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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Underwriting Members of Lloyd's Syndicate 980 & Ors v Sinco SA [2008] EWHC 1842 (Comm) (29 July 2008) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2008/1842.html Cite as: [2008] EWHC 1842 (Comm), [2009] Lloyd's Rep IR 365 |
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QUEEN'S BENCH DIVISIONCOMMERCIAL
COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
THE UNDERWRITING MEMBERS OF LLOYD'S SYNDICATE 980 FOR THE 1999, 2000, 2001, 2002, 2003, 2004 AND 2005 UNDERWRITING YEARS OF ACCOUNT AS MANAGED BY LIMIT UNDERWRITING LIMITED AND OTHERS |
Claimants |
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- and - |
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SINCO S.A. |
Defendant |
____________________
MR A HENSHAW (instructed by DLA Piper) for the Defendant
Hearing dates: 14 May 2008
____________________
Crown Copyright ©
Mr Justice Beatson :
"6.1 The claims made in the Greek proceedings are different from the claims set out in the English claim form, and the Greek court was first seised of the claims which Sinco makes in Greece."
"6.2 The claimants' claim for breach of the jurisdiction clauses in the Binders ("the Jurisdiction Clause Claim") involves the same cause of action as the jurisdiction dispute before the Greek court."
"6.3 The Jurisdiction Clause Claim should accordingly be stayed pending the Greek court's determination as to whether it has jurisdiction over the Greek claims."
"7.1 The Jurisdiction Clause Claim is not an assertion of jurisdiction; by this claim the claimants' simply seek compensation for breach of their contractual rights."
"7.2 The claims made in Greece, including the jurisdiction dispute, can be distinguished from the legal basis of the Jurisdiction Clause Claim, which is founded purely in contract."
"7.3 Success by the claimants in the Jurisdiction Clause Claim would not give rise to any risk of an irreconcilable judgment even if Sinco were to succeed on all of its claims in the Greek proceedings" [because the claimants in these proceedings are not seeking to stop the Greek proceedings but to claim damages for breach of contract].
The legislative framework
Section 9: lis pendens – related actions
Article 27
"(1) Where proceedings involving the same cause of action and between the same parties are brought in the courts of different member states, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established."
"(2) Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court."
Article 28
"(1) Where related actions are pending the courts of different member states, any court other than the court first seised may stay its proceedings."
"(2) Where the actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof."
"(3) For the purposes of this article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."
Article 29
"Where actions come within the exclusive jurisdiction of several courts, any court other than the court first seised shall decline jurisdiction in favour of that court."
Article 30
"For the purposes of this section, a court shall be deemed to be seised:
(1) at the time when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have service effected on the defendant, or
(2) if the document has to be served before being lodged with the court, at the time when it is received by the authority responsible for service provided that the plaintiff has not subsequently failed to take the steps he was required to take to have the document lodged with the court."
"(1) TheCommunity
has set itself the objective of maintaining and developing an area of freedom, security and justice, in which the free movement of persons is ensured. In order to establish progressively such an area, the
Community
should adopt, amongst other things, the measures relating to judicial co-operation in civil matters which are necessary for the sound operation of the internal market."
"(4) … this Regulation confines itself to the minimum required in order to achieve those objectives and does not go beyond what is necessary for that purpose."
"(11) The rules of jurisdiction must be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile and jurisdiction must always be available on this ground save in a few well defined situations in which the subject matter of the litigation or the autonomy of the party warrants a different linking factor. …"
"(15) In the interests of the harmonious administration of justice it is necessary to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in two member states. There must be a clear and effective mechanism for resolving cases of lis pendens and related actions and for obviating problems flowing from national differences as to the determination of the time when a case is regarded as pending. For the purposes of this Regulation that time should be defined autonomously."
"(16) Mutual trust in the administration of justice in theCommunity
justifies judgments given in a member state being recognised automatically without the need for any procedure except in cases of dispute."
Discussion
"30.1 A key objective, probably the key objective, of these provisions is to minimise the risk of conflicting judgments by courts of different Member States."
"30.2 To that end, priority is given to the court first seised in determining whether it or some other court has jurisdiction."
"30.3 Pursuant to the principles of mutual trust underlying the Convention/Regulation, other Member State courts should stay their hand pending the determination by the court seised of its own jurisdiction, and should not in the meantime review that court's jurisdiction."
"30.4 The provisions of the Convention/Regulation are to be interpreted in the light of the objectives and principles set out above."
It will be seen that, in respect of 30.2, although there is agreement as to the principle, there is a dispute as to which court is first seised of the jurisdiction clause claim.
Article 27
"[e]ven though the English Court, seised second, may be in the best position to give decisive effect to the agreement of the parties, the broader scheme of the legislation has been held to preclude it, no matter how severe or unjustified the disadvantage for those who enter into dispute-resolution agreements".
"… broadly speaking, the triple requirement of same parties, same cause and same objet entails that it is only in relatively simple situations that art. 21 bites, and, it may be said, is intended to bite. After all, art. 22 is available, with its more flexible discretionary power to stay, in the case of 'related proceedings'. … There is no need, therefore, as it seems to me, to strain to fit a case into art. 21."
"are seeking to recover sums allegedly due on an examination of the terms and performance of the contract. [The claimants] in England are seeking to stop any such examination taking place in Italy at all."
As far as the cause of action is concerned, he stated "in Italy the terms regarding delivery and urease and the parties' performance in that regard fall for determination, whereas in England the only issue is whether the Italian claims should be being determined by arbitration in London". He continued:
"It is true that [the claimants] have also raised in Italy the preliminary objection that the claims should be being arbitrated in London. But that is, at most, only one aspect of the Italian proceedings and, although this is not critical, because of the differences between the English and Italian law regarding arbitration agreements, it raises very different considerations in the two countries. It does not make it possible to view the two sets of proceedings as having the same cause of action.
The claim for a declaration also has a different object and cause of action in my view from the Italian proceedings. Its object is less clear-cut. Insofar as it is to try and oblige or influence the Italian court to accede to Toepfer's defence in Italy that the matter falls within a binding arbitration agreement, the object is to prevent the determination by the Italian court of the claims which it [the defendants] aim in Italy to pursue. Insofar as it is to resist enforcement in third countries such as Germany or to base a later claim for damages for breach of the arbitration proceedings, the object is again distinct from any which [the defendants'] suit in Italy is aimed. The cause of action in the sense identified above is also not the same for reasons similar to those identified in considering the claims to injunctions."
"An injunction restraining the appellants [Cargill] from continuing the proceedings before the French court, or instituting any further proceedings before any other court, in breach of the arbitration agreement… constitute the same cause of action as a challenge to the jurisdiction of the French court founded on the same arbitration agreement, so as to require the English court to stay the proceedings pursuant to Art. 21 of the Convention."
"While the form is totally different, the principal issue – the existence of a binding arbitration agreement – is the same. So is the object of each proceeding – the restraint of the substantive hearing before the French court."
As I have noted, the reference was abandoned and, other than these indications, there has been no decision of the Court of Appeal on this point.
"In none of [the] three cases did the claimant seek any relief in the English proceedings other than declarations and injunctions concerning the proper forum for the resolution of the underlying claim. No relief was sought in respect of the underlying claim."
Article 30
"where new parties or new claims are to be added by amendment, the corresponding date is presumably the date of reissue, rather [than] the date of application for such permission as may be required".
"Suppose A hascommenced
proceedings against B for breach of contract; and later seeks to amend to add a claim for a new head of damages, or a claim for equitable relief for breach of fiduciary duty. But if in the mean time B, seeing the limited nature of the claim advanced by A has
commenced
proceedings of his own in the courts of another Member State for a declaration that he owed no fiduciary duties, would this preclude A from making the amendment sought? It would be no answer that the later claim would relate back to the earlier as a matter of the law of limitation, for in Grupo Torras SA v Sheikh Fahad Mohammad Al-Sabah, the Court of Appeal considered that the date upon which proceedings were definitively pending was a question essentially of fact, and which arose before and quite independently of any internal procedural law doctrine of relation back which had any effect. If the court were persuaded that the new claim had the same objet and the same cause as the original claim, it may conclude that it was in fact and in law pending as from the issue of the original claim form. Desirable as this undoubtedly is, there will clearly be cases where this analysis is too strained to be advanced; and in those cases it appears that a defendant, who sees his opponent's claim as being limited or potentially incomplete, may be able to pre-empt later amendment by
commencing
proceedings of his own to steel the gap. If the law is indeed to be interpreted as here set out, there is a high price to pay if the original claim form is not drafted as fully and completely as the claimant's capacity for foresight permits."
With regard to the price to be paid if a claim form is not drafted to reflect the entire dispute between the parties, Briggs and Rees refer to the tactical disadvantage to a claimant who has to apply to the court for permission to amend and thus gives the intended defendant the opportunity to commence
proceedings of its own before the application is heard.
"for obviating problems flowing from national differences as to the determination of the time when a case is regarded as pending. For the purposes of this Regulation that time should be defined autonomously".
Grupo Torras SA v Al-Sabah shows that, in the context of the Convention and now the Regulation, including Article 30, any domestic procedural doctrine of relation back (such as that in CPR 17.3.4) does not apply.
Conclusion