Before : MR JUSTICE PETER SMITH Between :

Transcription

1 Neutral Citation Number: [2010] EWHC 1023 (Ch) IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION Case No: HC09CO1648 Royal Courts of Justice Strand, London, WC2A 2LL Date: 11/05/2010 Before : MR JUSTICE PETER SMITH Between : Secret Hotels 2 Limited - and - E.A. Traveller Limited Claimant Defendant Charlotte Edge (instructed by Blake Lapthorn) for the Claimant Mark Warwick (instructed by Jeffrey Green Russell) for the Defendant Peter Smith J : Hearing dates: 27th April Judgment INTRODUCTION 1. This appeal has been extremely well argued by both parties on this appeal. It is the Claimant s appeal with permission from Master Moncaster against his decision dated 9th February 2010 when he granted the Defendant s application for a stay of these proceedings pursuant to Article 27 of the Council Regulation (EC) no 44/2001 ( the Judgment Regulations ). BACKGROUND 2. The Claimant is a company registered and domiciled in England and Wales. Until 1st February 2009 it provided holiday accommodation in (amongst other countries) Cyprus. Until 25th February 2009 it operated under the name of Med Hotels Ltd. In this judgment I shall call it Med. 3. The Defendant (EA Traveller Ltd) ( Traveller ) is registered and domiciled in Cyprus. At all material times Traveller operated as Med s agent in Cyprus under two written agreements ( the Agency Agreements ) the first dated 12th April 2006 and the second ( the 2007 Agreement ) dated 18th September Clause 14 of the 2007 Agreement provided this Agreement shall be governed by and construed in accordance with English Law and the parties irrevocably submit to the non-exclusive jurisdiction of the English courts to settle any disputes that may arise in connection with this Agreement.

2 5. Traveller s obligations under the Agency Agreements included making hotel bookings on Med s behalf and acting as a local point of contact for holidaymakers. 6. On 1st February 2009 Med sold its business assets including the name Med Hotels Ltd to Thomas Cook. From that date onwards it ceased to operate in Cyprus and no longer had any need for Traveller s services. 7. The contractual period of the 2007 Agreement was from 1st May 2007 to 30th April Following the sale of its assets as I have said Med has not required Traveller s services under that Agreement. It is not clear at the moment what is the position about the 2007 Agreement. By that I mean Med s stance as to whether it terminated the same pursuant to any contractual right or whether its non use of Traveller before the expiration of the term covered by the 2007 Agreement is a breach of some express or implied term has not yet been ventilated. 8. It should be noted however that clause 12.3 provided:- in the event the volume of business (measured by passenger numbers and financial turnover) decreases by greater than 20% over the previous full season, measured by the company s data, then both parties reserve the right to review the exclusive nature of this Agreement and may consider contracting with third parties 9. Although this is not a part of the claim brought by Traveller in Cyprus (see below) it is not inconceivable that that clause with its contemplated minimum percentage might lead to an implied term that neither party should by its action take any step to prevent the maintenance of the minimum level contemplated by clause It is therefore capable of being argued that by unilaterally disposing of its business Med has in effect broken the Agreement which contemplated that for the period of its duration a certain minimum level of business would be achieved. 10. That is not currently a claim but the position of any claims under the 2007 Agreement is at a very early stage relatively speaking. PROCEEDINGS 11. There was an exchange of correspondence between the parties respective lawyers following the sale of the assets. It is fair to say in my view that Med kept Traveller in the dark about what was going on; Traveller only found out about the sale from the press. It instituted proceedings in Cyprus in the Limassol District Court of Cyprus on 13th March The endorsement of claims in those proceedings states the claim is for:- Euro 3,000,000 for damages for breach of the terms of the Agreement between the Plaintiff and Defendant 1) that was signed on 18th September 2007 which Agreement is supplemented and/or amended by arrangements and/or agreements, partly in writing and partly orally, effected between the Plaintiff and Defendants 1 and 2 and which resulted in the Plaintiff suffering damages and losses

3 12. The witness statement of Franklin Price on behalf of Traveller states that the claim is for damages for breach of the terms of the Agreement on the basis that Med has placed its business with other Agents in Cyprus prior to the sale of its business and has suffered loss. It is submitted on behalf of Med that the claim is speculative. In my view it is impossible to evaluate the claim `at this stage. 13. However it does not (despite its generalised form) apparently make any claim arising out of the failure to continue with the 2007 Agreement. This appears at least partly to be based on a misconception that Med is acting in breach of the exclusivity clause when in fact Med having sold its business is not carrying on any business in Cyprus. The former business owned by it is now being operated by Thomas Cook which has of course no contractual liability to Traveller. 14. On 14th May 2009 Med issued the present proceedings in England claiming an account in respect of all sums held by Traveller on its behalf and the payment of the sums found to be due on taking the account. JURISDICTION OF THE ENGLISH AND CYPRIOT COURTS 15. Both Cyprus and the United Kingdom are member states for the purposes of the Judgment Regulations. It is common ground that, subject to Articles 27 and 28, both the English and Cypriot courts have jurisdiction to determine both Med s and Traveller s claims. The English court has jurisdiction by virtue of the jurisdiction clause and article 23 of the Judgment Regulations and the Cypriot court has jurisdiction by virtue of article 5 because Cyprus was the place for the performance of the 2007 Agreement. 16. Either court was appropriate because the jurisdiction clause was non exclusive. Thus both parties contemplated the possibility that in the event of a dispute the proceedings could be commenced in either Cyprus or the United Kingdom. 17. One further factor I should mention is that the 2007 Agreement is governed by English law. TRAVELLER S APPLICATION 18. On 18th June 2009 Traveller applied for a stay of the English proceedings on the basis that the English proceedings and the Cyprus proceedings involve the same cause of action under Article 27 of the Judgment Regulations and that the Cyprus court was first seized. 19. Its application was initially put on the basis that the two sets of proceedings involve the same cause of action because they were between the same parties and arose out of the same contractual relationship. That argument was not pursued before the Master and has not been pursued on the appeal before me. 20. During the hearing Traveller submitted that its claim in the Cyprus proceedings could as a matter of law be set off against Med s claim in the English proceedings so that

4 both sets of proceedings would necessarily involve the same cause of action for the purposes of Article That stance was accepted by Med before the Master (see paragraph 5 of the Master s judgment). Miss Edge who appeared before the Master and who appears for Med accepted that was the position below. 22. In Med s Appellant s Notice (ground 2) it sought to resile from that stance and to argue that there was no right of set off in the hands of Traveller against Med s claim for an account in England and Wales. That technically was a new matter but after hearing submissions I determined that it was appropriate to allow, in the justice of the case, Med to withdraw the concession it made so that that issue could be fully argued on the appeal. I could see no discernable prejudice being suffered by Traveller in response to that. The only possibility is that it could have been said by Traveller that it might have needed to call evidence to address the issue raised by Med in paragraph 2 of its Notice of Appeal. That issue was as to whether or not the causes of action respectively were sufficiently connected so as to be an equitable set off. In the event Mr Warwick who appears for Traveller (and who appeared below) decided that there was no need for fresh evidence and that therefore the matter was simply a question of responding to a new argument. 23. Similarly the Master determined that he did not have enough material before him to decide whether or not he should exercise his discretion under Article 28 (paragraph 20 of his judgment). During the course of argument it seemed to me to be clear that there was sufficient material for that discretion in my judgment to be exercised, contrary to the learned Master s indication. 24. Traveller had not sought permission to appeal that determination nor had it served a Respondent s Notice seeking to affirm the Master s judgment on Article 28 grounds in the event that the appeal by Med was successful in respect of the Article 27 determination. The observations of the Master were strictly obiter because he decided the hearing on Article 27. Thus he had no need to consider Article In those circumstances it was appropriate in my view despite the lack of permission to appeal and Respondent s Notice to allow Traveller to maintain a fall back argument under Article 28. Once again no prejudice was identified and Med did not seek to call any evidence as to whether or not there were any other factors that might be available to put before the court in considering an exercise of a discretion under Article Thus in my view all arguments were fully ventilated on the appeal before me despite the technical failings on both sides. THE JUDGMENT REGULATIONS 27. The relevant regulations are Articles 27 and 28 which provide as follows:- Lis pendens - related actions Article 27

5 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 Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings. 2. Where these 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. 28. It seems to me also that parts of the preamble to the regulations are relevant to the issues before me and I set those out:- Whereas: (1) The Community 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 cooperation in civil matters which are necessary for the sound operation of the internal market. (2) Certain differences between national rules governing jurisdiction and recognition of judgments hamper the sound operation of the internal market. Provisions to unify the rules of conflict of jurisdiction in civil and commercial matters and to simplify the formalities with a view to rapid and simple recognition and enforcement of judgments from Member States bound by this Regulation are essential. (15) In the interests of the harmonious administration of justice it is necessary to minimise the possibility of concurrent

6 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. 29. It will be seen that a major purpose behind the regulations was to unify the rules of conflict of jurisdiction in civil and commercial matters to simplify the formalities with a view to rapid and simple recognition and enforcement of judgments from member states bound by the regulations. Recital (15) is particularly significant because a fundamental principle behind the regulations was to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments would not be given in two member states. The purpose of the regulations was to provide clear and effective mechanisms for resolving cases of lis pendens and related actions and for obviating problems from national differences as to the determination of the time when a case is regarded as pending. 30. The difficulties created by international regulations like this is well exemplified by the case of Phillips v Symes [2008] UKHL 1 a case under the Lugano Convention where similar problems arose. DUPLICATION OF PROCEEDINGS 31. Miss Edge acknowledged that if the appeal was successful there will be two parallel sets of proceedings in Cyprus and the United Kingdom. She submitted that the proceedings in Cyprus would be dealt with by that court adjudicating on Traveller s claim for damages against Med whereas the UK court would simply address the question of the account of sums found due to Med from Traveller. 32. This seems to me to be unreal. As Miss Edge acknowledged in argument I have no control over the Cyprus proceedings and nothing in this jurisdiction can stop those proceedings continuing. It may be possible of course for Med to make an application for a stay in the Cyprus proceedings but that was most unlikely to be made and even more unlikely to be successful (it would involve Med standing on its head the arguments they maintain before me). 33. Similarly, if not stayed, the English proceedings for an account will also continue. Even if (which for reasons I set out below I do not accept) Miss Edge is correct in submitting that Traveller has no right of set off against the account it could nevertheless maintain a counter claim for any damages due to it as against the claim for an account. Equally in the Cypriot proceedings Med (assuming it adopts the same stance as before me of no set off) could maintain a counter claim in those proceedings as against the claim for damages. It seems to me inevitable that both parties will have to raise their respective claims in response to the claims brought against them. It would take a brave party not to raise matters in diminution of the liabilities to which it is exposed. If for example Traveller did not raise its damages claim (assuming it is a good one) against the account then the taking of the account and (significantly) the order for payment of the sums found due on that account will lead to a judgment against it not reduced by its damages claim. That judgment could then be enforced in

7 Cyprus as against it. An attempt to raise the claim at the enforcement stage might well be resisted by Med on the grounds that by failing to raise it in the English proceedings and the judgment it is too late to raise it in a separate action. The converse could equally apply as regards Med not raising the account in Cyprus. 34. Miss Edge sought to address that by suggesting that one or other of the judgments could be stayed until the other claim is fully determined. That to my mind demonstrates the difficulty of Med s resistance to Traveller s application. 35. Even if neither party chooses to raise defensively its claim in the proceedings brought against it there nevertheless will be the need to address the fact that proceedings are taking place in parallel in different jurisdictions. Miss Edge submitted that the proceedings will be different and the evidence will be different. With respect to Miss Edge I think that submission is premature on the basis of the information currently available to me. Further if both parties choose to use their respective claims defensively both sets of proceedings will be determining both claims. That will necessarily lead to the potential for conflicts which recital (15) of the Judgment Regulations says the regulations were designed to avoid. It would lead to both courts adjudicating the identical issues. 36. Even if that is not correct and that the English proceedings determine the account and the Cyprus proceedings determine the damages claim it does not follow that there might not be differences in evidence that might lead to differing and contradictory conclusions on the evidence. It is impossible at this stage to say what evidence will be led in both claims. 37. Finally in respect of these complicating factors the parties will be forced to instruct lawyers in two jurisdictions arising out of the disputes under the 2007 Agreement. This seems to me to be precisely the type of duplication once again that the regulations were designed to avoid. 38. I accept Miss Edge s submission that as the 2007 Agreement is governed by English law there will be a greater effort in Cyprus because expert evidence will have to be given in Cyprus as to the English law applicable to the 2007 Agreement. However that will not go away if the stay is lifted. All that will happen is that the English courts will adjudicate on the account with its knowledge of English law but the Cyprus action will still carry on and if there are English law issues expert evidence will have to be adduced. However given the historical background of Cyprus and its affinity to UK law rather than continental law I suspect this is a problem that is more theoretical than actual. However once again lifting the stay exacerbates the problem. 39. By way of contrast as a matter of practicality if the stay remains in place all the issues arising under the 2007 Agreement will be litigated and determined in one court only. This appears to be what the courts considered was a significant point to conventions like this see for example The Tatry [1999] QB 515 at 534 C. CLOSE CONNECTION 40. It is submitted by Med that the two different causes of action are not closely connected for the purposes of an equitable set off within the well known decision of

8 Hanak v Green [1958] 2 QB 9. There is no question of a legal set off nor any question of mutual set off of debts. 41. For an equitable set off to be maintained there must be a sufficiently close connection between the two demands. It involves a consideration of the circumstances of the particular case and a close connection may not suffice to impeach the title if there are other discretionary factors which mitigate against equitable relief see generally Derham, The Law of Set Of (3rd edition) paragraphs and It seems to me that if one looks at Med s claim for an account that involves an enquiry as to what sums are due to it and the payment of the sums found due to it on taking such enquiry. The claim therefore necessarily involves drawing an account between the parties dealings. If Med has committed a breach of contract when that account is taken any losses that flow from that will necessarily be forming part of the account which is designed to settle the ultimate balance. Hence the prayer for relief for payment of the sums found due on the taking of such account. 43. Similarly in the Cyprus proceedings the statement of claim when addressing the loss and damage sustained by reason of the alleged breaches and the quantification of that will necessarily have to take into account and give credit for monies which it holds on account for Med. 44. Thus both claims in my view are sufficiently connected as they both have to be determined in the respective primary claim so that each claim is available as a set off against the other claim. Both proceedings therefore in my view (unless one or other of the partners is sufficiently bold not to put its set off in issue) involve precisely the same issues. THE DECISION OF MASTER MONCASTER 45. I have already observed that the Master in paragraph 5 recited that the parties acknowledged that each would have a set off against the other s claim. That has been challenged in this appeal but the challenge is unsuccessful for the reasons set out above. 46. He has referred to the key decision of Gantner Electronic v Basch KC 111/01 which determined that in that case defences must be disregarded in the application of Article 27 so that admitted set off is irrelevant. He accepted Mr Warwick s submissions that the Gantner case did not apply to an equitable set off under English law. That was Mr Warwick s stance repeated before me in response to Med s appeal (see paragraph 10 of the judgment). He pointed to difficulties when a set off is required to be disregarded as outlined in paragraphs of the opinion of the Advocate General in the Gantner case and concluded (paragraph 17) that the decision ought to be confined to cases where the set off only arises by acts of the party rather than by operation of law. He concluded that the Gantner decision addressed matters that have to be raised subsequently in defence. Thus he concluded that it did not apply to claims which arise by operation of law. Accordingly he did not accept the Gantner decision applied. 47. He then concluded as I have said that he did not have sufficient evidence to consider an exercise of discretion under Article 28.

9 ARTICLE 27 A DISCUSSION 48. I have set out the recital to the regulation and Article 27 above. It is useful to contrast the wording in Article 27 from that in Article 28. Article 27 applies where proceedings involve the same cause of action and between the same parties. Where such proceedings are brought in the different courts of the Member States any court other than the court first seized shall of its own motion stay the proceedings until such time as the jurisdiction of the court first seized is established. 49. Pausing there it is accepted that the Cyprus court was the first seized. Thus if the two sets of proceedings involve the same cause of action then the English proceedings must be stayed. That follows from paragraph 2 of Article 27. THE GANTNER CASE 50. It is interesting to see first what the Advocate General said. In paragraphs 6 and 7 of the Advocate s opinion the following is set out:- 6. In order to understand the case, it is appropriate to set out the principles of the Austrian law on set-off. As regards the concept of set-off, suffice it to note that it is a form of extinguishment of obligations. It has the effect of simultaneously extinguishing different obligations between two persons who are debtors of each other, to the extent of the lower debt. 7. According to Austrian law, set-off occurs by the unilateral declaration of one of the parties to the other. (4) Further types of set-off found in other European national laws, such as legal set-off (by operation of law) and judicial set-off (by order of a court), do not exist. The declaration may be made either extrajudicially or in proceedings. The declaration of set-off has the same effect whether it was made in an extrajudicial declaration or in proceedings. It is always retroactive - both debts are deemed to be extinguished on the date on which the requirements for set-off are satisfied, not on the date of the declaration of set-off, and the court merely makes a finding that the set-off has occurred. 51. Mr Warwick submits that those paragraphs show that the only matter being considered are statutory set offs under Austrian law. Express reference is made to other types of set off by operation of law or judicial set off. It is pointed out that such rights do not exist in Austria. 52. In the Gantner decision itself this is referred to again in paragraph 7:- Under Netherlands and Austrian law set-off always requires a unilateral declaration by one party to the other. Statutory set-off, characterised by the extinction of mutual claims by operation of law, which is well known in other European national laws, does not exist in Netherlands and Austrian law.

10 The declaration may be made either extra-judicially or in the course of proceedings. It has retroactive effect: the two claims are considered to be extinguished on the day on which the conditions for set-off are met and not on the day on which setoff is declared, and the court confines itself to making a declaration that set-off has been effected. 53. Once again the difference between the statutory nature of the set off in Netherlands and Austrian law is set out. Both require a unilateral declaration by one party to the other. The other form of European set offs (including the English right of equitable set off) are referred to. 54. The relevant parts of the decision are in paragraphs 25 and 26 where the following is said :- In that regard it must be observed, first of all, that according to its wording Article 21 of the Convention applies where two actions are between the same parties and involve the same subject-matter (see Gubisch Maschinenfabrik, cited above, paragraph 14). Furthermore, the subject-matter of the dispute for the purpose of that provision means the end the action has in view (The Tatry, cited above, paragraph 41). It thus appears from the wording of Article 21 of the Convention that it refers only to the applicants' respective claims in each of the sets of proceedings, and not to the defence which may be raised by a defendant. 55. It seems to me that is reflected in the different wording in Article 27 and Article 28. Article 27 refers to the same cause of action whereas Article 28 refers to merely related actions. 56. The conclusions are somewhat brief and somewhat bereft of reasoning: see paragraphs as follows:- Finally, the objective and automatic character of the lis pendens mechanism should be stressed. As the United Kingdom Government correctly points out, Article 21 of the Convention adopts a simple method to determine, at the outset of proceedings, which of the courts seised will ultimately hear and determine the dispute. The court second seised is required, of its own motion, to stay its proceedings until the jurisdiction of the court first seised is established. Once that has been established, it must decline jurisdiction in favour of the court first seised. The purpose of Article 21 of the Convention would be frustrated if the content and nature of the claims could be modified by arguments necessarily submitted at a later date by the defendant. Apart from delays and expense, such a solution could have the result that a

11 court initially designated as having jurisdiction under that article would subsequently have to decline to hear the case. It follows that, in order to determine whether there is lis pendens in relation to two disputes, account cannot be taken of the defence submissions, whatever their nature, and in particular of defence submissions alleging set-off, on which a defendant might subsequently rely when the court is definitively seised in accordance with its national law. In the light of the foregoing, the answer to the first two questions is that Article 21 of the Convention must be construed as meaning that, in order to determine whether two claims brought between the same parties before the courts of different Contracting States have the same subject-matter, account should be taken only of the claims of the respective applicants, to the exclusion of the defence submissions raised by a defendant. 57. The simple question to be answered is whether those paragraphs are to be applied to all forms of set offs and not merely those actually before the court. Master Moncaster accepted the latter submission which Mr Warwick repeats before me. 58. In my view the Master was correct to accept that submission. In the Med claims in the English proceedings the claim is for an account. The account is to establish the net sum due to it on taking that account. That involves assessing any cross liability due from it to Traveller. Nevertheless it is part of the Claimant s action which seeks an enquiry as to the amount of monies due to it which necessarily involves (as the prayer for relief demonstrates) determining the net sum and an order for payment for that net sum. Thus Med will have to deal in its own claim for an account with any claims Traveller raises against it. 59. The same is true as regards Traveller s proceedings in Cyprus. Although it is a claim for damages Traveller holds monies on behalf of Med. In order to establish its loss in net terms it will have to give credit for the sums that it is holding. Thus it is an integral part of its claim that it will have to give credit for the account due from it to Med. 60. Thus when one looks at it both claims are identical because both claims as part of establishing their entitlement necessarily require them to give effect to sums that would be due from the other side. Both of those requirements form part of their respective cause of action. The only difference between the two of course is that the procedure in Cyprus starts with a Traveller claim which needs to deal with a Med account whereas the English action starts with a claim for an account which needs to take into account any liability to Traveller. Apart from that reversal of procedures they are both the same cause of action in my view. The cause of action is to determine what is due to each under the contract.

12 61. In my view this is not the kind of set off contemplated by the Gantner decision. I am reinforced in that view by the preamble to the regulations. The purposes of the regulations are as far as possible to ensure efficient and just disposal within the Member States and an avoidance of identical actions proceeding in differing jurisdictions with the potential difficulties. To allow the appeal would create precisely the difficulties the regulations are designed to avoid. If Gantner is to be interpreted to have that effect in my view it is wrongly decided and I will decline to follow it for that reason. However I have determined in my view the Gantner case is confined solely to the unilateral form of set off identified in Austria and the Netherlands. It is not in my view intended to have any application to the forms of set off in English law identified in this judgment. 62. For all of those reasons I will dismiss the appeal. ARTICLE As I have said Master Moncaster felt unable to come to a decision on Article 28 although it is clear if he had had further material he would have exercised a discretion to stay the English proceedings. 64. Article 28 is in my view drawn to address precisely the difficulties that would be caused by allowing the English action to continue. The difference of course is that the actions have to be related but they do not have to be identical. Further paragraph 3 shows that the actions are deemed to be related where they are so closely connected and it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. 65. It seems to me that the present situation falls precisely within Article 28. I have already set out earlier the consequences of allowing the appeal. In my view it is inevitable that parallel proceedings will exist in both jurisdictions with all the risks that that might cause. Even if Traveller s action proceeds in Cyprus and Med do not raise their account and the converse occurs there is still a duplication of effort because both parties would have to address the same basic material i.e. the contractual relationships how the contract is developed and how the contract relationship of either ended and upon what basis. Thus a large part of the material will be duplicated in both jurisdictions. 66. In any event it is difficult to see how that will in practice occur. I cannot accept that either party would take the risk of finding itself non suited by failing to raise its relevant set off. In any event as I have said I cannot stop the Cyprus proceedings and I cannot stop Traveller raising a set off in the English proceedings. 67. The only difference which was highlighted by Miss Edge is that the English court might be slightly advantaged because the Agreement is covered by English law. However that is not in my view a significant justification for allowing the two actions to carry on. I have already observed that English law experts will still be required in Cyprus to evaluate Traveller s claim there and that will carry on irrespective of any order I make. What will happen however is that English law will be applied according to expert evidence there to the contract and English law will be applied by English judges in relation to the accounts. It is in my view another classic example of duplication which the regulations are designed to avoid. It goes without saying that

13 the actions are related because they spring from the same contract and in view of the clear set offs which I have determined either party has it is difficult to see that they are not related and it is equally difficult to see that they are not closely connected. It is expedient for all the reasons that I have set out above to hear and determine them together as set out in Article Therefore if I am wrong on Article 27 I would unhesitatingly exercise the discretion under Article 28 to stay the English proceedings.