1. Goshawk Dedicated Ltd., and Kite Dedicated Ltd., formerly known as
Goshawk Dedicated (No.2) Ltd., and Cavell Management Services Ltd. and
Cavell Managing Agency Ltd., the plaintiffs/respondents are referred to as
"the plaintiffs", Life Receivables Ireland Limited, the defendant/appellant,
is referred to as "the defendant".
2. The plaintiffs are companies incorporated in England. The defendant
is an Irish registered company and is a subsidiary of International
Investment and Underwriting.
3. These proceedings were commenced in Ireland by the plaintiffs
by way of a plenary summons issued on the 6th September, 2007.
Proceedings had already been commenced by the defendant against the
plaintiffs on 29th June, 2007, in the United States District Court for the
Northern District of Georgia, Atlanta Division, a federal court. In those
proceedings the defendant, as plaintiff, seeks certain reliefs against the
plaintiffs (as defendants) and against others who are not party to these
Irish proceedings. Those proceedings seek relief for, inter alia, alleged
misrepresentation, fraud, securities fraud, and other relief. A series of
negative declarations are sought in the Irish proceedings brought by
the plaintiffs, which mirror the relief sought in the United States District
Court, save that the parties are reversed. For example, a declaration that
none of the plaintiffs made any misrepresentations of material fact to the
defendant or failed to disclose any material facts that they were obliged
to supply to the defendant, whether in relation to (a) the defendant's
purchase of a partnership interest in Life Receivable II, LLP; (b) a series
of contingent cost insurance policies underwritten and issued by the first
and second named plaintiffs from September, 2000 until early 2003, or (c)
in the management of the run off of Syndicate 102. The prior proceedings
commenced in the U.S.A. by the defendant therefore relate to the same
matters. The court will return to these matters later in the judgment.
4. The issue which arises at this stage between the parties concerns
the proper interpretation of the Council Regulation E.C./44/2001 of 22
December, 2000 on jurisdiction and the recognition and enforcement
of judgments of civil and commercial matters, O.S. L012/7 16.1.2001
"Brussels I" Regulation. The defendant brought a motion to the High
Court seeking an order staying these Irish proceedings, pending the final
determination of the proceedings which it had commenced in the United
States District Court for the Northern District of Georgia, Atlanta Division.
The High Court (Clarke J.) refused the application by order of the 22nd
April, 2008, following upon the judgment delivered on the 27th February,
2008.
5. This is an appeal by the defendant from the order and judgment of the
High Court.
6. The High Court
6.1 The High Court found that the issue between the parties related to
the proper interpretation of the Brussels I Regulation and its application
to the circumstances of the case. It also involved a consideration of what
the learned High Court judge referred to as the common law doctrine of
forum non conveniens, and more particularly, in light of the argument of
the defendant, as eventually refined, the extent and application of the
doctrine of lis alibi pendens applicable to the case under the Brussels I
Regulation. The learned trial judge noted that the traditional common law
jurisdiction on forum non conveniens had been substantially eroded by
the provisions of the Brussels Convention and the Brussels I Regulation,
which neither the United Kingdom nor Ireland had sought to retain, in
its traditional common law form, upon their accession. He stated that in
reality the issue which arises in this case is as to just how far that process
of erosion has gone, and the extent of the application of the doctrine of lis
alibi pendens under the Brussels I Regulation to proceedings concerning
the same cause of action when the earlier proceedings, as here, have
been commenced in a non-Member State.
6.2 In the High Court the defendant submitted that it would be
appropriate under the common law for the Irish Courts to decline to deal
with this litigation because of the existence of the earlier proceedings
in Georgia, U.S.A., relating to the same matters in which the defendant
is the plaintiff and other parties, including the plaintiffs in these
proceedings, are defendants. The learned High Court judge pointed out
that if neither the Brussels Convention nor Brussels I Regulation existed
it would be necessary to consider under established common law rules
whether it was more appropriate that these proceedings be conducted in
the U.S.A. rather than Ireland. However, the primary submissions of the
plaintiffs were that the Brussels I Regulation removes the discretion of
the Court under common law, and, that in accordance with the Brussels
I Regulation properly construed, the courts of Ireland are obliged to deal
with the case.
6.3 Facts
The facts were found by the learned High Court judge as follows. The
defendant is incorporated in Ireland and has its principal place of business
in Ireland. The plaintiffs are companies incorporated in England and have
their principal places of business in London. In June 2005 the defendant
purchased a partnership interest in a Delaware partnership known as Life
Receivables II LLP in which the defendant and Life Receivables Holdings
are the only partners but in which the defendant would appear to be
the only partner with a financial stake. The partnership is, in turn, a
beneficiary of Life Receivables Trust whose commercial value derives
from trust property, being life insurance policies purchased in the early
years of this decade together with a contingent cost insurance issued
by Goshawk in respect of those policies. The defendant, as plaintiff in
the U.S. proceedings, alleged that it was induced into buying into the
partnership as a result of misrepresentation on the part of the defendants
in the U.S. proceedings. The defendant has commenced proceedings in
Georgia, U.S.A., as referred to earlier, against the plaintiffs and a number
of others who were involved in a series of transactions which were at the
heart of the dispute between the parties.
The complaint in those proceedings, briefly, alleges securities fraud,
common law fraud, negligent misrepresentation and conspiracy to commit
fraud in connection with a transaction valued at a figure in excess of U.S.
$14 million. The primary jurisdiction invoked is in respect of the securities
fraud pursuant to United States law, and a supplemental jurisdiction is
alleged of the common law claims, again pursuant to United States law,
on the grounds that the same facts and circumstances give rise to all
claims. Apart from the securities claims, one of the major allegations
made is that Goshawk, relying on material furnished through or by an
actuarial company located in Atlanta, Georgia, American Viatical Services,
made representations appearing on the face of the life policies, to persons
including Life Receivables, the defendant in the Irish proceedings. It is
also alleged that Cavell, acting through one of its principals, devised
a run off scheme to commute Goshawk's obligations to, inter alia, Life
Receivables. It is alleged that at certain times that principal, acting on
behalf of both Goshawk and Cavell, made material misrepresentations and
omissions. It is not necessary for the purposes of this judgment to go into
further detail in relation to the extent of the claim.
The proceedings commenced by the defendant in Georgia, U.S.A., on
the 29th June, 2007, are first in time. The plaintiffs have commenced
these Irish proceedings which seek declarations that the plaintiffs did not
make the misrepresentations, together with other similar relief, on the
6th September 2007. The Irish proceedings are a mirror image of the
Georgia proceedings, except that none of the additional co-defendants
in Georgia are parties in the Irish proceedings. On the 5th September,
2007, the plaintiffs in these proceedings moved, in the U.S. District Court,
by motion, to dismiss the defendant’s complaint, on the basis that that
court lacks “subject matter jurisdiction” over the defendants because the
transactions in issue in the case are “predominantly foreign” and lack the
necessary domestic conduct or effects to permit the application by that
court of American securities laws. The defendant in these proceedings
resisted that motion, and a ruling by the US District Court was, at the
time of this appeal, awaited.
6.4 Undisputed Law
The learned trial judge referred to the undisputed law. He quoted from
the judgment of the European Court of Justice in Case C-281/02 Owusu
v. Jackson [2005] E.C.R. I-383). In Owusu a person was injured while on
holiday in Jamaica and where, it was submitted, Jamaica would be a more
convenient forum for the conduct of litigation because of the availability
of witnesses. The travel agent sought to have the proceedings which had
been commenced against him in England on the basis of his domicile
stayed to permit proceedings in Jamaica. The European Court of Justice
held:-
"… the Brussels Convention precludes a court of a Contracting State from
declining the jurisdiction conferred on it by Article 2 of that convention
on the ground that a court of a non-Contracting State would be a more
appropriate forum for the trial of the action even if the jurisdiction of no
other Contracting State is in issue or the proceedings have no connecting
factors to any other Contracting State."
In the High Court Clarke J. stated that both the Brussels Convention
and the Brussels I Regulation deal, in the main, with contentions as
to which Contracting or Member States should deal with litigation. He
correctly stated that the terms do not expressly deal with a situation
where the possible alternative jurisdiction is that of a non-Member
State. The learned High Court judge found that the European Court
of Justice rejected the proposition that the presence of a non-Member
State jurisdiction, i.e. Jamaica, as an alternative to that of a Member
State, i.e. England, allowed for the continuance of the application of the
Member State's ordinary rules of private international law (in this case
the common law doctrine of forum non conveniens) to the selection of
the appropriate jurisdiction for the commencement of legal proceedings.
As the defendant in Owusu was domiciled in England Article 2 provided,
therefore, for England to have jurisdiction.
6.5 The learned High Court judge found that the real issue between the
parties in this motion was the relevance of the decision in Owusu to the
submission of the defendant that this Court retains a discretion under the
lis alibi pendens doctrine, which is an aspect of the doctrine of forum non
conveniens, to stay proceedings in circumstances such as those in the
present case, where proceedings already exist in another, non-Member
State.
6.6 Issue
The High Court held that the European Court of Justice in Owusu confined
itself to answering the narrower issue raised by Question 1 in that case.
Clarke J. held:-
"It seems to me clear, therefore, that the decision in Owusu does not,
of itself, expressly rule out a discretion existing in other circumstances.
The judgment does not, therefore, in my view, expressly rule out the
possibility that the lis alibi pendens jurisdiction remains, whether in
whole or in part, as part of the applicable law within those common law
countries which enjoyed that jurisdiction prior to the coming into force of
the Convention and the Regulation."
However, counsel for the plaintiffs in the High Court submitted that the
decision in Owusu, and other cases, pointed to only one conclusion – that
the type of discretion conferred on common law courts by the application
of the doctrine of lis alibi pendens could not be said to be consistent with
the Regulation. The learned High Court judge found that this was the true
issue between the parties.
6.7 Owusu
The learned High Court judge analysed the decision of the European Court
of Justice in Owusu. He also made reference to the fact that a second
question had been referred to the European Court of Justice but not
answered. This is considered in more detail later in the judgment.
6.8 Forum non conveniens and lis alibi pendens
The High Court set out the common law position on forum non conveniens
and lis alibi pendens. Under the common law the staying of proceedings
under the doctrine is discretionary. The rationale for the application of the
doctrine includes the importance of avoiding conflicting judgments from
the perspective of international comity, as well as the additional expense
and inconvenience where there are two sets of extant proceedings in
respect of the same or similar cause of action in two countries and
between the same parties. The learned High Court judge held:-
"Given the clear statements to be found in Owusu to the effect that
the Brussels I Regulation does not permit of the exercise of broad
discretionary powers for the purposes of declining a jurisdiction which
would otherwise arise under Article 2, it seems unlikely that a doctrine
of lis alibi pendens which conferred on the court the level of discretion
currently available under the common law, could survive in tandem with
the mandatory requirements of the Convention.
…
Having regard to Owusu, I am not satisfied that any doctrine of lis alibi
pendens which retained a significant discretion on the part of the courts,
is sustainable as being consistent with the Brussels I Regulation."
Therefore, the High Court went on to consider the proposition put forward
by the defendant.
6.9 Defendant's proposition
The defendant put forward, in the High Court, the proposition that a court
of a Contracting or Member State had a discretion (or perhaps, in the
alternative, an obligation) to decline jurisdiction in favour of a court of a
non-Contracting State where:-
(a) proceedings had first been commenced in the court of the non-
Contracting State; and
(b) the judgment of the court of that non-Contracting State was such that
it would, in accordance with the terms of the Regulation, be recognised
within the relevant Member State.
6.10 The High Court held that, under the Brussels I Regulation, as
and between Member States, a strict application of the doctrine of lis
pendens applies. Courts of one jurisdiction are precluded from exercising
jurisdiction over a dispute until the courts of a jurisdiction first seised with
that dispute have dealt with the question of whether that court first seised
has jurisdiction. This Court agrees with and would affirm that application.
6.11 In the High Court it was argued that the Regulation itself
acknowledges the existence of a lis pendens doctrine. It was there
submitted that there is no reason in principle why such a doctrine
should not apply equally to cases where there was a lis pending in
a non-Contracting State. It may be considered, by analogy, that the
provisions of the Regulation concerning lis pendens ought to be applied
to non-Contracting States: this is sometimes described as the reflexive
application of Articles 27 and 28. A variety of academic sources were
referred to.
6.12 The High Court also referred to the second argument which arises
from the fact that the Convention and the Regulation also give some
recognition to judgments of third party States.
Article 34.4. provides that a judgment should not be recognised:-
"If it is irreconcilable with an earlier judgment given in another Member
State or in a third State involving the same cause of action and between
the same parties, provided that the earlier judgment fulfils the conditions
necessary for its recognition in the Member State addressed."
Although by the terms of Article 32 of the Regulation, a “judgment”
means “any judgment given by a court or tribunal of a Member State,
whatever the judgment may be called,” and although, pursuant to Article
33 such a judgment given in a Member State shall be recognised in the
other Member States without any special procedure, nevertheless Article
34.4 suggests that there is, within the terms of the Regulation itself,
some provision for recognition of prior judgments in third party states.
Some further recognition is also inherent in the provisions of Article 36,
which provides that “Under no circumstances may a foreign judgment be
reviewed as to its substance. These provisions concern, however, priority
as between judgments rather than pending proceedings.
6.13 The High Court found that there is recognition in the Regulation
of both the doctrine of lis pendens and the appropriateness of affording
recognition, in accordance with private international law of the relevant
Member State, to third party state judgments.
6.14 The High Court found that the real issue to be decided was whether
the recognition afforded to both in paragraph 6.13 above, in the
Regulation, is sufficient to warrant a departure from what seems to be
the clear mandatory language of Article 2, as interpreted by the European
Court of Justice in Owusu.
6.15 The High Court referred to the lis pendens scheme provided in Article
27, and held that the analogy with Article 27 is not available in the case
of a non-Member State because the non-Member State will not be bound
by the terms of the Regulation in its consideration of whether it has
jurisdiction.
6.16 The High Court held that the analogy argument could not be
successful. For, when faced with the clear interpretation of the Regulation
by the European Court of Justice which emphasises that exceptions to or
derogations from its application must be found in the Regulation itself, it
did not seem to the High Court that the type of implied reasoning which
underlies the argument by analogy is permissible.
6.17 The High Court recognised that difficult consequences may flow
from its interpretation of the scope of the doctrine of lis alibi pendens. It
means that entities within the European Union may be sued in the country
of their domicile even though those entities have already commenced
proceedings in a non-Member State, and indeed where the proceedings
may have progressed considerably. Further, those difficulties may be
significant where it is likely that any judgment of the non-Member State
concerned would be recognised in any relevant Member State. In such
circumstances a judgment of the non-Member State may well be entitled
to recognition under the Regulation. Indeed, such a judgment may have
priority over a competing judgment of a Member State which is later in
time. The High Court recognised that there may be practical difficulties
also where proceedings have advanced in a non-Member State and at a
later stage identical proceedings are commenced in a Member State which
is the State of domicile of the defendant. The learned High Court judge
pointed out:
"If, in the ordinary course, the proceedings in the Third Party State
come to a conclusion prior to the proceedings in the Member State and
assuming that the judgment of the Third Party State is recognised in the
relevant Member State in accordance with its private international law,
that judgment will have to be recognised. If, therefore, under Irish private
international law the judgment of the non-Member State concerned
was to be recognised, then it would preclude the Irish court from giving
judgment even though the Irish court might be the court which had
jurisdiction in accordance with the terms of the Regulation."
The High Court was of the view that these difficulties arise because the
framers of both the Convention and the Regulation did not set out what
was to be the position in relation to competing proceedings within and
without the boundaries of the Member States.
6.18 The High Court held that a court in Ireland retains and must exercise
the mandatory jurisdiction conferred on it by Article 2, notwithstanding
the fact that there may be proceedings in a non-Member State which
are first in time, which involve the same subject matter, and where a
judgment from the court of the non-Member State would be recognised
in Ireland. Therefore, the High Court held that it does not have
jurisdiction to stay the proceedings pending the result of the District Court
proceedings in Georgia, U.S.A., or pending a decision of that court in the
United States District Court as to whether it has jurisdiction.
6.19 The High Court addressed also the claim that the Irish court has
jurisdiction to stay the Irish proceedings as being an abuse of process.
It was submitted that in seeking negative declarations in circumstances
where there is a corresponding positive claim already in being as an
abuse of process. The High Court held that the abuse of process doctrine
could not be utilised to prevent proceedings which are properly brought
in Ireland under the terms of the Regulation from going ahead. While
preserving for another case the issue whether seeking a negative
declaration per se could qualify as an abuse of process, it was held
that there is nothing wrong in principle with a party against whom an
accusation has been made in seeking appropriate declaratory relief. The
High Court held:-
"In those circumstances I am not satisfied that there is anything in
principle wrong with parties, such as [the plaintiffs], seeking a negative
declaration of the type sought in these proceedings. That being so it
does not seem to me that there is anything, again in principle, wrong
with [the defendant] being a defendant and thus any interference with
the entitlement to bring the proceedings in the country of domicile of
[the defendant], i.e. Ireland, is, in my view, impermissible under the
Regulation."
6.20 The High Court concluded that there was no basis for staying
the proceedings. There is nothing wrong with negative declaratory
proceedings. The High Court was not satisfied that any doctrine of lis alibi
pendens can be invoked to stay the proceedings which are mandated
to be brought in Ireland under Article 2, pending the resolution of prior
proceedings commenced in a non-Member State.
7. Grounds of Appeal
The defendant has appealed against the judgment and order of the High
Court. The defendant filed twelve grounds of appeal. In essence the
defendant has based his appeal on the following grounds:-
(a) The learned trial judge erred in law in holding that Council Regulation
E.C./44/2001, "the Brussels I Regulation", precludes a court of a
Member State which is seised of an action against a person domiciled in
that Member State from staying proceedings on the ground that prior
proceedings are pending in the court of a non-Member State.
(b) The learned trial judge erred in interpreting the decision Owusu
v. Jackson [2005] ECR I-1383 as precluding a court from staying
proceedings where there are prior proceedings pending in the court of a
non-Member State.
(c) The learned trial judge erred in law in holding that the Brussels I
Regulation does not permit proceedings to be stayed where proceedings
are pending in the court of a non-Member State.
(d) The learned trial judge erred in law in holding that the common law
doctrine of lis alibi pendens is incompatible with the Brussels I Regulation.
(e) The learned trial judge erred in law in not finding that a doctrine of
lis alibi pendens is applied in civil law countries and is consistent with
the laws of other Member States and the provisions of the Brussels I
Regulation.
(f) The learned trial judge erred in law in holding that Articles 27 and 28
of the Brussels I Regulation do not apply reflexively.
(g) The learned trial judge erred in law and/or in fact in reflecting a
reflexive application of Articles 27 and 28 on the ground, inter alia, that
the reflexive approach had its origins in criticisms by common law lawyers
of the civil law concepts underlying the Brussels Convention and the
Brussels I Regulation.
(h) The learned trial judge erred in law in holding that a court did not
have jurisdiction to stay proceedings seeking negative declarations.
(i) The learned trial judge erred in law and/or in fact in not staying the
proceedings on the grounds that negative declaratory relief is sought
in circumstances where there are proceedings between the parties in
relation to the same subject matter in being in another country.
(j) The learned trial judge erred in law in holding that a court did not
have jurisdiction to stay proceedings as an abuse of process which were
properly brought in Ireland under the Brussels I Regulation.
(k) The learned trial judge erred in law and/or in fact in holding that the
proceedings did not constitute an abuse of process.
8. The Law
Council Regulation E.C./44/2001 of 22 December, 2000 on jurisdiction
and the recognition and enforcement of judgments in civil and commercial
matters, O.J. L012/7 16.1.200, “the Brussels I Regulation” is at the core
of the issues raised on this appeal. The Recitals explain its proposed
purpose. In essence it is a Regulation relating to the Community and the
internal market. As Recital 2 states: “Certain differences between national
rules governing jurisdiction and recognition of judgments hampered
the sound operation of the internal market”. It has as its objective to
unify rules of conflict of jurisdiction in civil and commercial matters
and to simplify the formalities to enable rapid and simple recognition
and enforcement of judgments of Member States. Recital 4 states: “In
accordance with the principles of subsidiarity and proportionality as set
out in Article 5 of the Treaty, the objectives of this Regulation cannot
be sufficiently achieved by the Member States and can therefore be
better achieved by the Community. This Regulation confines itself to the
minimum required in order to achieve those objectives and does not
go beyond what is necessary for that purpose.” Recital 6 provides that:
“In order to attain the objective of free movement of judgments in civil
and commercial matters, it is necessary and appropriate that the rules
governing jurisdiction and the recognition and enforcement of judgments
be governed by a Community legal instrument which is binding and
directly applicable".
Article 2 provides:-
"1. Subject to this Regulation, persons domiciled in a Member State shall,
whatever their nationality, be sued in the courts of that Member State."
Lis pendens – related actions – are addressed in Article 27. It provides:-
"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 28 provides:-
"1. 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."
Article 34 refers to the recognition of judgments between Member States
and a third State. It provides:-
"A judgment shall not be recognised:
1. if such recognition is manifestly contrary to public policy in the Member
State in which recognition is sought.
…
4. if it is irreconcilable with an earlier judgment given in another Member
State or in a third State involving the same cause of action and between
the same parties, provided that the earlier judgment fulfils the conditions
necessary for its recognition in the Member State addressed."
In Case C-281/02 Owusu v. Jackson [2005] E.C.R. I-383 the European
Court Justice considered the interpretation of Article 2 of the Brussels
Convention. It first addressed the question: Does the Brussels Convention
preclude a court of a Contracting State which is seised of an action
against a person domiciled in the territory of that State and therefore
has jurisdiction to hear such an action on the basis of Article 2 from
exercising, under its national law, a discretion to decline to exercise such
a jurisdiction, on the ground that a court of a non-Contracting State would
be a more appropriate forum to determine the dispute?
The ECJ considered the doctrine of forum non conveniens and the
Brussels Convention. The Court held:-
"38. Respect for the principle of legal certainty, which is one of the
objectives of the Brussels Convention (see, inter alia, Case C-440/97 GIE
Groupe Concorde and Others [1999] ECR I-'6307, paragraph 23, and
Case C-256/00 Besix [2002] ECR I-'1699, paragraph 24), would not be
fully guaranteed if the court having jurisdiction under the Convention had
to be allowed to apply the forum non conveniens doctrine.
39. According to its preamble, the Brussels Convention is intended to
strengthen in the Community the legal protection of persons established
therein, by laying down common rules on jurisdiction to guarantee
certainty as to the allocation of jurisdiction among the various national
courts before which proceedings in a particular case may be brought
(Besix, paragraph 25).
40. The Court has thus held that the principle of legal certainty requires,
in particular, that the jurisdictional rules which derogate from the
general rule laid down in Article 2 of the Brussels Convention should be
interpreted in such a way as to enable a normally well-informed defendant
reasonably to foresee before which courts, other than those of the State
in which he is domiciled, he may be sued (GIE Groupe Concorde and
Others, paragraph 24, and Besix, paragraph 26).
41. Application of the forum non conveniens doctrine, which allows the
court seised a wide discretion as regards the question whether a foreign
court would be a more appropriate forum for the trial of an action, is
liable to undermine the predictability of the rules of jurisdiction laid
down by the Brussels Convention, in particular that of Article 2, and
consequently to undermine the principle of legal certainty, which is the
basis of the Convention.
42. The legal protection of persons established in the Community would
also be undermined. First, 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. Second, where a plea
is raised on the basis that a foreign court is a more appropriate forum to
try the action, it is for the claimant to establish that he will not be able to
obtain justice before that foreign court or, if the court seised decides to
allow the plea, that the foreign court has in fact no jurisdiction to try the
action or that the claimant does not, in practice, have access to effective
justice before that court, irrespective of the cost entailed by the bringing
of a fresh action before a court of another State and the prolongation of
the procedural time-limits.
43. Moreover, allowing forum non conveniens in the context of the
Brussels Convention would be likely to affect the uniform application of
the rules of jurisdiction contained therein in so far as that doctrine is
recognised only in a limited number of Contracting States, whereas the
objective of the Brussels Convention is precisely to lay down common
rules to the exclusion of derogating national rules.
44. 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.
45. In that regard, genuine as those difficulties may be, suffice it to
observe that such considerations, which are precisely those which may
be taken into account when forum non conveniens is considered, are not
such as to call into question the mandatory nature of the fundamental
rule of jurisdiction contained in Article 2 of the Brussels Convention, for
the reasons set out above.
46. In the light of all the foregoing considerations, the answer to the first
question must be that the Brussels Convention precludes a court of a
Contracting State from declining the jurisdiction conferred on it by Article
2 of that convention on the ground that a court of a non-Contracting State
would be a more appropriate forum for the trial of the action even if the
jurisdiction of no other Contracting State is in issue or the proceedings
have no connecting factors to any other Contracting State. "
The second question in that case was hypothetical in the circumstances
of that case. It raised the issue, inter alia, of pending proceedings. The
European Court of Justice held:-
"47. By its second question, the referring court seeks essentially to
know whether, if the Court takes the view that the Brussels Convention
precludes the application of forum
non conveniens, its application is ruled out in all circumstances or only in
certain circumstances.
48. According to the order for reference and the observations of
the defendants in the main proceedings and of the United Kingdom
Government, that second question was asked in connection with cases
where there were identical or related proceedings pending before a court
of a non-Contracting State, a convention granting jurisdiction to such a
court or a connection with that State of the same type as those referred
to in Article 16 of the Brussels Convention.
49. The procedure provided for in Article 234 EC is an instrument of
cooperation between the Court of Justice and national courts by means
of which the former provides the latter with interpretation of such
Community law as is necessary for them to give judgment in cases
upon which they are called to adjudicate (see, inter alia, Case C-231/89
Gmurzynska-Bscher [1990] ECR I-'4003, paragraph 18, Case C-'314/96
Djabali [1998] ECR I-'1149, paragraph 17, and Case C-318/00 Bacardi-
Martini and Cellier des Dauphins [2003] ECR I-'905, paragraph 41).
50. Thus, the justification for a reference for a preliminary ruling is not
that it enables advisory opinions on general or hypothetical questions to
be delivered but rather that it is necessary for the effective resolution
of a dispute (see, to that effect, Djabali, paragraph 19, Bacardi-Martini
and Cellier des Dauphins, paragraph 42, and Joined Cases C-480/00 to
C-482/00, C-484/00, C-489/00 to C-491/00 and C-'497/00 to C-499/00
Azienda Agricola Ettore Ribaldi and Others [2004] ECR I-'0000, paragraph
72).
51. In the present case, it is common ground that the factual
circumstances described in paragraph 48 of this judgment are not the
same as those of the main proceedings.
52. Accordingly there is no need to reply to the second question."
In other words, as the circumstances did not relate to a pending case,
the second question, in line with established jurisprudence, was not
answered.
9. Decision
Two primary issues arise in this case for decision. At the commencement
of the appeal, Mr. McDonald, senior counsel for the defendant, confirmed
that he was not seeking to rely on a discretionary jurisdiction of the type
contended for in the Owusu case, the judgment in which he accepts as
dealing definitively with that question. He argues that Owusu is of interest
only in relation to the clarification tendered by the ECJ on the discretion
claimed to have existed at common law under the doctrine forum non
conveniens, and to the approach of the ECJ to the second question which
was posed, but not responded to.
9.1 The defendant has relied, for its primary submission, on the doctrine
of lis alibi pendens which, it is argued, is given explicit recognition in
the Brussels I Regulation (albeit in the context of a contest between
proceedings commenced in two different Member States). Counsel
contends that even if he is wrong in his submission as to the existence
and application of the doctrine of lis alibi pendens, there may remain an
aspect of the forum non conveniens doctrine available to the court. In
that regard he submits that Article 2 of the Brussels I Regulation is the
primary rule as to jurisdiction. Articles 27 to 30 deal only with jurisdiction
as between Member States, but not between Member States and third
party States. The declarations sought in the present proceedings are a
mirror image of the claims in the U.S. proceedings. The determination
of the ECJ in Owusu, which determined the position where there were
no proceedings in being, is not sufficiently clear to enable this court to
resolve the issues between the parties, without a reference to the ECJ,
pursuant to Article 234 of the Treaty, the ECJ having expressly declined
to rule on the issue arising in the present appeal, and there is therefore
no guidance in the case law of the ECJ upon which this Court may with
certainty rule on the issue.
Reference was made also to Recital 15 and the words "there must be a
clear and effective mechanism for resolving cases of lis pendens …" and to
"… national difference as to the determination of the time when a case is
regarded as pending". The Court was referred to academic authors, and
to contrary approaches or to views taken that the Brussels I Regulation
does not preclude the application of lis alibi pendens rule in circumstances
where the first court seised is a non-Member State. On the one hand a
reflexive application of Articles 27 and 28 was advocated, rather than pre-
existing national principles of lis alibi pendens. Thus it was submitted that
in circumstances such as arise in this case the Member State may apply
rules analogous to those in Articles 27-30.
On the other hand, it was submitted that if a reflexive interpretation of
Articles 27 and 28 is not adopted, the Brussels I Regulation still does not
preclude the exercise of the Court's discretion at common law to stay the
proceedings pursuant to the doctrine of lis alibi pendens. Counsel argued
that the learned trial judge was wrong in law to refuse to exercise his
discretion to do so because the doctrine is not, or is not only, a common
law doctrine, but rather a well established civil law doctrine expressly
recognised in the Regulation and prior to that in the Brussels Convention,
as is clear from Recital 15 and the title to Section IX, and is the subject
of, inter alia, the Schlosser Statement. The Court was referred to legal
authority to demonstrate that the doctrine of lis alibi pendens is not solely
a principle of the common law countries, but is also applied in civil law
countries. Whether it is the same cause of action between the same
parties or, as here, the same cause of action, with the parties reversed, all
require the existence of a prior cause of action for the application of the
doctrine.
Counsel for the plaintiffs relies squarely on the decision of the ECJ in
Owusu and argues that the failure to respond to the second question
posed is merely the adoption of the normal formula found in the case
law of the ECJ. Mr. Collins, senior counsel, submits that Owusu answered
the issue in its entirety. The issue which arose in Owusu was whether the
third country was a more appropriate forum, and that is also the issue
in these proceedings. There is, he contends, no point of principle calling
for the application of a different approach to existing foreign proceedings
and to intended proceedings. Lis alibi pendens is not a doctrine, but a rule
adopted by jurisdictions, to resolve a practical problem, namely to avoid
conflicting judgments. There were formerly two solutions in being for that
problem, the first being the common law discretionary approach, and the
second the civil law approach which applies the “first in time” rule. The
Irish courts, following on from Owusu, have a mandatory jurisdiction,
pursuant to Article 2 of the Brussels I Regulation and may not decline
this, unless there is provision for a derogation from the application of that
Article, in the Regulation itself.
Conclusion
Case C-281/02 Owusu v. Jackson [2005] E.C.R. I.-1383) is the most
relevant case law, but it was limited to the facts of that case, which
are not similar to the circumstances of this case, and indeed the
circumstances of this (the pending case) are expressly excluded.
In this case there is a pending proceeding which is first in time, in a non
Contractual State. It is a situation identified in Owusu, but expressly not
answered. In these circumstances the issue may not be considered acte
clair.
The Court is satisfied that it is necessary to refer the question to the
European Court of Justice. The exact format of the reference may
be considered in submissions by the parties after the delivery of this
judgment. However, in essence such a reference would query whether,
when a defendant is sued in its country of domicile, it is inconsistent with
Regulation 44/2001 for the court of a Member State to decline jurisdiction
or to stay proceedings on the basis that proceedings between the same
parties and involving the same cause of action are already pending in
the courts of a non-Member State and therefore first in time. It may be
necessary also, having regard to the absence of any clear guidance, to
pose an additional question concerning the criteria to be applied by a
Member State coming to a decision whether to stay pending proceedings
in a Member State, depending on the response to the first, primary,
question to be posed.
Consequently, the parties may prepare terms of a draft reference for
consideration by the Court, on which submissions will be heard