JUDGMENT
LORD JUSTICE STAUGHTON: For the reasons that have been handed
down this appeal will be referred to the European Court.
LORD JUSTICE PHILLIPS: This is the Judgment of the Court.
In January 1994 C. entered into three contracts for the purchase from
T. of a total of 9500 tonnes of soybean meal pellets, CI. M., in France.
Pursuant to these contracts pellets were carried to M. aboard the G. W.,
which arrived at M. on the 7th February. A dispute then arose between C.
and T. as to whether the pellets complied with the contract. It is common
ground that each contract included a clause that required the dispute to
be resolved by a GAFTA arbitration, to the exclusion of any other tribunal.
This clause should have ensured that the dispute was resolved cheaply
and expeditiously by an expert tribunal. The parties have, however,
become embroiled in a procedural dispute which raises complex issues
as to the interpretation of the Brussels Convention 1968 and which must
already have involved legal costs far in excess of the amount at stake in
the substantive dispute. Nor will this appeal resolve these issues. They
are of general importance and the solution to them is far from clear.
Accordingly we have resolved that it is appropriate to refer them for the
ruling of the European Court of Justice, pursuant to Schedule 2 to the Civil
Jurisdiction and Judgments Act 1982. The object of this judgment is to put
in context the questions referred.
History of the proceedings
On the 8th February, C. became concerned about the condition of the
cargo and gave notice of those concerns to T.. T. responded the following
day, contending that the contracts, which were on the terms of GAFTA
Form 100 and contained the so-called "standing in“clause, provided
for the sampling and analysis procedure, which should be followed.
Instead of following this procedure, C. made an application to the Tribunal
de Commerce de St. Nazaire ("the French Court") under an urgent
interlocutory procedure known as "en reféré“for the appointment of a
court expert to ascertain the relevant facts. The French Court made the
order sought the following day. Mr Ha., the appointed expert asked T. to
produce certificates of analysis at the loadport. T. declined to do so on
the ground that under the contractual provisions these were irrelevant.
C.'s response, on the 11th February, was to make a further application
"en reféré“for the production of these certificates. On this day discharge
was completed. C. rejected the major part of the cargo and called for
arbitration, stating that the appointment of their arbitrator would follow.
On the 17th February C. nominated Mr Sc. as their Arbitrator.
On the 22nd February the French Court heard and dismissed objections
made by T. to the two orders made "en reféré". At this stage C. had given
no indication that they did not intend that the substantive dispute should
be resolved by arbitration. Their case was that the "en reféré“orders were
justified in order to obtain evidence for the purpose of the arbitration.
On the 1st March T. appointed Mr Sears as their arbitrator in the
arbitration.
On the 14th September T. appealed to the Cour d'Appel de Rennes against
the two orders made "en reféré". Their appeal was dismissed on the 19th
October.
On the 7th February 1995 C. issued proceedings in the French Court
making a substantive claim for damages against T.. At the same time,
however, they gave notice renewing the arbitration – under the GAFTA
rules this has to be done every 12 months, failing which the arbitration
lapses unless the arbitrators, in their discretion, otherwise order.
On the 20th February T. referred to GAFTA arbitration a claim for damages
on the ground that C. had acted in breach of contract in commencing
court proceedings in disregard of the arbitration clause. They nominated
Mr Scott as their arbitrator. On the 11th April C. nominated Mr Sears as
their arbitrator in respect of this claim.
On the 5th April 1996 C. purported to renew the arbitration once again. T.
took the point that they were out of time and contended that their claim
for arbitration was deemed withdrawn.
On the 17th June 1996 the expert appointed by the French court delivered
his report to the Court.
On the 19th June T. submitted, pursuant to Section 1458 of the New
Code of Civil Procedure, an objection to the jurisdiction of the French
Court in respect of the substantive proceedings, invoking the exclusive
GAFTA jurisdiction clause and seeking an order that the French Court
declare itself incompetent and refer the proceedings to arbitration. At the
same time T. gave C. notice that if they did not desist from the French
proceedings, T. would apply to the High Court in London for an injunction
restraining the French proceedings.
In the absence of response from C., T. initiated the present proceedings
by originating summons on the 16th September 1996. On the 16th
October the French Court ordered that T.'s objection to the jurisdiction of
the French Court should be heard on the 11th December, but that hearing
was subsequently adjourned, pending the result of these proceedings.
The Relief Sought
The relief sought in the present proceedings was as follows:
1. A declaration that the claims made by the Defendant against the
Plaintiff in proceedings commenced by writ dated 7th February 1995
in the Tribunal de Commerce de Saint-Nazaire in France (The French
Proceedings") are disputes within the scope of disputes agreed by the
Plaintiff and the Defendant to be referred to arbitration, in accordance
with Arbitration Rules No.125 of the Grain and Feed Trade Association
("GAFTA 125") under clause 32(a) of Form 100 of GAFTA ("GAFTA 100")
incorporated into and forming part of three contracts each made between
the plaintiff as seller and the defendant as buyer and dated 17th, 18th
and 20th January 1994 for the sale of 7,000, 1,000 and 1,500 metric
tonnes respectively of soyabean meal pellets.
2. A declaration that the Defendant is entitled and obliged to refer the
disputes referred to in 1. above to arbitration under the rules of GAFTA
125 in accordance with clause 32(a) of GAFTA 100.
3. A declaration that the commencement by the defendant on or around
7th February 1995 of the French Proceedings constituted, and the
continuation of the said proceedings by the First Defendant will constitute:
(a) a breach of the agreements made between the plaintiff and the
defendant under clause 32(a) of GAFTA 100 as incorporated into the
Contracts, to refer to arbitration all disputes arising out of or under the
Contracts.
(b) a breach of the agreements made between the plaintiff and the
defendants under clause 32 of GAFTA 100 as incorporated into the
Contracts, providing for exclusive jurisdiction of the Courts of England or
arbitrators in England over all disputes arising under the Contracts.
4. An injunction restraining the Defendant whether by itself its servants or
agents or howsoever otherwise from:
(a) continuing or prosecuting or taking any further steps in or assisting
in the continuation, prosecution or taking of further steps in or otherwise
further participating in the French Proceedings;
(b) commencing any further or other proceedings in any court
wheresoever situated, otherwise than by arbitration in London under
GAFTA 125, against the plaintiff in respect of all or any claims made in
the French Proceedings and any other dispute arising out of or under the
Contracts.
5. An injunction requiring the defendants by itself its servants or agents
or howsoever otherwise to discontinue, or take all steps necessary to
effect a discontinuation of the French Proceedings.
On the 20th December 1996 Co. J. granted the relief sought. C. then
appealed to this court against his order.
The jurisdiction provisions in the contracts
The contracts were subject to the following provisions of GAFTA Form
100:
31. DOMICILE – Buyers and Sellers agree that for the purpose
of proceedings either legal or by arbitration this contract shall be
deemed to have been made in England and to be performed there any
correspondence in reference to the offer, the acceptance, the place of
payment or otherwise notwithstanding and the Court of England or
arbitrators appointed in England, as the case may be, shall, except for
the purpose of enforcing any award made in pursuance of the arbitration
clause hereof, have exclusive jurisdiction over all disputes which may
arise under this contract. Such disputes shall be settled according to the
law of England, whatever the domicile, residence or place of business of
the parties to this contract may be or become.
32 Arbitration -
(a) Any dispute arising out of or under the contract shall be settled
by arbitration in accordance with the Arbitration Rules No. 125 of The
Grain and Feed Trade Association in the edition current at the date of
this contract, such Rules forming part of this contract and of which both
parties hereto shall be deemed to be cognisant.
(b) Neither party hereto, nor any persons claiming under either of them
shall bring any action or other legal proceedings against the other of them
in respect of any such dispute until such dispute shall first have been
heard and determined by the arbitrator(s) or a Board of Appeal as the
case may be, in accordance with the Arbitration Rules and it is expressly
agreed and declared that the obtaining of an award from the arbitrator(s)
or a Board of Appeal, as the case may be, shall be a condition precedent
to the right of either party hereto or of any persons claiming under either
of them to bring any action or other legal proceedings against the other of
them in respect of any such dispute.
The issues raised
By no means all the issues raised in these proceedings involve the
interpretation of the Brussels Convention. We think that it will be helpful,
however, if we identify all the issues and resolve those which do not turn
on the interpretation of the Convention, albeit that on one view of the
Convention the English Court should not even embark on considering
some of the issues raised.
One issue we feel we should address at the outset. This is the basis upon
which Co. J's order was made. There are two possibilities:
(1) The English court has a discretionary power to restrain by injunction a
breach of contract.
(2) The English court has recently asserted, in relation to those subject
to English jurisdiction, the power to restrain by injunction the pursuit of
proceedings in a foreign jurisdiction where such conduct is unconscionable
– see British Airways Board v. Laker Airways Limited [1985] AC 58;
Midland Bank PLC v. Laker Airways Limited [1986] QB 689; Airbus
Industrie GIE v. Patel [1997] 2 Lloyds Rep. 8.
We are in no doubt that the power which Co. J. purported to exercise
was the former. C. has done nothing intrinsically unconscionable in
commencing proceedings in France. The only ground on which objection
can be taken to such conduct is that it is in conflict with C.'s contractual
agreement to arbitrate – see Schiffahrtsgesellschaft Detlief von Appen
Gmbh v. Wiener Allianz Versicherungs AG [1997] CCL 993 at 1009.
Furthermore, the claims for declarations make it plain that T.'s application
to the English court was founded on their contractual rights.
C.'s Case
C.'s submissions can be summarised as follows:
1. Before the English proceedings were commenced, French proceedings
had been commenced to which the Convention applied.
2. The Convention applies to the English proceedings.
3. The French proceedings and the English proceedings involve the same
cause of action, within the meaning of that phrase in Article 21 of the
Convention. Accordingly, the English court is bound to stay the English
proceedings until the issue raised as to the jurisdiction of the French court
has been resolved by the French court.
4. Clause 31 of the contracts does not apply to the English proceedings;
its effect in this case is only to give exclusive jurisdiction over substantive
disputes to GAFTA arbitrators.
5. In any event, the English court is not competent to entertain the
claim for relief brought by T. in the absence of a prior arbitration award
determining that C.'s conduct in pursuing the French proceedings
constitutes a breach of contract – see the so-called Scott v. Avery clause
in clause 32 of the contracts.
6. If, contrary to the above submissions, Co. J. had a discretion to grant
the relief sought, he erred in principle in the exercise of that discretion.
T.'s Case
T.'s case is as follows:
1. The French proceedings are subject to the Convention, although the
determination of the jurisdiction objection to those proceedings is not
governed by the Convention, but rather by French domestic law.
2. The English proceedings are not subject to the Convention owing to the
exception of arbitration in Article 1(4).
3. If the Convention applies to the English proceedings, the French
proceedings and the English proceedings do not involve the same cause of
action, so that Article 21 does not apply.
4. Article 21 has no application because the contracts are subject to
exclusive English jurisdiction clauses and Article 17 has paramount effect.
5. The Scott v. Avery clause does not apply to the English proceedings.
6. The manner in which Co. J. exercised his discretion cannot be attacked.
In each case issues 1 to 3 and part of issue 4 depend on the
interpretation of the Convention; the remainder of issue 4 and issues 5
and 6 depend upon English law and procedure. We propose to address
these issues first in order to identify the significance of the questions
raised in relation to the Convention.
The Scott v. Avery Clause
Before Co. J. C. argued that Clause 32(b) precluded T. from bringing the
present proceedings without first obtaining an arbitration award. This was
a submission not lacking in effrontery, having regard to their own conduct
in bringing proceedings in France. Co. J. gave it short shrift. He held at
p.19:
"This submission is, in my view, quite unsustainable. The disputes to
which clause 32 applies are, on the proper construction of that clause,
clearly substantive disputes and not disputes as to compliance with the
very clause itself. The obvious purpose and meaning of the clause is that
neither party can have resort to any action or legal proceedings in respect
of substantive disputes unless and until the disputes have been referred
to arbitration and an award obtained. A dispute as to whether an anti-
suit injunction should be granted in order to cause one party to comply
with the clause cannot have been intended by the parties to have been
covered by the words "any dispute arising out of or under this contract".
The arbitrators could not grant such an injunction.
An award is therefore not a condition precedent to the claim for an
injunction not for the claim for declarations. Those declarations sought
merely express the factual bases which must be established in order to
obtain the injunctions. The determination of the existence of those facts
for the purpose of obtaining the injunctions would not, if in issue, fall
within clause 32. The fact that the plaintiffs claim declarations as relief
ancillary to the injunctions does not take (sic) issues as to those facts
within clause 32."
By "take“the Judge may have meant "make".
Mr Ts., for C., challenged Co. J.'s finding on this point. He pointed out
that T. had already commenced an arbitration claiming damages for C.'s
alleged breach of the arbitration agreement in starting proceedings in
France. C. had not admitted the alleged breach. There was thus before
the arbitrators a dispute as to whether there had been a breach of the
arbitration clause. T.'s application for an injunction raised precisely the
same issue and an identical dispute. That dispute had to be referred
to arbitration. Mr. Ts. referred us to the decision of Clarke J. in Halki
Shipping v. Sopex Oils [1997] 1 WLR 1268 in support of the proposition
that failure by C. to admit a claim, even where there were no apparent
grounds upon which they could challenge it, raised a dispute which had to
be referred to Arbitration. He also relied upon the decision of this Court
in Mantovani v. Carapelli [1980] 1 Lloyds Rep. 375 as demonstrating that
Co. J. was in error in confining the application of Clause 32 to substantive
disputes.
The latter case also concerned a GAFTA Scott v. Avery clause, which was
in essentially identical terms to that with which we are concerned. The
sellers had commenced an arbitration against the buyers but, before
obtaining an award, had brought proceedings in Italy to obtain security
for the claim advanced in the arbitration. The Court of Appeal held that
this conduct constituted a breach of the Scott v. Avery clause. In the
course of the leading judgment Lawton L.J. said of the clause, at p.381:
"For my part, I would construe the words as meaning that any form of
application for ancillary relief, and in particular that sought in Italy, was
within the arbitration clause"
He went on to observe, however:
"In the ordinary way, those who try to obtain ancillary relief through the
Courts will do so in England, and if they do so in England then no question
of damage can arise because under the terms of most arbitration clauses,
and certainly under the terms of clauses providing for arbitration within
the jurisdiction of the Supreme Court of Judicature, the Arbitration Act,
1950, applies. In those circumstances, what the parties do if they seek
ancillary relief within the jurisdiction of this Court is something which the
arbitration clause and the Arbitration Act permits. In other cases it may
be convenient for the parties, and probably would be, to restrain what
was being done in foreign Courts by means of an injunction."
Megaw L.J. agreed. He was however prepared to contemplate the
possibility that an injunction could have been sought by the buyers in
England to restrain the Italian proceedings – see p.384.
We have not found very satisfactory an approach which, as a matter
of implication, applies a Scott v. Avery clause to ancillary proceedings
outside England but not to ancillary proceedings within the English court.
Be that as it may, we are satisfied that, as a matter of construction, a
Scott v. Avery clause cannot apply to injunctive proceedings brought
for the purpose of enforcing the clause itself. Insofar as an issue arises,
it is likely to be as to whether or not the substantive dispute falls
within the jurisdiction of the arbitrators, which is not a suitable issue
for determination by the arbitrators themselves. More significantly, an
injunction does not fall within the relief that arbitrators are in a position to
provide. For these reasons, which are narrower than those of the Judge,
we hold that the Scott v. Avery clause in Clause 32 did not preclude Co. J.
from entertaining the claim for relief that was before him.
The exclusive jurisdiction clause
Co. J.'s finding in relation to the application of Clause 31 dovetailed neatly
with his view of the effect of the Scott v. Avery provision in Clause 32.
The vital words of Clause 31 are:
"the Court of England or arbitrators appointed in England, as the case
may be, shall.... have exclusive jurisdiction over all disputes which may
arise under this contract."
Co. J. held that the effect of these provisions was to share between
the English Court and the arbitrators exclusive jurisdiction over all
disputes. Those disputes which went to substance fell within the exclusive
jurisdiction of the GAFTA arbitrators whereas disputes in relation to
ancillary matters fell within the exclusive jurisdiction of the English Court.
Thus, in relation to Clause 31, he held at p.15:
"The effect of that clause, read together with clause 32, is that the English
courts are to have exclusive jurisdiction in all matters except those falling
within the ambit of the arbitration agreement and relating to enforcement
of awards. That would include applications for injunctive relief to enforce
the arbitration agreement."
Mr. Ts. challenged this conclusion. He submitted that Clause 31 provided
alternative jurisdictional regimes, applicable to all disputes covered by
that clause. We agree. Just as we would, if permitted, construe Clause 32
as relating to disputes of substance, rather than in relation to ancillary
relief, so also we are of the view that Clause 31 applies to disputes of
substance. We do not consider that Clause 31 must be construed as
tailored to fit with Clause 32. If the draftsman had wished to apportion
jurisdiction between the Court and arbitrators we do not believe that he
would have done so in this way. We consider that Clause 31 is designed
to apply where the contract provides for arbitration and also where it
does not. Where, as here, the Contract includes Clause 32, the alternative
provision in Clause 31 for exclusive jurisdiction of the English Court
does not take effect. Thus we differ from the conclusion of Co. J. that
proceedings to enforce the Arbitration clause were, by Clause 31, agreed
to be subject to the exclusive jurisdiction of the English Court. The
present proceedings are not subject to an agreed exclusive English
jurisdiction.
Discretion
The 1958 New York Convention on the Recognition and Enforcement of
Foreign Arbitral Awards Article II.3 requires the Court of a contracting
State to refer the parties to arbitration when an action is commenced
in disregard of a binding arbitration clause. It might be thought that
there would be much to be said, both as a matter of comity and in the
interests of procedural simplicity, if a Defendant who was improperly sued
in disregard of an arbitration agreement in the Court of a country subject
to the New York Convention were left to seek a stay of the proceedings in
the Court in question. It seems, however, that litigants in cases governed
by English arbitration clauses are not prepared to trust foreign Courts to
stay proceedings in accordance with the New York Convention, for it has
become the habit to seek anti-suit injunctions such as that sought in the
present case. In the Angelic Grace [1995] 1 Lloyds Rep. 87 the Court of
Appeal gave its approval to this practice. In the course of his judgment,
Millett L.J. said at p. 96:
"In my judgment, the time has come to lay aside the ritual incantation
that this is a jurisdiction which should only be exercised sparingly and
with great caution. There had been many statements of great authority
warning of the danger of giving an appearance of undue interference with
the proceedings of a foreign Court. Such sensitivity to the feelings of a
foreign Court has much to commend it where the injunction is sought
on the ground of forum non conveniens or on the general ground that
the foreign proceedings are vexatious or oppressive but where no breach
of contract is involved. In the former case, great care may be needed
to avoid casting doubt on the fairness or adequacy of the procedures of
the foreign Court. In the latter case, the question whether proceedings
are vexatious or oppressive is primarily a matter for the Court before
which they are pending. But in my judgment there is no good reason for
diffidence in granting an injunction to restrain foreign proceedings on the
clear and simple ground that the defendant has promised not to bring
them."
While we would not wish it to be thought that we have independently
endorsed these sentiments, in view of this decision we feel obliged to hold
that Co. J. did not err in principle in the exercise of his discretion when
granting an injunction in this case. The point will be open to argument in
a higher tribunal.
The Consequence of our findings
Our finding in relation to the Scott v. Avery clause rejects the argument
that the English Court is precluded, by the terms of the contracts, from
entertaining the present proceedings. Our interpretation of Clause 31 (the
exclusive jurisdiction clause) has the result that Article 17 is of no benefit
to T.. If the point had arisen, we would have been bound to hold that
Article 17 overrides Articles 21 and 22 of the Convention. This is because
it has been so held by this Court in Continental Bank v. Aeakos [1994] 1
WLR 588. That decision has provoked widespread controversy and it is,
perhaps, a pity that these proceedings are unlikely to provide an occasion
for its review.
We now turn to outline the issues which arise in relation to the
Convention.
The Convention issues
The foundation of the challenge to the jurisdiction of the French Court
that T. has made pursuant to Section 1458 of the civil code in the French
proceedings is founded on the allegation that the substantive dispute
is subject to an exclusive English jurisdiction agreement. The object of
that challenge is to prevent the French Court from exercising jurisdiction.
The basis of the application for relief in the English proceedings is the
same, as is, broadly speaking, its object. C. allege that both the French
and the English proceedings raise the same cause of action and that, as
the French Court was seized first, Article 21 of the Convention requires
the English Court to stay the English proceedings until the issue of
the jurisdiction of the French Court has been resolved in the French
proceedings. T. contend that C.'s case is unsound for two reasons:
(i) Proceedings to determine the validity of an arbitration clause fall within
the Article 1(4) exception, so that the Convention does not apply.
(ii) the cause of action in the French proceedings is not the same as the
cause of action in the English proceedings.
Both these contentions raise difficult questions of interpretation of the
Convention and the former, in particular, has given rise to a conflict of
academic views and legal decisions. It may be helpful if we briefly identify
some of these.
Proceedings to determine the validity of an arbitration clause
The Jenard Report (OJ C59 5.3.79 p.13) states in relation to Article 1(4):
"The Brussels Convention does not apply to the recognition and
enforcement of arbitral awards (see the definition in Article 25); it does
not apply for the purpose of determining the jurisdiction of courts and
tribunals in respect of litigation relating to arbitration – for example,
proceedings to set aside an arbitral award; and, finally, it does not apply
to the recognition of judgments given in such proceedings."
Similarly the Schlosser Report (OJ C59 5.3.79 p.93) states:
"In the same way a judgment determining whether an arbitration
agreement is valid or not, or because it is invalid, ordering the parties
not to continue the arbitration proceedings, is not covered by the 1968
Convention."
The Evrigemis and Kerameus Report (OJ C 298 24.11.86 p.10) states,
however:
"...the verification, as an incidental question, of the validity of an
arbitration agreement which is cited by a litigant in order to contest the
jurisdiction of the court before which he is being sued pursuant to the
Convention, must be considered as falling within its scope."
In The Atlantic Emperor (No 1) [1991] ECR 1-3855 Advocate General
Darmon expressed the following opinion at p.3886:
"Judgments given in response to an objection of lack of jurisdiction
raised in order to resist a substantive claim likewise hardly qualify for
international recognition, since their direct purpose is to give a decision as
to the jurisdiction of the national court which delivers them. By contrast,
it seems legitimate for a judgment which is given at the place where the
arbitral tribunal is sitting and which gives a decision, as a main issue,
on the arbitrator's jurisdiction (either as a declaratory judgment or in
the context of an action for annulment) to be recognised, on certain
conditions, in other countries. Admittedly, the place of arbitration is often
accidental and unrelated to the substance of the dispute. But that in itself
ensures the all-important neutrality. In any event there is no alternative
if the aim is to endeavour to centralize control in order to harmonize
decisions at international level."
The European Court left undecided, however, whether a free-standing
dispute as to the existence or validity of an arbitration clause falls within
the Article 1(4) exclusion.
Since then there has been discussion and disagreement as to the ambit of
the Article 1(4) evidenced by the following cases:
The Heidberg [[1994] 2 Lloyds Rep. 287; The Angelic Grace [1994] 1
Lloyds Rep. 168; The Xing Su Hai [1995] 2 Lloyds Rep. 15; T. v. Molino
Boschi [1996] 1 Lloyds Rep. 510 and Lexmar v. Nordisk [1997] 1 Lloyds
Rep. 289.
The cause of action in Article 21
On C.'s argument, the French proceedings involve two "causes of
action“within the meaning of that phrase in the English version of Article
21 – the substantive claim for damages and the procedural dispute in
relation to the arbitration clause. C. contend that the English proceedings
involve the second cause of action and that Article 21 applies accordingly.
It seems to us that a question arises as to whether a dispute as to
jurisdiction can properly be categorised as a "cause of action“at all. The
scheme of the Convention appears to anticipate that a dispute as to the
jurisdiction of a court to entertain a substantive dispute will arise either
by way of a challenge to jurisdiction in the court first seized or by reason
of the commencement of proceedings involving the same substantive
dispute before a second court. Mr Ts. conceded in argument that, had T.
not challenged the jurisdiction of the French Court, he would have had no
case to advance under Article 21. It seems to us, however, in fundamental
conflict with the scheme of the Convention that a Defendant before the
Court first seized should, without entering a challenge to jurisdiction in
that Court, be able to commence proceedings in a second Court in order
to challenge the jurisdiction of the Court first seized.
These questions apart, it seems to us that a nice question arises as
to whether one can equate, as a cause of action under Article 21, a
procedural objection under the domestic civil code in the French Court
with a claim for relief based on an allegation of breach of contract in the
English Court. While the form is totally different, the principal issue –
the existence of a binding arbitration agreement – is the same. So is
the object of each proceeding – the restraint of the substantive hearing
before the French Court. We do not believe that Overseas Union v. New
Hampshire [1992] 1 QB 434 and The Maciej Rataj [1995] 1 Lloyds Rep
302 provide a clear answer to these questions.
For these reasons, we refer for the ruling of the European Court the
following questions:
1. Does the exception in Article 1(4) of the Brussels Convention extend to
proceedings commenced before the English Courts seeking:
(a) a declaration that the commencement and continuation of proceedings
before a French Court constitutes a breach of an arbitration agreement;
(b) an injunction restraining the Appellants from continuing the
proceedings before the French Court, or instituting any further
proceedings before any other Court, in breach of the arbitration
agreement.
If not,
2. Do such proceedings constitute the same cause of action as a challenge
to the jurisdiction of the French Court founded on the same arbitration
agreement, so as to require the English Court to stay the proceedings
pursuant to Article 21 of the Convention?
ORDER: Appeal referred to the European Court.
(Order Not part of approved judgment)