Agrégateur de flux

At its fifty-second session, in 2019, UNCITRAL considered a proposal from the European Union on applicable law in insolvency proceedings (A_CN.9_995_E).

UNCITRAL agreed on the importance of the topic, which complemented the significant work already done by UNCITRAL in the area of insolvency law, in particular cross-border insolvency.

However, UNCITRAL also observed that the subject matter was potentially complex and required a high level of expertise in various subjects of private international law, as well as on choice of law in areas such as contract law, property law, corporate law, securities and banking and other areas on which it had not worked recently. Therefore, UNCITRAL agreed that it was essential to delineate carefully the scope and nature of the work that it could undertake.

UNCITRAL requested the Secretariat to organize a colloquium, in cooperation with other relevant international organizations, with a view to submitting concrete proposals for UNCITRAL’s possible future work on such topic, for consideration by the Commission at its fifty-third session, in 2020. The Colloquium is to be conducted on an informal basis, that is, not as an intergovernmental group.

The Colloquium was to be held in New York on 15 May 2020 (see the draft programme here), in cooperation with the Hague Conference on Private International Law.

Due to the postponement of the Working Group V session originally scheduled for 11-14 May 2020, the Colloquium on Applicable Law in Insolvency Proceedings is also postponed. Information on the new date will be communicated by the UNCITRAL Secretariat when possible.

AG Manuel Campos Sánchez-Bordona delivered today his opinion in case C‑620/18 (Hungary v European Parliament and Council of the European Union), which is about the relationship between Rome I and Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services. The opinion is available in all EU official languages (save Irish), albeit not in English. Here is the French version :

“VIII. Cinquième moyen : violation du principe de sécurité juridique en conséquence de l’incompatibilité de la directive 2018/957 avec le règlement Rome I

A. Position des parties

189. Le cinquième moyen comporte en réalité deux branches distinctes, sans grand rapport entre elles.

‐      D’une part, le gouvernement hongrois soutient que la directive 2018/957 est contraire au règlement Rome I ainsi qu’aux principes de sécurité juridique et de clarté normative, en ce qu’elle modifie l’application de ce règlement sans en altérer le libellé, ce qui engendre une incertitude juridique considérable quant à sa bonne application.

[…]

190. La Commission, le Conseil, le Parlement européen et les gouvernements des États membres intervenus à la procédure estiment que ce cinquième moyen n’est pas fondé.

B. Appréciation de la première branche du cinquième moyen : relation entre la directive 2018/957 et le règlement Rome I

191. L’article 8, paragraphe 1, du règlement Rome I, établit la règle générale de conflit de lois applicable aux contrats individuels de travail, qui désigne la loi choisie par les parties (conformément aux conditions que ledit règlement précise par ailleurs). À défaut d’un tel choix, « le contrat individuel de travail est régi par la loi du pays dans lequel ou, à défaut, à partir duquel le travailleur, en exécution du contrat, accomplit habituellement son travail. Le pays dans lequel le travail est habituellement accompli n’est pas réputé changer lorsque le travailleur accomplit son travail de façon temporaire dans un autre pays » (article 8, paragraphe 2).

192. L’article 23 du règlement Rome I prévoit une exception à l’applicabilité des règles de conflit de lois établies par ce dernier : si les dispositions du droit de l’Union fixent des règles relatives à la loi applicable aux obligations contractuelles dans certaines matières, ces règles ont priorité (115)

193. Les règles générales du règlement Rome I relatives au choix de la loi applicable cèdent donc le pas aux règles spéciales prévues à cet égard dans des dispositions spécifiques du droit de l’Union (116).

194. Contrairement à ce qu’avance le gouvernement hongrois, je suis d’avis que l’article 3, paragraphe 1, (pour les travailleurs détachés ordinaires) et le nouvel article 3, paragraphe 1 bis (pour les travailleurs détachés pour une longue durée) de la directive 96/71 constituent des règles spéciales de conflit de lois (117), dont l’application doit être combinée avec celle du règlement Rome I (118).

195. Ces deux dispositions de la directive 96/71, qui s’ajoutent à la loi applicable en vertu des règles ordinaires de conflit de lois, imposent les dispositions suivantes du droit de l’État d’accueil :

‐      Les travailleurs détachés ordinaires se voient imposer les dispositions relatives aux conditions (de travail et de protection de la sécurité et de la santé des travailleurs) détaillées dans la liste exhaustive établie à l’article 3, paragraphe 1 ;

‐      Les travailleurs détachés de longue durée se voient imposer, outre les conditions susmentionnées, toutes les autres règles de l’État d’accueil, comme indiqué ci‑dessus (article 3, paragraphe 1 bis).

196. Comme l’indique le Conseil dans ses observations, le processus d’élaboration du règlement Rome I prouve que son article 23 couvre l’exception prévue par la directive 96/71, car la proposition de la Commission contenait en annexe une liste de règles spéciales établies dans d’autres dispositions du droit de l’Union, parmi lesquelles figuraient celles de la directive 96/71 (119).

197. Le considérant 11 de la directive 96/71 confirme cette affirmation, en ce qu’il expose que la convention de Rome, du 19 juin 1980, sur la loi applicable aux obligations contractuelles (remplacée par le règlement Rome I) « ne préjuge pas l’application des dispositions qui, dans des matières particulières, règlent les conflits de lois en matière d’obligations contractuelles et qui sont ou seront contenues dans les actes émanant des institutions des Communautés européennes ou dans des législations nationales harmonisées en exécution de ces actes ».

198. Le considérant 40 du règlement Rome I, qui expose que « [t]outefois, le présent règlement n’exclut pas la possibilité d’insérer des règles de conflit de lois en matière d’obligations contractuelles dans les dispositions de droit communautaire concernant des matières particulières », conduit à la même conclusion.

199. Contrairement à la thèse de la Hongrie, le principe de sécurité juridique n’exige donc pas que la modification de la directive 96/71 opérée par la directive 2018/957 soit accompagnée d’une modification du règlement Rome I.

200. L’article 23 de ce règlement permet aux règles spéciales de la directive 96/71 de coexister avec les règles générales de son article 8 en ce qui concerne les contrats des travailleurs détachés. La relation entre les deux types de règles est suffisamment claire, prévisible et précise et, par conséquent, respecte à suffisance le principe de sécurité juridique (120).

201. Cette conclusion n’est pas contredite, comme le prétend la Hongrie, par le fait que le nouvel article 3, paragraphe 1 bis, troisième alinéa, de la directive 96/71, prévoie une règle anti-fraude pour les cas de détachement de remplacement que j’ai précédemment évoqués (121). Dans ce cas, le contrat de chaque travailleur concerné par le remplacement peut être soumis à la loi d’un pays différent et cette disposition ne fait qu’ajouter une condition visant à prévenir une utilisation frauduleuse de la relation entre la directive 96/71 et le règlement Rome I”.

Source : here

In another opinion delivered on the same day (case C‑626/18, Poland v European Parliament and Council of the European Union, available here), the same AG makes a renvoi to the above paragraphs 191 to 200 in fn. 33 in the following:

“83. Je ne partage pas non plus l’avis du gouvernement polonais lorsqu’il juge le nouveau régime des travailleurs détachés pour une longue durée incompatible avec l’article 9 du règlement Rome I.

84. Cet article fait référence à « l’application des lois de police du juge saisi », mais le nouvel article 3, paragraphe 1 bis, de la directive 96/71 n’est pas une loi de ce type.

85. La relation entre cette directive et le règlement Rome I est définie par l’article 8 (« Contrats individuels de travail ») et l’article 23 (« Relation avec d’autres dispositions du droit communautaire ») de ce dernier (33) ».

The Pax Moot went totally online this year (OK, no surprises there). The case concerns an employment dispute and environmental damage due to mining in an unidentified African country (see the paxmoot website). It raises various issues of jurisdiction, applicable law, freezing orders, parallel proceedings and company structures.

Over the past two days the preliminary rounds took place on an online platform hosted by the University of Antwerp. The Universities of Cologne, Erasmus Rotterdam, Maastricht and Singapore Management University secured places in the semi-finals.

Please join us on 29 May at the links below for the semi-finals and finals. All welcome!

Semi-finals 1, 10.00 – 11.30 CEST: https://eu.bbcollab.com/guest/4a86f539e78642859e773e301ddbb8dd

University of Cologne v. Erasmus University Rotterdam

Judges: Ilse COUWENBERG, Daniel GIRSBERGER and Matthias WELLER

Semi-finals 2, 10.00 – 11.30 CEST: https://eu.bbcollab.com/guest/2d4c41243bf44fdbb3c175b15d0f30cf

Singapore Management University v. Maastricht University

Judges: Hans VAN HOUTTE, María ALVÁREZ TORNÉ and Michael WILDERSPIN

Finals, 13:30-15:00: https://eu.bbcollab.com/guest/b85996765dce4a4db29ad03e4a9b235f

13:30 Welcome words, by Frederik SWENNEN, Dean of the Law Faculty, University of Antwerp

Pleadings

Judges: Horatia MUIR WATT, Alex LAYTON, Hans VAN LOON

Approx. 15:30 Awards and Closing Ceremony

• A few words about the Case, by Alexander LAYTON QC
• A few words on behalf of the European Commission, DG Justice, Civil Unit, by Pia LINDHOLM
• Official results of the 2020 Rounds:
  • Best written submissions, by Horatia MUIR WATT, Competition Initiator and Member of the PAX Team
  • Best oralist, by Daniel CHAN, Executive Secretary of the PAX Team
  • Winner of the 2020 Asser Round, PAX Competition, by Horatia MUIR WATT
• Farewell words, by Hans van LOON

The Moot Court Competition is organised by the University of Antwerp and the T.M.C. Asser Instituut, as part of the research project on ‘Regulation BIa: a standard for free circulation of judgments and mutual trust in the EU (JUDGTRUST)’, funded by the European Union, DG Justice (JUST-JCOO-AG-2017), in cooperation with Sciences Po Law School.

 

The Max Planck Institute for Comparative and International Private Law in Hamburg is starting a new virtual workshop series in private international law. The first speaker, Mathias Lehmann from Bonn University, will present (in German) on Tuesday, June 2, at 11:00-12:30 via zoom. His topic: Covid-19 and Private International Law (see also here and here). Open to everyone, including doctoral and predoctoral students!

More information (in German) and the link for signing up are here.

Bail rural

Bail commercial

Sécurité sociale

Bail commercial

Propriété immobilière

Habitation à loyer modéré

One does not often see Nigeria sue Shell. Federal Republic of Nigeria v Royal Dutch Shell Plc & Anor [2020] EWHC 1315 (Comm) engages Article 29 Brussels Ia’s lis alibi pendens rule in a period in which (see other posts on the blog) the High Court intensely entertained that section of Brussels Ia. Royal Dutch Shell Plc (RDS) is the anchor defendant for the other EU-domiciled defendants. Quite a few of the defendants are not domiciled in the EU.

The case concerns Nigerian allegations that monies paid by it under an earlier settlement following alleged expropriation, which had led to bilateral investment treaty arbitration under ICSID rules, had been channeled to pay bribes. Nigeria is pursuing the case in the criminal courts in Italy, too.

Nigeria therefore are already pursuing claims in Italy to obtain financial relief against 4 of the defendants including the anchor defendant. Defendants contend that those claims are the same claims as the English ones and that the court should decline jurisdiction in respect of those claims pursuant to A29 BIa. Defendants then further contend that, if the court so declines jurisdiction over the claims against RDS and Eni SpA, the entire proceedings should be dismissed. This is because RDS is the ‘anchor defendant’ under A8(1) BIa in the case of three of the EU-domiciled defendants and under English CPR rules against the other defendants. In the alternative to the application under Article 29, Defendants seek a stay of the proceedings under A30 BIa (related cases) or, in the further alternative as a matter of case management, pending a final determination, including all appeals, of the claim that the FRN has brought in Italy.

Butcher J refers at 41 to the UKSC in The Alexandros, and to Rix J in Glencore International AG v Shell International Trading and Shipping Co Ltd, at 110: ‘broadly speaking, the triple requirement of same parties, same cause and same objet entails that it is only in relatively straightforward situations that art [29] bites, and, it may be said, is intended to bite. After all, art [30] is available, with its more flexible discretionary power to stay, in the case of ‘related proceedings’ which need not involve the triple requirement of art [29]. There is no need, therefore, as it seems to me, to strain to fit a case into art [29].’

Same parties. Per CJEU The Tatry A29 applies to the extent to which the parties before the courts second seised are parties to the action previously commenced. Butcher J correctly holds that the fact that there may be other parties to the second action does not prevent this. Nigeria nevertheless argue that the involvement of the Italian Public Prosecutor in the Italian case, and not in the English case, and its crucial role in the Italian proceedings, means that the proceedings nevertheless are not between the ‘same parties’. Defendants call upon CJEU C-523/14 Aertssen to counter this: there BE and NL proceedings were considered to be caught by A29 even though the BE proceedings concerned criminal proceedings and the Dutch did not.

At 47 Butcher J holds that the prosecutor is not a ‘party’ in the A29 sense and that even it were, it is nevertheless clear from The Tatry that there does not have to be complete identity of the parties to the two proceedings for Article 29 to be applicable. (Ditto Leech J in Awendale v Pixis).

Same cause of action. Nigeria accept that there is no material difference in the facts at issue in the two proceedings, however contends that the legal basis of its claim in England is different.

Butcher J refers to Lord Clarke in The Alexandros, that in order to consider same cause of action, one must look ‘at the basic facts (whether in dispute or not) and the basic claimed rights and obligations of the parties to see if there is coincidence 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’. Doing that, at 55 he holds that these basic claimed rights in the IT and EN proceedings, which he characterises as being the right not to be adversely affected by conduct of RDS which involves or facilitates the bribery and corruption of the FRN’s ministers and agents, and the right to redress if there is such bribery and corruption’, are the same.

That seems to me an approach which is overly reliant on the similarity of underlying facts. (At 70, obiter, Butcher J splits the claims and suggests he would have held on a narrower similarity of cause of action for some claims and not the others, had he held otherwise on ‘same cause of action’; and at 80 that he would have ordered a stay under Article 30 or on case management grounds on the remainder of the action).

Same object. Nigeria contend that its present proceedings do not have the same objet as the civil claim in the Italian proceedings. It contends that the only claim made in the Italian proceedings is for monetary damages, while in the English action claims are also made of a declaration of entitlement to rescind the April 2011 Agreements, other declaratory relief, an account of profits and tracing remedies.

Butcher J disagrees. Per Lord Clarke in The Alexandros, he holds that to have the same object, the proceedings must have the ‘same end in view’, per CJEU Aertssen at 45 interpreted ‘broadly’. At 61; ‘that ‘end in view’ is to obtain redress for RDS’s alleged responsibility for bribery and corruption…. Further, it is apparent that a key part of the redress claimed in the English proceedings is monetary compensation, which is the (only) relief claimed in the Italian proceedings. On that basis I consider that the two sets of proceedings do have the same objet.’

That the English action also seeks to rescind the original 2011 agreements is immaterial, he finds, for RDS were not even part to those proceedings. Moreover, that aim included in the English action serves to support the argument that if the two sets of proceedings go ahead, (at 64) ‘there would be the possibility of the type of inconsistent decisions which Article 29 is aimed at avoiding’. ‘If the English proceedings were regarded as involving a significantly different claim, namely one relating to rescission, and could go ahead, that would give rise to the possibility of a judgment in one awarding damages on the basis of the validity of the April 2011 Agreements and the other finding that those Agreements were capable of rescission. That would appear to me to be a situation of where there is effectively a ‘mirror image’ of the case in one jurisdiction in the other,..’

At 66 ff Butcher J adopts the to my mind correct view on the application of A29 to proceedings with more than one ‘objet’: one does not look at all claims holistically, one has to adopt a claim by claim approach, in line with CJEU The Tatry. At 68: ‘Difficulties which might otherwise arise from the fragmentation of proceedings can usually be addressed by reference to Article 30..’

At 71 he then concludes that the stay must be granted, and that he has no discretion not to do so once he finds that the conditions of A29 are fulfilled. He also holds that with the case against the anchor defendant stayed, A8(1) falls away. He appreciates at 72 that this may expose Nigeria to limitation issues in the Italian proceedings, however those are of their own making for they were under no obligation to sue in Italy.

 

At 74 ff Article 30 is considered obiter, and Butcher J says he would have stayed under A29. At 77 he notes the continuing debate on the difference at the Court of Appeal between Privatbank and Euroeco. At 75(2) he summarises the distinction rather helpfully as

‘In the Kolomoisky case, it was decided that the word ‘expedient’ in the phrase ‘it is expedient to hear and determine them together’ which appears in Article 28.3 of the Lugano Convention (as it does in Article 30.3 of the Regulation), is more akin to ‘desirable’ that the actions ‘should’ be heard together, than to ‘practicable or possible’ that the actions ‘can’ be heard together: paras. [182]-[192]. In the Euroeco Fuels case, having referred to the Kolomoisky case, the Court of Appeal nevertheless appears to have proceeded on the basis that the court had no discretion to order a stay under Article 30 when there was no real possibility of the two claims being heard together in the same foreign court’

At 75(5) he then without much ado posits that

‘In any event, even if not under Article 30, there should be a stay under the Court’s case management powers, and in particular pursuant to s. 49(3) Senior Courts Act 1981 and CPR 3.1(2)(f). Such a stay would not, in my judgment, be inconsistent with the Regulation, and is required to further the Overriding Objective in the sense of saving expense, ensuring that cases are dealt with expeditiously and fairly, and allotting to any particular case an appropriate share of the Court’s resources. Given that the Italian proceedings are well advanced, and that after the determination of the Italian proceedings English proceedings may well either be unnecessary or curtailed in scope, there appear good grounds to consider that a stay of the English proceedings will result in savings in costs and time, including judicial time.’

Whether such case-management stay under CPR 3.1(2)(f) is at all compatible with the Regulation in claims involving EU domicileds, outside the context of Articles 29-34 is of course contested and, following Owusu, in my view improbable.

Most important lis alibi pendens considerations at the High Court these days.

Geert.

(Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2, Heading 2.2.14.5.

 

More lis alibi pendens.
Article 29/30 Brussels IA. All English claims stayed under Article 29, in favour of pending Italian proceedings. https://t.co/8EaGXfsLWP

— Geert Van Calster (@GAVClaw) May 22, 2020

CK Telecoms UK Investments / Commission
Concurrence
Le Tribunal de l’Union européenne annule la décision de la Commission refusant le projet de rachat de Telefónica UK par Hutchison 3G UK dans le secteur du marché de la téléphonie mobile

Conseil / K. Chrysostomides & Co. e.a.
Droit institutionnel
Selon l’avocat général Pitruzzella, les juridictions de l’Union ne sont pas compétentes pour connaître des recours en indemnité formés contre l’Eurogroupe

Hongrie / Parlement et Conseil
L’avocat général Campos Sánchez-Bordona invite la Cour à rejeter les recours en annulation introduits par la Hongrie et par la Pologne contre la directive renforçant les droits des travailleurs détachés

The author of this post is Aygun Mammadzada, PhD Researcher at the Institute of Maritime Law of the University of Southampton.

Status quo

Withdrawal of the United Kingdom from the European Union leaves many uncertainties and puzzling effects on civil justice and cross-border judicial cooperation. Upon its departure on 31 January 2020 the United Kingdom ceased to be a member of the Union while remaining subject to the EU law and rulings of the European Court of Justice throughout the transition period under Article 67 of the Withdrawal Agreement. In less than five weeks – by 1 July 2020, the United Kingdom and European Union should decide whether to extend the transition period up to two years, as permitted by the Agreement. However, that has been ruled out by the United Kingdom, which could be altered by another legislation and it seems hardly a case.

Once the transition period ends, the Brussels I bis Regulation will no longer be applicable to jurisdiction, as well as choice of court agreements and the recognition of judgments between the United Kingdom and the Union.

Absent such an instrument, successful operation of the sphere will mostly depend on either Article 33-34 of the Recast Regulation which are not comprehensive enough or domestic rules which prevent uniformity and certainty due to inevitable varieties. This will significantly affect businesses and individuals. Data suggested that in 2018 the UK was the largest legal services market in Europe (valued at approximately £35 bn in 2018).

On the same line, 75% of over 800 claims which were issued at the Admiralty and Commercial Court involved at least one foreign party and in 53% of the case all parties were international. In 2019, 77% of over 600 such claims were international in nature whilst in half of the cases all parties were international. On the same note, despite the fact that the Member States are taking different measures, such as establishing special commercial courts to attract international commercial parties, there is still not any alternative to the London Commercial Court as a leading global centre for international dispute resolution, as discussed by Giesela Rühl. Nonetheless, without any harmonized legal framework applicable to jurisdiction and the recognition of judgments in cross-border civil and commercial cases, parties to international trade might refrain from linking their transactions to English jurisdiction or avoid English choice of court agreements.

Among other measures, the UK has expressed that enhanced judicial cooperation with the EU is part of its global outlook and it will continue adherence to the existing international treaties, conventions and standards in the field. In this ambit, on 8 April 2020, the UK deposited its request for acceding the Lugano Convention of 2007 (see here a comment by Matthias Lehman).

The Convention is still applicable in regard to the UK during the transition period as part of the EU law. Unlike the Hague Convention on Choice of Court Agreements of 2005 which is also among the UK’s Brexit-related channels, the Lugano Convention is not an open treaty. According to Article 72 of the Convention, the UK can become a member only upon the unanimous consent of all of the contracting parties (EU and EFTA states). This brings many uncertainties about the foreseeable status of the UK’s accession request.

The Lugano Convention is mainly mirroring the Brussels regime and therefore, it might enshrine perspectives of cross-border judicial cooperation in civil and commercial matters between the UK and Union. The government perceives the importance of the Convention for the provision of judicial certainty and prevention of multiple court proceedings. Nevertheless, the Convention does not contain new lis pendens provisions that were brought by the Brussels I bis Regulation, hence lacks the same degree of respect to party autonomy and choice of court agreements as ensured by the revised Regulation.

Mastermelt Ltd v Siegfried Evionnaz SA: The relevance of the case

In the recent case of Mastermelt Ltd v Siegfried Evionnaz SA, the High Court decided that the Brussels I bis Regulation does not affect the interpretation of the Lugano Convention. Mr Justice Walksman concluded that unlike the new lis pendens provisions as contained in Article 31(2) of the Brussels I bis Regulation, the Lugano Convention preserves the “court first seized” rule and therefore, regardless of an exclusive jurisdiction agreement the court first seized shall continue the proceedings and rule on its jurisdiction.

This decision is very timely since it triggers nonequilibrium views on the foreseeable membership of the United Kingdom to the Convention. It confirms continuation of the Gasser scenarios and torpedo actions under the Lugano Convention, furthermore, gives rise to the risk of parallel proceedings and irreconcilable judgments.

Factual background

The dispute arose between Mastermelt Limited (Claimant), an English company, and Siegfried Evionnaz SA (Defendant), a Swiss company, over the quality of Mastermelt’s performance of the reclamation services in 2018.

After Siegfried informed Mastermelt about their intention to commence proceedings in Switzerland on the basis of the exclusive jurisdiction clause in favour the Swiss courts contained in Siegfried’s standard terms and conditions of contract (“STC”), the claimant initiated the English proceedings on 5 February 2019 seeking negative declaratory relief against the defendant. Later, on 23 July 2019, Siegfried instituted the Swiss proceedings in the Zurich Commercial Court against Mastermelt and subsequently, on 24 May 2019, applied the English High Court, for a declaration that it had no jurisdiction.

Mastermelt brought another set of Swiss proceedings for a stay in early 2020, which was rejected by the Zurich Commercial Court on 13 February 2020 and advanced to the Federal Supreme Court. As of the date of the hearing in the English High Court, the Supreme Court had not given any ruling on that.

Issues

The English court considered whether the harmonised version of Article 27 of the Lugano Convention applies and if so, it would have had stayed the proceedings until the Swiss court had decided the question of jurisdiction. Subsequently, the court also decided the question of its own jurisdiction and validity of the exclusive jurisdiction agreement.

Analysis

While considering the proper interpretation of Article 27 of the Lugano Convention the court as a primary point conferred that it was not bound by the Swiss court’s decision on the same issue which was relied upon by Siegfried.

Referring to Protocol No 2 to the Lugano Convention, Mr Justice Walksman paid ‘due account’ to the Swiss judgment, however, refused its binding effect. Drawing on the ‘too remote’ nature of the former to be characterized as res judicata, the judge opposed to the defendant’s contention to apply the CJEU’s decision in Gothaer v Samskip. On this line, the High Court resisted the harmonised interpretation of Article 27 of the Lugano Convention as Article 31(2) of the Brussels I bis Regulation and as the first seized court denied staying the proceedings.

Contrary to the defendant’s reasoning, the court determined that although the CJEU’s decision in Gasser was reversed by the new Article 31(2), it was not obsolete and still had limited application outside the Regulation. The court reiterated its conclusion by emphasizing the significance of academic discussion. As stated by Professor Briggs, “the innovation created by 31.2 … does not apply to proceedings within the scope of Lugano II which remains regulated by the original rule of strict temporal priority …”. Professor Joseph also took a similar approach by expressing that “… there is no equivalent provision in the … Convention to Article 31.2 … Therefore, as regards the enforcement of jurisdiction agreements, the court first seized will examine the enforcement of such an agreement, irrespective of whether it is the chosen court…”

These brought continuation of the proceedings and examination of the second issue – jurisdiction of the court first seized. Pursuant to the Convention, if there was an exclusive jurisdiction agreement in the ambit of Article 23 of the Lugano Convention the English court had to dismiss the proceedings in favour of the designated court, otherwise Siegfried’s claim had to be litigated in England as the place of performance according to Article 5.1(a).

Referring to a significant body of the European and English case law (including the CJEU’s rulings in Salotti v Ruwa, Berghoefer v ASA SA, Iveco v Van Hool, Benincasa v Dentalkit and the judgment o the Court Appeal in Deutsche Bank v Asia Pacific), Mr Justice Walksman regarded the existence of an agreement as an independent concept. The court highlighted the reasoning in Powell Duffryn and Aeroflot and stated that a valid agreement should be “clearly and precisely” demonstrated either in a form of “writing” or ‘evidenced in writing’. Moreover, it was asserted that the written form could be evidenced not only in a single document but it could consist of multiple documents such as the seller’s quotation and buyer’s purchase order.

While considering what constituted “writing”, Mr Justice Walksman articulated the tendency of the courts to adopt a flexible approach as in the CJEU’s judgment in Berghoefer and his own earlier decision in R + V Versicherung v Robertson which in turn referred to the decision of the Court of Appeal in 7E Communications v Vertex.

At the same time, he emphasized the importance of the valid agreement in the sense of consent in line with the opinion of the Advocate General Bot in Profit Investment. On this basis it was submitted that an oral agreement of the party to the other party’s STC which included an exclusive jurisdiction agreement would not be sufficient to meet the durability requirement without later written evidence of such putative consent. This view was also supported by academic commentaries and English authorities such as ME Tankers v Abu Dhabi Container Lines [2002] 2 Lloyds 643, Claxton Engineering v TXM [2007] 1WR 2175, Chester Hall v Service Centres [2014] EWHC 2529.

The court admitted that there was a written agreement and manifested consent between the parties on the basis of the purchase orders and STC, which were strongly compelled by prior dealings, later statements and invoices expressly found in the email exchange. It was also maintained that there was “much the better of the argument” satisfying the good arguable case standard for the applicability of Article 23.1(a) and any opposing presumption would be “commercially absurd”.

Upon these observations, Mr Justice Walksman held that the English proceedings had to be dismissed in favour of the exclusively designated Swiss court.

Comments

This decision is of importance for several reasons. It reaffirms the emphasis that has been traditionally placed on party autonomy and authentic consent in English law and practice.  Likewise, it reasserts the exhaustive interpretation of the form requirement of the exclusive jurisdiction agreements within the meaning of the Lugano Convention which might be a useful reference point for the courts post-Brexit provided the UK would have become a member to the framework.

On the other hand, the judgment is particularly sensible at the time of the United Kingdom’s Brexit planning and strategy to continue the Lugano membership. It reveals serious differences between the Brussels I bis Regulation and Convention notwithstanding the equivalent rules existing in both.

Contrary to the remarks favoring the Convention as an “oven ready” option for the United Kingdom, the lack of a mechanism preventing parallel proceedings and irreconcilable judgments frustrates legal certainty, provokes waste of time and expenses, thus, threatens the vital principle of private international law – party autonomy.

Articles 5 and 6 of the Hague Convention on Choice of Court Agreements which enforce parties’ choice and oblige any non-chosen court to stay or dismiss the proceedings, might be helpful in this regard, however only to some limited extent due to its limited scope and application only to the Contracting States, whereas the EFTA states have not ratified the treaty.

In this regard, return of anti-suit injunctions as the measures frequently issued by the English courts in support of exclusive jurisdiction agreements provokes special attention. Indeed, the lack of mutual trust within the Lugano framework might result in the reversal of the West Tankers ruling, however the matter is still uncertain since there has not been any relevant authority for such an implication. All the mentioned points raise considerable doubts over the satisfactory replacement of the Brussels I bis Regulation by the Convention for the post-Brexit UK.

Moreover, unusual obligation to “pay due account” to the case law of other contracting states, as well as the CJEU provided by Protocol No 2 to the Convention broadens skepticism. As indicated by Professor Hess, such language “… does not mean more than looking at the pertinent case-law and giving reasons as to why a deviation is considered to be necessary”. Furthermore, the absence of any sanction upon deviations brings “inherent weakness” of the Protocol and rests its application perspectives solely on “… goodwill and of courtesy of the courts …”.

All these lead to non-uniformity and harbours suspicion against the Convention as a successful post-Brexit means of the UK. These concerns leave further room for discussion about seeking robust solutions and especially reaching a bilateral agreement in this context as advised by Professor Hess. However crucial these items are, they are the subject matter of another study.

All in all, provided the United Kingdom becomes a Contracting State to the Lugano Convention, the Mastermelt ruling alerts the parties to be more careful and get appropriate legal advice while contracting and designating a competent forum for the resolution of their disputes.