Merits of claim against anchor defendant matter (probably)

This second post in our “new term catch up series” looks at Sabbagh v Khoury [2017] EWCA Civ 1120, an important case about using an anchor defendant under the Brussels Regulation regime.

The use of anchor defendants in English proceedings is very common. Establishing a claim against an anchor defendant allows co-defendants to be sued in England when jurisdiction could not otherwise be established over them.  In Sabbagh v Khoury, the Court of Appeal considered whether, when the Brussels Regulation (or the Lugano Convention) applied, the claim against the anchor defendant had to be meritorious or whether even a hopeless claim against the anchor defendant would be enough to found jurisdiction.

Interestingly, but unhelpfully for litigants, the Court of Appeal judges disagreed with one another.  Patten and Beatson LJJ held that the claim against the anchor defendant must have a real prospect of success.  Gloster LJ considered that this was unnecessary although did agree that the anchor defendant regime cannot be invoked if the sole object of the claim is to oust the jurisdiction of the courts which would otherwise have jurisdiction over the non-anchor defendants.

There is also considerable scope for the issue to be re-argued because, in fact, the court’s decision on whether the claim against the anchor defendant needed to have a real prospect of success was obiter dictum. Continue reading

Article 50 and the Brussels Regulation

With Article 50 now triggered, amongst many other negotiations, attention will turn to the Brussels I Regulation. Rather than setting alarm bells ringing, this article by Sara Masters QC and Belinda McRae sets out three steps, based on previous examples of EU negotiations, of how the UK Government should assuage fears of upheaval in the system of commercial dispute resolution following Brexit.

The full article is here.

What benefit? Interpretation of a Jurisdiction Clause: Perella Weinberg Partners UK LLP v Codere SA

In its decision on 20 May 2016, the Commercial Court (Walker J) considered a non-standard jurisdiction clause which fell within the regime of the Brussels I Recast Regulation (Regulation 1215/2012).   Perhaps unsurprisingly, he held that a clause, expressed to confer non-exclusive jurisdiction on the English courts, “for the benefit of” the Claimants did not in fact confer exclusive jurisdiction on those courts.

The decision demonstrates that the court will use both a literal and a common sense business reading when construing the jurisdiction clause.  Further, the Court was reluctant to allow the parties to import new elements (such as symmetry of obligations) into Articles 25 and 31 of the Recast Regulation. Continue reading

Israeli will dispute not to be heard in England: Winkler v Shamoon [2016] EWHC 217 (Ch)

The Chancery Division’s lengthy judgment earlier this week in a dispute between the legatees of a billionaire Israeli businessman (Mr Shamoon) makes interesting reading.  The result is that the English court would not take jurisdiction over a dispute about whether certain shares were to be treated as part of Mr Shamoon’s estate.

As well as covering specific points on the scope of the succession exception in Regulation 44/2001 (Brussels I), the judgment contains useful guidance on general points notably, what constitutes submission to the jurisdiction (at common law and under the Regulation). Continue reading

Combar lecture by Sir Richard Aikens

Last night, Sir Richard Aikens delivered the COMBAR lecture.  Among the topics he covered was Regulation 1215/2012 (Brussels I recast).

In the discussion which followed, it was clear that COMBAR members were divided in opinion as to whether Regulation 1215/2012 could be interpreted (and would be interpreted) to permit the English courts to issue anti-suit injunctions in support of arbitration.  It was suggested that this could be supported on the basis of the Advocate General’s Opinion on Gazprom (see our post on this decision) although many thought the CJEU would not be persuaded to follow this path even bearing in mind the changed recitals in the recast regulation.

More than one participant in the discussion had been involved in a case where the possibility of an injunction post Regulation 1215/2012 had arisen. In those cases, however, the arbitration tribunals had adopted procedures so as to resolve the jurisdiction issue promptly and before any substantial steps had been taken in the foreign litigation.

The issue remains one to watch although any party seeking an anti-suit injunction relying on the AG in Gazprom will almost certainly need to be ready for a trip to the CJEU.

Logistical nightmare? British American Tobacco SA v Exel Europe Ltd [2015] UKSC 65

Yesterday the Supreme Court handed down its judgment in an important case for those involved in international road haulage where successive carriers are involved.  The case is also of general importance for its discussion of the relationship between international treaties and EU law.  In that part of its judgment (discussed at the end of this post), the Supreme Court held that Regulation 44/2001 (the Brussels I Regulation) did not, in this case, have the effect of a trump card able to override the CMR’s jurisdiction provisions.

In summary, it was held that where the Convention on the Contract for the International Carriage of Goods by Road 1956 (CMR) applies (as it does in England pursuant to the Carriage of Goods by Road Act 1965), the jurisdiction provisions in CMR article 31 provide a complete jurisdictional code.  As a result, although the first carrier could be sued in England (by reason of its English domicile and/or an exclusive jurisdiction clause), this was not sufficient to found jurisdiction against subsequent, non-English, carriers.  Although the “commercial logic” of the CMR’s provisions might point to a single jurisdiction, “the language of the CMR points clearly in the other direction” (Lord Sumption at [60]).

The result is particularly unattractive for consignees shipping goods subject to high tax or duty. Continue reading

Anchor does not outweigh exclusive jurisdiction clause: Jong v HSBC (Monaco) [2015] EWCA Civ 1057

Yesterday’s Court of Appeal decision under the common law rules is a useful reminder that merely bringing a claim against an English domiciled defendant (who may unquestionably be sued in England) will not always be sufficient to persuade the court that it should exercise its jurisdiction over a foreign domiciled defendant in a related claim. This is particularly so where the foreign defendant and the claimant are party to an exclusive jurisdiction clause in favour of another court.

The courts were clearly influenced by the fact that the claim against the foreign defendant was “the most important of the claims” while “it is difficult to see what practical advantage Mrs Jong would gain by suing the two English … companies.”  Continue reading