SAVILLE LJ: The plaintiff, S & T B., is a company incorporated in Germany.
In April 1991 the defendant, Be. N., provided it in that country with a
'Schuldanerkenntnis' for DM1875m. This document is a form of formal
acknowledgment of debt. It was expressed to be governed by German
law under which the recipient of such a document can seek to enforce the
payment of the amount acknowledged by execution and without the need
to sue on the document or prove any underlying debt.
In 1994 the defendant started proceedings before the Dusseldorf
Landgericht seeking a declaration that the Schuldanerkenntnis was no
longer of any validity and was unenforceable against him. The defendant
asserts in those proceedings that he was released from his obligations
under the Schuldanerkenntnis by a 'Protokoll' executed in September
1991 which he says also had the effect of discharging any underlying
indebtedness.
The plaintiff is defending the proceedings, principally on the ground that
the alleged Protokoll relied on was in fact created much later as a wholly
fraudulent device designed by the defendant and the plaintiff's former
managing director to escape from the indebtedness. The plaintiff has also
counterclaimed in the same proceedings for DM1775m which they assert
is the amount of the debt underlying the Schuldanerkenntnis together
with interest. These proceedings are pending and unless and until the
Schuldanerkenntnis is declared invalid or enforceable the plaintiff is, as a
matter of German law, free to seek to enforce it.
In June this year the plaintiff applied ex parte to, and obtained from,
Gage J a worldwide Mareva injunction against the defendant in respect
of the Schuldanerkenntnis. On 18 July there was an inter partes hearing
before Viscount Bledisloe QC, sitting as a deputy judge of the High Court,
who varied the injunction by confining its effect to this country. From this
decision the plaintiff appeals with the leave of the judge.
It is clear from the judgment that the judge considered that the principle
stated by this court in Rosseel NV v Oriental Commercial and Shipping
(UK) Ltd [1990] 3 All ER 545, [1990] 1 WLR 1387 was applicable. The
judge took the view that what the English court was being asked to do
in the present case was to grant interlocutory Mareva relief in support of
another jurisdiction, namely Germany, and since he considered that there
were no exceptional circumstances, the case cited showed that a 'long
arm' jurisdictional order was inappropriate. In the Rosseel decision given
in July 1990, Lord Donaldson MR said ([1990] 3 All ER 545 at 546, [1990]
1 WLR 1387 at 1388-1389):
'Where this court is concerned to determine rights then it will, in an
appropriate case, and certainly should, enforce its own judgment by
exercising what would be described as a long arm jurisdiction. But, where
it is merely being asked under a convention or an Act of Parliament
to enforce in support of another jurisdiction, whether in arbitration or
litigation, it seems to me that, save in an exceptional case, it should
stop short of making orders which extend beyond its own territorial
jurisdiction. I say that because, if you take a hypothetical case of rights
being determined in state A and assets being found in states B to M, you
would find a very large number of subsidiary jurisdictions (in the sense
that they were merely being asked to enforce the rights determined by
another jurisdiction) making criss-crossing long arm jurisdictional orders
with a high degree of probability that there would be confusion and,
indeed, resentment by the nations concerned at interference with their
jurisdictions. It seems to me that, apart from the very exceptional case,
the proper attitude of the English courts (and, I may add, courts in other
jurisdictions) is to confine themselves to their own territorial area, save in
cases in which they are the court or tribunal which determines the rights
of the parties. So long as they are merely being used as enforcement
agencies they should stick to their own last.'
In the present case, the plaintiff seeks to attack the reliance by Viscount
Bledisloe on the Rosseel case on a number of grounds. The first of these
grounds is a submission that in truth the English court is not being asked
to grant interlocutory relief in support of another jurisdiction.
The immediate difficulty with this argument is that one of the bases
on which the plaintiffs themselves sought to invoke the jurisdiction of
the English court is that provided by s 25 of the Civil Jurisdiction and
Judgments Act 1982. Subsections (1) and (2) of this section provides as
follows.
'(1) The High Court in England and Wales or Northern Ireland shall have
power to grant interim relief where -- (a) proceedings have been or are
to be commenced in a Brussels or Lugano Contracting State other than
the United Kingdom or in a part of the United Kingdom other than that
in which the High Court in question exercises jurisdiction; and (b) they
are or will be proceedings whose subject-matter is within the scope of
the 1968 Convention as determined by Article 1 (whether or not the
convention has effect in relation to the proceedings).
(2) On an application for any interim relief under subsection (1) the court
may refuse to grant that relief if, in the opinion of the court, the fact that
the court has no jurisdiction apart from this section in relation to the
subject-matter of the proceedings in question makes it inexpedient for the
court to grant it.'
If reliance is placed on these provisions, it is self-evident that the court is
being asked to grant relief in support of another jurisdiction. Mr Strauss
QC, who appeared on behalf of the plaintiff, did not seriously suggest
otherwise. However, the plaintiff also relies on art 50 of the Convention
on Jurisdiction and the Enforcement of Judgments in Civil and Commercial
Matters 1968, made part of our law by s 2 of the 1982 Act. Article 50
provides as follows:
'A document which has been formally drawn up or registered as an
authentic instrument and is enforceable in one Contracting State shall, in
another Contracting State, be declared enforceable there, on application
made in accordance with the procedures provided for in Article 31 et seq.
The application may be refused only if enforcement of the instrument is
contrary to public policy in the State addressed. The instrument produced
must satisfy the condition necessary to establish its authenticity in the
State of origin. The provisions of section 3 of Title III shall apply as
appropriate.'
The judge below decided that the Schuldanerkenntnis fell within the
requirements of this article. There was no appeal from this ruling. The
plaintiff has undertaken to take the appropriate steps to enforce the
Schuldanerkenntnis here under RSC Ord 71, rr 27 and 28. The judge held
that the English court accordingly has jurisdiction to grant interlocutory
relief in advance in support of the registration of the Schuldanerkenntnis
here and again there is no appeal from that holding. On this basis,
Mr Strauss submits that the relief cannot be properly categorised as
granted in support of another jurisdiction since it is granted in support
of a jurisdiction to be exercised in this country by the registration of the
Schuldanerkenntnis here.
The judge rejected the submission and so do I. Article 50 is clearly
designed to provide the same enforcement procedures throughout
contracting states for documents complying with the requirements of that
article, as for judgments complying with the provisions of the articles
relating to them. Article 50 is designed to enable rights existing under the
laws of one jurisdiction to be enforced in others. The jurisdiction here is
therefore not an originating jurisdiction but an enforcement jurisdiction,
whether it is founded on s 25 of the 1982 Act or art 50. Once again,
therefore, it seems to me to be inescapable that the English court is being
asked to grant interlocutory relief in support of another jurisdiction.
Mr Strauss submitted that the principle in the Rosseel case is not
applicable to the present case since the proceedings in Germany were
started by the defendant. Accordingly, he submitted, it would be unfair
to deny the plaintiff the rights it would have enjoyed had it started
proceedings here, which it could have done under art 2 of the convention
but for the German proceedings, since the defendant is resident and
thus domiciled in this country. I agree again with the judge that the
short answer to this point is that this has not happened. The fact that
the plaintiff is seeking relief in support of another jurisdiction cannot be
altered by the assertion that something else which has not happened
might have happened. Apart from this, it seems to me for the reasons
stated, leaving aside the German legal proceedings, that the court is
being asked through art 50 to exercise a supporting jurisdiction. The
fact that this is in support of a document (ie the Schuldanerkenntnis)
rather than a judgment, does not to my mind distinguish the case in any
material respect from Rosseel's case.
The next submission was that Rosseel's case does not, and indeed cannot,
lay down any binding principle, since this would be to fetter the general
discretion given to the court to grant Mareva and other forms of injunctive
relief.
In my judgment, such a submission simply ignores how our law actually
works. In our courts, the law relating to Mareva injunctions and the
like has in the main come from decided cases which have developed
elaborate rules, practices and principles designed to ensure that these
draconian remedies are employed to do justice rather than injustice.
Thus, for example, it is a general requirement for granting Mareva relief
that the applicant must provide, and often fortify with security, a cross-
undertaking as to damages. Again, the courts have laid down principles
requiring an applicant for ex parte Mareva relief to make full disclosure
of all relevant matters, including those which might be said to militate
against the granting of such relief.
Such rules, practices and principles do not act as an impermissible fetter
on the exercise of discretion. What they do is to lay down guidelines
which experience has taught are calculated to do justice rather than
injustice. In the infinite variety of human affairs, there will be exceptional
or special cases where the justice of the case requires a departure from
such guidelines. In general, however, the duty of the court to seek to do
justice will mean adherence to those rules, practices and principles.
Mr Strauss then submitted that we should not follow the Rosseel decision.
In my judgment, this court is bound by the Rosseel case. It would be
contrary to our rules of precedent simply to depart from the case. It
is a recent decision and there is nothing to suggest that in the last six
years, since the decision was given, there has been any change in the
development of this part of our law which would begin to justify departing
from the decision.
The next submission is that the Rosseel case is distinguishable since
in the present case the appellants have offered cross-undertakings in
respect of foreign proceedings, along the lines of those set out in Gee
Mareva Injunctions and Anton Piller Relief (3rd edn, 1995) p 306, namely:
'(1) not to commence proceedings abroad on the same subject matter
against the same defendant, without the leave of the court; (2) not to
apply to a foreign court to enforce the Mareva relief without the leave of
the court...'
Mr Strauss submitted that those undertakings would eliminate, or at least
radically reduce, the risk of competing or conflicting jurisdictions which
underlie the decision in the Rosseel case.
The actual decision in the Rosseel case does not reveal whether the
under- takings were offered in that case. There is no discussion in the
judgment on their possible effect. However, we were informed by counsel
who has spoken to Mr Millett (who appeared for the appellants in that
case) that the undertakings were offered on that occasion, although
there was no discussion on them between Mr Millett and the court and no
submissions were made about them.
It is not in the least surprising that the undertakings were on offer to the
court in the Rosseel case. In Derby & Co Ltd v Weldon (No 1) [1989] 1
All ER 469 at 473, [1990] Ch 48 at 55, a case which was decided a year
before, May LJ made clear in his view that such terms or undertakings
should generally be part of any worldwide prejudgment Mareva. It is
noteworthy that Parker LJ agreed with that judgment, as well as the
further judgment given by Nicholls LJ in that case.
It is suggested in effect that somehow Lord Donaldson MR in the Rosseel
case must have overlooked the cross-undertakings on offer or the effect
which Mr Strauss says that they would have on the rationale of the
principle in the Rosseel case. It seems to me that that is a most unlikely
supposition. Lord Donaldson MR, coming as he did from the Commercial
Court, and well used to Marevas of all shapes and sizes, could hardly, in
my view, have simply overlooked the fact that as the result of a judgment
of the Court of Appeal a year earlier, such undertakings had become well-
established as a requirement for the grant of a worldwide Mareva.
In all those circumstances, therefore, it seems to me that Mr Strauss'
submission that the judge erred in law in applying the principle or
guideline in the Rosseel case cannot be sustained. The principle has been
clearly set down in that case and nothing I can see in the present case
leads to me to suppose that it can be distinguished from that principle.
In addition, as was the case with the judge, I can find nothing which
indicates that the circumstances of this case are so special that justice
requires the English court in its supporting role to run the risk to which
Lord Donaldson MR referred. The plaintiff points in particular to what it
says is strong evidence of fraud and a concealment of assets. I agree, as
did the judge, that the evidence at present is strong, but this does not
make this case exceptional. Such evidence is generally required before
the question of a worldwide Mareva could even be considered.
As to other matters, having decided that the judge did not err, as was
suggested, in his approach to the matter, it seems to me that it is for the
plaintiff to demonstrate that no judge properly applying the law to the
facts before him could have concluded that the Mareva should be confined
to this country.
Suffice to say that I remain unpersuaded of this fact and it follows in
these circumstances that I would dismiss this appeal.
JUDGMENTBY-2: JUDGE LJ
JUDGMENT-2:
JUDGE LJ: I agree.
DISPOSITION:
Appeal dismissed. Leave to appeal to House of Lords refused.