain as to jurisdiction or arbitration? Or should it interpret the Convention so as to give one party a procedural advantage that would not only permit it to evade substantive law but permit it to evade substantive justice through use of a procedural device? The English courts took the view that substantive matters took precedence and that commercial parties who had reached a bargain should be held to that bargain. Procedural law should not be used to permit that bargain to be frustrated. Its commitment to affording precedence to the achievement of substantive justice informed its approach to interpretation of the Convention.

I will return in a moment to the inroads which have been made into those principles by Gasser and Turner.

The fourth class of case to which I referred earlier was jurisdiction under an international convention. The only such convention with which we are concerned this evening is the Brussels Convention on Jurisdiction 1965 as subsequently amended. The relevant rules are now contained in the Council Regulation (EC) Regulation 44/2001. I will call the whole system the Brussels-Lugano regime.

The Brussels-Lugano regime

The regime was intended to provide those countries to which it applies with a single, uniform, jurisdictional system in the field of civil and commercial private international law. This aim was clearly set out in both the Brussels Convention's preamble and Rapporteur Jenard's report. It was intended to simplify, and render more expeditious, the procedure for the mutual recognition and enforcement of judgments of the courts of each contracting state in other contracting states under Article 220 (now Article 293) of the Treaty of Rome 1957. That was the Convention's aim. It was not however a freestanding one. Its aim furthered the implementation of a wider Community goal, which as Rapporteur Jenard [Footnote 1] records was described in a note sent by the Commission of the European Economic Community to the six member states requesting that they commence the negotiations that resulted in the Convention. The note stated that:

"a true internal market between the six States will be achieved only if adequate legal protection can be secured. The economic life of the Community may be subject to disturbances and difficulties unless it is possible, where necessary by judicial means, to ensure the recognition and enforcement of the various rights arising from the existence of a multiplicity of legal relationships. As jurisdiction in both civil and commercial matters is derived from the sovereignty of Member

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States, and since the effect of judicial acts is confined to each national territory, legal protection and, hence, legal certainty in the common market are essentially dependent on the adoption by the Member States of a satisfactory solution to the problem of recognition and enforcement of judgments."

The overarching aim of the Convention was thus to further the creation of a fully-functioning single internal market for the EEC pursuant to, for example, Articles 3 and 7 of the Treaty of Rome. This aim had two subsidiary, or what might better be described as, facilitative aspects. First it required an increase in legal certainty within the common market. As Jenard put it, the Convention sought to bring about "a genuine legal systematization . . . (to) . . . ensure the greatest possible degree of legal certainty." [Footnote 2] This would in turn facilitate an increase in legal protection of those individuals and corporations domiciled within the common market.

These three aims have been stressed by the ECJ throughout the past 38 years: see for instance: Owusu Bank Ltd v Bracco [1994] ECR I-117. Equally they were stressed in Jenard and Möller's Report on the Lugano Convention: see paragraphs 4 - 5 and 8 - 11. They were again emphasised in the preamble to Regulation 44/2001 in the following terms:

" (1) The Community has set itself the objective of maintaining and developing an area of freedom, security and justice, in which the free movement of persons is ensured. In order to establish progressively such an area, the Community should adopt, amongst other things, the measures relating to judicial cooperation in civil matters which are necessary for the sound operation of the internal market. (2) Certain differences between national rules governing jurisdiction and recognition of judgments hamper the sound operation of the internal market. Provisions to unify the rules of conflict of jurisdiction in civil and commercial matters and to simplify the formalities with a view to rapid and simple recognition and enforcement of judgments from Member States bound by this Regulation are essential."

Legal certainty was stressed in paragraphs 11 and 15 of the preamble.

The Brussels-Lugano regime's aims can thus be summarised as threefold: first, the creation of a single, straightforward and supranational code governing jurisdiction and the enforcement of judgments, which, secondly, increases legal certainty surrounding such matters in those nations which form part of its jurisdictional area and, thirdly, thereby assists the creation of a fully operative single internal market within those member states.

The regime was to achieve these aims in two connected ways: first, by providing a directly effective system of law, or as in the United Kingdom's case an indirectly effective one in the form of the Civil Jurisdiction and Judgments Act 1982 ("the 1982 Act"), which overrode each member state's own domestic law, except

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where recourse to such law was specifically provided for within the regime itself: see, for instance, Articles 1 (2), 4, 67 and 71 of the Regulation, the corresponding Articles of the Conventions and Sanicentral GmbH v Collin [1979] ECR 3423; and secondly, by ensuring common, autonomous, interpretation of its terms: see Mulox v Geels [1993] ECR I-4075 at 10 - 11. It was therefore not only a supranational jurisdictional regime, but one which operated according to supranational jurisprudence developed by the ECJ. It was inevitable that the ECJ would develop a European approach which would, at the very least differ from, and might well conflict with, the approach taken by national courts.

Its operation was likely (as has proved to be the case) to differ most starkly from the traditional English pragmatic approach because it operates along formalist lines. This is I think demonstrated by the three cases to which I referred earlier and to which I shall refer in a moment.

The English approach to the Brussels-Lugano regime

The regime became part of English law and is now set out in the Regulation, which has direct effect which is recognised in Civil Jurisdiction and Judgments Order 2001 (SI 2001/3929) and reflected in CPR 6.19. As a result, subject to certain restrictions, permission is not required in order to serve proceedings out of the jurisdiction in respect of a claim which the court has power to determine under the Regulation. There is no room for the doctrine of forum non conveniens, at any rate as between parties who are domiciled in a member state or member states, because the Regulation states which court has jurisdiction in each class of case. Moreover, it has detailed provisions as to which of one or more possible courts in different member states has jurisdiction. Its essential philosophy is that the court first seised has jurisdiction and other do not: see article 21 of the Convention (now article 27 of the Regulation).

It is not necessary for me to set out the detailed provisions of the Regulation here for two reasons. The first is that you all know them by heart and the second is that, if I did, this lecture would never come to an end. It is sufficient to note that the basic principle that jurisdiction depends on domicile is contained in Article 2 of the Convention, now Article 2 of the Regulation. Article 16 of the Convention (now Article 17 of the Regulation) provides for exclusive jurisdiction in particular classes of case. Article 17 of the Convention (Article 23 of the Regulation) provides for the exclusive jurisdiction of the courts of a state in the case where the parties have included an exclusive jurisdiction clause in their contract. Article 21 (now Article 27) provides that, where proceedings involve the same cause of action, any court other than the court first seised must decline jurisdiction. Article 22 (now Article 28) provides that where actions are brought in the courts of different contracting states any court other than the court first seised may stay its proceedings.

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It is right to say that the English courts initially took a narrow view of the regime's ambit. They did so by adopting an interpretative approach to the Brussels-Lugano regime which sought to keeps its ambit within bounds set by what they took to be its primary aim: the creation of a single market between the member states. They took therefore an approach to the regime which sought to retain as broad an ambit of application for national law as was compatible with that aim.

This approach was clearly evidenced in the decision in the Court of Appeal in In re Harrods (Buenos Aires) Ltd [1992] Ch 72. In that case proceedings were brought in England in respect of the winding up of an English company. An issue arose as to whether Argentina was the more appropriate forum on the ground that the company carried out its business exclusively in Argentina. The Brussels Convention was (to use a Strasbourg expression) prima facie engaged as the company was the defendant in the action and was domiciled in England. However the Court of Appeal accepted an argument that the Convention did not apply because the question was whether the courts of a member state or the courts of a non-member state were the appropriate forum and the Convention only applied where the issue of jurisdiction was as between the courts of member states.

In the Court of Appeal both Dillon and Nicholls LJJ concluded that the Brussels Convention was limited in its ambit to governing international relations between member states amongst themselves, rather than governing member states international relationships per se. They did so by identifying the Convention's purpose, in Jenard's words, as the creation of:

". . . an autonomous system of international jurisdiction in relations between the member states. . ." (per Dillon LJ at 96.)

The single market was thus one that existed only as between member states. That its scope was limited in this way flowed from its other aim, namely the creation of a common jurisdictional basis for the mutual recognition and enforcement of judgments between member states. If that was the Convention's purpose under Article 220 of the Treaty of Rome, it was difficult to envisage how the Convention's jurisdictional rules could apply in litigation involving parties domiciled outside the member states. Bingham LJ adopted a similar interpretative approach, although he did so by placing reliance on the aim of the Treaty and the Convention to create for the various member states a single, jurisdictional unit between themselves alone and to do so by replacing prior bilateral agreements between several of the member states: see page 101 et seq.

The rationale behind the Court of Appeal's decision was subject to a number of criticisms, of which the two most serious are noted in Cheshire & North's Private International Law at page 264 as first, that it displayed a misunderstanding of the

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jurisdictional ambit of the Convention and, second, that it created uncertainty in the law. In Owusu the ECJ has held that the decision was wrong.

The three decisions

Before looking at the issues raised by the three decisions it is perhaps helpful to give an overview of them.

Erich Gasser GmbH v MISAT Srl [2005] QB 1

In Gasser proceedings were brought in both Italy and Austria arising out of an alleged breach of a commercial contract for the supply of children's clothing. The first set of proceedings was brought in April 2000 by MISAT before a court in Rome. In August 2000 Gasser commenced proceedings before a court in Feldkirch in Austria. Gasser argued that the Austrian court was the appropriate forum under the Convention because Austria was the place of performance of the contract within Article 5 (1) and because of a choice of jurisdiction clause in the contract, with the result that the Austrian court had jurisdiction under Article 17. MISAT argued that the Austrian court had no jurisdiction as it was domiciled in Italy and that Article 2 applied. It also contested the validity of the choice of jurisdiction clause and argued that the Roman court must determine that question as the court first seised. The Austrian court stayed the proceedings before it of its own motion in accordance with Article 21. Gasser appealed.

The Austrian appellate court referred two questions to the ECJ. It is the first of those which is of interest. It had two limbs: first, whether a court second seised could proceed to determine the case without waiting for the court first seised to determine jurisdiction where it, the court second seised, had exclusive jurisdiction under the contract; and secondly, if this were impermissible as a general rule, whether an exception to the effect of Article 21 could legitimately be made where the courts of the member state first seised were subject to excessive procedural delay. The ECJ gave its judgment in December 2003 and answered both questions in the negative: the procedural rule embodied in Article 21 took precedence over Article 17 and no exceptions could be made to its operation on the basis of internal aspects of a member state's procedural system: see the judgment at paragraph 46 - 47 and 70 - 73.

Turner v Grovit [2005] 1 AC 101

Shortly before Gasser was handed down substantially the same constitution of the ECJ heard Turner. The issue in the action was straightforward. Mr Turner, a solicitor, was employed by a group of companies as a legal adviser. During the course of his employment he was transferred to work in Madrid. He worked there for a very short period before he sought to terminate his employment. He then issued proceedings before an employment tribunal in England claiming unfair dismissal. Having dismissed an objection to the proceedings on the grounds of

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jurisdiction, the employment tribunal found in Mr Turner's favour. While those proceedings were continuing the defendants commenced proceedings against Mr Turner in Madrid alleging a breach of contract. Mr Turner applied for what is inelegantly known as an anti-suit injunction to restrain the defendants from proceeding with the Spanish action. An interim injunction was initially granted by the High Court in December 1998 but the judge refused to renew it in February 1999. Mr Turner appealed that refusal. The Court of Appeal allowed the appeal and reimposed the injunction.

Laws LJ gave the leading judgment. The Court of Appeal held that the English and Spanish proceedings were both concerned with the same subject matter, namely the termination of Mr Turner's contract, and that as the court first seised the English tribunal had exclusive jurisdiction under Article 21. More significantly perhaps the court held that the Spanish proceedings were brought merely to harass and intimidate Mr Turner. As Laws LJ put it:

". . . it is to my mind plain beyond the possibility of argument that the Spanish proceedings were launched in bad faith in order to vex the plaintiff in his pursuit of the application before the Employment Tribunal here."

He said that the court's power to grant an anti-suit injunction to restrain such proceedings derived from its inherent jurisdiction to prevent the abuse of process and that that power was not inconsistent with the Brussels Convention. On the contrary he held that:

". . . the carefully constructed system of mutual recognition between jurisdictions established by the Brussels Convention is built on the premise that the courts of one State only will hear the case, and its judgment may be enforced, without further consideration of the merits, in any of the other contracting States. To my mind it follows that where a party in the courts of one State seeks to vex and oppress his opponent by process against him in another State, directed to issues which are being or could be litigated within the proceedings in the first State, the case is to all intents and purposes the same as one where, within this jurisdiction, one party oppresses his adversary by the issue and prosecution of multiple actions."

Unassisted by the decision of the ECJ, I would have formed the view that that reasoning was impeccable. The defendants appealed to the House of Lords, which was of the preliminary opinion that, where a second set of proceedings was commenced in bad faith, there was no inconsistency between the grant of such an injunction and the provisions of the Brussels Convention: see [2005] 1 AC at 106. However it referred the question to the ECJ. The ECJ in a short judgment disagreed with both the Court of Appeal and the preliminary view of the House of Lords. The ECJ held that such injunctions were impermissible because they were incompatible with the Convention and they were incompatible with the

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Convention because they ran counter to the doctrine of mutual trust between member states, which underpinned the Convention.

Owusu v Jackson (t/a Villa Holidays Bal Inn Villas) [2005] QB 801

The third case raised the correct application of Article 2 of the Convention. Mr Owusu was domiciled in the United Kingdom. He hired a holiday villa in Jamaica from the first defendant, Mr Jackson. Whilst he was on holiday he suffered a serious injury, which resulted in him being left tetraplegic. The injury occurred while he was using a private beach owned and operated by the second defendant to which the terms of the holiday let gave him access. Mr Owusu brought a claim against Mr Jackson in England for damages for breach of contract. In addition he brought actions in tort against five Jamaican-based defendants. Four of the six defendants, including Mr Jackson, applied to the High Court for declaratory relief. The basis of their application was that the English court should decline jurisdiction or stay the action pursuant to the doctrine of forum non conveniens. They argued that Jamaica was the appropriate forum to hear the dispute because both the five Jamaican defendants and the relevant witnesses had closer links with Jamaica than with England and that the accident took place in Jamaica.

At first instance the judge refused to grant the order sought. He did so, following the ECJ's decision in Universal General Insurance Co (UGIC) v Group Josi Reinsurance Co SA [2001] QB 68 that jurisdiction under Article 2 of the Convention depended on the domicile of the defendant. The judge held that, since the first defendant was domiciled in the UK, the court could not decline jurisdiction or stay the proceedings against him and that it followed that the appropriate forum for the proceedings against the other non-UK based defendants was England even though the Convention did not apply to them and Jamaica was in one sense the more convenient forum. It was more appropriate for the English court to have sole jurisdiction for all proceedings. Otherwise there was a risk that separate proceedings in the two countries would lead to inconsistent judgments on the same or similar facts and issues.

The defendants appealed to the Court of Appeal, which referred the following questions to the ECJ:

"(1) Is it inconsistent with the Brussels Convention . . . where a Claimant contends that jurisdiction is founded on Article 2, for a court of a contracting State to exercise a discretionary power, available under its national law, to decline to hear proceedings brought against a person domiciled in that State in favour of the courts of a non-Contracting state: if the jurisdiction of no other Contracting State under the 1968 Convention is in issue; if the proceedings have no other connecting factors to any other Contracting State?

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(2) If the answer to question 1 (a) or 1 (b) is yes, is it consistent in all circumstances or only in some and if so in which?"

Both the Advocate-General in his opinion and the ECJ in its judgment concluded that there was no scope for an application of the doctrine of forum non conveniens where a defendant was domiciled in a member state. It made no difference to the exclusive applicability of Article 2 that the dispute centred on a non-member state and the acts or omissions of other defendants who were domiciled in that state.

This decision was perhaps predictable in the light of the court's reasoning in Turner. In paragraph 35 of his opinion in Turner Advocate-General Ruiz-Jarabo Colomer drew the following comparison:

"The effects of restraining orders are similar to those produced by application of the doctrine of forum non conveniens, whereby a decision may be made not to hear actions which have been brought in an inappropriate forum. Restraining injunctions, however much they are addressed to the parties and not to a judicial authority, presuppose some assessment of the appropriateness of bringing an action before a specific judicial authority. However, save in certain exceptional cases which are not relevant here, the Convention does not allow review of the jurisdiction of a court by a judicial authority of another contracting state: . . . "

The rationale behind the decisions

The rationale underlying these decisions is stark in its simplicity: the Brussels-Lugano regime must be interpreted so as to further its three overarching aims, which I identified earlier, that is to say, it must be interpreted so as to promote legal certainty thereby enhancing legal protection for those domiciled in the member states; to place proper weight on the doctrine of mutual trust between member states' and their internal legal systems; and thereby to enhance the development of the EU internal market.

Legal certainty

The importance of legal certainty is emphasised throughout the three decisions. The court's rejection of a power to derogate from Article 21 was rejected in Gasser on two grounds.

The first was that there was no explicit power in the Convention to derogate: see paragraph 71. The absence of an explicit power of course does not necessarily mean that a power could not be implied into the Convention. Although the Court did not address the question of implication, the second reason for rejecting the derogation demonstrates why it would not have been able do so: such a power

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would undermine the aim of ensuring the achievement of legal certainty which the Convention sought to ensure by creating a single, common jurisdictional regime: see paragraph 51. It is interesting to note that the importance of this aim was one which the Court felt no need to expand on in great detail because its status and importance were accepted as common ground between the parties: see paragraph 72 and its importance is implicitly acknowledged at paragraphs 44 - 45 of Advocate-General Lèger's opinion.

The role that legal certainty plays in guiding the Court's interpretation of the regime is also inherent in Advocate-General Ruiz-Jarabo Colomer's opinion in Turner. He said in paragraph 33:

"The Convention seeks to provide a comprehensive system, for which reason it is appropriate to ask ourselves whether a measure which has an impact on its field of application is compatible with the common rules which it establishes. The question must be answered in the negative."

A comprehensive system is one which tends towards certainty: it is of the widest application. Equally, and obviously, the creation of common rules applicable to all, in this case Convention member states, fosters certainty. The ability of States to arrogate a power outwith that common regime to decide questions of jurisdiction by, for instance, issuing an anti-suit injunction would in the Advocate-General's words lead to 'chaos'. It would be wholly antipathetic to legal certainty because, although the Advocate-General does not put it in these terms, it would in effect permit individual States to reintroduce national rules governing jurisdiction, something which the Convention explicitly aims to remove.

The Advocate-General's opinion on this issue was approved by the ECJ in paragraphs 29 and 30 of its judgment, where it clearly stresses that the regime's commitment to legal certainty must not be undermined by member states deploying any procedural mechanism in respect of litigation governed by the regime except those sanctioned by the regime itself. The regime is all-embracing.

Advocate-General Lèger's opinion in Owusu offers the most detailed exposition of the commitment to legal certainty. That aim is identified at paragraph 159 - 162 of his opinion in these terms:

"(159) In the terms of its preamble, the Convention aims 'to strengthen in the Community the legal protection of persons therein established'. Again according to the preamble, it is for that purpose that the Convention lays down, first, rules concerning the jurisdiction of courts common to the Contracting States and, second, rules to facilitate recognition of judgments and to establish an expeditious procedure for their enforcement. (160) The Court has clarified the meaning of that aim of the Convention, in particular with regard to the common jurisdictional rules which it contains. It has taken the view that the strengthening of the legal protection of persons

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established in the Community involves 'enabling the claimant to identify easily the court in which he may sue and the defendant reasonably to foresee in which court he may be sued'. The Court has also characterised those rules as 'guaranteeing certainty as to the allocation of jurisdiction among the various national courts before which proceedings in matters relating to a contract may be brought'. (161) Only jurisdictional rules meeting those requirements are capable of guaranteeing observance of the principle of legal certainty, which is also, according to settled case-law, one of the objectives of the Brussels Convention. (162) In my view, those two aims of the Convention, both that of strengthening legal protection for people established in the Community and that of ensuring legal certainty, mean that the application of Article 2 of the Convention cannot be made conditional on the existence of a dispute displaying connections with different Contracting States."

Those aims would be undermined by permitting an interpretation of Article 2 of the Convention which could give rise to litigation concerning the question of when it applied and when it did not. Most significantly, perhaps, the Advocate-General identified disputes as to intra-community jurisdiction as particularly problematic and such as would give rise to the greatest degree of legal uncertainty if such litigation were permitted: see paragraphs 164 - 168. To militate against such uncertainty he concluded that:

"(168) . . . in more general terms it is important to bear in mind that private international law is a discipline which it is far from easy to handle. The Brussels Convention is a specific response to a concern for simplification of the rules in force in the various Contracting States regarding jurisdiction of the courts, as well as recognition and enforcement. That simplification contributes, in the interest of everybody, to promoting legal certainty. It is also intended to facilitate the work of national courts in dealing with proceedings. It is therefore preferable not to introduce into the system created by the Convention elements which are liable seriously to complicate its operation."

Looking more specifically at the possible application of a forum non conveniens doctrine to the Brussels-Lugano regime, the Advocate-General concluded, with explicit reference to the ECJ's decision in Turner, that permitting its introduction into the regime would run counter to the aim of ensuring legal certainty and undermine its efficacy. He said at paragraphs 263 - 270:

"(263) . . . by allowing the court seised the opportunity to decline - in a purely discretionary manner - to exercise the jurisdiction which it derives from a provision of the Convention, such as Article 2, the doctrine of forum non conveniens seriously affects the predictability of the effects of the jurisdiction rules laid down by the Convention, in particular the rule in Article 2. . . . that predictability . . . constitutes the only way of ensuring observance of the principle of legal certainty and ensuring greater legal protection for people established in

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the Community, in accordance with the objectives pursued by the Convention. Any impact of that kind on the predictability of the jurisdiction rules . . . thus ultimately detracts from the effectiveness of the Convention. (264) In that connection, it is important to bear in mind that the Convention is largely inspired within the civil law system, which attaches particular importance to the predictability and inviolability of rules on jurisdiction. That dimension has a lower profile in the common law system, since the application of the rules in force is approached in a somewhat more flexible manner and on a case-by-case basis. In that way, the forum non conveniens doctrine fits easily within the common law system, since it grants the court seised the power to exercise a discretion in considering whether or not it is appropriate to exercise the jurisdiction vested in it. It is therefore clear that that doctrine is hardly compatible with the spirit of the Convention. (265) Quite apart from the foregoing general considerations, it is important to consider in greater detail the procedural consequences of implementing the forum non conveniens doctrine. In my view, such consequences would be difficult to reconcile with the objectives of the Convention which, let it be remembered, relate both to observance of the principle of legal certainty and to greater legal protection for people established in the Community. (266) As we have seen, as English law stands at present, the application of that doctrine entails a stay of proceedings, that is to say suspension of an action, which may operate sine die. That situation is inherently unsatisfactory in terms of legal certainty. (267) Moreover, in my view, instead of providing greater legal protection for people established in the Community, the forum non conveniens doctrine is more liable to undermine it. That is particularly true for claimants. (268) It bears repeating that it is upon a claimant seeking to escape the effect of the procedural objection in question that it is incumbent to establish his inability to secure a just outcome in the foreign forum in question. Here too, that situation is not satisfactory, in view of the real fear that that procedural objection may be invoked by certain defendants for the sole purpose of delaying the progress of proceedings against them. (269) Furthermore, where the court seised has finally decided to allow the plea of forum non conveniens, it is once again incumbent upon a claimant wishing to re-initiate proceedings to produce the evidence necessary for that purpose. Thus, it is for the claimant to establish that the foreign court does not ultimately have jurisdiction to hear the case or that he himself is not likely to secure a just outcome in that court or has not been able to do so. That burden of proof on the claimant may prove particularly heavy. In that respect, application of the forum non conveniens doctrine is therefore liable to have a considerable impact on the defence of his interests, so that it tends to detract from rather than reinforce the legal protection enjoyed by the claimant, contrary to the objective of the Convention. (270) Finally, in the event of the claimant not succeeding in producing the evidence in question to oppose a stay of proceedings (which could be pronounced sine die) or to recommence proceedings already suspended, the

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only possibility that would remain if he sought to pursue his claims would be to take all the steps needed to commence a new suit before the foreign court. It goes without saying that those steps have a cost and are likely considerably to prolong the time spent in the conduct of proceedings before the claimant finally has his case heard. Moreover, in that respect, the mechanism associated with the forum non conveniens doctrine could be regarded as incompatible with the requirements of Article 6 of the European Convention on the protection of human rights and fundamental freedoms."

The Advocate-General's approach was, in a much pared down form, adopted by the Court in its judgment in Owusu. In doing so it emphasised, at paragraphs 38 - 43, that the achievement of legal certainty was one of the regime's aims and that that would not be "fully guaranteed" if the doctrine of forum non conveniens was held to be compatible with the regime's operation. It stressed once again that that doctrine would undermine "the predictability of the rules of jurisdiction laid down by the Brussels Convention . . . and consequently to undermine the principle of legal certainty, which is the basis of the Convention."

It is more than apparent from the judgments and the opinions of the Advocates General in the three cases that the ECJ acknowledges the achievement of legal certainty as a fundamental instrument of interpretation. The commitment to certainty brooks no exceptions and guides the regime's interpretation and application. In so doing it has led the ECJ to accept an interpretation of the Convention which affords territorial range of very considerable scope. Its international jurisdiction now governs not only jurisdictional questions between the 29 member states but equally (one might say) their extra-member state relations.

Mutual trust

The second element which guided the ECJ in this line of authorities is the doctrine of mutual trust. That is the idea that each member state must place trust in the courts of other member states properly to carry out their obligations under the Convention. While there is nothing new about this doctrine - indeed, as Blobel and Spath rightly note in The Tale of Multilateral Trust and the European Law of Civil Procedure (2005) European Law Review, 30 (4) at 528, it can be traced back to the earliest days of the European institutions - its importance as a guiding principle to the interpretation and application of EC law had not previously been stressed so clearly. Blobel and Spath again rightly note that both Gasser and Turner 'stand out (as judgments) for the decisive weight . . .' the ECJ grants to the doctrine of mutual trust: ibid at 531. It played no part in Owusu.

Its importance is indeed emphasised in robust terms. Advocate-General Lèger relies on it in his opinion in Gasser, in rejecting the argument that Article 21 could be derogated from where the court first seised with a dispute is in a member state, such as those identified at paragraph 85 of his opinion i.e., "Italy, Greece

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and France", whose courts are known for excessive delay. He makes the point as follows:

"(88) . . . It does not really seem conceivable that it should be possible to refrain from applying article 21 of the Convention on the ground that the court first seised is established in a member state in whose courts there are, in general, excessive delays in dealing with cases. That would be tantamount to saying that the rules on lis pendens do not apply where the court first seised is established in one of certain member states. (89) Such an interpretation would be manifestly contrary to the scheme and the basis of the Brussels Convention. The Convention does not contain any provision to the effect that its rules, in particular those of article 21, should cease to apply because of the length of proceedings before the courts in another contracting state. Moreover . . . the Convention is based on the trust which the member states accord to each other's legal systems and judicial institutions: see R v Medicines Control Agency, Ex p Smith & Nephew Pharmaceuticals Ltd (Case C-201/94) [1996] ECR I-581 . . . It is on the basis of that trust that the Convention establishes a compulsory system of jurisdiction which all the courts within its purview are required to observe. It is also that trust which enables the contracting states to waive the right to apply their internal rules on the recognition and enforcement of foreign judgments in favour of a simplified mechanism for recognition and enforcement. It is therefore also the basis of the legal certainty which the Convention seeks to ensure by allowing the parties to foresee with certainty which court will have jurisdiction."

The Advocate-General's opinion was emphatically endorsed by the ECJ, which at paragraph 72 of its judgment attributes to mutual trust a key foundational role in the development of the Brussels-Lugano regime:

". . . it must be borne in mind that the Brussels Convention is necessarily based on the trust which the contracting states accord to each other's legal systems and judicial institutions. It is that mutual trust which has enabled a compulsory system of jurisdiction to be established, which all the courts within the purview of the Convention are required to respect, and as a corollary the waiver by those states of the right to apply their internal rules on recognition and enforcement of foreign judgments in favour of a simplified mechanism for the recognition and enforcement of judgments."

That foundational role, in tandem with the need to ensure legal certainty and the absence of an explicit power of derogation, left the Court in no doubt that the procedural rule enunciated in Article 21 was not one which could be derogated from where the court first seised was one from a legal system characterised by delay. Derogation on such a basis would tend to undermine the requisite trust that all member states must repose in each other's legal systems.

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A more detailed examination of the doctrine's importance is to be found in Turner at paragraphs 26 - 34. First, the Advocate-General reviewed the argument put forward by the UK government that anti-suit injunctions were aimed at protecting an individual claimant from being harassed by 'obstructive procedural measures' arising from abusive litigation by defendants in other jurisdictions and thus protecting the integrity of UK proceedings and that their use would thereby achieve the regime aim of reducing the number of proceedings before the courts of various member states. In his opinion that argument failed because of the doctrine of mutual trust. He thought that anti-suit injunctions 'cast doubt' on the doctrine. That they did so was in his view 'decisive'. It was impermissible to undermine the doctrine of mutual trust. He noted that the commitment to mutual trust had most recently been emphasised in Recitals 16 and 17 of the Regulation. The use of anti-suit injunctions, which either directly or indirectly undermined mutual trust, was impermissible because it would undermine European judicial co-operation, "which presupposes that each state recognises the capacity of other legal systems to contribute independently, but harmoniously, to attainment of the stated objectives of integration". I pause here to note that mutual trust and judicial co-operation are viewed as facilitative of a wider aim, namely integration and a single internal market.

The Advocate-General's rejection of the validity of anti-suit injunctions was again endorsed by the European Court. In its short judgment it highlighted the importance afforded to the doctrine of mutual trust by emphasising the rationale of decision in Gasser and by concluding that:

"(25) It is inherent in that principle of mutual trust that, within the scope of the Convention, the rules on jurisdiction that it lays down, which are common to all the courts of the contracting states, may be interpreted and applied with the same authority by each of them: see, to that effect, Overseas Union Insurance Ltd v New Hampshire Insurance Co (Case C-351/89) [1992] QB 434, 458, para 23, and Gasser, para 48."

It is perhaps unsurprising that with such a ringing endorsement of the doctrine the Court concluded that to permit the court of one member state to find that proceedings brought in another member state were abusively brought was impermissible. Assessing the appropriateness of proceeding in another member state undermines mutual trust as it effectively undermines first, the regime for such review put in place by the Convention, and secondly, the ability of the courts of other member states to assess for themselves the proceedings brought before them. Impinging on the jurisdiction of another court cannot but undermine trust between member states.

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Development of the single internal market

The third limb which has guided the ECJ's interpretation of the regime is the aim to facilitate the growth of the single internal market. Of the three limbs it is the least developed in this field.

It is only implicitly referred to in the Gasser judgment, where the Court alludes to the Brussels-Lugano regime itself being an embodiment of the single market ideal by creating a common, uniform jurisdictional regime which all courts of all member states have equal authority to administer. The ECJ's view is that to permit derogations from its rules, such as that embodied in Article 21, would run counter to that single juristic space: see paragraph 48. A similar point is made in the Advocate-General's opinion in Turner at paragraph 37, where it is noted that while member states are autonomous insofar as their national civil procedural codes are concerned they must ensure that any such rules comply with the underlying the regime. The regime thus sets uniform, common standards with which all member states must comply. It thus facilitates the creation of a 'true internal market' between the member states.

The creation of common rules governing the determination of issues of private international law by way of the Brussels-Lugano regime is further identified in the Advocate-General's opinion in Owusu: see paragraphs 189 - 212. Rejecting the UK government's argument that the Brussels Conventions sought to facilitate the growth of a common market only in respect of the recognition and enforcement of judgments delivered in member states, he emphasised the content of the second and eighth recitals to the Regulation's preamble. As he put it at paragraph 196:

"(196) . . . as emphasised in the second and eighth recitals in the preamble to the regulation, the jurisdictional rules contained in it - in view of the diversity of the existing national rules in this area and the resulting difficulties for the proper functioning of the internal market - seek to 'unify the rules of conflict of jurisdiction in civil and commercial matters', so as to arrive at 'common rules' in the Member States. This exercise of unifying jurisdictional rules forms part of an approach comparable to that provided for in Article 94 EC for the adoption of directives, since the aim of that substantive legal basis is 'the approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the common market'."

The Advocate-General drew further support for the importance of the need to interpret the regime compatibly with the aim of facilitating the growth of the single internal market by reference to the interpretation of Article 95 of the EC Treaty, Directive 95/46 and Regulation 1408/71. In arriving at its judgment the Court at paragraph 34 expressly referred to this discussion when it emphasised that the Brussels-Lugano regime was intended to facilitate the development of the internal market so that: ". . . there is a real and sufficient link with the working of the internal market, by definition involving a number of member states."

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Conclusions

Where are we now? It seems to me that a number of conclusions can be drawn from a contrast between the approach of the English court and of the ECJ on the other to two particular aspects of civil and commercial litigation. The first is the anti-suit injunction and the second is forum non conveniens. I take them in turn.

The anti-suit injunction

The contrast between the approaches can be seen from a comparison between the English approach exemplified by the judgment of Millett LJ in The Angelic Grace, which I quoted earlier and the approach of the ECJ in Gasser and Turner. The latter approach has been the subject of no little academic criticism. That criticism includes articles by Jonathan Mance (now of course Lord Mance) in LQR 2004, 120 (JUL), 357-365 and Adrian Briggs LQR 2004, 120 (OCT), 529-533.

Jonathan Mance recognises that the decision in Gasser is imbued with pure European principle but observes that it promises problems for legitimate claimants and opportunities for those unwilling to meet their obligations. Article 21 (now article 27) adopts a simple test of chronological priority for the court first seised. The effect of Gasser is to give that court priority over the agreed jurisdiction, so that, until the court first seised has decided that there is indeed a binding jurisdiction clause in favour of the courts of another member state, the latter must decline jurisdiction in favour of the former and the former must accept jurisdiction. He says:

"It is at the practical efficacy of Art.17 (now Art.23) that the European Court's decision in Erich Gasser seriously strikes. London is one important elective jurisdiction. However, the decision is of far from parochial concern, and may even affect commercial parties' willingness to agree to litigate (as distinct from arbitrate) in Europe."

Jonathan Mance then contrasts the views of Advocate General Leger with those of the ECJ as follows:

"The Advocate General was M. Philippe Léger. In a comprehensive and nuanced Opinion he drew the analogy between exclusive jurisdiction under Art.16 (now Art.22) and Art.17 (now Art.23). In paras [57], [62] and [66]-[68], he pointed out that, if Art.21 prevailed, it would "seriously compromise" the utility of Art.17 and the legal certainty to which it contributed. He went on: "67... In effect, ... the party who, in violation of his obligations resulting from the agreed choice of jurisdiction, has first initiated proceedings before a tribunal which he knows to be incompetent could abusively delay the resolution of the dispute on the merits when he knows this would be unfavourable to him ...

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68. This consequence is shocking as a matter of principle and risks encouraging delaying tactics..."

The Advocate General also noted that the basic problem was one of tactical manoeuvring, not simply delay in some judicial systems. A party commencing proceedings in a country (State A) other than the country agreed (State B) would "use every internal means to delay the moment when the decision that this jurisdiction is incompetent becomes definitive" (para.[69]). The solution was to allow the court second seised to continue to exercise jurisdiction provided that it could establish the existence and application of the agreed choice of jurisdiction clause in a rigorous manner and beyond any possible doubt—any risk of contradictory decisions being thereby largely avoided) paras. [81-83].

The European Court reached very different conclusions: see [2004] 1 Lloyd's Rep. 222. As to question two, the court second seised must under Art.21 always defer to a court first seised, unless and until that court declares itself incompetent. There should be a clear and precise rule, in view of "the disputes which could arise as to the very existence of a genuine agreement between the parties" within Art.17. A court second seised is "in no case ... in a better position than the court first seised to *360 determine whether the latter has jurisdiction" (para. [48]). Practical implications were summarily dismissed:

"53...the difficulties ... stemming from delaying tactics ... are not such as to call in question the interpretation of any provision of the Brussels Convention as deducted from its wording and purpose".

The court answered question three even more shortly, though with the Advocate General's support. An exception to Art.21 based on excessive delay was contrary to the letter, spirit and aim of the Convention (para. [70]). The Convention was necessarily based on mutual trust, and sought to ensure legal certainty (para. [72]. The court impliedly rejected the United Kingdom's fall-back suggestion that the court of State B could determine jurisdiction under and exclusive clause where (i) suit was issued in state A in bad faith to block any suit in State B and (ii) the court in State A had failed to adjudicate upon its own jurisdiction within a reasonable time.

It may comfort theoreticians that the Community has rules of ideological purity and logical certainty. But the result can only be practical uncertainty with large scope for tactical manoeuvring. The irrebutable assumption that all national systems operate for the best shows the barrier on the Rhine between Strasbourg and Luxembourg concerns and thinking.

Jonathan Mance expresses the view that the reasoning of the ECJ is in five critical respects unpersuasive: see pages 360-2. I will refer briefly to only three. His first point is that the ECJ's judgment seems ambivalent whether article 21 is subject to any exceptions. What about article 16? He asks the question:

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"If Art. 16 is an exception, why should Art. 17, resting on party autonomy, be different? .... According to the Schlosser Report (para 22), not mentioned by the court, a court must "also of its own motion consider whether there exists an agreement on jurisdiction which excludes the court's jurisdiction and which is valid in accordance with article 17"."

His third point is that, whereas in some circumstances the court first seised may be better placed to rule on the question of jurisdiction, the reverse applies where the parties have chosen a jurisdiction. His fourth point (which is closely related to his third) is this:

"Fourthly, the 'legal certainty' so esteemed by the court consists apparently in knowing 'clearly and precisely which of the two national courts is to establish whether it has jurisdiction under the rules of the Convention' (paras 51 and 72). But the parties' commitment, when contracting, was that the chosen court should assume its exclusive jurisdiction without delay and without either party having to engage in litigation elsewhere to achieve this."

In conclusion Jonathan Mance suggests that in contrast to the ECJ's absolutist approach, the Advocate General's careful opinion offered a measured compromise. I must say that I agree with that.

In his article Adrian Briggs focused on Turner, in which the court simply held that an anti-suit injunction was incompatible with the Convention, even in a case in which the injunction was granted by the court first seised. He said that "taken together with the court's wilful weakening of jurisdiction agreements (noted by ... Jonathan Mance ...), an effective and sophisticated tool of English commercial litigation has been decommissioned." Adrian Briggs expressed his views in strong terms. He referred to the Continental Bank case and observed that the effect of Gasser and Turner is that it cannot be reconciled with the Convention. He added:

"It is well known that many continental lawyers have a peculiar hostility to the anti-suit injunction. As an antidote to jurisdictional shenanigans its usefulness is second to none, but its roots did not lie in civilian legal systems. So it had to go, as the dullardism of the lowest common denominator asserted itself. In its place, we are to repose trust in the other states' legal systems and judicial institutions. This pious substitute for adjudication may be all very well for judges and diplomats, but it was not much use to Gasser or Turner, and will doubtless be just as useless for future litigants who inhabit the real world. No doubt the enlargement of the European Union will bring even more opportunities to trust foreign legal systems, and make even more redundant the summary and direct enforcement of jurisdictional agreements and jurisdictional rules."

I would not myself use such strong language but it does seem to me to be a pity that the ECJ has set itself against the anti-suit injunction with quite such

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determination. Why not adopt the sensible compromise suggested by Advocate General Leger quoted above (and not expressly commented upon by the ECJ), namely that the solution is to allow the court second seised to continue to exercise jurisdiction provided that it could establish the existence and application of the agreed choice of jurisdiction clause in a rigorous manner and beyond any possible doubt—any risk of contradictory decisions being thereby largely avoided?

I hope that one of these days the ECJ might be willing to consider some of these considerations. After all there is now a good deal of academic comment to the effect that its present approach can be said to legitimise the use of a procedural device whose purpose is to frustrate the proper determination of disputes. This is the device which has become known as 'the Italian Torpedo': see Delaygua, Choice of Court Clauses: Two Recent Developments [2004] ICCLR 15 (9) 288 at 295. It is an approach which can be compared with the French courts' approval of their own use of anti-suit injunctions: see Banque Worms v Brachot (cass. 1re civ., November 11, 2002; 2003 Rev. Crit. 816. [Footnote 3] The French introduction of the anti-suit injunction might be thought to support the conclusion that this type of injunction is not anti-pathetic to civilian jurisdictions. It might also help to persuade the ECJ to give serious consideration to its approval as part of the armoury of all member states' courts as a necessary procedural device in order to ensure that the Brussels-Lugano regime is not abused.

However, until the ECJ is persuaded to change its view that anti-suit injunctions are impermissible, it must be recognised that the law applicable in England (as in other member states) is as stated in Gasser and Turner. Thus the Continental Bank case can no longer be regarded as good law.

The question remains whether the English court is now prevented from granting anti-suit injunctions in cases to which the Convention (or Regulation) does not apply. This is a point which I have had to consider in a judicial capacity in the comparatively recent past. This was in a case which we held was outside the Convention because it was within the arbitration exception in Article 1.2 (d) of the Regulation. The case was Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co. Ltd [2005] 1 Lloyd's Rep 67 in the Court of Appeal.

The basis of the jurisdictional dispute before the court was relatively straightforward. Certain goods were to be transported by ship from Calcutta to Kotka in Finland. They were then to be transported to Moscow. They were however lost during the final leg of their journey. They were insured against loss and damage by the defendants, New India Assurance. The shipper claimed against that policy. That claim was subsequently compromised and the benefit of any action against the carrier was assigned to New India. The carrier and an associated company that was also involved in the shipment however declared bankruptcy. They were insured by the claimants, Through Transport. New India

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issued proceedings in Finland under a Finnish third parties' rights against insurers statute against Through Transport. After the proceedings were served, Through Transport sought to contest jurisdiction and did so by way of issuing proceedings in England for a declaration that the parties were bound by an arbitration clause, which required the parties to arbitrate the dispute in England, and an anti-suit injunction. An issue arose between the parties as to whether the arbitration clause applied. The English High Court held that the Regulation did not apply as it did not apply to arbitration proceedings and it thus granted the sought for declaration and anti-suit injunction. New India appealed.

One of the issues the Court of Appeal had to decide was whether it was bound to apply the Gasser decision and hold that, as the court second seised, it must stay the proceedings before it pending the outcome of a jurisdictional challenge in Finland. It seemed to the Court that, at least as a matter of principle, there was an argument that the Regulation required the court first seised to determine the issue of jurisdiction i.e., whether the proceedings before it fell under the arbitration exception (see paragraph 24). It appeared to us however that such an approach was inconsistent with the ECJ's decision in Marc Rich & Co AG v Societa Italiana PA (The Atlantic Emperor) [1992] 1 Lloyd's Rep. 342.

A strong argument was put to us that The Atlantic Emperor could not now be relied on to support the conclusion that the English court had the requisite jurisdiction. That argument was based on an application of Gasser to the effect that as the court first seised the Finnish court was the correct court to determine the issue of jurisdiction. We took the view that Gasser could be distinguished as in that case both parties accepted that both sets of proceedings in Italy and Austria fell within the regime. In contrast the question before the court here was whether the English proceedings fell within the regime at all. It was not therefore a question of how did the regime apply but whether it applied at all (paragraph 36). Given that distinction and the decision in The Atlantic Emperor we concluded that the correct approach would be for the English court, even as the court second seised, to determine whether the proceedings fell within the regime and then only if they did apply the regime's procedural rules.

Agreeing with the judge, we held on the facts that the proceedings were within the arbitration exception and thus outside the Brussels-Lugano regime. On that basis the question arose whether we should grant an injunction restraining the claimant from proceeding in Finland. That raised the question whether it would be wrong in principle to do so in the light of the decision in Gasser and Turner. Should the principle in those cases that no anti-suit injunction be granted in the interests of certainty and mutual trust equally be applied where proceedings are said to have been brought in one member state in breach of an arbitration clause?

We reached the conclusion that the answer to that question was no. The case was not like Gasser because there was no breach of an exclusive jurisdiction

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clause and the proceedings were outside the Convention because they were within the arbitration exception and it was not like Turner because it was not a case in which the sole question was whether the proceedings restrained were vexatious or oppressive and there was no breach of an arbitration agreement. We reached the conclusion, rightly or wrongly that, where proceedings are brought in breach of an arbitration clause the principles expressed by Millett LJ in The Angelic Grace remain applicable. I recognise that there is scope for argument as to whether that is correct or not. It appears that Adrian Briggs thinks that it is not. However, the view we took was that, once it is held that the proceedings are in breach of an arbitration agreement, there is nothing in the Convention to prevent the court from granting an injunction on the basis of Millett LJ's principles. It seemed to us that no question of mutual trust arose, there was no reason why the Finnish court should be offended by an injunction which would simply have enjoined the New India personally. We noted that, if the positions had been reversed, there would have been no question of the English courts being offended by an injunction granted elsewhere enjoining claimants from continuing with proceedings in England in breach of an agreement to arbitrate. This approach was followed by Colman J in The Front Comor [2005] 2 Lloyd's Rep 257.

In the event, however, we allowed the appeal against the grant of an anti-suit injunction in that case because we formed the view that in the particular circumstances of the case the proceedings in Finland were not brought in breach of contract and that, applying Turner, it would not be appropriate to grant an injunction. Let it never be said that the English courts do not loyally apply the decisions of the ECJ to questions to which they are applicable. I should however add that in The Front Comor Colman J, following The Jay Bola [1997] 2 Lloyd's Rep 279 (a case not cited to us in Through Transport), granted an injunction in a case where the proceedings restrained were brought by subrogated underwriters. Neither side sought to appeal to the House of Lords in Through Transport but I understand that there is to be a leapfrog appeal to the House of Lords in The Front Coma. Moreover I understand that the appeal is to be heard in the near future. I shall look forward with great interest to the result, especially to the speech of Lord Mance.

Forum non conveniens

Owusu had also come in for some academic criticism, notably by Adrain Briggs in LQR 2005 121 (OCT) 535-540. He says that this was the third time in 15 months that the ECJ has struck a blow against international commercial litigation. As to Owusu he says:

" And now the court has ruled that though an English court has been satisfied, clearly and distinctly, that a court in a non-contracting state is more appropriate for the trial of the action, and has further determined that no injustice would be done to the claimant if the English proceedings were stayed, a defendant

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domiciled in the United Kingdom may not seek, and a court may not grant, a stay on the ground of forum non conveniens."

Adrian Briggs notes that the effect of Owusu is to overrule Re Harrods (Buenos Aires) Ltd, to which I referred earlier, and says that the real, if collateral, victims of the ruling were the five Jamaican defendants, who had no connection with any member state but found that they were in effect dragged to England to defend themselves. Briggs describes the ECJ as being 'airily dismissive of their predicament'. As he puts it, the ECJ simply stated that such considerations were not such as to call into question the fundamental rule of jurisdiction contained in Article 2.

I must say that this does seem a startling result and appears to promote the principle of legal certainty above the more pragmatic and (it might be thought) just solution of arriving at a fair conclusion on the facts of a particular case. However, it is not perhaps for me to say. I leave you to judge.

Postscript

I am sure that these three decisions have not provided a fatal blow to commercial litigation, where in England or elsewhere but they have certainly not helped. I hope that the ECJ will bear some of these considerations in mind when deciding future questions of this kind.

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ANNEX V – Note dated 24 April 2006 prepared, at the request of Professor

Peter Schlosser, by Andrew Dickinson, Clifford Chance LLP and Honorary

Fellow at the British Institute of International and Comparative Law,

concerning the Enforcement against Non-parties of world-wide Freezing

Injunctions (including attachment and follow-up note)

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By way of follow-up to my previous note, I would draw your attention to the recent decision of the Court of Appeal in Dadourian Group v. Simms [2006] EWCA Civ 499

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2006/399.html&query=simms+AND+wfo&method=all

This case laid down the guidelines for determining an application by the claimant to relax the (normal) undertaking given to the court not to enforce the freezing injunction outside England without the court's permission. In Dadourian, an application was made to take enforcement proceedings in Switzerland, although the principles set out apply equally to Member States under Reg. 44/2001.

By way of background, as a condition for the grant of a worldwide freezing injunction, the court will normally require the claimant to give certain (voluntary) undertakings to the court. The standard forms of these are set out in the specimen order, which you have, although they are subject to variation. Although the undertakings are voluntary, they may be enforced as if they were contained in an order of the court.

The guidelines laid down by the court (which, as appears below, include provision for the protection of third parties holding assets) are as follows:

"Guideline 1: The principle applying to the grant of permission to enforce a WFO abroad is that the grant of that permission should be just and convenient for the purpose of ensuring the effectiveness of the WFO, and in addition that it is not oppressive to the parties to the English proceedings or to third parties who may be joined to the foreign proceedings.

Guideline 2: All the relevant circumstances and options need to be considered. In particular consideration should be given to granting relief on terms, for example terms as to the extension to third parties of the undertaking to compensate for costs incurred as a result of the WFO and as to the type of proceedings that may be commenced abroad. Consideration should also be given to the proportionality of the steps proposed to be taken abroad, and in addition to the form of any order.

Guideline 3: The interests of the applicant should be balanced against the interests of the other parties to the proceedings and any new party likely to be joined to the foreign proceedings.

Guideline 4: Permission should not normally be given in terms that would enable the applicant to obtain relief in the foreign proceedings which is superior to the relief given by the WFO.

Guideline 5: The evidence in support of the application for permission should contain all the information (so far as it can reasonably be obtained in the time available) necessary to make the judge to reach an informed decision, including evidence as to the applicable law and practice in the foreign court, evidence as to the nature of the proposed proceedings to be commenced and evidence as to the assets believed to be located in the jurisdiction of the foreign court and the names of the parties by whom such assets are held.

Guideline 6: The standard of proof as to the existence of assets that are both within the WFO and within the jurisdiction of the foreign court is a real prospect, that is the applicant must show that there is a real prospect that such assets are located within the jurisdiction of the foreign court in question.

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Guideline 7: There must be evidence of a risk of dissipation of the assets in question.

Guideline 8: Normally the application should be made on notice to the respondent, but in cases of urgency, where it is just to do so, the permission may be given without notice to the party against whom relief will be sought in the foreign proceedings but that party should have the earliest practicable opportunity of having the matter reconsidered by the court at a hearing of which he is given notice."

One possible question, which I had not considered before, is whether the English court has jurisdiction under Reg. 44/2001 to accept undertakings relating to enforcement in other Member States, in view of the terms of Art. 22.5. Although the undertakings are voluntarily given, they have the force of court orders and might be held to fall within the exclusive enforcement jurisdiction of another Member State. For the time being, however, it seems likely that claimants will continue to offer such undertakings in order to benefit from the extremely useful power of the English courts to grant worldwide freezing injunctions. The issue may arise for judicial decision only if a claimant in breach of such an undertaking pleads the jurisdiction point by way of defence.

I hope that this is helpful, and that your conference in Heidelberg ran smoothly. Please let me know if you need any further information.

Kind regards Andrew

Andrew Dickinson

Office: +44 (0)1206 398114 Mobile: +44 (0)7881 588871 E-mail: andrew.dickinson@btconnect.com