„(…) LORD WOOLF MR:
1. This is an appeal by the claimants ("D.") from a judgment given by
Mr Justice Moore-Bick on 26 July 1999. The judge set aside service of
the claim form on the first defendant ("S."), declared that the court had
no jurisdiction over S. in respect of the causes of action (if any) set out
in the claim form and stayed the effect of his order pending the present
appeal. The judge gave leave to appeal because he accepted that the
case raised questions of general importance in relation to the grant of
negative declarations and as to the effect of the Brussels Convention. The
Convention has force of law in this jurisdiction in consequence of the Civil
Jurisdiction and Judgments Act 1982.
The Facts
2. The proceedings follow from an A. A340 aircraft owned by S. being
involved in an incident when landing at Brussels Airport on 29 August
1998. The incident was caused by the aircraft's starboard landing gear
failing. Fortunately the injuries to those on board were slight but the
aircraft and its starboard engine were extensively damaged. The loss
caused by the failure of the landing gear, including losses sustained as
a result of the aircraft being out of use while being repaired, is said to
be about US$50 million. The aircraft was manufactured by the second
defendants ("A."). A. is a French economic entity registered under the
laws of France. It is a consortium of European aircraft manufacturers. The
British partner is the third defendant ("B.").
3. The landing gear was designed and manufactured by successive
members of the D. group of companies to whom I will refer collectively as
"D.". D. and B. are companies registered in this country. S. is a Belgian
company.
4. A. was responsible for the manufacture and the supply to S. of the A.
A340 involved in the incident. The aircraft was supplied by A. to S. under
a contract governed by French law. The contract contains an exclusive
jurisdiction clause, which gives jurisdiction to the "Tribunaux de Paris".
The contract relating to the design and supply of the landing gear states
that it is made between B. ("the Purchaser") and D. ("the Supplier"). The
contract recites that B. is acting for and on behalf of A.. English Law is the
applicable law of the contract and the English courts are given exclusive
jurisdiction. "The Purchaser" is recorded in the contract as having a
number of obligations.
5. From the background facts which I have already set out, it is apparent
that the incident on 29 August 1998 was likely to provide fertile ground
for protracted and expensive litigation involving highly undesirable
satellite disputes as to which jurisdiction is, or which jurisdictions are the
appropriate seats for the litigation. As Sir Sydney Kentridge QC for D.
accepted, it is now reasonably clear that the cause of the incident was
faulty design or manufacture or both of the landing gear. It is no longer
suggested that there has been any default on the part of S.. S., subject
to the terms of its contract with A., would therefore appear to be in the
relatively happy position of having a straightforward claim against A.
for breach of the contract, which is governed by the French jurisdiction
clause. S. could also have a claim against D. in tort or delict for breach
of duty by D. in the design and manufacture of the landing gear. Under
English law it could hardly be disputed that a designer and manufacturer
of landing gear owes a duty of care to the operator of the aircraft for
which the landing gear is provided. Equally, it is clear that A. could have
a claim for indemnity insofar as the faulty design was the responsibility of
D. under the contract with D. in so far as D. was in breach of contract.
6. It is D.'s contention that the faults in the landing gear were due to the
failure of B. and/or A. to provide data for the design and manufacture of
the landing gear which was "sufficiently demanding". In particular the
"fatigue spectra" which was provided to D. by B. did not indicate the need
for what would be an adequate fatigue strength. D. contends that B. owed
a duty of care to D. as to the provision of the data. Whether that duty was
owed only in tort or in tort and contract depends upon whether B. was a
party to the contract.
7. On 15 April 1999 S. made an application to the Tribunal de Commerce
in Paris under Article 145 of the new Civil Code. The application was
for the appointment of a panel of experts to investigate and report on
the causes of the incident on 15 April 1999. D. and A. were named as
the defendants to the application. It is common ground that such an
application does not amount to the commencement of proceedings. The
"Expertise", as it is called can, and frequently does, result in proceedings
against those who are named as defendants to the application.
8. On 11 May 1999 the Tribunal de Commerce in Paris declared the
application competent and appointed the experts who were to investigate
and report. That order was made despite the opposition of D.. D. has
entered an appeal against this decision and the date for the hearing
of the appeal is at present 24 February of this year. The procedure in
France under Article 145 is not dissimilar to the procedure which is now
possible under the extended powers contained in our Civil Procedure
Rules. The Rules enable the civil courts in this country to make extensive
pre-litigation orders. (Under CPR 25.1 and 25.2)
9. On 30 April 1999 D. issued proceedings in the High Court. This was
followed by the service of the particulars of claim on 14 June 1999. The
claim form recited D.'s claims, so far as relevant, in these terms:
"(a) Against [S.], for a declaration that [D.] are not liable to [S.] in
respect of any loss, expenditure, liability or damage incurred by [S.] in
consequence of or in connection with an accident at Brussels Airport on 29
August 1998 involving an A340/200 aircraft... which was being operated
by [S.] including, but not limited to, all costs associated with carrying out
of remedial works and modification to aircraft equipped with landing gear
supplied by [D.] or arising out of limitations imposed upon the operation
of such aircraft;
(b) Against [A.], for a declaration that [D.] are not liable to [A.] in
respect of any loss, expenditure, liability or damage incurred by [A.] in
consequence of or in connection with the accident referred to in paragraph
(a), including but not limited to
(i) any sum for which [A.] is liable to [S.] or any other party as a result of
the accident; and
(ii) any expenditure incurred by [A.] in carrying out remedial works and
modifications to aircraft manufactured by it which are equipped with
landing gear supplied by [D.] or arising out of limitations imposed upon
the operation of such aircraft as a result of the accident.
(c) Against [B.], for a declaration that [D.] are not liable to [B.] in
respect of any loss, expenditure, liability or damage incurred by [B.] in
consequence of or in connection with the accident..."
10. The declaration against B. then continues in like terms to the
declaration sought against A. but extending the indemnity, which is
sought to any liability to S. or A..
11. The Particulars of Claim, which were delivered, set out fully the
claim for the declarations. They refer to the contract for the design,
development and supply of the landing gear as being concluded between
D. and B. "acting for and on behalf of A.". It also refers to various
obligations of B. under that contract. It alleges that A. and/or B. were in
breach of contract and negligent in the data which they provided to D..
The Particulars also include an allegation that D. have suffered and will
continue to suffer loss and damage in respect of which they are entitled to
seek compensation and a declaration of indemnity. As particulars of this
allegation, it is alleged that there is a clear risk that D. will be joined in
proceedings arising out of the failure or potential failure of landing gear of
other aircraft and that D. have already incurred legal costs in connection
with the "likely assertions of liability by S.".
12. The Particulars of Claim accept that D. owe a duty to prospective
owners of A. aircraft but contend that duty was discharged and the
damage to the aircraft did not arise through any negligence on their
part. D. also claim to recover from B. and/or A. compensation for the
substantial work which they have carried out to establish the cause of the
accident and the implications for the reliability of landing gear on other
A. aircraft and for the supply of spare parts etc. This is therefore a claim
against A. or B. for work done and materials supplied.
13. Since the service of the Particulars of Claim there have been meetings
of the experts in France, Belgium and in this country under the Article 145
procedure. In particular on 14 September, there was a meeting of experts
in Gloucester which involved D..
The Proceedings in the Courts Below
14. On 1 July 1999, in the English proceedings, there was a hearing for
directions before Rix J. This was followed by the application, which has
given rise to this appeal. This application by S. to Moore-Bick J was made
on alternative grounds. The first being that the court had no jurisdiction
to determine the claim against S. and the second that the proceedings
against S. were an abuse of the process of the court. A. and B. have
taken no part in the application and do not contest the jurisdiction of
the High Court to determine the proceedings, which have been brought
against them. A. and B. did, however, make an application for a stay of
the English proceedings. That application was refused by Langley J on 3
December 1999.
15. Before the judge Mr Shepherd (who also appeared in this court on
their behalf) made two main submissions. The first was that D. had no
cause of action against S. and that the court should refuse to entertain a
claim for a negative declaration of non-liability in the circumstances of this
case. Mr Shepherd based himself on the decision of this court in Re Clay
[1919] 1 Ch 66 and subsequent decisions to the like effect. The second
submission was that as S. is domiciled in Belgium and this case does not
fall within any of the exceptions to Article 2 of the Brussels Convention
the English Courts do not have jurisdiction over D.'s claims.
16. The judge dealt with the second contention first because, as he
explained:
"Although the authorities contain dicta which suggest that in certain cases
the court has no jurisdiction to grant a negative declaration, I think in the
light of the more recent authorities that they must be taken as meaning
only that in such cases the court cannot properly exercise its jurisdiction
in favour of the claimant. The court has an inherent jurisdiction to grant
declaratory relief which, as Sir Thomas Bingham pointed out in Re: S
[1995] 3 All ER 290 at p.296 is regulated rather than conferred by O15
r.16. Moreover it was a jurisdiction which the court may exercise at its
discretion in appropriate cases. The Convention, on the other hand, is
concerned with the regulating exercise of jurisdiction by national courts
over persons domiciled within contracting States. That does not depend
on the exercise of the court's discretion but upon giving effect to the
rule set out in the Convention itself: see for example Boss Group v Boss
France S.A. [1996] 4 All ER per Saville LJ at pages 976/977."
The Brussels Convention
17. Before turning to the judge's decision, it is desirable to refer to the
relevant Articles of the Brussels Convention to which this country is a
party and which is part of our domestic law under the Civil Jurisdiction
and Judgments Act 1982. The starting point is the general provision
contained in Article 2 that:
"persons domiciled in a Contracting State shall, whatever their nationality,
be sued in the courts of that State."
18. This general principle is subject to special rules. Of the special rules
the first one to which it is necessary to refer is Article 5 which provides:
"A person domiciled in a Contracting State may, in another Contracting
State, be sued:........-
(3) in matters relating to tort, delict or quasi-delict, in the courts for the
place where the harmful event occurred."
19. The next Article to which it is necessary to make reference is Article 6
which contains a further exception to the general rule namely that:
"A person domiciled in a Contracting State may also be sued -
(1) where he is one of a number of defendants, in the courts for the place
where any one of them is domiciled."
20. Read literally Article 6(1) is in very wide terms. However, as I will
make clear later, it has been construed restrictively by the European
Court.
21. The next article to which it is necessary to refer is Article 17. That
Article provides that where parties, "one or more of whom is domiciled
in a Contracting State, have agreed that a court or the courts of a
Contracting State are to have jurisdiction to settle any disputes which
have arisen or which may arise in connection with a particular legal
relationship, that court or those courts shall have exclusive jurisdiction".
22. The only other Articles to which it is necessary to refer are Articles 21,
22 and 23. They are the contents of Section 8 of the Convention, which is
headed "Lis Pendens – Related actions".
23. Article 21 gives precedence to the first court seised of proceedings
when "proceedings involving the same cause of action and between the
same parties are brought in the courts of different Contracting States",
subject to the jurisdiction of the first court being established.
24. Article 22 provides:
"Where related actions are brought in the courts of different Contracting
States, any court other than the court first seised may, while the actions
are pending at first instance, stay its proceedings.
A court other than the court first seised may also, on the application of
one of the parties, decline jurisdiction if the law of that court permits the
consolidation of related actions and the court first seised has jurisdiction
over both actions.
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."
25. Article 23 provides that:
"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."
26. It is obvious from the language of the Articles to which I have
referred, that the jurisdictional rules of the Convention place a premium
on being the first court seised of the proceedings. This encourages parties
to disputes to rush into proceedings. This is quite contrary to the culture
which our Civil Procedure Rules are seeking to promote. However it is
generally accepted that the jurisdictional rules of the Convention are not
subject to a discretion in a national court to stay an action on the basis
of the courts of some other Contracting State are the more appropriate
forum. (See Dicey & Morris, The Conflict of Laws, 13th Edition, Volume
I 11/012.) The same position applies if a party commences proceedings
precipitously and does not first seek to dispose of the proceedings without
resorting to litigation.
The Decision of Moore-Bick J
27. The jurisdictional rules of the Convention do not prevent the
English courts under their own procedural rules disposing summarily of
proceedings which should not have been brought. This is important to
the approach adopted by Moore-Bick J. He considered that the action
brought by D. against B. had not been "properly brought so as to entitle
the court to exercise jurisdiction over S. under Article 6.1 of the Brussels
Convention". He also considered that D.'s claims against S. for a negative
declaration could not be supported because S. may not bring proceedings
if it decides that it can succeed more easily against A.. He did not consider
that it would be appropriate for the court to entertain a claim for a
negative declaration when it was accepted on behalf of D. that there was
no pressing commercial need to have the issue resolved otherwise than in
the normal way. He therefore granted S.'s application.
Forum Shopping
28. In between the decision of Moore-Bick J and the hearing of this
appeal, S. commenced proceedings in France claiming damages for
breach of contract. Under Article 17 of the Convention, France is the only
jurisdiction in which those proceedings could appropriately be brought. If
S. is to remain a party to the English proceedings, then the consequence
of D.'s proceedings will be that S. will inevitably be involved in two sets of
proceedings arising out of the incident.
29. In his judgment of 3 December 1999 Langley J, of the proceedings
issued by D., states that:
"This step was admittedly and indeed unashamedly taken because D. was
apprehensive that the Article 145 procedure in Paris might result in D.
being drawn into proceedings in Paris thus undermining the agreement
of D. and A. that the appropriate forum for the resolution of disputes
between them was in England."
30. Mr Shepherd relied on this as an indication that D. was forum
shopping when it issued its proceedings. That this is the position is
confirmed by letter written by D.'s solicitors dated 30 April 1999. The
commencement of proceedings to obtain a jurisdictional advantage can
be categorised as forum shopping. The use of this term is designed to
suggest that there is something objectionable in itself in a claimant
starting proceedings for this collateral purpose. However in view of the
primacy which the Convention gives to the jurisdiction which is first
seised of proceedings, it is not proper to criticise a claimant, who is in
a position to bring perfectly appropriate proceedings, for commencing
those proceedings earlier than he would otherwise do, so as to obtain an
advantage under the Convention. As Lord Justice Saville stated in Boss
Group v Boss France S.A. [1996] 4 All ER 970 at 977E:
"The charge of forum shopping can only be made good by assuming
that a party which takes advantage of the convention exceptions to the
general rule of domicile is somehow doing something illegitimate; but
that assumption cannot be sustained if in truth one of the exceptions is
applicable".
31. The position is different if a defendant is added to the proceedings,
despite the absence of any credible claim, solely to claim jurisdiction
against a party who could otherwise not be joined in the proceedings.
Such tactics are an abuse of the process of the court as was held by the
Supreme Court of Ireland in Valerie Gannon v British and Irish Steam
Packet Co. Ltd. and Others [1993] 2 IR 359.
32. Whether it be desirable that this should be the position or not, (and
there are strong arguments that it is undesirable) there is good sense in
the recommendations contained in Civil Jurisdiction and Judgments 2nd
Edition (by Briggs, edited by Rees p.210-2.13) that claimants are well
advised not to delay proceedings.
The Outcome of the Appeal
33. Sir Sydney Kentridge QC submits on the appeal that there is a very
considerable advantage in S. being joined in the claimant's proceedings
because it will enable a consistent determination of all questions of
responsibility and fault concerning the landing gear to be determined in
those proceedings. From a case management point of view, there would
be benefits if this could be achieved. However, in view of the proceedings,
which have already been commenced by S., it is now extremely doubtful
whether this objective could be achieved. It is therefore preferable to
focus on the alternative questions which arises on this appeal namely,
whether S. is entitled to be removed from the proceedings as a matter
of English procedural law concerning negative declarations or under the
jurisdictional rules of the Brussels Convention.
A. Negative Declarations
34. Sir Sydney no doubt confines his reference to our procedural law since
the jurisprudence of the European Courts suggests that in the application
of the Convention the correct approach is to treat negative declarations,
that is declarations that the claimant is under no liability, in exactly the
same way as claims for positive relief are treated. This is not our domestic
approach as I will seek to show hereafter. As to the position in relation
to the Convention, the situation is accurately stated by Advocate General
Tesauro in "the Tatry" Case C/406/92 [1994] ECR 1 5439. The Advocate
General stated:
"23. It should also be borne in mind that the bringing of proceedings to
obtain a negative finding, which is generally allowed under the various
national procedural laws and is entirely legitimate in every respect, is
an appropriate way of dealing with genuine needs on the part of the
person who brings them. For example, he may have an interest, where
the other party is temporizing, in securing a prompt judicial determination
– if doubts exist or objections are raised – of the rights, obligations or
responsibilities deriving from a given contractual relationship."
35. The approach reflected in the decision in the Tatry can be contrasted
with the less sympathetic consideration which is sometimes given to the
use of negative declarations in transnational litigation by English courts.
The situation as it existed in 1995 was commented upon by Dr Bell at
the time he wrote his article "The Negative Declaration in Transnational
Litigation" (1995) 111 LQR 674. He concluded that the form of relief
sought should not affect the assessment of the jurisdictional propriety of
the chosen forum. He adds at p.695:
"As far as the impact of this form of relief on the interests of comity is
concerned, it has been argued that the problems created by negative
declarations are the problems of concurrent litigation in general. If it is
the case that the right to initiate litigation should not be the exclusive
preserve of those parties seeking to vindicate positive rights, then the
problem of multiple litigation must be addressed in a way that does not
simply entail the emasculation of a long established and potentially useful
form of action. There is no valid reason to penalise one prospective party
and not the other in relation to matters which may be as strategically
critical in a transnational dispute as the timing and venue for litigation."
36. There is force in these comments. I can see no valid reason for
taking an adverse view of negative declaratory relief. This is whether it is
claimed in relation to transnational disputes or domestic litigation. In this
respect I would treat with reservation the observations of Kerr LJ in First
National Bank of Boston v Union Bank of Switzerland [1990] 1 Lloyds Rep.
32 at 39 and in the Volvox Hollandia [1998] 2 Lloyds Rep. 361 at 391. The
use of negative declarations domestically has expanded over recent years.
In the appropriate cases their use can be valuable and constructive.
37. Mr Shepherd on behalf of S. strongly refutes that this approach is
permissible on the authorities. He submits that in this case the court is
bound to follow the approach adopted eighty years ago in Re Clay [1919]
1 Ch. 66. He draws attention to the fact that it was followed in Midland
Bank Plc v Laker Airways Limited [1986] QB 689 by Lawton LJ with whom
Dillon and Neill LJJ agreed (page 700H-701A). Lawton LJ stated:
"As the liquidator has never threatened to take proceedings against either
bank in the English courts, on the authority of in Re Clay there is no
jurisdiction in the court to make the declarations asked for." (emphasis
added)
38. This approach was applied by Timothy Walker J in New Hampshire
Insurance Company v Aerospace Finance Limited & Ors [1998] 2 Lloyds
Rep. 538.
39. As against these authorities there are the numerous cases where
without objection negative declarations have been granted. There are also
the judgments of Lord Denning MR in this court and Lord Wilberforce in
the House of Lords in Camilla Cotton Oil Company v Granadex S.A. [1975]
1 Lloyds Rep. 470 and [1976] 2 Lloyds Rep. 10. Lord Denning at p.474-5
said:
"It has been said that a declaration as to non-liability ought very rarely to
be made, see Dyson v Attorney General [1911] 1 KB 410 and Guaranty
Trust Company of New York v Hannay & Company [1915] 2 KB 536. And
Re Clay, [1919] 1 Ch. 61, is sometimes cited for the proposition that it
cannot be made. But it is nothing of the kind. In modern times, I think
that a declaration of non-liability can be made whenever it will serve a
useful purpose. I would not limit it in any way".
40. In the House of Lords at p.14, Lord Wilberforce stated the position in
his own words but the effect was very much the same. He said:
"The declaration claimed is of a negative character and as Lord Sterndale
himself had said:
"....a declaration that a person is not liable in an existing or possible
action is one that will hardly ever be made."
"Hardly ever" is not the same as "never" but the words warn us that we
must apply some careful scrutiny. So I inquire whether to grant such a
negative declaration would be useful.
The liability which the English Court is asked to negative is any possible
liability of the respondents on the basis of agency -"
41. Lord Wilberforce and Lord Denning differed in the circumstances of
that case as to whether the declaration would serve a useful purpose.
However, if it would, that it would then be appropriate to grant a
declaration was agreed. The approach is pragmatic. It is not a matter
of jurisdiction. It is a matter of discretion. The deployment of negative
declarations should be scrutinised and their use rejected where it would
serve no useful purpose. However where a negative declaration would
help to ensure that the aims of justice are achieved the courts should
not be reluctant to grant such declarations. They can and do assist in
achieving justice. For example where a patient is not in a position to
consent to medical treatment declarations have an important role to play.
Without the use of negative declarations, recent extensions in the use
of declaratory relief, including the beneficial intervention of the courts
in cases concerning mentally incapacitated people would not have been
possible. As Sir Thomas Bingham MR said in Re S (Hospital Patient:
Court's Jurisdiction) [1996] FAM 1, [1995] 3 All ER 290 (at p.303) "any
statutory rule, unless framed in terms so wide as to the give the court
an almost unlimited discretion, would be bound to impose an element of
inflexibility which would in my view be wholly undesirable". He considered
that the different situation he was there considering was "pre-eminently
an area in which the common law should respond to social needs". So in
my judgment the development of the use of declaratory relief in relation
to commercial disputes should not be constrained by artificial limits
wrongly related to jurisdiction. It should instead be kept within proper
bounds by the exercise of the courts' discretion.
42. While negative declarations can perform a positive role, they are an
unusual remedy in so far as they reverse the more usual roles of the
parties. The natural defendant becomes the claimant and vice versa.
This can result in procedural complications and possible injustice to an
unwilling `defendant'. This in itself justifies caution in extending the
circumstances where negative declarations are granted, but, subject to
the exercise of appropriate circumspection, there should be no reluctance
to there being granted when it is useful to do so.
B. Should S. have been made a party to the English Proceedings?
43. It would be wrong to conclude that just because a negative
declaration would serve some useful purpose that means that it is
appropriate for a claim to be made so that it should be granted. There
may be other reasons why to claim a negative declaration amounts to a
misuse of the courts' procedure. In this case it is submitted there is no
justification for S. being joined as a party to the proceedings. Whether a
party should be joined in proceedings is always a matter for the discretion
of a court. That discretion is now subject to Part I of the Civil Procedure
Rules and in determining whether a joinder of party is appropriate a court
takes into account its overriding obligation "to deal with cases justly". It is
the joinder of S., which has caused me more concern then the fact that D.
are seeking a negative declaration.
44. I turn to consider whether as a matter of domestic English practice,
the joinder of S. as a party by D. is consistent with the requirement to
deal with cases justly. In considering this issue I do not draw any adverse
inference from the fact that D.'s primary motive for joining S. as a party
to the proceedings and for seeking a negative declaration against S. was
a desire to ensure that the English courts had jurisdiction to determine
between all relevant parties the extent, if any, of the liability of D. for the
loss caused to S. and the cost of rectifying the design faults generally. In
doing so, I also reject the contention of Mr Shepherd that as a matter of
principle negative declarations should not be granted (or perhaps only in
wholly exceptional cases granted) in respect of possible tortious liability. I
would not quarrel, however, with the judge's statement that:
"It may well be that few such cases will lend themselves to relief of that
kind, especially where the injured party has a choice of which defendants
to sue".
45. As I have already indicated, Sir Sydney Kentridge's primary
justification for joining S. was that it would achieve a consistent
determination of all questions of responsibility and fault concerning the
landing gear in one set of proceedings. This is now almost certainly
unobtainable because S. has commenced proceedings in France against A.
and France under the Convention has exclusive jurisdiction in relation to
those proceedings (Article 17). Against this now flawed justification for S.
being joined, there has to be placed the substantial arguments against S.
being joined. These arguments are as follows:
1. S.'s primary claim must always have been against A.. A. was the party
with which S. contracted. Any litigation involving S.'s contractual rights
against A. was, for the reason already indicated, inevitably going to be
based in France.
2. Requiring S. to defend proceedings in England would mean that S. was
going to be subjected to the substantial disadvantage of having to litigate
in a second jurisdiction, namely England, against its wishes at the same
time as it was litigating in France.
3. Although S. has every reason to reserve its position as to whether it
intends to make a claim against D., it is doubtful if it will ever have cause
to do so. The real dispute is as to who was responsible for the faulty
design of the landing gear. This is now primarily a dispute between D., A.
and possibly B..
4. It is not at this stage suggested, because, for example, of a term in
the contract between A. and S., that S. will be unable to recover the same
compensation from A. as it could from D.. From S.'s point of view it could
well be the case that there is no advantage in it being involved in the
English proceedings
5. If S. made a claim against D. (and I do not regard its involvement of
D. in the Article 145 procedure as being a claim) there would then be a
real justification for involving S. in the English proceedings. There would
then be a conflict of jurisdiction. The conflict would be between the French
proceedings and the English proceedings. At this stage, it is not possible
to say whether in those circumstances it would be preferable from a case
management point of view for the proceedings to be disposed of as part
of the French proceedings or as part of the English proceedings. However,
for reasons I will explain later there would be a real prospect that S. could
then be justly joined in the English proceedings applying the provisions of
the Convention. If there is to be joinder of S., the right time to do this in
this case is when S. has reached a decision on whether to claim or at least
not before it is in such a position.
46. Looking at the situation as a whole, the conclusion which I have come
to is that, as an issue of domestic law alone, the joinder of S. at this stage
is not justified and is inconsistent with resolving the English proceedings
justly. S. should therefore unless this would be inconsistent with the
policy of the Convention be dismissed from the proceedings. This would
be a procedural decision taken in the light of the position as it now is and
therefore a decision, which could be reconsidered by the English courts if
the position should change in consequence of S. making a claim or being
in a position to make up its mind as to whether to claim directly against
D..
C. Jurisdiction Under The Convention
47. This is not however a situation where the question of the joinder
of S. can be considered in isolation from the question of jurisdiction.
Jurisdiction is governed by the Convention and if the Convention required
S. to be sued now within this jurisdiction or if this was consistent with the
policy of the Convention, then this would be a compelling circumstance
against exercising discretion in a way, which I have indicated. In fact
there is nothing in the Convention which requires D. to bring proceedings
in England and, if proceedings are brought, England does not have
exclusive jurisdiction.
48. The primary jurisdiction for proceedings against S. is, under Article
2, Belgium. Under Article 5.3, S. theoretically could seek to bring
proceedings against D. in Belgium as being the place "where the harmful
event occurred". Bearing in mind the proceedings, which have already
been commenced, I regard the risk of this happening as being remote.
Even if this did happen I would expect the Belgian courts to decline
jurisdiction in favour of this country or France. As to this country this
would be because this is also a jurisdiction in which proceedings could
be brought under Article 5.3. The European Court of Justice decided in
Handelskwekerij G.J. Bier B.V. v Mines de Potasse d'Alsace S.A. [1976] 3
ECR 1735 that the defendant under Article 5.3 may be sued at the option
of the claimant, either in the courts for the place where the damage
occurred or in the courts for the place of the event which gave rise to
and is at the origin of that damage. In proceedings in tort for faulty
design by S. in addition to Belgium having jurisdiction as the place of the
event, England would also have jurisdiction as the place, which was the
origin of the damage. England would also be the primary country to have
jurisdiction in proceedings against D. under Article 2.
49. Mr Shepherd vigorously contested the right of D. to justify its joinder
of S. as a defendant to the English proceedings by relying on Article 6.1.
His first ground for doing so was because he submitted that B. were an
unnecessary defendant to the English proceedings. Moore-Bick J was
sympathetic to this argument. Sir Sydney Kentridge on the other hand
argued that any responsible counsel would in addition to making claims
against A. also bring proceedings against B. both in tort and under the
contract. Neither A. nor B. have suggested that there is any impropriety in
B. having been joined as a defendant and having regard to the nature of
the dispute between B. and D., I reject Mr Shepherd's contention that B.
was not a proper defendant to D.'s proceedings. Irrespective of whether
there is a contractual liability on A., if B. negligently failed to provide the
design information to which D. was entitled then this in itself would make
it legitimate for B. to be a defendant in proceedings by D. alleging B. had
been negligent. If B. is a legitimate defendant, then D. can contend with
regard to S. that it is "one of a number of defendants in the courts of the
place where any one of them is domiciled" in accordance with Article 6.1.
50. However, in order to rely on Article 6.1, D. has to do more than
comply with the literal terms of Article 6. In Kalfelis v Schroder [1988] 5
ECR 5565 the European Court of Justice held that Article 6 must be read
with Article 22 of the Convention so that Article 6.1 only applies "where
the actions brought against the various defendants are related when the
proceedings are instituted, that is to say where it is expedient to hear
and determine them together in order to avoid the risk of irreconcilable
judgments resulting from separate proceedings". (Para 12 at p.5584) At
this stage, when S. has made no claim against D., D. cannot establish
that the joinder of S. meets this additional requirement of Article 6.1.
It is not at present expedient that S. should be joined for the reasons
already given. However, if a claim were to be made by S. against D., D.
would be in a different position. D. would be entitled to contend that the
additional requirement had been fulfilled. There would then be a risk of
irreconcilable judgments. (A claim against B. by D. in contract would not
be sufficient for this purpose.)
51. This examination of the position under the Convention shows that
treating the joinder of S. at this stage as being improper, is not contrary
to the jurisdictional regime established by the Convention. On the facts as
they are now, Moore-Bick J came to the right decision although I do not
agree with the whole of his reasoning.
52. I would dismiss this appeal.
LADY JUSTICE HALE:
I agree.
LORD MUSTILL:
I also agree.
Order: Appeal Dismissed. Costs agreed. Interim payment to be made.
Leave to appeal to the House of Lords refused. Order to lie in the office
pending petition to the House of Lords and if granted the appeal. Liberty
to apply. Order does not form part of the approved judgment.