The Brussels I Regulation and the Re-Emergence of the English Common Law

Harris, Jonathan

The European Legal Forum (E) 4-2008, 181 - 189

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PRIVATE INTERNATIONAL LAW AND INTERNATIONAL CIVIL PROCEDURE ______

The Brussels I Regulation and the Re-Emergence of the English Common Law

Prof. Jonathan Harris*

I. Introduction II. Gasser, Turner and Owusu: overturning prior English authority English lawyers have become used to ECJ decisions on the 1 Brussels I Regulation which restrict the scope of common Let us first consider the conflict between the English courts law powers, or which contradict earlier English authority on and the ECJ on three key issues, namely: the relationship be- the role of jurisdiction clauses. In its famous trilogy of deci- tween jurisdiction clauses and the court first seised rule; the 2 3 sions in Erich Gasser GmbH v MISAT Srl, Turner v Grovit role of anti-suit injunctions; and the role of the doctrine of fo- 4 and Owusu v Jackson, the ECJ gave judgments which ap- rum non conveniens. In each of its three landmark decisions, peared to deliver near fatal wounds to the survival of the Gasser, Turner and Owusu, the ECJ overturned existing Eng- common law rules of jurisdiction for matters falling within the lish authority which creatively interpreted the Brussels Con- 5 scope of the Brussels I Regulation. But, as we shall see, this is vention to give effect to what the English courts perceived to far from the case. Rather, the common law has been busy re- be its spirit and intendment. inventing itself and searching for ways to limit the impact of these landmark decisions. 1. The relationship between jurisdiction clauses and the The purpose of this article is first to consider the conflict be- court first seised rule; anti-suit injunctions tween the English courts and the ECJ on questions as to the 6 role of common law doctrines. It then looks at some of these In Continental Bank v Aeakos, proceedings had been insti- ways in which the common law has reasserted itself in the face gated against the defendants in Greece. In the English Court of the ECJ’s decisions, and the extent to which these devel- of Appeal, the defendants argued that the Greek proceedings opments may be justified. were brought in breach of an English jurisdiction clause and sought an anti-suit injunction to restrain the claimants from proceeding in Greece. Steyn LJ could not believe that the 7 * Professor of International Commercial Law, University of Birming- court first seised rule in Articles 21 and 22 of the Convention ham; and Barrister, Brick Court Chambers, London (UK). could have been intended to override the rules on jurisdiction 1 8 Council Regulation (EC) No 44/2001 of 22 December 2000 on Juris- agreements in Article 17 of the Convention, since, if so: diction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, OJ 2001 L12/1. 2 “(…) it follows that a party will be able to override an exclu- ECJ 9 December 2003 – C-116/02 – Erich Gasser GmbH v MISAT Srl sive jurisdiction agreement which is governed by article 17, by [2003] ECR I-14693 = [2004] EuLF (E) 49. 3 pre-emptively suing in the courts of another contracting state. ECJ 27 April 2004 – C-159/02 – Turner v Grovit [2005] ECR I-3565 = [2004] EuLF (E) 120. 4 ECJ 1 March 2005 – C-281/02 – Owusu v Jackson [2005] ECR I-1383 6 [1994] 1 WLR 588. = [2005] EuLF I-72, II-66. 7 5 Now Articles 27 and 28 of the Brussels I Regulation. Save, of course, where Article 4 applies and the Regulation derogates 8 explicitly to national rules of jurisdiction. Now Article 23 of the Regulation.

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The courts of the latter state which ex hypothesi have been de- shrillest of alarm calls. The court first seised mechanism, the prived of jurisdiction would then be ‘the court first seised.’ The prevention of irreconcilable judgments and the doctrine of chosen court of the parties would then be obliged to decline ju- mutual trust were to be prized above the sanctity of commer- risdiction or, if the jurisdiction of the other court is contested, cial agreements. To the United Kingdom Government’s ar- to stay its proceedings. In this way a party who is in breach of guments that this would provide a commercially undesirable the contract will be able to set at naught an exclusive jurisdic- solution, the ECJ’s response was simply this: rules are rules, tion agreement which is the product of the free will of the par- and this is the solution dictated by the Convention: ties. The principle of the autonomy of the parties, enshrined in 9 “Finally, the difficulties of the kind referred to by the article 17, cannot countenance such a conclusion.” United Kingdom Government, stemming from delaying tac- But this, of course, is exactly what was intended, at least by tics by parties who, with the intention of delaying settlement the ECJ. The ECJ had already ruled in Overseas Union Insur- of the substantive dispute, commence proceedings before a 10 ance Ltd v New Hampshire Insurance Co that the court sec- court which they know to lack jurisdiction by reason of the ond seised could not second guess the findings of jurisdictional existence of a jurisdiction clause, are not such as to call in competence of the court first seised, unless that court had exclu- question the interpretation of any provision of the Brussels 11 12 17 sive jurisdiction under Article 16 of the Convention. It held Convention, as deduced from its wording and its purpose”. that “(…) in no case is the court second seised in a better posi- To many English lawyers, used to the teleological approach tion than the court first seised to determine whether the latter to judicial reasoning and to seeking to provide solutions 13 has jurisdiction”. Somewhat curiously, the Overseas Union which look to the nature and purpose of the legislation and to ruling was not cited in the Continental Bank judgment. the consequences of a particular construction, the much more Even at the time, it was clear to many that the Court of Ap- literal approach of the ECJ can be difficult to accept. Indeed, peal’s decision, whatever its commercial merits in upholding one member of the House of Lords, writing extra-judicially, the sanctity of commercial agreements, could not withstand has suggested that: “It may comfort theoreticians that the scrutiny. For instance, Briggs argued that the Court of Appeal Community has rules of ideological purity and logical cer- “took most thinking people by surprise and in an astonishing tainty. But the result can only be practical uncertainty, with 18 judgment, gave an effect to an English choice of law clause large scope for tactical manoeuvring.” 14 which is bold, attractive, and hopelessly wrong”. There was no reason for regarding the English courts as any more com- 2. Anti-suit injunctions and proceedings commenced in petent to interpret the clause than the Greek courts. More- bad faith over, the Convention did not give the designated court the right to determine the scope of the clause; this was a matter Whatever one’s views on the decision in Continental Bank, for the court first seised by virtue of Article 21 of the Conven- it could at least have been confined in scope, since Steyn LJ 19 tion. Briggs prophetically suggested that: “Sooner or later expressly stated that he was not addressing the situation someone will pay the price of order being restored to this cor- where an anti-suit injunction was sought in circumstances 15 ner of the law.” where no exclusive jurisdiction clause existed. Yet, in Turner v 20 At this point, then, the court first seised mechanism was, at Grovit, the Court of Appeal was prepared to restrain pro- least in England, subordinate to the rules on jurisdiction ceedings commenced in a Spanish court, in circumstances agreements. This, perhaps, reflected English wishful thinking where no exclusive jurisdiction clause existed in favour of the rather than anything else; a desire to protect the sanctity of English courts, in order to prevent vexatious or oppressive commercial agreements and not to be precluded from so doing pursuance of the foreign proceedings, conduct which was con- by the strictures of the Convention. But, of course, this hier- sidered to amount to an abuse of process. Without making archy could not last; and in Erich Gasser GmbH v MISAT any sustained attempt to look at the nature of the Convention, 16 Srl, those who had not already realised this received the Laws LJ was able to “entertain not the slightest doubt but that, were the English court to find that proceedings had been 9 At pp 596-7. launched in another Brussels Convention jurisdiction for no 10 ECJ 27 June 1991 – C-351/89 – Overseas Union Insurance Ltd and purpose other than to harass and oppress a party who is al- others v New Hampshire Insurance Company [1991] ECR I-3317. 11 ready a litigant here, the English court possesses the power” Now Article 22 of the Regulation. 21 12 to grant the injunction. Laws LJ’s certainty was expressed “(…) without prejudice to the case where the court second seised has exclusive jurisdiction under the Convention and in particular under without regard to whether it was for the Spanish court alone Article 16 thereof, Article 21 of the Convention must be interpreted as to decide upon its jurisdictional competence; nor to the fact meaning that, where the jurisdiction of the court first seised is contested, the court second seised may, if it does not decline jurisdiction, that, if a Spanish court was granted jurisdiction by a Conven- only stay the proceedings and may not itself examine the jurisdiction of tion to which the United Kingdom was party, its proceedings the court first seised.” (para 26). 13 Para 23. 14 Briggs, ‘Anti-European Teeth for Choice of Law Clauses’ [1994] 17 LMCLQ 158. Para 53. 15 18 Ibid, p 163. See also Bell, ‘Anti-Suit Injunctions and the Brussels Con- The Rt Hon Lord Mance, ‘Exclusive Jurisdiction Agreements and vention’ (1994) 110 LQR 204; Rogerson, ‘English Interference in Greek European Ideals’ (2004) 120 LQR 357, 360. 19 Affairs’ [1994] CLJ 241. [1994] 1 WLR 588, 596. 16 20 Erich Gasser GmbH v MISAT Srl (supra note 2). For an illustration of [2000] QB 345. the application of Gasser in the English courts, see JP Morgan v Pri- 21 macom AG [2005] EWHC 508 (Comm). At 357.

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26 could arguably, by definition, not be vexatious or oppressive But the ECJ was wholly unpersuaded. It regarded the anti- in the eyes of English law. Once again, the decision in Over- suit injunction as very much incompatible with the Conven- seas Union Insurance was not considered in the judgment. tion rules and the doctrine of mutual trust. The Court was The House of Lords recognised that there was an important also concerned that the retention of the anti-suit injunction in point of law at stake as to the compatibility of the anti-suit in- England to restrain proceedings in another Contracting State junction with the Brussels Convention and referred the matter would impede the uniform application of rules of jurisdiction. 22 to the ECJ. But, fearing what the answer might be, the It observed that: “Any injunction prohibiting a claimant from House of Lords encouraged the ECJ to rule that the granting bringing such an action must be seen as constituting interference with the jurisdiction of the foreign court which, as such, of an anti-suit injunction on the facts was compatible with the 27 Convention regime. Lord Hobhouse noted that: is incompatible with the system of the Convention.” “The making of a restraining order does not depend upon The argument that the anti-suit injunction interfered only denying, or pre-empting, the jurisdiction of the foreign court indirectly with the jurisdiction of the foreign court was re- (…). For the foreign court, its jurisdiction and whether to ex- jected on the basis that: “In so far as the conduct for which the ercise that jurisdiction falls to be decided by the foreign court defendant is criticised consists in recourse to the jurisdiction itself in accordance with its own laws (including Conventions of the court of another member state, the judgment made as to to which the foreign country may be a party). The jurisdiction the abusive nature of that conduct implies an assessment of the appropriateness of bringing proceedings before a court of an- which the foreign court chooses to assume may thus include 28 an extraterritorial (or exorbitant) jurisdiction which is not in- other member state.” But the ECJ did not, as it usually does, ternationally recognised. International recognition of the ju- restrict its ruling to the question posed. Although the House risdiction assumed by the foreign court only becomes critical of Lords had been at pains to stress that the Continental Bank at the stage of the enforcement of the judgments and decisions scenario, where proceedings are brought allegedly in breach of of the foreign court by the courts of another country. Re- a jurisdiction clause was not the subject of its reference, the straining orders come into the picture at an earlier stage and ECJ answered the question in broad terms, making clear that involve not a decision upon the jurisdiction of the foreign the anti-suit injunction itself was incompatible with the Con- court but an assessment of the conduct of the relevant party in vention for matters falling within the Convention’s scope. A invoking that jurisdiction. English law makes these distinc- firmer rejection of common law doctrine would have been dif- tions. Indeed, the typical situation in which a restraining order ficult to imagine. is made is one where the foreign court has or is willing to assume jurisdiction; if this were not so, no restraining order 3. Forum non conveniens 23 would be necessary and none should be granted.” His Lordship suggested that: There was another blow to the common law still to come. The English courts had had several opportunities to consider “In so far as a purpose of the Convention is to limit the risk the question of whether the doctrine of forum non conveniens of irreconcilable judgments, the use of restraining orders by was compatible with the Convention. This discretionary doc- the English courts is effective to achieve or aid this result. (It trine allows an English court to stay proceedings at the insti- has achieved it in this case: the probability of irreconcilable gation of the defendant where he or she demonstrates that the judgments has been avoided.) It does so by granting a remedy so-called “natural forum” to hear the case lies in another ju- 29 which does not attack the jurisdiction of the foreign court. It risdiction. bases the grant of that remedy upon a ground which does not 30 In Re Harrods (Buenos Aires), the Court of Appeal de- involve a denial of the jurisdiction of the foreign court. It 31 achieves a result intended by the Convention in a manner parted from earlier English authority and ruled that it had a 24 which is consistent with the Convention.” discretion to stay proceedings brought under the Convention in favour of the courts of a non-Contracting State, Argentina. 32 He concluded that: Dillon LJ reasoned as follows: “Were the question of interpretation one which it was for “For the English court to refuse jurisdiction, in a case your Lordship's House alone to decide, I would reject the de- 26 fendant's arguments and dismiss the appeal primarily upon Turner v Grovit (supra note 3). 27 the ground that the defendant's arguments mis-state the Eng- Para 27. 28 lish law and that therefore their arguments upon the Conven- Para 28. 29 tion are misplaced. But their arguments also seek to give the See, in particular, Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460. 30 Convention an ambit, wider than is justified by any decision of [1992] Ch 72, discussed by Collins, ‘Forum Non Conveniens and the Brus- the Court of Justice which they have cited, so as to cover ques- sels Convention’ (1990) 106 LQR 535. The issue had been referred to the tions of the procedure to be followed and remedies to be Court of Justice by the House of Lords in Re Harrods (Case C-314/92, 25 Ladenimor SA v Intercomfinanz SA) but the case settled before a ruling was adopted by national courts where jurisdiction is not the issue.” given. See also Haji-Ioannou v Frangos [1999] 2 Lloyd’s Rep 337; Ace In- surance SA-NV v Zurich Insurance Co [2001] 1 Lloyd’s Rep 618. 31 22 S & W Berisford Plc v New Hampshire Insurance Co [1990] 2 QB 631 [2002] 1 WLR 107. and Arkwright Mutual Insurance Co v Bryanston Insurance Co Ltd 23 [1990] 2 QB 649. See also the decision of the Dutch Supreme Court in At 118-9. 24 Van der Eist v Pierson, Heldring & Pierson NV, 22 December 1989, No At 122. 13718. 25 32 At 123. At pp 97-8.

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______against a person domiciled in England, on the ground that the who asks for a stay is hardly then likely to object that, if the court of some non-contracting state is the more appropriate court grants it, his legal certainty about whether the English court to decide the matters in issue does not in any way im- court will hear the case or not is compromised. Nevertheless, it pair the object of the Convention of establishing an expedi- is undeniable that cogent arguments based upon legal certainty tious, harmonious, and, I would add, certain, procedure for can be made against the use of forum non conveniens under the securing the enforcement of judgments, since ex hypothesi if Brussels Convention. There would clearly be uncertainty for the English court refuses jurisdiction there will be no judg- the claimant if he did not know whether a court would defi- ment of the English court to be enforced in the other contract- nitely take jurisdiction at the time that he commenced an action ing states. Equally and for the same reason such a refusal of in the English courts. There may also be considerable cost and jurisdiction would not impair the object of the Convention expense involved in fighting battles on the issue of forum non that there should, subject to the very large exception of article conveniens in the courts of a Contracting State. And if the Eng- 4, be a uniform international jurisdiction for obtaining the lish courts were to apply the doctrine of forum non conveniens, judgments which are to be so enforced.” this might undermine the uniform application of the Conven- In Owusu v Jackson, Mr Owusu, a domiciliary of the tion rules throughout the Contracting States. United Kingdom, suffered serious injuries in a diving accident The Court of Justice was not immune to the attractions of whilst on holiday in Jamaica. He brought proceedings in Eng- the English discretionary approach It observed that: land against Mr Jackson, a fellow United Kingdom domicili- “The defendants in the main proceedings emphasise the ary, who had let Mr Owusu a holiday villa in Jamaica. The negative consequences which would result in practice from claim was for breach of contract, in failing to provide access to the obligation the English courts would then be under to try a safe swimming area. He also sued various Jamaican compa- this case, inter alia as regards the expense of the proceedings, nies in tort. At first instance, the English judge found that he the possibility of recovering their costs in England if the had no power to stay proceedings brought against Mr Jack- 33 claimant’s action is dismissed, the logistical difficulties result- son. He drew support from UGIS v Group Josi, where the ing from the geographical distance, the need to assess the mer- Court of Justice had found the Brussels Convention to be ap- its of the case according to Jamaican standards, the enforce- plicable to a defendant domiciled in a Contracting State irre- ability in Jamaica of a default judgment and the impossibility 38 spective of the claimant’s domicile. When the matter came be- of enforcing cross-claims against the other defendants.” fore the Court of Appeal, it noted that the Court of Justice had never issued a judgment on the key question of whether it But the ECJ simply responded that since the Brussels Con- vention rules are mandatory, nothing could be done to ad- was possible for a court with jurisdiction on the basis of the 39 defendant’s domicile under Article 2 of the Brussels Conven- dress them. The need for a uniform application of the Brus- tion to stay proceedings in favour of the courts of a non- sels Convention overrode any practical difficulties that this 34 Contracting State, and, if so, in what circumstances. may generate. The forum non conveniens doctrine would lead to a lack of uniform application of a Convention which was But, as is well known, the ECJ had no doubt that the forum designed to harmonize the rules of jurisdiction around 40 non conveniens doctrine was incompatible with the Conven- Europe, and so promote the internal market. As a matter of tion. It stressed that jurisdiction under the Brussels Conven- construction, the ECJ’s approach appears to be a proper in- tion is mandatory, save where a specific exception is made in terpretation of the Convention’s wording and aims. Its rules the Convention. No such exception was made in the case of 41 35 and bases of jurisdiction are not discretionary and provide forum non conveniens. The Court of Justice reasoned that le- no clear basis for the residual exercise of discretion. gal certainty would be compromised if the discretion to stay 36 proceedings could be invoked. It held that: “(…) a defendant, who is generally better placed to conduct his defence be- 4. Reflection fore the courts of his domicile, would not be able, in circumstances such as those of the main proceedings, reasonably to Such, then, is the battle that has raged between the English 37 foresee before which other court he may be sued”. The rea- courts and the ECJ. Those who defend the English methodol- soning is wholly erroneous on this point, as English courts only ogy would describe it as pragmatic, flexible and designed to grant a stay if the defendant himself asks for it; and a defendant ensure that litigation is expedient, efficient and conducted in good faith. Others may see the English approach as a self- 33 ECJ 13 July 2000 – C-412/98 – Group Josi Reinsurance Company SA v motivated desire to preserve doctrines of the common law and Universal General Insurance Company [2000] ECR I-5925 = [2000/01] undermine the bastions of mutual trust and uniformity that EuLF (E) 49. 34 are central to the Regulation. See [2002] EWCA Civ 877; [2002] IL Pr 45. 35 In any event, the ECJ’s decisions in Gasser, Turner and Para 37, citing Gasser, para 72, and Turner, para 24, in support. See also the Report by Professor Schlosser on the Convention of 9 October 1978 Owusu, taken together, should have represented a hammer on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on blow for the English common law. In reaching its conclusions, Jurisdiction and the Enforcement of Judgments in Civil and Commer- cial Matters and to the Protocol on its Interpretation by the Court of 38 Para 44. Justice (‘the Schlosser Report’), OJ 1979 C 59/ 71, paras 77 and 78. 39 36 Para 45. Para 38, referring to ECJ 28 September 1999 – C-440/97 – GIE Groupe 40 Concorde & Others [1999] ECR I-6307, para 23, and ECJ 19 February 2002 Para 43. – C-256/00 – Besix [2002] ECR I-1699 = [2002] EuLF (E) 177, para 24. 41 37 Save in the very rare circumstances where a limited discretion is given Para 42. expressly to the courts of a particular state.

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______one consistent thread of reasoning in the ECJ is as to the per- sion in Owusu did not restrict the application of the forum ceived importance of legislative silence. If a particular power is non conveniens doctrine where proceedings were brought in not explicitly preserved by the Brussels I Regulation, then the England in breach of an exclusive jurisdiction clause for the ECJ will almost inevitably conclude that the power is prohib- courts of a non-Member State. Shortly after the Court of Jus- ited by the Regulation. The ECJ’s interpretations of the Regu- tice’s judgment in Owusu was delivered, the English High 45 lation have been consistently literalistic. There is very little Court was faced in Konkola Copper Mines plc v Coromin evidence of the common law’s role being preserved under the with a case where it had jurisdiction under Article 2 of the Regulation. Brussels I Regulation and under Article 6(2) of the Lugano 46 Perhaps not surprisingly, all three ECJ decisions have been Convention. The defendants argued that the parties were badly received in England. For instance, Hartley states that: bound by a Zambian jurisdiction clause and that the court “These three decisions by the European Court have caused could and should stay its proceedings for the courts of Zam- something of a crisis of confidence among English lawyers. bia. Colman J ruled that such a stay was possible in principle The view is gaining ground that the European Court cannot and that the decision in Owusu did not preclude this. He be trusted to give reasonable decisions in private-law cases. It noted that there is no general right to stay on forum non con- seems unwilling to take practical considerations into account veniens grounds under Article 2, since: and to consider the needs of litigants. This is a worrying de- “(…) there is simply no provision in the Convention that 42 velopment.” To some English eyes, it is difficult to under- deals with forum non conveniens, whereas in the (…) case [of stand how a regime of jurisdiction can fail to protect the sanc- jurisdiction clauses] there is Article 17 (Convention)/Article tity of commercial agreements. Equally, some see the Owusu 23 (Judgments Regulation) which provides for the court in a decision as forcing litigation to take place in an inappropriate member state selected by the jurisdiction clause to have exclu- jurisdiction where greater inconvenience and expense may re- sive jurisdiction. It could therefore be said that those provi- sult. Even the anti-suit injunction, which is perhaps, most ob- sions reflect an underlying policy to give effect at least to ju- viously incompatible with the Regulation regime of mutual risdiction agreements relating to courts within Member States 47 trust, is thought by some to be a powerful weapon to prevent in preference to the domicile rule”. wasteful litigation and to hold parties to their agreements. Colman J continued: “The Convention by Article 17 recog- nises that character of certainty and party autonomy by super- 48 III. The Common Law Fights Back imposing it on the domicile rule”. He reasoned that these virtues of certainty and party autonomy should not be aban- But the common law is nothing if not creative. In recent doned where the jurisdiction clause is for the courts of a non- times, it has evolved new, and sometimes surprising means, of Contracting State. Colman J rejected the approach of the 49 preserving a role of common law doctrines under the Regula- Cour d’Appel of Versailles in Bruno v Société Citibank, tion. It is to this subject that we now turn. which held that the defendant domicile rule prevails in the face of a jurisdiction clause for the courts of a non-Contracting State, on the basis that no express right to stay in such circum- 1. Limiting the impact of Owusu stances is conferred by the Convention. Colman J described this approach as “very formalistic” and stated that it “(…) Let us first take the doctrine of forum non conveniens. The 50 would appear to have no conceptual foundation”. Moreover, ECJ in Owusu declined to answer the question whether the the court did not consider that it needed to apply the rules on power to stay proceedings in favour of the courts of a non- jurisdiction agreements in the Regulation on a strict, reflexive Contracting State survives in other contexts in which reflexive basis; indeed, on the facts, the court decided in its discretion, effect might be given to the Convention rules. In particular, not to stay proceedings. questions arise as to the power to stay where: (i) there is an exclusive jurisdiction clause in favour of the courts of a non- English writers tend to agree that the doctrine of forum non Member State; (ii) parallel proceedings are taking place in a conveniens need not be applied in a strictly reflexive way. In non-Member State; or (iii) had the facts arisen in a Member some writers’ view, the jurisdiction rules in the Regulation State, they would have conferred exclusive jurisdiction on that merely provide the inspiration for the power to stay in favour state’s courts under Article 22 of the Regulation. of the courts of a non-Member State. The leading English 51 work, Dicey, Morris and Collins, The Conflict of Laws, pro- Almost as soon as the Owusu judgment was handed down, 43 vides as follows: English writers began to look for ways to restrict its ambit. 44 Within a few weeks, the English courts stated that the deci-

42 45 Hartley, ‘The Modern Approach to Private International Law: Interna- [2005] EWHC (Comm) 898, [2005] 2 Lloyd's Rep 555. 46 tional Litigation and Transactions from a Common-Law Perspective: OJ 1988 L319/9. General Course on Private International Law’ (2006) 319 Recueil des 47 Cours 9, 183. Para 88. See also Arkwright Mutual Insurance Co v Bryanston Insur- 43 ance Co Ltd [1990] 2 QB 649, 660. See Peel, ‘Forum Non Conveniens and European Ideals’ [2005] 48 LMCLQ 363; Briggs, ‘Forum Non Conveniens and Ideal Europeans’ Konkola, para 99. 49 [2005] LMCLQ 378; Harris, ‘Stays of Proceedings and the Brussels 1992 Rev Crit 333. Convention’ (2005) 54 ICLQ 933; Fentiman, ‘Civil Jurisdiction and 50 Third States: Owusu and After’ (2006) 43 CML Rev 705. Para 100. 51 44 L Collins (gen ed), Dicey, Morris and Collins, The Conflict of Laws Judgment was handed down in Konkola on 10 May 2005; judgment in th Owusu had been given on 1 March 2005. (14 edn Sweet & Maxwell, London 2006), at para 12-022.

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“In the absence of specific guidance from the European diction clause for such a State, or exclusive jurisdiction by Court, it is submitted that the proper course for an English analogy to Article 22 of the Regulation, the English courts court is to use Arts 22 and 23 to identify the classes of case in will continue to find that the doctrine of forum non conven- which a court may continue apply its national law. It is inap- iens survives, and to apply it as liberally as possible. In this re- propriate to go further and to insist on the Articles being ap- spect, the English courts’ tendency to look for ways to pre- plied slavishly. So, for example, it would not be necessary to serve the doctrine of forum non conveniens has survived the show that the proceedings had as their object rights in rem in, decision in Owusu. or a tenancy of, land in a non- Regulation State; it would suffice that the case was one which required a court to rule on a ques- 2. Limiting the impact of Turner tion of title to foreign land. And it would not be necessary for an agreement on jurisdiction for the courts of New York to A similar trend has been witnessed in respect of anti-suit in- comply with the formalities specified by Art.23; it should suf- junctions. Perhaps unsurprisingly, the English courts have had fice that the jurisdiction agreement is valid as a matter of Eng- to consider the scope of the ruling in Turner. Rather more lish rules of the conflict of laws. Similarly, if an English court surprisingly, the English courts have found in the Brussels I were to conclude that the case was one in which it was entitled Regulation bases on which to extend the reach of the anti-suit to grant jurisdictional relief, it should be able to apply its own injunction. law to decide whether in fact the relief should be granted, and should not be driven by the analogy of Arts 22 and 23 to conclude that it had an absolute obligation to decline jurisdiction. If 2.1 Anti-suit injunctions and arbitration agreements this is correct, then there can be no objection to an English In West Tankers Inc v RAS Riunione Adriatica di Sicurta court applying the doctrine of forum non conveniens in a situa- 54 55 SpA (The Front Comor), the House of Lords referred to the tion of lis alibi pendens in a non-Regulation State, and applying ECJ the question whether the ruling in Turner v Grovit pre- Arts 27 and 28 of the Judgments Regulation by analogy as well. vents the English courts from issuing anti-suit injunctions Indeed, there can be no sensible justification for insisting that an when proceedings are brought in the courts of another Mem- English court is required to blind itself to the fact that there is a ber State allegedly in breach of an English arbitration agree- lis alibi pendens in a non-Regulation State, especially when the ment. Lord Hoffmann delivered a speech in which he indi- judgment of a court in a non-Regulation State may well be enti- cated to the ECJ the answer that he thought it should give. As tled to recognition in England. The result will be that the power with Lord Hobhouse in Turner v Grovit, so Lord Hoff- to apply the doctrine of forum non conveniens in favour of the mann’s speech attempts to persuade the ECJ to rule that the courts of a non-Regulation State will be confined to cases in power to issue anti-suit injunctions survives in this context. which Arts 22, 23 and 27 of the Judgments Regulation may be Lord Hoffman argues that the arbitration exclusion in Article applied by analogy.” 1 of the Regulation is to be broadly construed; and that, as a So, for instance, if the right to stay persists in the case of result, the regime of mutual trust cannot extend to matters fal- 52 parallel proceedings in a non-Member State, a strict, reflexive ling outside the scope of the Regulation. Lord Hoffmann also approach to Article 27 of the Regulation would mean that any stresses the commercial importance of the anti-suit injunction 56 such stay would only be available where the foreign court is in this context: first seised. But Peel argues that the court first seised rule “The existence of the jurisdiction to restrain proceedings in would not work well here because it can only be justified be- breach of an arbitration agreement clearly does not deter par- tween Member States with mutual confidence in their jurisdic- ties to commercial agreements. On the contrary, it may be re- tion rules; and because reflexive effect would make the timing garded as one of the advantages which the chosen seat of arbi- of the proceedings in the non-Member State of the essence, tration has to offer (…). [I]n cases concerning arbitration, fal- whereas “it is far better that there should be a balanced con- ling outside the Regulation, it is in my opinion (…) necessary sideration of whether it is more appropriate for the two sets of that Member States should trust the arbitrators (under the proceedings to continue or for the proceedings in the English 53 doctrine of Kompetenz-Kompetenz) or the court exercising courts to be stayed”. supervisory jurisdiction to decide whether the arbitration Accordingly, one might expect that, unless and until the clause is binding and then to enforce that decision by orders ECJ decides upon the reflexive effect of the Regulation where which require the parties to arbitrate and not litigate.” there are parallel proceedings in a non-Member State, a juris- 57 Whether the ECJ will ultimately agree, remains to be seen. Meanwhile, many English lawyers will have been disap- 52 But see the decision of the Irish High Court in Goshawk Dedicated pointed but unsurprised that the Advocate General’s Opin- Ltd & Ors v Life Receivables Ireland Ltd [2008] IEHC 90, where it ruled that the power to stay proceedings was not available, even when the courts of the non-Member State were first seised. 54 53 [2007] UKHL 4, [2007] 1 Lloyd’s Rep 391. See also Fentiman (n 43) 732: “It could be said that both regimes are at 55 root concerned with the same objectives, but give effect to that concern in As a court from which there was no appeal, it was obliged to do so. different ways. In English law the mechanism is discretionary, but in 56 At para 20. Regulation and Convention a simple chronological approach is adopted 57 as the only alternative to a discretionary approach. In that sense, the It might rule that if the matter is a civil and commercial one, then no ‘court first seised’ rule is not a reflection of any commitment in principle English court can grant an order which indirectly interferes with the to favouring the first court, but simply a method – the only available competence of the courts of a Member State to exercise jurisdiction method – for avoiding parallel proceedings and inconsistent judgments.” under the Regulation.

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58 ion is that the issuing of anti-suit injunctions in this circum- in the proceedings. For the reasons set out above, however, a 59 stance is not permissible. The Advocate General’s approach party which takes the view that it is not bound by the arbitra- focuses on the subject matter of the foreign proceedings and tion clause cannot be barred from having access to the courts 62 holds that as long as these are civil and commercial with the having jurisdiction under Regulation No 44/2001.” meaning of Article 1(1) of the Regulation, it matters not that Unfortunately, this reasoning does not sufficiently address the they give rise to preliminary question as to the validity of the fact that a party to an English arbitration agreement may not arbitration clause. This, it might be said, is not wholly com- want to wait for what may be months or years whilst the other pelling; the so-called “preliminary” issue is whether the matter 60 party, perhaps in bad faith, starts proceedings in the courts of falls within the competence of the foreign courts at all. If it another Member State; and may not want to have to participate does not, then one might doubt why the regime of mutual in those foreign proceedings to assert the validity of the arbitra- trust should operate. It is somewhat artificial to talk of the tion agreement.. Anti-suit injunctions are concerned to redress subject matter of a dispute falling with the jurisdiction of the vexatious or oppressive behaviour by a claimant in foreign pro- 63 courts of another Member State, if there is a valid arbitration ceedings; and that is the sort of behaviour that cannot now be clause that ousts the jurisdiction of the courts and so, in turn, redressed. The effect may be very considerable delay before ar- ousts the rules of the Regulation which would otherwise have bitral proceedings can go ahead. The Opinion is likely to be applied. The Advocate General arguably did not dwell suffi- seen in many English eyes as placing mutual trust and the rigid- ciently on the key question of the width of the arbitration ex- ity of the Regulation’s court first seised mechanism ahead of the ception and whether this extended to circumstances in which needs of those who agree to arbitrate. the arbitration clause was in dispute. To say, as the Advocate General did, that the subject matter of the claim in Syracuse What can be seen from the West Tankers proceedings before was tort is arguably to miss the point; the question is whether the English courts is that their desire to preserve a role for the the matter fell within the parameters of the Regulation at all; anti-suit injunction and to try to persuade the ECJ courts to since, if not, the rules in that Regulation for allocating juris- rule accordingly has clearly survived the decision in Turner. diction in, inter alia, tort matters had no application. Fur- Whatever the ECJ decides in West Tankers, the English courts are likely to continue to look for ways to limit the impact of thermore, it is clear that the English proceedings had arbitra- 64 tion as their subject matter and so could be said not to have ECJ decisions in the future . been subject to the strictures of the Regulation. At least as important is the Advocate General’s firm rejec- 2.2 The Brussels I Regulation as a jurisdictional basis for tion of the pragmatic arguments of Lord Hoffmann. The Ad- the issuance of anti-suit injunctions vocate General responded that: “To begin with it must be stated that aims of a purely economic nature cannot justify in- It is one thing for the English courts to seek to limit the im- 61 fringements of Community law” This, of course, is not the pact of ECJ decisions on common law doctrines. What is point. Lord Hoffmann was saying that where Community law harder to imagine is how anything in the Regulation could be is genuinely unclear, the ECJ should interpret it in such a way used as an impetus to extend the reach of the anti-suit injunction. Yet this is exactly what happened in Samengo-Turner v as to provide solutions which are economically sound. 65 J&H Marsh & McLennan (Services) Ltd. The case concerned Even less convincingly, the Advocate General claimed that: an employment contract dispute. The New York courts took “The interpretation advanced here respects individual jurisdiction pursuant to an exclusive jurisdiction clause. The ap- autonomy, however, and also does not call into question the pellants, who were domiciled in England, then claimed that the operation of arbitration. Proceedings before a national court litigation related to their contracts of employment and should outside the place of arbitration will result only if the parties not have been brought in a non-Member State. Instead, they re- disagree as to whether the arbitration clause is valid and appli- lied upon Article 20(1) of the Regulation, which states that an cable to the dispute in question. In that situation it is thus in employer may only sue an employee in the state where the em- fact unclear whether there is consensus between the parties to ployee is domiciled. In England, the jurisdiction clause was in- submit a specific dispute to arbitration. effective since, under Article 21 of the Regulation, the clause If it follows from the national court’s examination that the would need to have been agreed after the dispute had arisen. arbitration clause is valid and applicable to the dispute, the Tuckey LJ found that the employee had what he called a New York Convention requires a reference to arbitration. “statutory right” under the Regulation to be sued in England. There is therefore no risk of circumvention of arbitration. It is true that the seising of the national court is an additional step 62 Para 67-68. 63 If there are serious doubts about the validity of the argument agree- 58 ment, an English court may not regard the conduct of the claimant in ECJ – C-185/07 – Allianz SpA (formerly Riunione Adriatica Di Sicurta starting the proceedings in the foreign court as vexatious or oppressive. SpA) and Others v West Tankers Inc. Opinion of AG Kokott, 4 Sep- 64 tember 2008 = EuLF in this issue at 197. See, for instance, the suggestion by Briggs that English courts might is- 59 sue mandatory injunctions compelling the overseas claimant to proceed This article was written before the Opinion of the Advocate General to arbitration: http://www.conflictoflaws.net/2008/cases/the-ag- was delivered and, whilst it has been possible to incorporate some dis- opinion-in-west-tankers/. cussion of it, the article does not attempt to analyse it in detail. 65 60 [2007] EWCA Civ 723, [2007] IL Pr 52; see Briggs, ‘Who is Bound by Other than the supervisory court jurisdiction of the state where the ar- the Brussels Regulation?’ [2007] LMCLQ 433; Dickinson, ‘Resurgence bitration has its seat. 61 of the Anti-Suit Injunction: the Brussels I Regulation as a Source of Para 66. Civil Obligations?’ (2008) 57 ICLQ 465.

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The New York proceedings violated that right. He held that cause of action requiring its own basis of jurisdiction. The “The New York court cannot give effect to the Regulation Regulation renders the English court competent to restrain a and has already decided in accordance with New York law on party from litigating in a non-Member State. The result, of conventional grounds that it has exclusive jurisdiction. The course, is that the English court can invoke a common law only way to give effect to the English claimants' statutory power to injunct proceedings that would not generally be 66 rights is to restrain those proceedings.” available in the rest of the European Union. The decision may be wrong. It is, of course, true that the Regulation confers exclusive jurisdiction on the courts of the 3. Limiting the impact of Gasser: actions for damages for employee’s domicile. But it is far from clear that the Regula- breach of jurisdiction clauses tion confers exclusive jurisdiction in the sense that the courts of the Member States of the employee’s domicile have juris- We have seen ways in which the impact of the ECJ decisions diction and the courts of no other State in the world may prop- in Owusu and in Turner has been softened in England. But erly exercise jurisdiction. Even allowing for the ECJ’s broad what of the decision in Gasser? It appears, at first, to present view of the ambit of the Regulation in Owusu, the Regulation an immovable obstacle against the court second seised acting cannot say anything about the jurisdictional competence of to protect the sanctity of a jurisdiction clause in favour of its non-Member States. Arguably, the so-called “statutory right” courts. But even here, English writers and courts may find in the Regulation is simply a right not to be sued in any other ways around the strictures of the ECJ ruling. A much dis- Member State. cussed question in England is the extent to which alternative The result is a curious one. In issuing the anti-suit injunc- means can be found to enforce jurisdiction agreements. In tion, the English court invoked a power that would not have particular, the question arises as to whether an action for damages could be brought in the English courts to provide a rem- generally been available in other Member States; and so un- 69 dermined the uniformity of protection for Regulation rights. edy for breach of contract. The issue has arisen in the Eng- But the most extraordinary aspect of the decision is that it lish courts in the context of anti-suit injunctions to restrain uses the strictures of the Brussels Regulation to enhance the breaches of contract where the claimant has instigated proceed- use of the anti-suit injunction. After all, but for the Regula- ings abroad in a State other than that chosen by the parties. tion’s rules on employment contracts, there would have been Where the common law rules of jurisdiction apply, there has no question of issuing the injunction, since the proceedings in been a burgeoning line of authority in support of such dam- 70 New York were pursuant to an exclusive jurisdiction agree- ages. In Union Discount v Zoller, the Court of Appeal held ment. The decision is a telling insight into the inclination of that a claim to recover costs incurred by a party against whom many English judges to preserve common law jurisdictional an action was commenced abroad in breach of contract was 71 tools whenever they can. permissible. In A/S Svendborg D/S v Akar, the High Court held that this was so even if those costs could be recovered Nor is this an isolated case where the Regulation’s rules of 72 jurisdiction have been found to provide a basis on which to abroad. In the House of Lords in Donohue v Armco Inc, grant an anti-suit injunction. In Masri v Consolidated Con- counsel for the respondent conceded that damages would be 67 tractors International Co SAL, the Court of Appeal held that available as a remedy for breach of an English jurisdiction where an EU domiciliary had submitted to proceedings in clause where a party started proceedings overseas, so as to reflect any increased liability or expense incurred by the party England, and so conferred jurisdiction upon an English court 73 sued in the foreign forum. And in Sunrock Aircraft Corp Ltd under the Brussels I Regulation, this provided a basis pursuant 74 to which the court could then restrain that party from pursu- v Scandinavian Airline Systems Denmark-Norway-Sweden, ing proceedings in the courts of a non-Member State. Law- the Court of Appeal said that: “It is established that damages can be awarded for a loss incurred by the failure to comply rence Collins LJ said that: “The judgment debtors' submission 75 to the English jurisdiction in those proceedings is a sufficient with the terms of an exclusive jurisdiction clause (…)”. basis for the imposition of the anti-suit injunction, and the The question then arises as to whether such damages could claim for the injunction does not require (…) any separate ba- 68 sis of jurisdiction (…) under the Brussels I Regulation (…)”. 69 For detailed discussion, see Briggs, Agreements on Jurisdiction and The Masri decision appears to be correct and certainly does Choice of Law (OUP, Oxford 2008), chapter 8; Merrett, ‘The En- forcement of Jurisdiction Agreements within the Brussels Regime’ not suffer from the logical inconsistencies of Samengo-Turner. (2006) 55 ICLQ 315; Tan and Yeo, ‘Breaking Promises to Litigate in a Nonetheless, its impact is noteworthy. An English court can- Particular Forum: are Damages an Appropriate Remedy?’ [2003] LMCLQ 435; Tham, ‘Damages for Breach of English Jurisdiction not, of course, consider whether to grant an anti-suit injunc- Clauses: More than Meets the Eye’ [2004] LMCLQ 46. 70 tion unless it has a jurisdictional basis upon which to grant the [2001] EWCA Civ 1755, [2002] 1 WLR 1517. order. The effect of Masri is that where the Regulation confers 71 [2003] EWHC 797. jurisdiction on the English courts, those courts are also given a 72 [2001] UKHL 64, [2002] 1 Lloyd’s Rep 425. basis for the injunction, which is not to be treated as a separate 73 Lord Hobhouse, para 48. See also Lord Bingham’s views at para 48. Lord Scott appeared to limit the availability of damages to costs. For 66 more recent developments, see A v B (No 2) [2007] EWHC 54 Para 43. (Comm), [2007] 1 Lloyd’s Rep 358; National Westminster Bank plc v 67 Rabobank Nederland [2007] EWHC 1056 (Comm). [2008] EWCA Civ 625. 74 68 [2007] EWCA Civ 882. Para 99. See also the earlier proceedings in the Court of Appeal in the 75 same case: [2008] EWCA Civ 303. At para 37.

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______be awarded in cases where the Brussels I Regulation applies. action for damages. As with the decisions in Owusu and in Suppose, for instance, that a contract between the parties con- Turner, so the English courts may look for ways to limit the tains a jurisdiction clause for the courts of England. Notwith- impact of the Gasser ruling. standing this, the claimant starts proceedings in Italy. One might ask whether the defendant to those proceedings could IV. Conclusion bring an action in England for damages against the claimant in the Italian proceedings for wrongly starting proceedings This article has been a tale of matters past, present and fu- against him in breach of the jurisdiction clause? If the Italian 76 ture. In the past, prior to the ECJ decisions in Gasser, Turner court ultimately finds that it has no jurisdiction, Joseph ar- and Owusu, the English courts on the whole did not accept gues that an action for the costs incurred in ensuring the dis- that the Brussels Convention could curtail their ability to pro- missal of the Italian proceedings, and, perhaps, for the delay tect the sanctity of jurisdiction agreements, to issue anti-suit causes, is compatible with the Regulation and the Gasser ruling. injunctions, and to stay proceedings in favour of the courts of But if the Italian court did take jurisdiction, could an action non-Contracting States. The ECJ has, in recent years, reached for breach of the jurisdiction clause still be brought in Eng- very different conclusions which have, ostensibly, greatly re- land? Briggs points out that the foreign court may have taken stricted the role of the common law. In the present, we can see jurisdiction on the basis that although there was a consensus the green shoots of the English common law re-emerging between the parties, the formality requirements of Article 23 from the tatters of the ECJ decisions, often in surprising and of the Regulation were not met, as where the jurisdiction innovative ways. In the future, one suspects that many of clause is not evidenced in writing. That, however, is not to say these common law solutions will ultimately be held by the that the clause was not the subject of a contractual agreement ECJ to be incompatible both with the Regulation and with its 78 between the parties. Briggs argues that this is a separate mat- own jurisprudence. In that respect, the pattern of the past ter: “The foundation for this argument is that there is a dis- will repeat itself. But looking still further ahead, one can imag- tinction between two issues: whether the jurisdiction agree- ine that, whatever the ECJ decides and whatever further bat- ment is effective in law to prorogate or derogate from the ju- tering awaits the common law doctrines in the Court of Jus- risdiction of a court, and whether there was a private and tice, the English courts and commentators will find new ways binding agreement on seising a court with jurisdiction, or on to breathe life back into the common law rules of jurisdiction. 77 the issue of proceedings.” On this view the action in the English court would not be revisiting the Italian court’s find- 76 ing that Article 23 was not satisfied; it would simply be en- Joseph, Jurisdiction and Arbitration Agreements and their Enforce- forcing a private agreement between the parties. ment, (Sweet & Maxwell, London 2005), para 14.13. Briggs, Agree- ments on Jurisdiction and Choice of Law (OUP, Oxford 2008) p 332 One can only imagine what the ECJ might say if asked if argues that even if the Italian court has ruled that the defendant could not recover its costs, this should not be considered inconsistent with an such an action for damages is compatible with the Regulation. action for damages for breach of the jurisdiction clause in the English It seems very likely that the response would be that if the Ital- courts. 77 ian court finds that the jurisdiction clause is ineffective, the Briggs, Agreements on Jurisdiction and Choice of Law (OUP, Oxford 2008) p 334. principle of mutual trust requires the English court to accept 78 Certainly, the Advocate General in West Tankers was unpersuaded by the decision. The aim of that action for damages is indirectly the House of Lords’ call for the survival of anti-suit injunctions to re- to circumvent the foreign court’s decision and the ruling in strain alleged breaches of arbitration agreements in other Member States. Gasser. But unless and until it so decides, one can equally imagine that the English courts might permit, and develop, an

On the applicability of the Brussels II a Regulation to state measures for the protection of the child1

Marianne Andrae*

2 1The decision by the ECJ in the legal matter C-435/06 dis- application of the Brussels II a Regulation. The German Fed- 3 cussed in this article, decisively contributes to the clarification eral Court of Justice (BGH) affirmed the question without of the issue whether proceedings which are initiated by state closer argumentation in two decisions. Those cases concerned authorities for the protection of a child are within the scope of the jurisdiction of the German courts to decide on the applica-

2 Council Regulation (EC) No 2201/2003 concerning jurisdiction and * Prof. Dr. Marianne Andrae, Professor at the University of Potsdam the recognition and enforcement of judgments in matrimonial matters (Germany), Chair for Civil Law, Private International Law, Interna- and the matters of parental responsibility, repealing Regulation (EC) tional Civil Procedural Law and Comparative Law. No 1347/2000, OJ 2003 No L 338, p. 1 [as amended by Council Regula- 1 tion (EC) No 2216/2004 of 2 December 2004, OJ 2004 No L 367, p. 1]. Annotation of ECJ judgment of 27 November 2007, Case C-435/06 - 3 “C”, OJ 2008 No C 22, p. 11 (Leitsätze - ratio decidendi); ECR 2007, BGH, Case XII ZB 41/07, decision of 11 September 2007, FPR 2008, I-10141; FamRZ 2008, 125-128. = [2008] EuLF I-58. 115; Case XII ZB 42/07, decision of 17 October 2007, FamRZ 2008, 45.