DILLON L.J. This case comes before this court on appeal from a decision
of Harman J. in the Chancery Division of 5 April 1990.
The proceedings in which the appeal is brought are entitled “In the matter
of Harrods (Buenos Aires) Ltd.” That company (“the company”) was
incorporated in England in 1913 under the Companies Acts 1908 and
1913, and its registered office is and has always been in England. But its
business is and has always been exclusively carried on in Argentina and
its central management and control is exercised in Argentina; its principal
activity is to carry on a department store or general store in Buenos Aires.
Since 1979, the company has had two shareholders only, both of
which are companies incorporated in Switzerland and whose central
management and control is exercised in Switzerland, viz., the present
appellant Intercomfinanz S.A., which owns 51 per cent. of the issued
share capital of the company and the present respondent, Ladenimor
S.A., which owns the remaining 49 per cent.
The present proceedings were commenced on 7 July 1989 by the
presentation by Ladenimor in the Companies Court of a petition under
the Companies Act 1985 and the Insolvency Act 1986. The primary case
put forward by Ladenimor is that the affairs of the company have been
and are being conducted by the present management in a manner which
is unfairly prejudicial to Ladenimor within the meaning of section 459 of
the Companies Act 1985, and the primary relief sought is an order that
Intercomfinanz purchase Ladenimor’s shares in the company at a price
representing 49 per cent. of the value of the company and upon the basis
that there be added back to the value of the company such loss as may
be found to have been caused to the company by the matters complained
of in the petition. In the alternative, however, it is submitted in the
petition that it is just and equitable that the company should be wound
up, and a compulsory winding up order is sought under the Insolvency Act
1986. It is not in doubt that the company is solvent.
Under the relevant statutory rules, the company was a necessary party
to the proceedings, whether the relief sought was a winding up order,
or merely an order against Intercomfinanz under section 459 of the Act
of 1985, and there was of course no difficulty in serving the company
at its registered office in England. In addition, on ex parte application
Ladenimor obtained from Mr. Registrar Buckley on 12 July 1989 an order
under R.S.C., Ord. 11, giving leave to Ladenimor to serve the petition on
Intercomfinanz out of the jurisdiction.
The upshot of that was that Intercomfinanz, by its English solicitors,
issued a summons of 20 November 1989 claiming (1) an order that
the order of Mr. Registrar Buckley giving leave to serve the petition on
Intercomfinanz be set aside; (2) an order that the service of the petition
on Intercomfinanz be set aside; and (3) an order that the petition and all
proceedings thereon be stayed, on the grounds that there was another
forum (namely Argentina) having competent jurisdiction which was the
appropriate forum for the trial of the issues raised by the petition.
That summons came before Harman J. and by his order now under
appeal he dismissed it. He held, in effect, first, that leave under Order
11 to serve the petition out of the jurisdiction was never required, on a
true appreciation of the statutory position – with the consequence that
any lack of proper disclosure in the affidavit which was put before Mr.
Registrar Buckley was immaterial – and secondly, that the English court,
and not the Argentine court, was the appropriate forum for the trial of the
issues raised by the petition.
Harman J. refused Intercomfinanz leave to appeal against his order,
but leave to appeal was granted by Nicholls L.J. on 14 June 1990. He
commented:
“Although the company was incorporated in England, and although a
decision on whether or not to grant a stay is a matter of discretion for
the judge, Intercomfinanz S.A. has a seriously arguable case on the
application of the Spiliada principles [Spiliada Maritime Corporation v.
Cansulex Ltd. [1987] A.C. 460] in the unusual circumstances present
here.”
In this court a preliminary issue of importance has been taken on behalf
of Ladenimor. It is submitted that as the result of the Brussels Convention
on Jurisdiction and the Enforcement of Judgments in Civil and Commercial
Matters 1968 between the original member states of the E.E.C., to which
the United Kingdom, Denmark and Ireland acceded in 1978 after joining
the E.E.C., the English court has no jurisdiction to refuse on the grounds
of forum non conveniens to decide the issues raised by the petition or to
stay the petition, since the company is for the purposes of the Convention
domiciled in England (albeit also domiciled in Argentina).
The terms of the Convention are set out in Schedule 1 to the Civil
Jurisdiction and Judgments Act 1982, and under section 2 of that Act, the
Convention has the force of law in the United Kingdom. The Preamble to
the Convention sets out the genesis of the Convention in the following
terms:
“The high contracting parties to the Treaty establishing the European
Economic Community, desiring to implement the provisions of article
220 of that Treaty by virtue of which they undertook to secure the
simplification of formalities governing the reciprocal recognition and
enforcement of judgments of courts or tribunals; anxious to strengthen
in the Community the legal protection of persons therein established;
considering that it is necessary for this purpose to determine the
international jurisdiction of their courts, to facilitate recognition and
to introduce an expeditious procedure for securing the enforcement of
judgments, authentic instruments and court settlements; have decided to
conclude this Convention …”
The scope of the Convention is prescribed in article 1 in Title I. With
exceptions which are immaterial to the present case it is to apply in civil
and commercial matters whatever the nature of the court or tribunal. Title
II, comprising articles 2 to 24, is headed “Jurisdiction.” Section 1 of the
Title, comprising articles 2 to 4, is headed “General provisions.” Article 2
provides:
“Subject to the provisions of this Convention, persons domiciled in a
contracting state shall, whatever their nationality, be sued in the courts of
that state….”
That is the article fundamental to the preliminary issue.
It is not in doubt that the company is domiciled in the United Kingdom,
although also domiciled in Argentina, and that Intercomfinanz and
Ladenimor are domiciled in Switzerland: see section 42(3) and (6) of the
Act of 1982.
Article 3 of the Convention provides that persons domiciled in a
contracting state may be sued in the courts of another contracting state
only by virtue of the rules set out in articles 2 to 6 of Title II. The second
paragraph of article 3 then lists particular provisions of the laws of the
various contracting states including the United Kingdom which are not to
be applicable as against persons domiciled in other contracting states; the
details are not relevant.
Article 4 then provides:
“If the defendant is not domiciled in a contracting state, the jurisdiction
of the courts of each contracting state shall, subject to the provisions
of article 16, be determined by the law of that state. As against such a
defendant, any person domiciled in a contracting state may, whatever his
nationality, avail himself in that state of the rules of jurisdiction there in
force, and in particular those specified in the second paragraph of article
3, in the same way as the nationals of that state.”
There are then further articles setting out detailed provisions, many of
which in various respects qualify article 2. I shall have to refer to some of
these later. There are also, under Title III, detailed articles from 25 to 49
dealing with the recognition and enforcement of judgments.
It is in particular to be noted that the doctrine of forum conveniens
under English and Scottish law, as elaborated by Lord Goff of Chieveley
in Spiliada Maritime Corporation v. Cansulex Ltd. [1987] A.C. 460, is
not a recognised basis for jurisdiction under any of the articles of the
Convention where the contest is between the jurisdiction of contracting
states. As between the contracting states the general principle of the
Convention is that the court first properly seised of a cause of action
under the Convention shall exercise jurisdiction. Thus articles 21 and 23
provide:
“21. Where proceedings involving the same cause of action and between
the same parties are brought in the courts of different contracting states,
any court other than the court first seised shall of its own motion decline
jurisdiction in favour of that court….
“23. Where actions come within the exclusive jurisdiction of several
courts, any court other than the court first seised shall decline jurisdiction
in favour of that court.”
Against that background section 49 of the Act of 1982 provides that
nothing in the Act shall prevent any court in the United Kingdom from
staying, sisting, striking out, or dismissing any proceedings before it
on the ground of forum non conveniens or otherwise where to do so
is not inconsistent with the Convention. It is implicit in that section, in
my judgment, that the court cannot stay or strike out or dismiss any
proceedings on the ground of forum non conveniens where to do so would
be inconsistent with the Convention, and that covers all cases where
the defendant in proceedings in England is domiciled in England and the
conflict of jurisdiction is between the jurisdiction of the English court and
jurisdiction of the courts of some other contracting state.
The crucial question in the present case is whether the English court
can stay, strike out or dismiss proceedings on the ground of forum non
conveniens, where the defendant in the English proceedings is domiciled
in England, but the conflict of jurisdiction is between the jurisdiction of the
English court and the jurisdiction of the courts of a state which is not a
contracting state, no other contracting state being involved.
That question came before the Commercial Court in S. & W. Berisford
Plc. v. New Hampshire Insurance Co. [1990] 2 Q.B. 631. In that case
the second plaintiff, which was the relevant plaintiff, was an American
company based in New York. The defendant was an American insurance
company domiciled in New Hampshire, but the disputes arose out of
the operations of the defendant’s London branch, and consequently
the defendant was deemed, for the purpose of the Convention, to be
domiciled in the United Kingdom. It was held by Hobhouse J. in those
circumstances (a) that since the parties had not agreed that the courts
of any other contracting state should have jurisdiction, article 2 of the
Convention required that the defendant should be sued in the United
Kingdom, (b) that to stay the proceedings on the ground of forum non
conveniens – viz., that the courts of New York were the more appropriate
forum – would be inconsistent with the Convention, and (c) that,
accordingly, the English court had no jurisdiction under section 49 of the
Act of 1982 to stay the action.
The ratio of the judgment of Hobhouse J. is to be found in the passage
at pp. 643G-645D. The crux is, in my judgment, to be found, where the
judge said, at p. 645:
“It is clear that the Convention is designed (subject to article 4) to
achieve uniformity and to 'harmonise' the relevant procedural and
jurisdictional rules of the courts of the contracting states. The Convention
leaves no room for the application of any discretionary jurisdiction by the
courts of this country; the availability of such a discretion would destroy
the framework of the Convention and create lack of uniformity in the
interpretation and implementation of the Convention.”
That decision of Hobhouse J. was followed by Potter J. in Arkwright Mutual
Insurance Co. v. Bryanston Insurance Co. Ltd. [1990] 2 Q.B. 649. In that
case the plaintiff, an American insurance company, had a claim on London
reinsurers who disputed the claim on the ground that the loss was not
covered by the policy. The reinsurers commenced proceedings against
the plaintiff in New York for a declaration that they were not liable. The
plaintiff then commenced an action in London against the reinsurers
claiming payment, and the reinsurers applied to stay the English
proceedings on the ground of forum non conveniens and lis alibi pendens.
They contended that the New York court was the more appropriate court
to decide the issue. The arguments in favour of a stay were summarised
by Potter J. under eight heads, at pp. 660-661. Heads (1) to (6) read:“(1)
The Convention, being concerned, or principally concerned, to govern
relations between contracting states, which thereby adopted mutual
obligations and accepted regulation of their own potentially competing
jurisdictions, should not readily be construed as operating so as to
deprive or inhibit non-contracting states in relation to cases where the
jurisdiction of such states would otherwise plainly be most appropriate for
determination of the dispute in question. The Convention being concerned
to decide which of the contracting states should assume jurisdiction in
cases of competition inter se, no violence is done or inconsistency effected
by one contracting state staying proceedings in its courts in favour of a
non-contracting state.
“(2) The general rule as to domicile imposed by article 2 is not to be
regarded as so overwhelming or all-pervading as to preclude stay in all
cases where it is not expressly required or permitted by the Convention.
The rule of domicile is the prima facie rule only, within a sophisticated
framework of provisions which recognise a number of exceptions in
individual situations, the most logical and compelling of which are those
dealt with in articles 5 to 6A (special jurisdiction), article 16 (exclusive
jurisdiction) and article 17 (foreign jurisdiction clauses).
“(3) Any English court should be slow so to construe the Convention as
to inhibit the valuable and important jurisdiction of stay on grounds of
forum non conveniens, which is designed to promote comity, to encourage
efficiency in the resolution of disputes, to prevent duplication of time and
cost of litigation, and to avoid inconsistent judgments in two jurisdictions.
“(4) Albeit articles 21 to 23 constitute a more limited and rigid scheme
for allotment of jurisdiction than that achieved by application of a general
principle of forum non conveniens they are concerned to give effect
to the network of provisions in articles 2 to 20 and to avoid the risk of
inconsistent judgments in two or more contracting states, by requiring
dismissal or stay of actions in favour of the court of the contracting
state first seised. If there is no jurisdiction for a contracting state in
which a defendant is domiciled or otherwise properly sued to decline
jurisdiction, or to stay, in favour of the courts of a non-contracting state,
that creates the remarkable situation whereby the Convention determines
the appropriate forum (according to its own provisions) for the competing
jurisdictions of contracting states, but requires entertainment of suit
in the domicile of the defendant (without the application of any test of
appropriateness) where a non-contracting state is concerned.
“(5) Even if the Berisford case is right in respect of the broad principle
of forum non conveniens, it need and should not be applied in respect
of the more limited case of lis alibi pendens, the very ground of stay
contemplated by article 21 in respect of contracting states.
“(6) Given that the purposes of the Convention are avoidance within the
courts of the Community of inconsistent judgments and simplification of
enforcement of judgments within those courts neither purpose will be
disturbed by the exercise of a jurisdiction to stay on grounds of forum
non conveniens and/or lis alibi pendens in favour of the courts of a non-
member state.”
These arguments, however, though recognised, at p. 661, as “powerful,”
were rejected by Potter J. on the ground that he agreed with the decision
of Hobhouse J. in the Berisford case [1990] 2 Q.B. 631 and preferred the
logic of the Berisford case.
The answer to the question depends on the true construction of the
Convention and that is a matter of European law. The Court of Justice
of the European Communities has jurisdiction to give rulings on the
interpretation of the Convention under the Protocol on the interpretation
of the Convention of 1968 by the European Court, signed at Luxembourg
in June 1971. The text of the Protocol of 1971 is set out as Schedule 2
to the Act of 1982, and that specifies the courts which may request the
Court of Justice to give preliminary rulings on questions of interpretation;
they include the courts of the contracting states when they are sitting in
an appellate capacity.
In addition the Act of 1982 provides by section 3(1) that
“Any question as to the meaning or effect of any provision of the
[Convention] shall, if not referred to the European Court in accordance
with the Protocol of 1971, be determined in accordance with the principles
laid down by and any relevant decision of the European Court.”
It is further provided that in ascertaining the meaning or effect of any
provision of the Convention the courts may consider the reports of Mr. P.
Jenard and Professor Peter Schlosser, Official Journal 1979 No. C. 59/1
and 59/71, and shall give them such weight as is appropriate in the
circumstances. These reports are both referred to in the judgments of
Hobhouse J. in the Berisford case and of Potter J. in the Arkwright case
and in this court we have had copious citation from both reports. For my
part, I find it difficult to give much weight to the reports in relation to
the question with which we are concerned because I do not think that
Mr. Jenard or Professor Schlosser had that question in contemplation.
There are general statements in the reports which can be used as pointers
either way, without themselves solving the question in issue. Moreover
at the time even of the Schlosser report, the English doctrine of forum
conveniens was considerably less fully developed than it is now; the
decision in The Abidin Daver [1984] A.C. 398 and even more, Spiliada
Maritime Corporation v. Cansulex Ltd. [1987] A.C. 460, came later.
As I see it the starting point in approaching the construction of the
Convention must be article 220 of the E.E.C. Treaty, since the Preamble
to the Convention shows as the starting point the desire of the parties
to implement that article. The object of article 220 was to secure the
simplification of formalities governing the reciprocal recognition and
enforcement of judgments of courts or tribunals between the member
states of the Community.
To achieve such recognition and enforcement it was evidently decided
that the contracting states should have a common basis of international
jurisdiction – or jurisdiction in the international order – in the matters
which fall within the scope of the Convention. But the common basis of
jurisdiction envisaged does not apply worldwide since under article 4, if
a defendant is not domiciled in a contracting state the jurisdiction of the
courts of each contracting state is to be determined by the national law.
The desideratum expressed in Professor Schlosser’s report, Official Journal
1979 No. C. 59/71, p. 97, para. 78, that
“A plaintiff must be sure which court has jurisdiction. He should not
have to waste his time and money risking that the court concerned may
consider itself less competent than another.”
is thus very obviously not met where the defendant is not domiciled in a
contracting state. Indeed the following passages in paragraph 78 appear
to show that the Professor was only concerned in the paragraph with the
protection of persons domiciled in the contracting states and with choices,
which should not be on the ground of forum conveniens, between the
courts of several contracting states having jurisdiction. That is in line with
references in the Jenard report, e.g. the reference in Official Journal 1979
No. C. 59/1, p. 7, to “an autonomous system of international jurisdiction
in relations between the member states” and the statement on p. 15 that
“the purpose of the Convention is also, by establishing common rules of
jurisdiction, to achieve, in relations between the six and in the field which
it was required to cover, a genuine legal systematisation which will ensure
the greatest possible degree of legal certainty.”
For the English court to refuse jurisdiction, in a case against a person
domiciled in England, on the ground that the court of some non-
contracting state is the more appropriate court to decide the matters
in issue does not in any way impair the object of the Convention of
establishing an expeditious, harmonious, and, I would add, certain,
procedure for securing the enforcement of judgments, since ex hypothesi
if the English court refuses jurisdiction there will be no judgment of the
English court to be enforced in the other contracting states. Equally and
for the same reason such a refusal of jurisdiction would not impair the
object of the Convention that there should, subject to the very large
exception of article 4, be a uniform international jurisdiction for obtaining
the judgments which are to be so enforced.
But if the English court as a result of article 2 of the Convention does
not have the power to decline jurisdiction to entertain an action against
a person domiciled in England on the ground that the courts of a non-
contracting state are the more appropriate forum, the English court
must equally have no power to refuse to entertain such an action on the
ground of lis alibi pendens, if the lis is pending in the courts of a non-
contracting state. Articles 21 and 22 of the Convention are only concerned
with the position where proceedings involving the same cause of action
and between the same parties, or where related actions, are brought in
the courts of different contracting states. There is nothing at all in the
Convention to deal with the situation where there is one lis pending in
a court of a contracting state against a person domiciled in that state
and another, and possibly earlier, lis pending, in proceedings involving
the same cause of action or in a related action, in the courts of a non-
contracting state.
Again article 17 of the Convention provides that if the parties have agreed
that the courts of a particular contracting state shall have exclusive
jurisdiction to settle any disputes which may arise in connection with
a particular legal relationship, then the courts of that state shall have
exclusive jurisdiction to settle such disputes. There is nothing at all in the
Convention to deal with the situation where the parties have agreed that
the courts of a non-contracting state shall have exclusive jurisdiction to
resolve their disputes. But if article 2 has the full mandatory effect which
Hobhouse J. in the Berisford case [1991] 2 Q.B. 631 thought it has, the
English courts would be bound to hear and decide an action against a
person domiciled in England even though both parties to the action had
agreed that the courts of some non-contracting state – be it New York or
Argentina – should have exclusive jurisdiction.
Such results would, in my judgment, be contrary to the intentions of the
Convention. Since the Convention is merely an agreement between the
contracting states among themselves, I do not agree with Hobhouse J.
that the framework of the Convention would be destroyed if there were
available to the English court a discretion to refuse jurisdiction, on the
ground that the courts of a non-contracting state were the appropriate
forum, in a case with which no other contracting state is in any way
concerned. I do not accept that article 2 has the very wide mandatory
effect which Hobhouse J. would ascribe to it where the only conflict is
between the courts of a single contracting state and the courts of a non-
contracting state.
Respectfully differing, therefore, from the rulings of Hobhouse J. and
Potter J. in S. & W. Berisford Plc. v. New Hampshire Insurance Co. [1990]
2 Q.B. 631 and Arkwright Mutual Insurance Co. v. Bryanston Insurance
Co. Ltd. [1990] 2 Q.B. 649, I would reject the preliminary issue raised
by Ladenimor, and I would hold that the English court has jurisdiction to
stay or dismiss the petition on the grounds of forum non conveniens if the
English court holds that the courts of Argentina are the more appropriate
forum to decide the issues.
I would add that it is not appropriate, in my judgment, for this court to
request the Court of Justice of the European Communities to give a ruling
on this issue.
STOCKER L.J. I have read the judgments of Dillon and Bingham L.JJ.,
which I agree with, and I have nothing to add.
BINGHAM L.J. Before the judge it was common ground that he had
a discretion to stay Ladenimor’s proceedings against the company
on the ground of forum non conveniens if he was of the opinion that,
applying the Spiliada test (Spiliada Maritime Corporation v. Cansulex Ltd.
[1987] A.C. 460) in this rather novel situation, good reason for doing so
existed. The question in issue was whether the judge should exercise that
discretion in favour of the Argentinian court on the ground that it was the
appropriate forum for trial of the proceedings.
In this court Mr. Briggs for Ladenimor contended that the judge had no
such discretion. He based this argument on the Civil Jurisdiction and
Judgments Act 1982 and the Conventions to which that Act gave the force
of law in the United Kingdom. His submission was, in brief, that since
the company was, by virtue of section 42 of the Act of 1982, domiciled
here, the Conventions required the English court to accept jurisdiction and
forbade it to decline jurisdiction in favour of the Argentinian court whether
that was judged to be the appropriate forum or not. Mr. Briggs accepted
that, despite the Act and the Conventions, the judge retained a discretion
to stay Ladenimor’s proceedings against Intercomfinanz, which is not
on any showing domiciled here, but he submitted that Intercomfinanz’s
application to stay had to be judged on the basis that the proceedings
against the company would continue in any event. The argument thus
raised is of some obvious general importance.
In interpreting the Act of 1982 our task is, as always, to ascertain the
intention of Parliament and give effect to it. But in so far as the Act is
intended to give legal effect to the Conventions and to implement the
United Kingdom’s international obligation to give legal effect to the
Conventions, we must assume – in the absence of a clear indication to
the contrary, which is not to be found here – that Parliament intended
the Conventions to be incorporated into English law so as faithfully to
reflect the international consensus embodied in them. The Conventions
themselves are in part set out in Schedules to the Act, but it cannot be
doubted that in interpreting them we are required to consider first the
objectives and scheme of the Conventions, and secondly the general
principles which stem from the corpus of the national legal systems of
the contracting states: L.T.U. Lufttransportunternehmen G.m.b.H & Co.
K.G. v. Eurocontrol (Case 29/76) [1976] E.C.R. 1541. For this purpose
we must adopt an international and communautaire, not a national and
chauvinistic, approach. Although these Conventions do not expressly
provide, like article 18 of the Rome Convention on the law applicable to
contractual obligations (see the Contracts (Applicable Law) Act 1990 and
Schedule (1) thereto), that
“In the interpretation and application of the preceding uniform rules,
regard shall be had to their international character and to the desirability
of achieving uniformity in their interpretation and application,”
it is plain that that is the basis upon which we should act.
As the Preamble to the Convention of 1968 and the Jenard report, Official
Journal 1979 No. C. 59/1, p. 1 et seq., make clear, that Convention was
negotiated pursuant to the obligation undertaken by the original member
states in article 220 of the E.E.C. Treaty to
“enter into negotiations with each other … with a view to securing for the
benefit of their nationals the simplification of formalities governing the
reciprocal recognition and enforcement of judgments of courts or tribunals
and of arbitration awards.”
When instigating the negotiations which led to the Convention of 1968,
the Commission of the E.E.C. observed:
“As jurisdiction in both civil and commercial matters is derived from
the sovereignty of member states, and since the effect of judicial acts
is confined to each national territory, legal protection and, hence, legal
certainty in the common market are essentially dependent on the
adoption by the member states of a satisfactory solution to the problem of
recognition and enforcement of judgments:” Jenard report, Official Journal
1979 No. C. 59/1, p. 3.
If member states were to recognise and enforce each others’ judgments
virtually on the nod, it was plainly desirable, so far as possible, to agree
on a common basis for accepting jurisdiction, so as to minimise the
number of occasions on which state A would have to recognise and
enforce a judgment given by state B in circumstances where state A
would not itself have accepted jurisdiction. Given the reference in article
220 to “the benefit of their nationals,” one might have expected the
common basis of jurisdiction to be founded on nationality, as the Jenard
report, Official Journal 1979 No. C. 59/1, p. 14, acknowledges. But
instead the common basis of jurisdiction was firmly founded on the
domicile of the defendant. The Jenard report, at p. 13, explains the
intentions of the original negotiators:
“Underlying the Convention is the idea that the member states of the
European Economic Community wanted to set up a common market
with characteristics similar to those of a vast internal market. Everything
possible must therefore be done not only to eliminate any obstacles to the
functioning of this market, but also to promote its development. From this
point of view, the territory of the contracting states may be regarded as
forming a single entity: it follows, for the purpose of laying down rules on
jurisdiction, that a very clear distinction can be drawn between litigants
who are domiciled within the Community and those who are not.”
The domicile of the Community-based defendant is not in all cases
a determinative test. It was necessary to make special provision for
agreements conferring exclusive jurisdiction on a specific court, a matter
which became of greatly increased importance on the accession of
the United Kingdom “owing to the frequency with which jurisdiction is
conferred upon United Kingdom courts in international trade” (Schlosser
report, Official Journal 1979 No. C. 59/71, p. 124, para. 177), and cases
of dual domicile (discussed in the Schlosser report, at pp. 96-97, para.
75; p. 120, para. 162, and p. 125, para. 181): see articles 17 and 21
of the Convention of 1968. But for the Community-domiciled defendant
the state of domicile is the state upon which jurisdiction is primarily
conferred. For that reason Ireland and the United Kingdom cannot found
jurisdiction on service during temporary presence in the country nor
Scotland on the grounds listed in sub-paragraphs (b) and (c) of the
second paragraph of article 3: see article 3 and paras. 85 and 86 of the
Schlosser report, at pp. 99-100. Further:
“the jurisdiction of English courts in respect of persons domiciled in the
Community can no longer be based on the ground that the claim concerns
a contract which was concluded in England or is governed by English law:”
Schlosser report, p. 100, para. 87.
As the extract from p. 13 of the Jenard report quoted above makes clear,
however, there is a clear and fundamental distinction between the position
of the Community-domiciled defendant and the defendant domiciled
elsewhere. In respect of the latter, contracting states may, by virtue of
article 4 of the Convention of 1968, continue to apply their traditional
rules: the French may assert their exorbitant jurisdiction under articles
14 and 15 of the Civil Code (Jenard report, pp. 19-20), the Scots on the
bases specified in sub-paragraphs (b) and (c) of the second paragraph of
article 3, the English on the basis of service during temporary residence
or because the contract was made here or was governed by English
law. Thus in the present case, Intercomfinanz being domiciled in none
of the contracting states, it would not violate the letter or the spirit of
the Conventions if the English court were to assume jurisdiction over it
on any of the traditional grounds, however exorbitant. For purposes of
recognition and enforcement no distinction is drawn between judgments
against defendants domiciled within and judgments against defendants
domiciled outside contracting states. While, therefore, the Conventions
reduce the number of cases in which state A will have to recognise and
enforce judgments given by state B in circumstances where state A would
not itself have accepted jurisdiction, they do not eliminate such cases
altogether.
In contending that the English court was not only entitled but bound
to accept jurisdiction in Ladenimor’s proceedings against the company,
Mr. Briggs relied in particular on the wide, unambiguous and mandatory
language of article 2. He also relied on the third recital in the Preamble
to the Convention of 1968 as showing that the purpose of the Convention
was to determine the international jurisdiction of the courts of the
contracting states. It is, however, plain, adopting the approach to
interpretation which I have outlined above, that article 2 must be
interpreted so as to reflect the purpose and scheme of the Convention
as a whole. The reference to “international jurisdiction” in the Preamble
is, in my view, intended to make clear that the Convention is in no way
concerned with the national jurisdiction of the courts of the contracting
states, i.e. with cases lacking any international element: Jenard report,
Official Journal 1979 No. C. 59/1, p. 8.
Mr. Boyle for Intercomfinanz accepted that, since the company is
domiciled here, and since there is no exclusive jurisdiction clause, and
since no proceedings had been first started in another contracting state,
the English court would have to accept jurisdiction if the alternative forum
alleged to be appropriate were, instead of Argentina, the court of any
other contracting state. In any choice of jurisdiction between the courts of
contracting states, he accepted that the Conventions provide a mandatory
and comprehensive code. But he submitted that the Conventions were
directed and directed only to control of relations between contracting
states among themselves. If this court were to decline jurisdiction in
favour of the Argentinian court, how could that possibly prejudice any
Community interest which the Conventions were designed to protect or
promote? If, as he contended, the answer was that it could not, since
the enforceability of an Argentinian judgment in any contracting state
would depend on bilateral arrangements between Argentina and that state
and it was very unlikely that an Argentinian judgment would be more
readily enforceable than an English judgment, that was a sure sign that
the Conventions were not intended to apply in such a situation.
Both parties made references to excerpts from the Jenard and Schlosser
reports, while urging us to read more extensively in the reports. I think
there is an obvious danger in seizing on occasional passages here and
there in these long and closely-reasoned reports to support one view or
the other when it is acknowledged that the present question was never
squarely addressed. I have read the reports much more extensively
than the reasonable bounds of oral argument permitted to counsel and
am in the result of opinion that the thrust of the reports gives much
more support to Mr. Boyle’s argument for Intercomfinanz than to Mr.
Briggs’ for Ladenimor. I give one example. Both reports consider in
detail the existence of earlier bilateral or trilateral conventions between
contracting states, some of which are indeed listed in article 55 of the
Convention of 1968. Yet, save for an isolated – and I think irrelevant –
reference to a convention between France and Switzerland on p. 14 of
the Jenard report, there is (so far as I can trace) no reference to any
convention between any contracting state and any non-contracting state.
On Mr. Boyle’s argument this is understandable: in the absence of any
conflict or potential conflict of jurisdiction between contracting states, the
Conventions have no role. If, however, the Conventions govern relations
between a contracting state and a non-contracting state even when there
is no conflict or potential conflict between contracting states, one would
expect all conventions to fall for consideration and examination.
Mr. Briggs was able to rely on two recent authorities as supporting his
submission. The first, a reserved decision of Hobhouse J., was S. &
W. Berisford Plc. v. New Hampshire Insurance Co. [1990] 2 Q.B. 631.
In that case the effective plaintiff was a New York company and the
defendant, although a New Hampshire company, carried on business and
was served at an office in the City of London. The defendant sought a
stay, contending that New York was the appropriate forum. The plaintiff
resisted, contending that by virtue of the Act and the Conventions the
court had no discretion to grant a stay and that in any event the grounds
for granting a stay were not made out. The judge agreed with the plaintiff
on both these points. The argument addressed to us by Intercomfinanz, if
correct, would have ensured the defendant’s success on the first of these
points, but the argument was not put. Thus the judge did not have to rule
on it expressly. But the tenor of his judgment strongly suggests that if he
had had to rule on it he would have rejected it.
Such was the inference drawn, in my view rightly, by Potter J. in the
second case, Arkwright Mutual Insurance Co. v. Bryanston Insurance
Co. Ltd. [1990] 2 Q.B. 649. In those proceedings, the plaintiff was
a Massachusetts insurer and the defendants were English reinsurers
resisting a claim under policies of reinsurance. Before the English
proceedings began, the reinsurers had issued proceedings against the
insurer in New York for a declaration that they were not liable to the
insurer. After issue of the proceedings here the reinsurers asked the court
to stay them in the exercise of its discretion on the grounds of forum
non conveniens and lis alibi pendens. The insurer, relying on the Act of
1982 and the Conventions, contended that the court no longer had such
a discretion to exercise. Counsel for the reinsurers took issue with that
proposition on a number of grounds which are quoted in the judgment of
Dillon L.J., ante, pp. 94D-95D.
The judge, in a reserved judgment [1990] 2 Q.B. 649, rejected the
reinsurers’ submission and upheld, at pp. 662-663, the insurers’
submission founded on the decision of Hobhouse J.:
“that, for the English court to retain its former wide discretion in respect
of the doctrine of forum non conveniens would be inconsistent with the
Convention.”
I do not however think that the judge specifically addressed himself to
counsel’s arguments which I have quoted, which seem to me powerfully
persuasive.
Ladenimor’s argument is of course strengthened by these two first
instance judgments which, although not binding on us, are entitled to
respect. They have, however, provoked a critical note bearing the very
considerable authority of Mr. Lawrence Collins in (1990) 106 L.Q.R. 535. I
would for my part adopt his conclusion, at pp. 538-539:
“When the European Court comes to consider the application of the
Convention to non-contracting states, it should seek the answer in treaty
interpretation, and ultimately in public international law. The Convention
was intended to regulate jurisdiction as between the contracting
states. Thus the Convention provides that in principle domiciliaries of a
contracting state should be sued in that state, subject to important and
far-reaching exceptions, and not in other contracting states. Once a court
in a contracting state has jurisdiction it is entitled, vis-à-vis other states,
to exercise that jurisdiction and other courts cannot. But the states which
were parties to the Convention had no interest in requiring a contracting
state to exercise a jurisdiction where the competing jurisdiction was in a
non-contracting state. The contracting states were setting up an intra-
Convention mandatory system of jurisdiction. They were not regulating
relations with non-contracting states.”
Section 49 of the Act preserves the power of the English court to stay or
dismiss any proceedings before it, on the ground of forum non conveniens
or otherwise, where to do so is not inconsistent with the Convention
of 1968. The ultimate question, therefore, is whether exercise of the
discretionary power here in issue in the present situation, where the only
alternative forum is in a non-contracting state, is inconsistent with the
Convention of 1968. I conclude that it is not and accordingly accept the
argument of Intercomfinanz on this point.
Since preparing this judgment I have had the advantage of reading in
draft the judgment of Dillon L.J., with which I am in full agreement.
Like him, I do not think it necessary to request the Court of Justice of
the European Communities to rule on the question of interpretation of
the Convention of 1968 raised in this case to enable this court to give
judgment on it.