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Stays of Proceedings and the Brussels Convention

Published online by Cambridge University Press:  17 January 2008

Jonathan Harris
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Extract

The Court of Justice has ruled in Owusu v Jackson that the Brussels Convention is applicable even where a case has objective connections to only one Contracting State and to a non-Contracting State. It has also held that where the court of a Contracting State to the Brussels Convention has jurisdiction on the basis of the defendant's domicile pursuant to Article 2, it has no general discretion to stay its proceedings in favour of the court of a non-Contracting State on the basis that the latter is the natural forum for resolution of the dispute. However, the ruling leaves a number of important questions unresolved. This article considers the reasoning behind, and implications of the ruling, and the permissibility of staying proceedings in other situations falling within the scope of the Brussels regime post-Owusu.

Type
Shorter Articles, Comments, and Notes
Information
International & Comparative Law Quarterly , Volume 54 , Issue 4 , October 2005 , pp. 933 - 950
Copyright
Copyright © British Institute of International and Comparative Law 2005

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References

1 Case C-281/02,Owusu v Jackson (t/a Villa Holidays Bal Inn Villas) [2005] IL Pr 25, judgment of 1 Mar 2005 (not yet published in the ECR).

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

3 [1992] Ch 72; see also Haji-Ioannou v Frangos [1999] 2 Lloyd's Rep 33; Ace Insurance SA-N V v Zurich Insurance Co [2001] 1 Lloyd's Rep 618. See Collins, L (gen ed), Dicey and Morris, The Conflict of Laws (13th ednSweet & Maxwell London 2000) 393–5;Google ScholarCollins, L ‘Forum Non Conveniens and the Brussels Convention’ (1990) 106 LQR 535. The issue had been referred to the Court of Justice by the House of Lords in Re Harrods (Case C-314/92, Ladenimor SA v Intercomfinanz SA) but the case settled before a ruling was given.Google Scholar

4 Section 49 of the United Kingdom's Civil Jurisdiction and Judgments Act 1982 preserves the court's power to stay when not inconsistent with the Brussels Convention. This does not take us very far, since the very question in issue is when, if ever, such a stay is inconsistent with the Convention.

5 See [2002] EWCA Civ 877; [2002] IL Pr 45.

6 Which accorded with the views expressed in the Opinion of AG Léger, delivered on 14 Dec 2004.

7 On this issue, see also the Opinion of AG Lenz in Case C-129/92, Owens Bank Ltd v Bracco [1994] ECR I-117, para 32 of the Opinion; and of AG Darmon in Case C-318/93, Brenner v Dean Witter Reynolds Inc [1994] ECR I-4275 and in Case C-89/91, Shearson Lehmann Hutton Inc v TVB mbH [1993] ECR I-139.

8 Rec 25 of the Judgment.

9 OJ 1979 C59/1, 8.

10 In particular, the third recital to the Convention's Preamble simply refers to the determination of rules of international jurisdiction by the Convention.

11 The Court of Justice (Rec 27) cited Case C-190/89, Marc Rich [1991] ECR I-3855, Case C-406/92, The Tatry [1994] ECR I-5439 and Case C-412/98, UGIS v Grupo Josi [2000] ECR I-5925, Rec 60.

12 Now Art 22 of the Brussels I Regulation.

13 Now Art 23 of the Brussels I Regulation.

14 These provisions now appear as Arts 27 and 28 of the Brussels I Regulation.

15 See Rec 29 of Judgment; see also paras 142–52 of the Advocate General's Opinion.

16 And for the purpose of enforcing the judgment in another Contracting State.

17 Para 157 of the Opinion.

18 See also the Advocate General's Opinion, paras 178–86.

19 Not least the decision in Case C-412–98, UGIS v Grupo Josi [2000] ECR I-5925.

20 eg Arts 4, 16, and 17 of the Convention; respectively Arts 4, 22, and 23 of the Brussels I Regulation.

21 The Court of Justice referred (Rec 33) to the fourth indent of Art 220 of the EC Treaty (now the fourth indent of Art 293 EC).

22 Rec 34 of the Judgment.

23 Rec 34.

24 The Brussels I Regulation was adopted pursuant to Art 65 EC, which applies to ‘measures in the field of judicial cooperation in civil matters having cross-border implications…’ to be adopted ‘….insofar as necessary for the proper functioning of the internal market …’. It may be questioned whether it has yet been satisfactorily explained how uniform rules of jurisdiction are ‘necessary’ for the proper functioning of the internal market, rather than being simply desirable.

25 Para 192 of the Opinion.

26 This uncertainty would itself undermine confidence in the internal market.

27 Para 164 of the Opinion.

28 See Para 168 of the Opinion.

29 Para 117 of the Opinion.

30 In the Court of Appeal in Owusu [2002] EWCA Civ 877; [2002] IL Pr 45, Brooke LJ noted that the Dutch court had considered there to be no discretion to decline jurisdiction in Van der Eist v Pierson, Heldring & Pierson NV, judgment of 22 Dec 1989, No 13718.

31 [1987] AC 460.

32 Rec 37, citing Case C-116/02, Gasser [2005] QB 1 [2003] ECR I-14693, Rec 72, and Case C-159/02, Turner v Grovit [2004] ECR I-3565, Rec 24. See also the Report by Professor Schlosser on the Convention of 9 Oct 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 (‘the Schlosser Report’), OJ 1979 C59/ 71, paras 77 and 78.

33 Ibid para 78.

34 Ibid.

35 Rec 38, referring to Case C-440/97, GIE Groupe Concorde and Others [1999] ECR I-6307, Rec 23, and Case C-256/00, Besix [2002] ECR I-1699, Rec 24.

36 Rec 42.

37 Ibid.

38 The Advocate General argued (para 268) that a defendant might simply plead forum non conveniens to prolong proceedings. But since the burden of proof does not fall onto the claimant unless and until the defendant has shown the natural forum to be abroad (at which point, the shifting of the burden is eminently reasonable), it is difficult to accept this argument.

39 [1992] Ch 72.

40 Overruling the first instance decisions in S & W Berisford plc v New Hampshire Insurance Co [1990] 2 QB 631 and Arkwright Mutual Insurance Co v Bryanston Insurance Co Ltd [1990] 2 QB 649.

41 See also the criticism in North, P and Fawcett, JCheshire and North's Private International Law (13th ednButterworths London 1999) 264.Google Scholar

42 Since a court which stays its proceedings by definition does have jurisdiction over the matter; it is simply declining to exercise that jurisdiction. In principle, the stay could subsequently be lifted on the application of one of the parties.

43 By virtue of the court first seised rule in Arts 21 and 22 of the Brussels Convention (Arts 27 and 28 of the Brussels I Regulation). The Brussels Convention provides no definition of when a court is seised and it is for the State addressed to apply its own national law to decide when it is seised (see Dresser (UK) Ltd v Falcongate Freight Management Ltd [1992] QB 502). A European autonomous definition of seisure was introduced by the Brussels I Regulation: see Art 30.

44 It could be argued that this is not a significant problem where the facts have no objective connection to another Contracting State. But this simply creates a further level of uncertainty in cases where there are objective connections to more than one Contracting State and also to a non-Contracting State, and it is argued that the last of these is the natural forum: see Cheshire and North's Private International Law (13th edn Butterworths London) 265.

45 But see Haji-Ioannou v Frangos [1999] 2 Lloyd's Rep 337.

46 Briggs, A and Rees, PCivil Jurisdiction and Judgments (3rd ednLLP London 2002) 220.Google Scholar

47 Rec 44.

48 Although admittedly this would be of the claimant's own making if the first defendant could also have been sued alternatively in Jamaica.

49 Rec 45.

50 Council Regulation (EC) No 44/2001 of 22 Dec 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters; OJ 2001 L12/1.

51 The Convention is less explicit: see Briggs and Rees (n 46) p 218.

52 But see Ibid 220–1

53 Rec 43.

54 Emphasis added. See also the Advocate General's Opinion, para 231.

55 Save in the very rare circumstances where a limited discretion is given expressly to the courts of a particular state.

56 The English courts' attempts to restrain proceedings in other Contracting States by anti-suit injunction, which were neither expressly permitted nor prohibited by the Convention, were promptly halted by the Court of Justice in Case C-159/02, Turner v Grovit [2004] ECR I-3565. There was no express basis on which such injunctions were sanctioned in the Brussels regime and they were considered incompatible with its aims. Each Contracting State must accept that the courts of another Contracting State are equally competent to apply the jurisdiction rules of the Brussels Convention.

57 Still less whether, under the Brussels I Regulation, such an approach is ‘necessary for the proper functioning of the internal market’ within the meaning of Art 65 EC.

58 Not least since Denmark secured an opt-out and is not bound by the Brussels I Regulation.

59 Even though there are some substantive changes to the content of individual rules of jurisdiction in the Regulation.

60 [1992] Ch 72, 96.

61 Briggs and Rees (n 46) p 223.

62 Art 14 of the Brussels Convention; Art 16 of the Brussels I Regulation.

63 One might alternatively say that it is unlikely that the natural forum would lie in a State other than that where the consumer claimant is domiciled; or perhaps that the claimant would in any event easily be able to demonstrate that it would be unjust to require him to sue in the courts of a Non-Contracting State where he is not domiciled.

64 Art 23(3) of the Brussels I Regulation.

65 Special jurisdiction offers the claimant an alternative forum in which to sue other than the state where the defendant is domiciled; it does not oust the jurisdiction of the State where the defendant is domiciled.

66 Or Art 6.

67 Para 241 of the Advocate General's Opinion.

68 Schlosser Report, OJ 1979 C59/ 71, para 78.

69 The court first seised mechanism prevents him from suing in more than one State.

70 See Rec 48.

71 See the Schlosser Report, OJ 1979 C59/ 71, para 176; Case C-387/98, Coreck Maritime GmbH v Handelsveem BV [2000] ECR I-9337.

72 See Ace Insurance SA-NV v Zurich Insurance Co [2001] EWCA Civ 173; [2001] 1 Lloyd's Rep 618. See also W Kennett ‘Forum Non Conveniens in Europe’ (1995) 54 CLJ 552.

73 Art 16(1) of the Brussels Convention; Art 22(1) of the Brussels I Regulation.

74 Art 17 of the Brussels Convention; Art 23 of the Brussels I Regulation.

75 Arts 21 and 22 of the Brussels Convention; Arts 27 and 28 of the Brussels I Regulation.

76 Rec 50; citing Case C314/96, Djabali [1998] ECR I-1149, Rec 19, Case C-318/00, Bacardi-Martini and Cellier des Dauphins, [2003] ECR I-905, Rec 42, and Joined Cases C-480/00 to C-482/00, C-484/00, C-489/00 to C-491/00 and C497/00 to C-499/00, Azienda Agricola Ettore Ribaldi [2004] ECR I-2943 Rec 72.

77 Schlosser Report, OJ 1979 C59/ 71, para 176. Schlosser suggests that the court's ‘decision on the validity of the agreement depriving it of jurisdiction must be taken in accordance with its own lex fori’.

78 Case C-387/98, [2000] ECR I-9337.

79 Rec 19.

80 Case C-365/88, [1990] I ECR 1845.

81 Para 260 of the Opinion in Owusu; citing Hagen, Rec 20 of the Judgment; Case C-159/02, Turner v Grovit [2004] ECR I-3565, Rec 29 of the Judgment.

82 And to uphold their expectations as to where litigation will occur.

83 [2005] EWHC (Comm) 898, judgment of 10 May 2005, not yet published.

84 OJ 1988 L319/9.

85 Para 88. See also Arkwright Mutual Insurance Co v Bryanston Insurance Co Ltd [1990] 2 QB 649, 660.

86 Konkola, para 99.

87 1992 Rev Crit 333; Dicey and Morris, para 12–090.

88 Para 100.

89 By Almeida Cruz, Desantes Real and Jenard: OJ 1990 C189/35.

90 By which Spain and Portugal became parties to the Brussels Convention.

91 OJ 1990 C189/35, 47.

92 Art 16(1) of the Convention; Art 22(1) of the Brussels I Regulation.

93 OJ 1979 C59/ 1, 35.

94 Where Art 16(1) of the Brussels Convention (Art 22(1) of the Brussels I Regulation) is applicable, any judgment delivered by the courts of another Contracting State in breach of this provision is not to be recognized in other Contracting States: see Art 28 of the Brussels Convention (Art 35(1) of the Brussels I Regulation).

95 Case C-387/98, [2000] ECR I-9337.

96 A view supported by Briggs and Rees (n 46) pp 229–30. But see the comments above on the meaning and effect of the Coreck Maritime ruling in relation to jurisdiction clauses.

97 [2005] EWHC (Comm) 898. See also Arkwright Mutual Insurance Co v Bryanston Insurance Co Ltd [1990] 2 QB 649, 663.

98 At common law, claims concerning title to land overseas are said not to be justiciable in the English courts: see British South Africa Co v Cia de Moçambique [1893] AC 602. Although such claims must be treated as justiciable under the Brussels regime (cf Pearce v Ove Arup Partnership Ltd [2000] Ch 403), it is very likely that an English court would conclude that the proper forum for trial of the action would be in the State where the immoveable property was located.

99 [2005] EWHC (Comm) 898, para 98.

100 [1990] 2 QB 649, 663.

101 Art 34(4) of the Brussels I Regulation.

102 In an area where uniformity is already impossible, given the importance attached to the State of recognition's national rules on the recognition of the non-Contracting State's judgment.

103 [2002] EWCA Civ 877; [2002] IL Pr 45, para 44, at 826.

104 See Brooke LJ's comments, Ibid, para 45, at 826.

105 [2005] EWHC (Comm) 898.

106 This is also Art 4 of the Brussels I Regulation.

107 At least where no exception to the defendant domicile rule applies.

108 Maharanee of Baroda v Wildenstein [1972] 2 QB 283.

109 See Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460; Seaconsar (Far East) Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438; Civil Procedure Rule r 6.21(2)(a).

110 Para 235 of the Opinion.

111 So that, arguably, the courts of no other State in Europe can hear the case if an English court stays its proceedings.

112 [1997] 1 Lloyd's Rep 113; J Harris, ‘Staying Proceedings for another Contracting State to the Brussels Convention’, (1997) 113 LQR 557.

113 Arts 27 and 28 of the Brussels I Regulation.

114 [1987] AC 460.

115 See also Haji-Ioannou v Frangos [1999] 2 Lloyd's Rep 337, where it was suggested that this difficulty might be overcome if the English court were to dismiss its proceedings, rather than to stay them.

116 [1992] Ch 72.