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

Transcription

1 Harris, Jonathan The Brussels I Regulation and the Re-Emergence of the English Common Law The European Legal Forum (E) , IPR Verlag GmbH München The European Legal Forum - Internet Portal Literature Doc

2 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 English lawyers have become used to ECJ decisions on the Brussels I Regulation 1 which restrict the scope of common law powers, or which contradict earlier English authority on the role of jurisdiction clauses. In its famous trilogy of decisions in Erich Gasser GmbH v MISAT Srl, 2 Turner v Grovit 3 and Owusu v Jackson, 4 the ECJ gave judgments which appeared to deliver near fatal wounds to the survival of the common law rules of jurisdiction for matters falling within the scope of the Brussels I Regulation. 5 But, as we shall see, this is far from the case. Rather, the common law has been busy reinventing itself and searching for ways to limit the impact of these landmark decisions. The purpose of this article is first to consider the conflict between the English courts and the ECJ on questions as to the role of common law doctrines. It then looks at some of these ways in which the common law has reasserted itself in the face of the ECJ s decisions, and the extent to which these developments may be justified. * Professor of International Commercial Law, University of Birmingham; and Barrister, Brick Court Chambers, London (UK). 1 Council Regulation (EC) No 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, OJ 2001 L12/1. 2 ECJ 9 December 2003 C-116/02 Erich Gasser GmbH v MISAT Srl [2003] ECR I = [2004] EuLF (E) ECJ 27 April 2004 C-159/02 Turner v Grovit [2005] ECR I-3565 = [2004] EuLF (E) ECJ 1 March 2005 C-281/02 Owusu v Jackson [2005] ECR I-1383 = [2005] EuLF I-72, II Save, of course, where Article 4 applies and the Regulation derogates explicitly to national rules of jurisdiction. II. Gasser, Turner and Owusu: overturning prior English authority Let us first consider the conflict between the English courts and the ECJ on three key issues, namely: the relationship between jurisdiction clauses and the court first seised rule; the role of anti-suit injunctions; and the role of the doctrine of forum non conveniens. In each of its three landmark decisions, Gasser, Turner and Owusu, the ECJ overturned existing English authority which creatively interpreted the Brussels Convention to give effect to what the English courts perceived to be its spirit and intendment. 1. The relationship between jurisdiction clauses and the court first seised rule; anti-suit injunctions In Continental Bank v Aeakos, 6 proceedings had been instigated against the defendants in Greece. In the English Court of Appeal, the defendants argued that the Greek proceedings 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 court first seised rule in Articles 21 and 22 of the Convention 7 could have been intended to override the rules on jurisdiction agreements in Article 17 of the Convention, 8 since, if so: ( ) it follows that a party will be able to override an exclusive jurisdiction agreement which is governed by article 17, by pre-emptively suing in the courts of another contracting state [1994] 1 WLR 588. Now Articles 27 and 28 of the Brussels I Regulation. Now Article 23 of the Regulation.

3 I-182 Issue The European Legal Forum The courts of the latter state which ex hypothesi have been deprived of jurisdiction would then be the court first seised. The chosen court of the parties would then be obliged to decline jurisdiction or, if the jurisdiction of the other court is contested, to stay its proceedings. In this way a party who is in breach of the contract will be able to set at naught an exclusive jurisdiction agreement which is the product of the free will of the parties. The principle of the autonomy of the parties, enshrined in article 17, cannot countenance such a conclusion. 9 But this, of course, is exactly what was intended, at least by the ECJ. The ECJ had already ruled in Overseas Union Insurance Ltd v New Hampshire Insurance Co 10 that the court second seised could not second guess the findings of jurisdictional competence of the court first seised, unless that court had exclusive jurisdiction under Article of the Convention. 12 It held that ( ) in no case is the court second seised in a better position than the court first seised to determine whether the latter has jurisdiction. 13 Somewhat curiously, the Overseas Union ruling was not cited in the Continental Bank judgment. Even at the time, it was clear to many that the Court of Appeal s decision, whatever its commercial merits in upholding the sanctity of commercial agreements, could not withstand scrutiny. For instance, Briggs argued that the Court of Appeal took most thinking people by surprise and in an astonishing judgment, gave an effect to an English choice of law clause which is bold, attractive, and hopelessly wrong. 14 There was no reason for regarding the English courts as any more competent to interpret the clause than the Greek courts. Moreover, the Convention did not give the designated court the right to determine the scope of the clause; this was a matter for the court first seised by virtue of Article 21 of the Convention. Briggs prophetically suggested that: Sooner or later someone will pay the price of order being restored to this corner of the law. 15 At this point, then, the court first seised mechanism was, at least in England, subordinate to the rules on jurisdiction agreements. This, perhaps, reflected English wishful thinking rather than anything else; a desire to protect the sanctity of commercial agreements and not to be precluded from so doing by the strictures of the Convention. But, of course, this hierarchy could not last; and in Erich Gasser GmbH v MISAT Srl, 16 those who had not already realised this received the 9 At pp ECJ 27 June 1991 C-351/89 Overseas Union Insurance Ltd and others v New Hampshire Insurance Company [1991] ECR I Now Article 22 of the Regulation. 12 ( ) without prejudice to the case where the court second seised has exclusive jurisdiction under the Convention and in particular under Article 16 thereof, Article 21 of the Convention must be interpreted as meaning that, where the jurisdiction of the court first seised is contested, the court second seised may, if it does not decline jurisdiction, only stay the proceedings and may not itself examine the jurisdiction of the court first seised. (para 26). 13 Para Briggs, Anti-European Teeth for Choice of Law Clauses [1994] LMCLQ Ibid, p 163. See also Bell, Anti-Suit Injunctions and the Brussels Convention (1994) 110 LQR 204; Rogerson, English Interference in Greek Affairs [1994] CLJ Erich Gasser GmbH v MISAT Srl (supra note 2). For an illustration of the application of Gasser in the English courts, see JP Morgan v Primacom AG [2005] EWHC 508 (Comm). shrillest of alarm calls. The court first seised mechanism, the prevention of irreconcilable judgments and the doctrine of mutual trust were to be prized above the sanctity of commercial agreements. To the United Kingdom Government s arguments that this would provide a commercially undesirable solution, the ECJ s response was simply this: rules are rules, and this is the solution dictated by the Convention: Finally, the difficulties of the kind referred to by the United Kingdom Government, stemming from delaying tactics by parties who, with the intention of delaying settlement of the substantive dispute, commence proceedings before a court which they know to lack jurisdiction by reason of the existence of a jurisdiction clause, are not such as to call in question the interpretation of any provision of the Brussels Convention, as deduced from its wording and its purpose. 17 To many English lawyers, used to the teleological approach to judicial reasoning and to seeking to provide solutions which look to the nature and purpose of the legislation and to the consequences of a particular construction, the much more literal approach of the ECJ can be difficult to accept. Indeed, one member of the House of Lords, writing extra-judicially, has suggested that: It may comfort theoreticians that the Community has rules of ideological purity and logical certainty. But the result can only be practical uncertainty, with large scope for tactical manoeuvring Anti-suit injunctions and proceedings commenced in bad faith Whatever one s views on the decision in Continental Bank, it could at least have been confined in scope, since Steyn LJ expressly stated 19 that he was not addressing the situation where an anti-suit injunction was sought in circumstances where no exclusive jurisdiction clause existed. Yet, in Turner v Grovit, 20 the Court of Appeal was prepared to restrain proceedings commenced in a Spanish court, in circumstances where no exclusive jurisdiction clause existed in favour of the English courts, in order to prevent vexatious or oppressive pursuance of the foreign proceedings, conduct which was considered to amount to an abuse of process. Without making any sustained attempt to look at the nature of the Convention, Laws LJ was able to entertain not the slightest doubt but that, were the English court to find that proceedings had been launched in another Brussels Convention jurisdiction for no purpose other than to harass and oppress a party who is already a litigant here, the English court possesses the power to grant the injunction. 21 Laws LJ s certainty was expressed without regard to whether it was for the Spanish court alone to decide upon its jurisdictional competence; nor to the fact that, if a Spanish court was granted jurisdiction by a Convention to which the United Kingdom was party, its proceedings 17 Para The Rt Hon Lord Mance, Exclusive Jurisdiction Agreements and European Ideals (2004) 120 LQR 357, [1994] 1 WLR 588, [2000] QB At 357.

4 The European Legal Forum Issue I-183 could arguably, by definition, not be vexatious or oppressive in the eyes of English law. Once again, the decision in Overseas Union Insurance was not considered in the judgment. The House of Lords recognised that there was an important point of law at stake as to the compatibility of the anti-suit injunction with the Brussels Convention and referred the matter to the ECJ. 22 But, fearing what the answer might be, the House of Lords encouraged the ECJ to rule that the granting of an anti-suit injunction on the facts was compatible with the Convention regime. Lord Hobhouse noted that: The making of a restraining order does not depend upon denying, or pre-empting, the jurisdiction of the foreign court ( ). For the foreign court, its jurisdiction and whether to exercise that jurisdiction falls to be decided by the foreign court itself in accordance with its own laws (including Conventions to which the foreign country may be a party). The jurisdiction which the foreign court chooses to assume may thus include an extraterritorial (or exorbitant) jurisdiction which is not internationally recognised. International recognition of the jurisdiction assumed by the foreign court only becomes critical at the stage of the enforcement of the judgments and decisions of the foreign court by the courts of another country. Restraining orders come into the picture at an earlier stage and involve not a decision upon the jurisdiction of the foreign court but an assessment of the conduct of the relevant party in invoking that jurisdiction. English law makes these distinctions. Indeed, the typical situation in which a restraining order is made is one where the foreign court has or is willing to assume jurisdiction; if this were not so, no restraining order would be necessary and none should be granted. 23 His Lordship suggested that: In so far as a purpose of the Convention is to limit the risk of irreconcilable judgments, the use of restraining orders by the English courts is effective to achieve or aid this result. (It has achieved it in this case: the probability of irreconcilable judgments has been avoided.) It does so by granting a remedy which does not attack the jurisdiction of the foreign court. It bases the grant of that remedy upon a ground which does not involve a denial of the jurisdiction of the foreign court. It achieves a result intended by the Convention in a manner which is consistent with the Convention. 24 He concluded that: Were the question of interpretation one which it was for your Lordship's House alone to decide, I would reject the defendant's arguments and dismiss the appeal primarily upon the ground that the defendant's arguments mis-state the English law and that therefore their arguments upon the Convention are misplaced. But their arguments also seek to give the Convention an ambit, wider than is justified by any decision of the Court of Justice which they have cited, so as to cover questions of the procedure to be followed and remedies to be adopted by national courts where jurisdiction is not the issue [2002] 1 WLR At At At 123. But the ECJ was wholly unpersuaded. 26 It regarded the antisuit injunction as very much incompatible with the Convention rules and the doctrine of mutual trust. The Court was also concerned that the retention of the anti-suit injunction in England to restrain proceedings in another Contracting State would impede the uniform application of rules of jurisdiction. It observed that: Any injunction prohibiting a claimant from bringing such an action must be seen as constituting interference with the jurisdiction of the foreign court which, as such, is incompatible with the system of the Convention. 27 The argument that the anti-suit injunction interfered only indirectly with the jurisdiction of the foreign court was rejected on the basis that: In so far as the conduct for which the defendant is criticised consists in recourse to the jurisdiction of the court of another member state, the judgment made as to the abusive nature of that conduct implies an assessment of the appropriateness of bringing proceedings before a court of another member state. 28 But the ECJ did not, as it usually does, restrict its ruling to the question posed. Although the House of Lords had been at pains to stress that the Continental Bank scenario, where proceedings are brought allegedly in breach of a jurisdiction clause was not the subject of its reference, the ECJ answered the question in broad terms, making clear that the anti-suit injunction itself was incompatible with the Convention for matters falling within the Convention s scope. A firmer rejection of common law doctrine would have been difficult to imagine. 3. Forum non conveniens There was another blow to the common law still to come. The English courts had had several opportunities to consider the question of whether the doctrine of forum non conveniens was compatible with the Convention. This discretionary doctrine allows an English court to stay proceedings at the instigation of the defendant where he or she demonstrates that the so-called natural forum to hear the case lies in another jurisdiction. 29 In Re Harrods (Buenos Aires), 30 the Court of Appeal departed from earlier English authority 31 and ruled that it had a discretion to stay proceedings brought under the Convention in favour of the courts of a non-contracting State, Argentina. Dillon LJ reasoned as follows: 32 For the English court to refuse jurisdiction, in a case Turner v Grovit (supra note 3). Para 27. Para 28. See, in particular, Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460. [1992] Ch 72, discussed by Collins, Forum Non Conveniens and the Brussels Convention (1990) 106 LQR 535. The issue had been referred to the Court of Justice by the House of Lords in Re Harrods (Case C-314/92, Ladenimor SA v Intercomfinanz SA) but the case settled before a ruling was given. See also Haji-Ioannou v Frangos [1999] 2 Lloyd s Rep 337; Ace Insurance SA-NV v Zurich Insurance Co [2001] 1 Lloyd s Rep 618. S & W Berisford Plc v New Hampshire Insurance Co [1990] 2 QB 631 and Arkwright Mutual Insurance Co v Bryanston Insurance Co Ltd [1990] 2 QB 649. See also the decision of the Dutch Supreme Court in Van der Eist v Pierson, Heldring & Pierson NV, 22 December 1989, No At pp 97-8.

5 I-184 Issue The European Legal Forum against a person domiciled in England, on the ground that the court of some non-contracting state is the more appropriate court to decide the matters in issue does not in any way impair the object of the Convention of establishing an expeditious, harmonious, and, I would add, certain, procedure for securing the enforcement of judgments, since ex hypothesi if the English court refuses jurisdiction there will be no judgment of the English court to be enforced in the other contracting states. Equally and for the same reason such a refusal of jurisdiction would not impair the object of the Convention that there should, subject to the very large exception of article 4, be a uniform international jurisdiction for obtaining the judgments which are to be so enforced. In Owusu v Jackson, Mr Owusu, a domiciliary of the United Kingdom, suffered serious injuries in a diving accident whilst on holiday in Jamaica. He brought proceedings in England against Mr Jackson, a fellow United Kingdom domiciliary, who had let Mr Owusu a holiday villa in Jamaica. The claim was for breach of contract, in failing to provide access to a safe swimming area. He also sued various Jamaican companies in tort. At first instance, the English judge found that he had no power to stay proceedings brought against Mr Jackson. He drew support from UGIS v Group Josi, 33 where the Court of Justice had found the Brussels Convention to be applicable to a defendant domiciled in a Contracting State irrespective of the claimant s domicile. When the matter came before the Court of Appeal, it noted that the Court of Justice had never issued a judgment on the key question of whether it was possible for a court with jurisdiction on the basis of the defendant s domicile under Article 2 of the Brussels Convention to stay proceedings in favour of the courts of a non- Contracting State, and, if so, in what circumstances. 34 But, as is well known, the ECJ had no doubt that the forum non conveniens doctrine was incompatible with the Convention. It stressed that jurisdiction under the Brussels Convention is mandatory, save where a specific exception is made in the Convention. No such exception was made in the case of forum non conveniens. 35 The Court of Justice reasoned that legal certainty would be compromised if the discretion to stay proceedings could be invoked. 36 It held that: ( ) a defendant, who is generally better placed to conduct his defence before the courts of his domicile, would not be able, in circumstances such as those of the main proceedings, reasonably to foresee before which other court he may be sued. 37 The reasoning is wholly erroneous on this point, as English courts only grant a stay if the defendant himself asks for it; and a defendant ECJ 13 July 2000 C-412/98 Group Josi Reinsurance Company SA v Universal General Insurance Company [2000] ECR I-5925 = [2000/01] EuLF (E) 49. See [2002] EWCA Civ 877; [2002] IL Pr 45. 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 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters and to the Protocol on its Interpretation by the Court of Justice ( the Schlosser Report ), OJ 1979 C 59/ 71, paras 77 and 78. Para 38, referring to ECJ 28 September 1999 C-440/97 GIE Groupe Concorde & Others [1999] ECR I-6307, para 23, and ECJ 19 February 2002 C-256/00 Besix [2002] ECR I-1699 = [2002] EuLF (E) 177, para 24. Para 42. who asks for a stay is hardly then likely to object that, if the court grants it, his legal certainty about whether the English court will hear the case or not is compromised. Nevertheless, it is undeniable that cogent arguments based upon legal certainty can be made against the use of forum non conveniens under the Brussels Convention. There would clearly be uncertainty for the claimant if he did not know whether a court would definitely take jurisdiction at the time that he commenced an action in the English courts. There may also be considerable cost and expense involved in fighting battles on the issue of forum non conveniens in the courts of a Contracting State. And if the English courts were to apply the doctrine of forum non conveniens, this might undermine the uniform application of the Convention rules throughout the Contracting States. The Court of Justice was not immune to the attractions of the English discretionary approach It observed that: The defendants in the main proceedings emphasise the negative consequences which would result in practice from the obligation the English courts would then be under to try this case, inter alia as regards the expense of the proceedings, the possibility of recovering their costs in England if the claimant s action is dismissed, the logistical difficulties resulting from the geographical distance, the need to assess the merits of the case according to Jamaican standards, the enforceability in Jamaica of a default judgment and the impossibility of enforcing cross-claims against the other defendants. 38 But the ECJ simply responded that since the Brussels Convention rules are mandatory, nothing could be done to address them. 39 The need for a uniform application of the Brussels Convention overrode any practical difficulties that this may generate. The forum non conveniens doctrine would lead to a lack of uniform application of a Convention which was designed to harmonize the rules of jurisdiction around Europe, and so promote the internal market. 40 As a matter of construction, the ECJ s approach appears to be a proper interpretation of the Convention s wording and aims. Its rules and bases of jurisdiction are not discretionary 41 and provide no clear basis for the residual exercise of discretion. 4. Reflection Such, then, is the battle that has raged between the English courts and the ECJ. Those who defend the English methodology would describe it as pragmatic, flexible and designed to ensure that litigation is expedient, efficient and conducted in good faith. Others may see the English approach as a selfmotivated desire to preserve doctrines of the common law and undermine the bastions of mutual trust and uniformity that are central to the Regulation. In any event, the ECJ s decisions in Gasser, Turner and Owusu, taken together, should have represented a hammer blow for the English common law. In reaching its conclusions, 38 Para Para Para Save in the very rare circumstances where a limited discretion is given expressly to the courts of a particular state.

6 The European Legal Forum Issue I-185 one consistent thread of reasoning in the ECJ is as to the perceived importance of legislative silence. If a particular power is not explicitly preserved by the Brussels I Regulation, then the ECJ will almost inevitably conclude that the power is prohibited by the Regulation. The ECJ s interpretations of the Regulation have been consistently literalistic. There is very little evidence of the common law s role being preserved under the Regulation. Perhaps not surprisingly, all three ECJ decisions have been badly received in England. For instance, Hartley states that: These three decisions by the European Court have caused something of a crisis of confidence among English lawyers. The view is gaining ground that the European Court cannot be trusted to give reasonable decisions in private-law cases. It seems unwilling to take practical considerations into account and to consider the needs of litigants. This is a worrying development. 42 To some English eyes, it is difficult to understand how a regime of jurisdiction can fail to protect the sanctity of commercial agreements. Equally, some see the Owusu decision as forcing litigation to take place in an inappropriate jurisdiction where greater inconvenience and expense may result. Even the anti-suit injunction, which is perhaps, most obviously incompatible with the Regulation regime of mutual trust, is thought by some to be a powerful weapon to prevent wasteful litigation and to hold parties to their agreements. III. The Common Law Fights Back But the common law is nothing if not creative. In recent times, it has evolved new, and sometimes surprising means, of preserving a role of common law doctrines under the Regulation. It is to this subject that we now turn. 1. Limiting the impact of Owusu Let us first take the doctrine of forum non conveniens. The ECJ in Owusu declined to answer the question whether the power to stay proceedings in favour of the courts of a non- Contracting State survives in other contexts in which reflexive effect might be given to the Convention rules. In particular, questions arise as to the power to stay where: (i) there is an exclusive jurisdiction clause in favour of the courts of a non- Member State; (ii) parallel proceedings are taking place in a non-member State; or (iii) had the facts arisen in a Member State, they would have conferred exclusive jurisdiction on that state s courts under Article 22 of the Regulation. Almost as soon as the Owusu judgment was handed down, English writers began to look for ways to restrict its ambit. 43 Within a few weeks, the English courts 44 stated that the deci Hartley, The Modern Approach to Private International Law: International Litigation and Transactions from a Common-Law Perspective: General Course on Private International Law (2006) 319 Recueil des Cours 9, 183. See Peel, Forum Non Conveniens and European Ideals [2005] LMCLQ 363; Briggs, Forum Non Conveniens and Ideal Europeans [2005] LMCLQ 378; Harris, Stays of Proceedings and the Brussels Convention (2005) 54 ICLQ 933; Fentiman, Civil Jurisdiction and Third States: Owusu and After (2006) 43 CML Rev 705. Judgment was handed down in Konkola on 10 May 2005; judgment in Owusu had been given on 1 March sion in Owusu did not restrict the application of the forum non conveniens doctrine where proceedings were brought in England in breach of an exclusive jurisdiction clause for the courts of a non-member State. Shortly after the Court of Justice s judgment in Owusu was delivered, the English High Court was faced in Konkola Copper Mines plc v Coromin 45 with a case where it had jurisdiction under Article 2 of the Brussels I Regulation and under Article 6(2) of the Lugano Convention. 46 The defendants argued that the parties were bound by a Zambian jurisdiction clause and that the court could and should stay its proceedings for the courts of Zambia. Colman J ruled that such a stay was possible in principle and that the decision in Owusu did not preclude this. He noted that there is no general right to stay on forum non conveniens grounds under Article 2, since: ( ) there is simply no provision in the Convention that deals with forum non conveniens, whereas in the ( ) case [of jurisdiction clauses] there is Article 17 (Convention)/Article 23 (Judgments Regulation) which provides for the court in a member state selected by the jurisdiction clause to have exclusive jurisdiction. It could therefore be said that those provisions reflect an underlying policy to give effect at least to jurisdiction agreements relating to courts within Member States in preference to the domicile rule. 47 Colman J continued: The Convention by Article 17 recognises that character of certainty and party autonomy by superimposing it on the domicile rule. 48 He reasoned that these virtues of certainty and party autonomy should not be abandoned where the jurisdiction clause is for the courts of a non- Contracting State. Colman J rejected the approach of the Cour d Appel of Versailles in Bruno v Société Citibank, 49 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 circumstances is conferred by the Convention. Colman J described this approach as very formalistic and stated that it ( ) would appear to have no conceptual foundation. 50 Moreover, the court did not consider that it needed to apply the rules on jurisdiction agreements in the Regulation on a strict, reflexive basis; indeed, on the facts, the court decided in its discretion, not to stay proceedings. English writers tend to agree that the doctrine of forum non conveniens need not be applied in a strictly reflexive way. In some writers view, the jurisdiction rules in the Regulation merely provide the inspiration for the power to stay in favour of the courts of a non-member State. The leading English work, Dicey, Morris and Collins, The Conflict of Laws, 51 provides as follows: 45 [2005] EWHC (Comm) 898, [2005] 2 Lloyd's Rep OJ 1988 L319/9. 47 Para 88. See also Arkwright Mutual Insurance Co v Bryanston Insurance Co Ltd [1990] 2 QB 649, Konkola, para Rev Crit Para L Collins (gen ed), Dicey, Morris and Collins, The Conflict of Laws (14 th edn Sweet & Maxwell, London 2006), at para

7 I-186 Issue The European Legal Forum In the absence of specific guidance from the European Court, it is submitted that the proper course for an English court is to use Arts 22 and 23 to identify the classes of case in which a court may continue apply its national law. It is inappropriate to go further and to insist on the Articles being applied slavishly. So, for example, it would not be necessary to show that the proceedings had as their object rights in rem in, 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 question of title to foreign land. And it would not be necessary for an agreement on jurisdiction for the courts of New York to comply with the formalities specified by Art.23; it should suffice that the jurisdiction agreement is valid as a matter of English rules of the conflict of laws. Similarly, if an English court were to conclude that the case was one in which it was entitled to grant jurisdictional relief, it should be able to apply its own 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 this is correct, then there can be no objection to an English court applying the doctrine of forum non conveniens in a situation of lis alibi pendens in a non-regulation State, and applying Arts 27 and 28 of the Judgments Regulation by analogy as well. Indeed, there can be no sensible justification for insisting that an English court is required to blind itself to the fact that there is a lis alibi pendens in a non-regulation State, especially when the judgment of a court in a non-regulation State may well be entitled to recognition in England. The result will be that the power to apply the doctrine of forum non conveniens in favour of the courts of a non-regulation State will be confined to cases in which Arts 22, 23 and 27 of the Judgments Regulation may be applied by analogy. So, for instance, if the right to stay persists in the case of parallel proceedings in a non-member State, 52 a strict, reflexive approach to Article 27 of the Regulation would mean that any such stay would only be available where the foreign court is first seised. But Peel argues that the court first seised rule would not work well here because it can only be justified between Member States with mutual confidence in their jurisdiction rules; and because reflexive effect would make the timing of the proceedings in the non-member State of the essence, whereas it is far better that there should be a balanced consideration of whether it is more appropriate for the two sets of proceedings to continue or for the proceedings in the English courts to be stayed. 53 Accordingly, one might expect that, unless and until the ECJ decides upon the reflexive effect of the Regulation where there are parallel proceedings in a non-member State, a juris But see the decision of the Irish High Court in Goshawk Dedicated 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. See also Fentiman (n 43) 732: It could be said that both regimes are at root concerned with the same objectives, but give effect to that concern in different ways. In English law the mechanism is discretionary, but in Regulation and Convention a simple chronological approach is adopted as the only alternative to a discretionary approach. In that sense, the court first seised rule is not a reflection of any commitment in principle to favouring the first court, but simply a method the only available method for avoiding parallel proceedings and inconsistent judgments. diction clause for such a State, or exclusive jurisdiction by analogy to Article 22 of the Regulation, the English courts will continue to find that the doctrine of forum non conveniens survives, and to apply it as liberally as possible. In this respect, the English courts tendency to look for ways to preserve the doctrine of forum non conveniens has survived the decision in Owusu. 2. Limiting the impact of Turner A similar trend has been witnessed in respect of anti-suit injunctions. Perhaps unsurprisingly, the English courts have had to consider the scope of the ruling in Turner. Rather more surprisingly, the English courts have found in the Brussels I Regulation bases on which to extend the reach of the anti-suit injunction. 2.1 Anti-suit injunctions and arbitration agreements In West Tankers Inc v RAS Riunione Adriatica di Sicurta SpA (The Front Comor), 54 the House of Lords referred 55 to the ECJ the question whether the ruling in Turner v Grovit prevents the English courts from issuing anti-suit injunctions when proceedings are brought in the courts of another Member State allegedly in breach of an English arbitration agreement. Lord Hoffmann delivered a speech in which he indicated to the ECJ the answer that he thought it should give. As with Lord Hobhouse in Turner v Grovit, so Lord Hoffmann s speech attempts to persuade the ECJ to rule that the power to issue anti-suit injunctions survives in this context. Lord Hoffman argues that the arbitration exclusion in Article 1 of the Regulation is to be broadly construed; and that, as a result, the regime of mutual trust cannot extend to matters falling outside the scope of the Regulation. Lord Hoffmann also stresses the commercial importance of the anti-suit injunction in this context: 56 The existence of the jurisdiction to restrain proceedings in breach of an arbitration agreement clearly does not deter parties to commercial agreements. On the contrary, it may be regarded as one of the advantages which the chosen seat of arbitration has to offer ( ). [I]n cases concerning arbitration, falling outside the Regulation, it is in my opinion ( ) necessary that Member States should trust the arbitrators (under the doctrine of Kompetenz-Kompetenz) or the court exercising supervisory jurisdiction to decide whether the arbitration clause is binding and then to enforce that decision by orders which require the parties to arbitrate and not litigate. Whether the ECJ will ultimately agree, remains to be seen. 57 Meanwhile, many English lawyers will have been disappointed but unsurprised that the Advocate General s Opin- 54 [2007] UKHL 4, [2007] 1 Lloyd s Rep As a court from which there was no appeal, it was obliged to do so. 56 At para It might rule that if the matter is a civil and commercial one, then no English court can grant an order which indirectly interferes with the competence of the courts of a Member State to exercise jurisdiction under the Regulation.

8 The European Legal Forum Issue I-187 ion 58 is that the issuing of anti-suit injunctions in this circumstance is not permissible. 59 The Advocate General s approach focuses on the subject matter of the foreign proceedings and holds that as long as these are civil and commercial with the meaning of Article 1(1) of the Regulation, it matters not that they give rise to preliminary question as to the validity of the arbitration clause. This, it might be said, is not wholly compelling; the so-called preliminary issue is whether the matter falls within the competence of the foreign courts at all. 60 If it does not, then one might doubt why the regime of mutual trust should operate. It is somewhat artificial to talk of the subject matter of a dispute falling with the jurisdiction of the courts of another Member State, if there is a valid arbitration clause that ousts the jurisdiction of the courts and so, in turn, ousts the rules of the Regulation which would otherwise have applied. The Advocate General arguably did not dwell sufficiently on the key question of the width of the arbitration exception and whether this extended to circumstances in which the arbitration clause was in dispute. To say, as the Advocate General did, that the subject matter of the claim in Syracuse was tort is arguably to miss the point; the question is whether the matter fell within the parameters of the Regulation at all; since, if not, the rules in that Regulation for allocating jurisdiction in, inter alia, tort matters had no application. Furthermore, it is clear that the English proceedings had arbitration as their subject matter and so could be said not to have been subject to the strictures of the Regulation. At least as important is the Advocate General s firm rejection of the pragmatic arguments of Lord Hoffmann. The Advocate General responded that: To begin with it must be stated that aims of a purely economic nature cannot justify infringements of Community law 61 This, of course, is not the point. Lord Hoffmann was saying that where Community law is genuinely unclear, the ECJ should interpret it in such a way as to provide solutions which are economically sound. Even less convincingly, the Advocate General claimed that: The interpretation advanced here respects individual autonomy, however, and also does not call into question the operation of arbitration. Proceedings before a national court outside the place of arbitration will result only if the parties disagree as to whether the arbitration clause is valid and applicable to the dispute in question. In that situation it is thus in fact unclear whether there is consensus between the parties to submit a specific dispute to arbitration. If it follows from the national court s examination that the arbitration clause is valid and applicable to the dispute, the New York Convention requires a reference to arbitration. There is therefore no risk of circumvention of arbitration. It is true that the seising of the national court is an additional step ECJ C-185/07 Allianz SpA (formerly Riunione Adriatica Di Sicurta SpA) and Others v West Tankers Inc. Opinion of AG Kokott, 4 September 2008 = EuLF in this issue at 197. This article was written before the Opinion of the Advocate General was delivered and, whilst it has been possible to incorporate some discussion of it, the article does not attempt to analyse it in detail. Other than the supervisory court jurisdiction of the state where the arbitration has its seat. Para 66. in the proceedings. For the reasons set out above, however, a party which takes the view that it is not bound by the arbitration clause cannot be barred from having access to the courts having jurisdiction under Regulation No 44/ Unfortunately, this reasoning does not sufficiently address the fact that a party to an English arbitration agreement may not want to wait for what may be months or years whilst the other party, perhaps in bad faith, starts proceedings in the courts of another Member State; and may not want to have to participate in those foreign proceedings to assert the validity of the arbitration agreement.. Anti-suit injunctions are concerned to redress vexatious or oppressive behaviour by a claimant in foreign proceedings; 63 and that is the sort of behaviour that cannot now be redressed. The effect may be very considerable delay before arbitral proceedings can go ahead. The Opinion is likely to be seen in many English eyes as placing mutual trust and the rigidity of the Regulation s court first seised mechanism ahead of the needs of those who agree to arbitrate. What can be seen from the West Tankers proceedings before the English courts is that their desire to preserve a role for the anti-suit injunction and to try to persuade the ECJ courts to rule accordingly has clearly survived the decision in Turner. Whatever the ECJ decides in West Tankers, the English courts are likely to continue to look for ways to limit the impact of ECJ decisions in the future The Brussels I Regulation as a jurisdictional basis for the issuance of anti-suit injunctions It is one thing for the English courts to seek to limit the impact of ECJ decisions on common law doctrines. What is harder to imagine is how anything in the Regulation could be used as an impetus to extend the reach of the anti-suit injunction. Yet this is exactly what happened in Samengo-Turner v J&H Marsh & McLennan (Services) Ltd. 65 The case concerned an employment contract dispute. The New York courts took jurisdiction pursuant to an exclusive jurisdiction clause. The appellants, who were domiciled in England, then claimed that the litigation related to their contracts of employment and should not have been brought in a non-member State. Instead, they relied upon Article 20(1) of the Regulation, which states that an employer may only sue an employee in the state where the employee is domiciled. In England, the jurisdiction clause was ineffective since, under Article 21 of the Regulation, the clause would need to have been agreed after the dispute had arisen. Tuckey LJ found that the employee had what he called a statutory right under the Regulation to be sued in England. 62 Para If there are serious doubts about the validity of the argument agreement, an English court may not regard the conduct of the claimant in starting the proceedings in the foreign court as vexatious or oppressive. 64 See, for instance, the suggestion by Briggs that English courts might issue mandatory injunctions compelling the overseas claimant to proceed to arbitration: 65 [2007] EWCA Civ 723, [2007] IL Pr 52; see Briggs, Who is Bound by the Brussels Regulation? [2007] LMCLQ 433; Dickinson, Resurgence of the Anti-Suit Injunction: the Brussels I Regulation as a Source of Civil Obligations? (2008) 57 ICLQ 465.

9 I-188 Issue The European Legal Forum The New York proceedings violated that right. He held that The New York court cannot give effect to the Regulation and has already decided in accordance with New York law on conventional grounds that it has exclusive jurisdiction. The only way to give effect to the English claimants' statutory rights is to restrain those proceedings. 66 The decision may be wrong. It is, of course, true that the Regulation confers exclusive jurisdiction on the courts of the employee s domicile. But it is far from clear that the Regulation confers exclusive jurisdiction in the sense that the courts of the Member States of the employee s domicile have jurisdiction and the courts of no other State in the world may properly exercise jurisdiction. Even allowing for the ECJ s broad view of the ambit of the Regulation in Owusu, the Regulation cannot say anything about the jurisdictional competence of non-member States. Arguably, the so-called statutory right in the Regulation is simply a right not to be sued in any other Member State. The result is a curious one. In issuing the anti-suit injunction, the English court invoked a power that would not have generally been available in other Member States; and so undermined the uniformity of protection for Regulation rights. But the most extraordinary aspect of the decision is that it uses the strictures of the Brussels Regulation to enhance the use of the anti-suit injunction. After all, but for the Regulation s rules on employment contracts, there would have been no question of issuing the injunction, since the proceedings in New York were pursuant to an exclusive jurisdiction agreement. The decision is a telling insight into the inclination of many English judges to preserve common law jurisdictional tools whenever they can. Nor is this an isolated case where the Regulation s rules of jurisdiction have been found to provide a basis on which to grant an anti-suit injunction. In Masri v Consolidated Contractors International Co SAL, 67 the Court of Appeal held that where an EU domiciliary had submitted to proceedings in England, and so conferred jurisdiction upon an English court under the Brussels I Regulation, this provided a basis pursuant to which the court could then restrain that party from pursuing proceedings in the courts of a non-member State. Lawrence Collins LJ said that: The judgment debtors' submission to the English jurisdiction in those proceedings is a sufficient basis for the imposition of the anti-suit injunction, and the claim for the injunction does not require ( ) any separate basis of jurisdiction ( ) under the Brussels I Regulation ( ). 68 The Masri decision appears to be correct and certainly does not suffer from the logical inconsistencies of Samengo-Turner. Nonetheless, its impact is noteworthy. An English court cannot, of course, consider whether to grant an anti-suit injunction unless it has a jurisdictional basis upon which to grant the order. The effect of Masri is that where the Regulation confers jurisdiction on the English courts, those courts are also given a basis for the injunction, which is not to be treated as a separate 66 Para [2008] EWCA Civ Para 99. See also the earlier proceedings in the Court of Appeal in the same case: [2008] EWCA Civ 303. cause of action requiring its own basis of jurisdiction. The Regulation renders the English court competent to restrain a party from litigating in a non-member State. The result, of course, is that the English court can invoke a common law power to injunct proceedings that would not generally be available in the rest of the European Union. 3. Limiting the impact of Gasser: actions for damages for breach of jurisdiction clauses We have seen ways in which the impact of the ECJ decisions in Owusu and in Turner has been softened in England. But what of the decision in Gasser? It appears, at first, to present an immovable obstacle against the court second seised acting to protect the sanctity of a jurisdiction clause in favour of its courts. But even here, English writers and courts may find ways around the strictures of the ECJ ruling. A much discussed question in England is the extent to which alternative means can be found to enforce jurisdiction agreements. In particular, the question arises as to whether an action for damages could be brought in the English courts to provide a remedy for breach of contract. 69 The issue has arisen in the English courts in the context of anti-suit injunctions to restrain breaches of contract where the claimant has instigated proceedings abroad in a State other than that chosen by the parties. Where the common law rules of jurisdiction apply, there has been a burgeoning line of authority in support of such damages. In Union Discount v Zoller, 70 the Court of Appeal held that a claim to recover costs incurred by a party against whom an action was commenced abroad in breach of contract was permissible. In A/S Svendborg D/S v Akar, 71 the High Court held that this was so even if those costs could be recovered abroad. In the House of Lords in Donohue v Armco Inc, 72 counsel for the respondent conceded that damages would be available as a remedy for breach of an English jurisdiction clause where a party started proceedings overseas, so as to reflect any increased liability or expense incurred by the party sued in the foreign forum. 73 And in Sunrock Aircraft Corp Ltd v Scandinavian Airline Systems Denmark-Norway-Sweden, 74 the Court of Appeal said that: It is established that damages can be awarded for a loss incurred by the failure to comply with the terms of an exclusive jurisdiction clause ( ). 75 The question then arises as to whether such damages could 69 For detailed discussion, see Briggs, Agreements on Jurisdiction and Choice of Law (OUP, Oxford 2008), chapter 8; Merrett, The Enforcement of Jurisdiction Agreements within the Brussels Regime (2006) 55 ICLQ 315; Tan and Yeo, Breaking Promises to Litigate in a Particular Forum: are Damages an Appropriate Remedy? [2003] LMCLQ 435; Tham, Damages for Breach of English Jurisdiction Clauses: More than Meets the Eye [2004] LMCLQ [2001] EWCA Civ 1755, [2002] 1 WLR [2003] EWHC [2001] UKHL 64, [2002] 1 Lloyd s Rep 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 more recent developments, see A v B (No 2) [2007] EWHC 54 (Comm), [2007] 1 Lloyd s Rep 358; National Westminster Bank plc v Rabobank Nederland [2007] EWHC 1056 (Comm). 74 [2007] EWCA Civ At para 37.