JUDGE MCGONIGAL (SITTING AS A HIGH COURT JUDGE):
1. The Claimant ("Comet") applies for a declaration that an order made by
the Tribunal de Commerce de Meaux on 10 January 2003 is a judgment
which is not entitled to recognition or enforcement in the English Courts
and for injunctions that the Defendant ("Unika") should not continue
the French proceedings but should apply to the French Courts for the
discharge of that judgment.
2. On 26 October 1999 the Claimant ("Comet") and the Defendant
("Unika") entered into a contract called Conditions of Purchase ("the
Contract"). It is common ground that the Contract governs the matters
in dispute between the parties. Under the Contract Unika supplied
computers to Comet. A dispute arose between the parties. Comet
considered that computers supplied by Unika were defective and sent
them back to Unika. Comet has not paid Unika invoices totalling,
according to Unika, over £ 550,000 because Comet claims a set-off of a
larger sum than that in respect of the defective computers. Unika disputes
Comet's right to a set-off. Unika say that "the conditions under which the
machines were sent back did not guarantee their protection" and that
Comet was in breach of contractual conditions regarding the return of
goods.
3. Comet is a company registered in England and Wales. Unika is a
company registered in France.
4. On June 2000 Maitre Chriqui, the French Avocat for Unika, wrote to
Comet a letter before action demanding the payment of £ 553,960.92 in
respect of alleged unpaid invoices and threatening to issue proceedings
in France if payment was not made by Comet. Comet's solicitors replied
on 20 June 2002 pointing out that the Contract contained a clause (clause
20) in these terms:
"The Contract shall be governed by the laws of England and the parties
hereby submit to the exclusive jurisdiction of the Courts of England".
The Contract defined "the Contract" as "the contract between Comet and
[Unika] on the terms of the Order [defined as "Comet's order overleaf to
which these Conditions apply"] and these conditions". Comet's solicitors
told Maitre Chriqui that Unika could not commence proceedings in the
French courts because, under "the Brussels regulations" the exclusive
jurisdiction Clause governs the position. They said that the French courts
had no jurisdiction.
5. In their letter of 20 June 2002 Comet's solicitors stated out that
the invoices listed in the schedule with Maitre Chriqui's letter totalled
£ 530,509.83, that Comet had claims totalling £ 556,690 under three
heads, that under the Contract Unika is bound to issue credits for returns,
and Comet is entitled by an express term to deduct from sums due to
Unika any sums payable to Comet. The solicitors said that Comet disputed
the allegations that returned goods were damaged or incomplete and that
under the Contract Unika was obliged to collect returned products.
6. There is no evidence of any other correspondence between the parties
after the letter of 20 June 2002 from Comet's solicitors. The next thing
that happened was that in November 2002 Comet was served with a claim
made by Unika against Comet in the Tribunal de Commerce de Meaux.
This was a claim for unpaid invoices totalling £ 516,733.10. In the claim
form (assignation) Unika claimed that Comet "unilaterally granted credit
notes to itself" equal to the unpaid Unika invoices "on the pretext of the
existence of various products returned to [Unika]". Unika complained that
the returned computers were damaged and incomplete.
7. On 20 December 2002 there was a hearing before the Tribunal de
Commerce de Meaux at which both parties were represented. There is
some dispute about what happened at this hearing. Comet say that on
instructions their lawyer did not advance any substantive arguments
on the merits of Unika's claim "because to do so would run the risk of
submitting to the jurisdiction of the French courts" but that their French
lawyer told the Court that Comet had a substantive defence. Comet say
that at that hearing the Presiding Judge gave an assurance to Comet's
advocate that no decision would be reached on the merits of the claim,
and a further hearing would be listed should the Tribunal find in Unika's
favour on the question of jurisdiction". It is clear from the judgment that
Comet disputed the jurisdiction of the French court.
8. Maitre Chriqui, who appeared for Unika at the hearing agrees that
Comet contested the jurisdiction of the French Court and says that "it was
a fully argued hearing", lasting about 45 minutes, and that "Comet failed
to show any arguable defence to the claim".
9. On 10 January 2003 the Tribunal de Commerce de Meaux gave
judgment. In the judgment the Tribunal recited that Comet had argued
that the Tribunal had no jurisdiction, relying on the exclusive jurisdiction
clause and Council Regulations 44/2001 ("the Brussels Regulations") and
that Unika relied on Article 31 of the Brussels Regulations and Article 484
of the NCPC (the Nouveau Code de Procedure Civile). The Tribunal ruled
as follows (in translation):-
"In the light of community regulation No. 44/2001, articles 2,23 and 31,
In the light of the contract concluded between the parties on 26 October
1999, referring to article 20 thereof,
In the light of article 484 of the NCPC,
We rule that we hold jurisdiction to hear the present matter,
And ruling by means of a defended ordinance and on initial jurisdiction.
On the main issue, we instruct the parties to refer elsewhere, but as of
now and on a provisional basis
In the light of article 873 of the New Code of Civil Procedure,
We sentence the company COMET GROUP PLC to pay to the UNIKA
COMPUTER company the equivalent value in euro of the amount of £
516,733.10 ...... on a provisional basis together with interest at the legal
rate starting on 6 June 2002, the date of the formal notice
We recall that provisional enforcement is provisionally applicable."
10. On 16 December 2002 Comet had started this action seeking an
injunction to restrain Unika from continuing legal proceedings in the
French Courts in breach of the agreement that disputes would be
determined exclusively by the English Courts. Following the judgment
of the Tribunal de Commence de Meaux it was agreed between the
parties that Comet could also seek a declaration that that judgment is not
entitled to recognition or enforcement by the English Courts and an order
that Unika should apply to the Tribunal in Meaux to seek the discharge of
the judgment.
11. It is common ground between the parties that their dispute is a civil
and commercial matter within the scope of the Brussels Regulations,
that the English Courts have exclusive jurisdiction over the substance of
Unika's claim by virtue not only of the exclusive jurisdiction clause quoted
in paragraph 3 above and Article 23 of the regulations but also by virtue
of Article 2 of those Regulations (since Comet is domiciled in England) and
by virtue of Article 5.1 since Unika claims the price of computers delivered
to Comet in England.
12. The French Court in its decision on jurisdiction recites Articles 2,
23 and 31 of the Brussels Regulations. In his evidence for Unika Maitre
Chriqui, who appeared for Unika at the hearing on 20 December 2002,
says that Unika relied on Article 31 of the Brussels Regulations and Article
484 of the NCPC. Articles 31 and 489 read as follows:-
Article 31"Application may be made to the Courts of a Member State
for such provisional, including protective, measures as may be available
under the law of that State, even if, under this Regulation, the Courts
of another Member State have jurisdiction as to the substance of the
matter."
Article 484
"L'ordonnance de référé est une decision provisoire rendue à la demande
d'une partie, l'autre partie présente ou appelée, dans les cas ou la loi
confère a un juge qui n'est pas saisi du principal le pouvoir d'ordonner
immédiatement les mesures necessaires."
Maitre Chriqui translates Article 484 as follows:
"The ordonnance de référé procedure is a provisional decision rendered at
the request of one party, the other party being present, in the case where
the law authorises a judge who is not in charge of the substance of the
matter to decide the necessary measures."
13. The evidence of Maitre Chriqui as to the position under French law is
as follows:-
"As the record shows, the application for summary judgment before
the Court of Meaux was treated by the Court as an application for
a provisional measure. Indeed, as the record shows, it resulted in
provisional judgment. The Court therefore accepted Unika's submission
that the application for summary judgment fell within Article 31 of Council
Regulation 44/2001, and accordingly the French Court had jurisdiction to
deal with the application."
"The key point is that an order for summary judgment by a French Court
is regarded by the French Court as a provisional order. It is regarded
as provisional because the losing party can appeal to the Paris Court of
Appeal. If the Defendant can show to the Paris Court of Appeal that it
really does have an arguable defence, then the provisional judgment of
the Lower Court will be set aside. If that happens, the Claimant cannot
enforce the judgment, and will have to fight the substantive action in the
normal way."
"The present situation therefore is that Unika has a provisional judgment
against Comet obtained in the French Courts, following a contested
hearing when the jurisdiction issues raised before the English Court in
the present application were fully argued. The French Court decided the
jurisdiction issue in favour of Unika. The French Court decided that it
had jurisdiction to order provisional judgment against Comet. As Comet
had not shown any defence on the merits, the French Court ordered
provisional judgment against Comet in the full amount claimed."
14. The issue for this Court is not whether an order for summary
judgment by a French Court is a provisional order under French law but
whether the order made on 10 January 2003 is a provisional, including
protective, measure under Article 31 of the Brussels Regulations.
15. Mr Michael James, counsel for Comet, referred me to two relevant
authorities of the European Court of Justice relating to Article 24 of the
Brussels Convention which was in identical terms to Article 31 of the
Brussels Regulation. Dr James Behrens, who appeared for Unika, told
me that these two cases were not cited to the Tribunal de Commerce de
Meaux.
16. Mr James relied on these two cases for the proposition that to be a
provisional measure under Article 31, an order of a national court ordering
payment of a contractual sum must satisfy two conditions:-
(i) repayment must be guaranteed; and
(ii) the order must relate only to specific assets located within the
jurisdiction of the national court making the order.
He submitted that the Meaux judgment fails to satisfy both these
conditions.
17. The first decision is Van Uden B.V. v Deco-line [1999] 2 WLR 1181.
The Dutch claimant ("Van Uden") and the German defendant ("Deco-
line") had concluded an agreement whereby Van Uden made cargo space
available to Deco-Line on a liner service. The agreement contained an
arbitration clause. When Deco-Line failed to pay Van-Uden's invoices,
Van Uden began arbitration proceedings in the Netherlands pursuant to
the agreement. Van Uden thought Deco-Line was procrastinating over
the appointment of arbitrators and that continuing non-payment of its
invoices was seriously affecting its cash flow. Van Uden, therefore, applied
to the District Court in Rotterdam for payment of four of the unpaid
invoices. That Court ordered payment of about half of Van Uden's claim
by "a provisionally enforceable judgment". Deco-Line appealed to the
Regional Court of Appeal. That Court held that whilst article 126(3) of the
Dutch Code of Civil Procedure could give a Dutch Court jurisdiction under
Article 24 of the Brussels Convention, that jurisdiction was "subject to
the additional criterion that the matter must have sufficient connection
with Netherlands law". The appeal court held that in the context of
the Brussels Convention that criterion "was fulfilled only if the relief
granted by the court hearing interlocutory applications was capable of
taking effect within the territorial jurisdiction of that court, and if it was
enforceable there". Deco-line had no seizable assets in the Netherlands.
Van Uden appealed to the Hoge Raad which referred various questions to
the European Court of Justice, including questions about the scope and
meaning of Article 24.
18. In the Van Uden case the Court in its judgment referred to the
previous decisions of the Court in Denilauler and Reichert v Dresdner
Bank A.G (Case C-261/30) 1992 E.C.R. 1-2149 when dealing with an
argument by Van Uden that "as regards the conditions set out in the
Convention for the ground of an application under Article 24 ... no further
condition need be fulfilled for the court hearing such an application to
have jurisdiction provided that it has jurisdiction under the provisions of
its national law". The Court rejected that argument in these terms:-
"37. In that regard, it must be remembered that the expression
"provisional, including protective, measures" within the meaning of article
24 of the Convention is to be understood as referring to measures which,
in matters within the scope of the Convention, are intended to preserve a
factual or legal situation so as to safeguard rights the recognition of which
is otherwise sought from the court having jurisdiction as to the substance
of the case: Reichert, para. 34.
38. The granting of this type of measure requires particular care
on the part of the court in question and detailed knowledge of the
actual circumstances in which the measures sought are to take effect.
Depending on each case and commercial practices in particular, the court
must be able to place a time limit on its order or, as regards the nature
of the assets or goods subject to the measures contemplated, require
bank guarantees or nominate a sequestrator and generally make its
authorisation subject to all conditions guaranteeing the provisional or
protective character of the measure ordered; Denilauler v S.n.c. Couchet
Freres (Case 125/79) [1980] E.C.R. 1553, 1570, para. 15.
39. In that regard, the court held at paragraph 16 of Denilauler that the
courts of the place - or, in any event, of the contracting state - where the
assets subject to the measures sought are located are those best able
to assess the circumstances which may lead to the grant or refusal of
the measures sought or to the laying down of procedures and conditions
which the plaintiff must observe in order to guarantee the provisional and
protective character of the measures authorised.
40. It follows that the granting of provisional or protective measures on
the basis of article 24 is conditional on, inter alia, the existence of a real
connecting link between the subject matter of the measures sought and
the territorial jurisdiction of the contracting state of the court before which
those measures are sought.
41. It further follows that a court ordering measures on the basis of
article 24 must take into consideration the need to impose conditions or
stipulations such as to guarantee their provisional or protective character."
19. The Court then turned to "the question whether an interim order
requiring payment of a contractual consideration may be classified as a
provisional measure within the meaning of Article 24 of the Convention".
The Court expressed its views on this question in these terms:-
"45. Here, it must be noted that it is not possible to rule out in advance,
in a general and abstract manner, that interim payment of a contractual
consideration, even in any amount corresponding to that sought as
principal relief, may be necessary in order to ensure the practical effect
of the decision on the substance of the case and may, in certain cases,
appear justified with regard to the interests involved: see, in the context
of community law, Antonissen v Council of the European Union (Case
C-393/96P (R) (1997) E.C.R I-441, 457, para. 37.
46. However, an order for interim payment of a sum of money is, by its
very nature, such that it may pre-empt the decision on the substance
of the case. If, moreover, the plaintiff were entitled to secure interim
payment of a contractual consideration before the courts of the place
where he is himself domiciled, where those courts have no jurisdiction
over the substance of the case under articles 2 to 18 of the convention,
and thereafter to have the order in question recognised and enforced
in the defendant's state, the rules of jurisdiction laid down by the
Convention could be circumvented.
47. Consequently, interim payment of a contractual consideration does
not constitute a provisional measure within the meaning of article
24 unless, first, repayment to the defendant of the sum awarded is
guaranteed if the plaintiff is unsuccessful as regards the substance of his
claim and, secondly, the measure sought relates only to specific assets of
the defendant located or to be located within the confines of the territorial
jurisdiction of the court to which application is made".
20. The Court in its decision in Van Uden (paragraph 48) held that a
national court should not grant provisional or protective measures under
Article 24 (and, therefore, under Article 31) unless:
i) there is a real connecting link between the subject matter of the
measures sought and the territorial jurisdiction of the national court; and,
where the interim measure sought is an interim payment of contractual
consideration;
ii) repayment is guaranteed if the Claimant is ultimately unsuccessful; and
iii) the measures sought relate only to specific assets of the defendant
located within the jurisdiction of the national court.
21. Dr Behrens for Unika made a valiant effort to argue that the Mietz
judgment met these criteria. He submitted that provisions (ii) and (iii) in
the preceding paragraph were alternative rather than cumulative. This
submission was based on one paragraph in the judgment of the European
Court in Mietz v Intership Yachting Snek BV [1999] I-2277. Paragraph
53 of the judgment in Mietz set out a number of characteristics of the
judgment of the national court in that case in which it departed from
the requirements of the Convention. These included the fact that that
judgment was:-
"limited to ordering the payment of a contractual consideration, without,
on the one hand, repayment to the defendant of the sum awarded being
guaranteed if the plaintiff is unsuccessful as regards the substance
of his claim or, on the other, the measure sought relating only to
specific assets of the defendant located or to be located within the
confines of the territorial jurisdiction of the court to which application is
made." (emphasis added)
The use of the word "or" in that paragraph is not inconsistent with the
requirements for a guarantee of repayment and limitation to specific
assets being cumulative.
22. The European Court in Mietz clearly considered them to be cumulative
because in paragraph 42 of its judgment it had stated:-
"42 In contrast, in the case of a judgment delivered solely by virtue
of the jurisdiction provided for under Article 24 of the Convention and
ordering interim payment of a contractual consideration, the Court ruled
in Van Uden that such a judgment does not constitute a provisional
measure within the meaning of Article 24 unless, first, repayment to the
defendant of the sum awarded is guaranteed if the plaintiff is unsuccessful
as regards the substance of his claim and, second, the measure ordered
relates only to specific assets of the defendant located or to be located
within the confines of the territorial jurisdiction of the court to which
application is made". (Emphasis added.)
Dr Behrens argued that the condition must be alternative because "there
is no reason to limit a judgment for a payment of money ... to particular
assets". He submitted that "the second Van Uden condition is intended to
relate to freezing orders and other steps to preserve particular assets".
But it is clear that both in Van Uden and in Mietz the Court was saying
that both conditions must be satisfied where the provisional measure is an
order for "interim payment of a contractual consideration" (see paragraph
47 of Van Uden quoted in paragraph 18 above and paragraph 42 of Mietz
quoted above.
23. Dr Behrens sought to remedy the failure of the Mietz Tribunal to
provide for any guarantee of repayment by offering on instructions a
guarantee of an unnamed French bank. In my view, the original order of
the national court must provide for such a guarantee and that is a defect
which cannot be cured by the offer of an guarantee outside the order.
24. It is clear that the order of the Tribunal de Commerce de Meaux
made on 10 January 2003 does not satisfy the requirements of Article
31 of the Brussels Regulations set out above. It contains no guarantee of
repayment and it does not relate to specific assets of Comet in France. In
any event Comet has no assets in France and no current plans to transfer
assets to France.
25. The next question is whether, notwithstanding the failure to satisfy
the requirements of Article 31, the judgment of the Meaux Tribunal is
entitled to recognition. That was a question addressed by the European
Court of Justice in Mietz. In that case a Dutch claimant ("Intership")
had obtained a judgment against Mr Mietz, domiciled in Germany who
had failed to pay for a yacht they had sold him. Under that judgment
Mr Mietz was ordered to pay Intership DM 143,750; the judgment was
declared to be provisionally enforceable. Intership sought to enforce the
Dutch judgment in Germany and two German Courts held that the Dutch
judgment was enforceable. Mr Mietz appealed to the Bundesgerichtshof
which stayed the proceedings and referred a number of questions to the
European Court of Justice, including the question whether a judgment
ordering payment of contractual consideration through an application for
an immediate interim order by way of an abbreviated procedure ("kort
geding") "constitute a provisional measure within the meaning of Article
24 of the Brussels Convention". The Dutch 'kort geding' appears to be
a similar summary judgment procedure to that adopted by the Meaux
Tribunal in this case.
26. The European Court of Justice held (paragraph 38) that kort geding is
a procedure of the type envisaged in Article 24 of the Brussels Convention
under which a national court is authorised by domestic law to order
provisional or protective measures even if, under the Convention, it does
not have jurisdiction as to the substance of the matter. But, in paragraph
43, it held that an order under the kort geding procedure for interim
payment of contractual consideration is not a provisional measure capable
of being granted under Article 24 unless it satisfies the two conditions
summarised in paragraph 20 above. The Court held that:
"43 ........ a judgment ordering interim payment of contractual
consideration, delivered at the end of a procedure such as that provided
for under Article 289 to 297 of the Netherlands Code by a court not
having jurisdiction under the Convention as to the substance of the
matter is not a provisional measure capable of being granted under Article
24 of the Convention unless, first, repayment to the defendant of the
sum awarded is guaranteed if the plaintiff is unsuccessful as regards the
substance of his claim and, second, the measure ordered relates only
to specific assets of the defendant located or to be located within the
confines of the territorial jurisdiction of the court to which application is
made".
27. I find, therefore, that the judgment given by the Meaux Tribunal
against Comet was not a provisional measure capable of being granted
under Article 31 of the Brussels Regulations.
28. The European Court in Mietz went on to set out what course a national
court should take when asked to enforce a judgment of another national
court ordering provisional measures when that judgment is one which is
not capable of being made under Article 24 of the Convention (now Article
31 of the Brussels Regulations). The Court stressed that it was setting
out the course to be adopted where the national court which ordered the
provisional measures derived its jurisdiction only from Article 24 (now
Article 31). That is the position of the Meaux Tribunal as recited in its
decision on jurisdiction quoted in paragraph 9 above.
29. The European Court set out the position in paragraphs 46 of 49 of its
judgment in these terms: (the "court of origin" refers to the Dutch Court
in that case):-
"46. Article 24 of the Convention expressly provides that a court has
jurisdiction under its national law to grant an application for such
measures, even it does not have jurisdiction as to the substance of the
matter. That jurisdiction must be exercised within the limits set out in
Article 24 of the Convention with regard, in particular, to the granting
of measures ordering interim payment, limits which do not apply where
the court has jurisdiction as to the substance of the matter (see, to that
effect, Van Uden, paragraph 19).
47. However, it is important to ensure that enforcement, in the State
where it is sought, of provisional or protective measures allegedly founded
on the jurisdiction laid down in Article 24 of the Convention but which go
beyond the limits of that jurisdiction, does not result in circumvention of
the rules on jurisdiction as to the substance set out in Articles 2 and 5 to
18 of the Convention (see, to that effect, Van Uden, paragraph 46).
48. Next, it should be noted that although, in the main proceedings, the
court of origin ordered only one measure - namely interim payment - it
may happen, in other situations, that the court of origin orders several
measures, some of which are to be classified as provisional or protective
measures within the meaning of Article 24 of the Convention, while others
go beyond the limits provided for in that provision.
49. The question which arises for the court to which application for
enforcement is made therefore relates not to the jurisdiction, as such, of
the court of origin, but rather to the extent to which it is possible to seek
enforcement of a judgment delivered in the exercise of the jurisdiction
recognised by Article 24. That jurisdiction constitutes, within the context
of the Convention, a special regime (see, in that regard, case 125/79
Denilauler v Couchet Freres [1980] ERC 1553, paragraph 15, and Van
Uden, paragraph 42)."
It is the question referred to in paragraph 49 which is relevant when
considering whether to grant to Comet the declaration it seeks that
the judgment of the Tribunal de Commerce de Meaux is not entitled to
recognition or enforcement by the English Courts.
30. In paragraph 53 of its judgment the Court in Mietz pointed out that
the Dutch judgment with which it was concerned was a judgment in
summary proceedings for the granting of interim measures by a Court
which did not have jurisdiction over the substance of the matter. That
is also the case in relation to the judgment of the Meaux Tribunal. The
Court went on, in the passage from paragraph 53 quoted in paragraph 21
above, to point out that the Dutch judgment did not contain a guarantee
of repayment and was not limited to specific assets in the Netherlands.
The judgment of the Meaux Tribunal also omits both those matters.
31. The European court drew the following conclusion:-
"56 It follows that, in a case having the characteristics set out in
paragraph 53 of the present judgment, the court to which application
for enforcement was made should conclude that the measure ordered is
not a provisional measure within the meaning of Article 24 and for that
reason cannot be the subject of an enforcement order under Title III of
the Convention".
The judgment of the Meaux Tribunal has the characteristics set out in
paragraph 53 of the Mietz judgment. It follows that the judgment cannot
be the subject of an enforcement order under Chapter III of the Brussels
Regulations. It is appropriate, therefore, to grant to Comet a declaration
that the judgment of the Tribunal de Commerce de Meaux, France, dated
10 January 2003 in proceedings brought by the Defendant against the
Claimant is not entitled to recognition or enforcement by the English
Courts.
32. In his evidence Maitre Chriqui argued that the provisional judgment
of the Meaux Tribunal is a judgment within the terms of Article 32 of
the Brussels Regulations, that it is a judgment that must be recognised
under Article 33 because none of the circumstances in which a judgment
of a court of another member state should not be recognised as set
out in Articles 34 and 35 of the Regulations apply and that Article 36
makes it plain that under no circumstances may an English. Court review
the decision of the French court as to its substance. However, one of
the exceptions to those general rules is where the judgment of which
recognition is sought is one where the court which made it claimed
to base its jurisdiction on Article 31 of the Regulations. In view of the
statements of the European Court in Van Uden (paragraph 46) about the
danger of Article 24 of the Convention being used to circumvent the rules
as to jurisdiction over the substance of the matter and the statement in
Mietz (paragraph 47) about the importance of ensuring that enforcement
of a judgment purportedly made under Article 24 does not result in
such circumvention, a national court is required to consider whether
the judgment is of a type which is authorised by Article 24 and now by
Article 31 of the Brussels Regulations (see Dicey and Morris 13th Edition
paragraph 14-201). This seems to be a clear case of a national court
using Article 31 to rule on the merits of the dispute where that court has
no jurisdiction to rule on the merits under the Convention.
33. Comet seek an injunction against Unika continuing the French
proceedings. Comet have appealed to the Paris Court of Appeal against
the judgment of the Meaux Tribunal and Mr James accepted that any
such injunction must be qualified to allow Unika to defend the appeal.
Comet also seek an injunction requiring Unika to seek the discharge
of the judgment of 10 January 2003. Again, any injunction restraining
continuation of the French proceedings must be qualified to allow an
application for discharge, if an injunction is made requiring Unika to make
such an application.
34. In this case the parties have agreed to submit to the exclusive
jurisdiction of the English Courts. It has been held that an English Court
may order an injunction to enforce a jurisdiction clause conferring
exclusive jurisdiction on the English Court (see Continental Bank N.A
v Compania Aeakes Naviera S.A [1994] 1 W.L.R 588). In that case the
Court of Appeal considered that Article 17 of the Brussels Convention (the
precursor of Article 23 of the Brussels Regulations) had mandatory effect
and that it took priority over Articles 21 and 22 (now Articles 27 and 28 of
the Regulations) which require any court other than the court first seised
of a matter to stay its proceedings. The Court of Appeal said:-
"Article 17 follows the civilian approach. Article 17 has mandatory
effect. When Article 17 applies it follows that the jurisdiction agreement
prorogates (confers) jurisdiction on the courts of the contracting state
chosen by the parties, and that the jurisdiction agreement deprives the
Courts of other contracting states of jurisdiction. Indeed, it is the duty of
other contracting states of their own motion to consider whether Article
17 applies and to decline jurisdiction if it does not; Schlosser Report
(Official Journal 1979 No. C. 59, p 81, para.22). There is no discretionary
power in the Convention itself to override the conclusive effect of an
exclusive jurisdiction agreement which conforms with the requirements
of Article 17. It follows that, if Article 17 applies, its provisions take
precedence over the provisions of Articles 21 and 22."
35. The Court of Appeal pointed out that, if the arguments of the
defendants in that case were right, "it follows that a party will be able
to override an exclusive jurisdiction agreement which is governed by
Article 17, by pre-emptively suing in the Courts of another contracting
state. The Courts of the latter state ......... would then be "the court first
seised". The chosen Court of the parties would then be obliged to decline
jurisdiction or, if the jurisdiction of the other Court is contested, to stay
its proceedings. In this way a party who is in breach of the contract will
be able to set at naught an exclusive jurisdiction agreement which is the
product of the free will of the parties. The principle of the autonomy of the
parties, enshrined in Article 17, cannot countenance such a conclusion".
This echoes the views expressed by the European Court of Justice in
paragraph 46 of its judgment in Van Uden (quoted in paragraph 19
above) and repeated in paragraph 47 of the judgment in Mietz (quoted in
paragraph 29 above).
36. One of the differences between Article 17 of the Brussels Convention
and Article 23 of the Brussels Regulations is that Article 23(1) of the
Regulations provides that it confers exclusive jurisdiction on the chosen
Court "unless the parties have agreed otherwise". So the English Courts
have exclusive jurisdiction both under clause 20 of the Contract and under
Article 23. So far as Clause 20 is concerned, in my view that clause is a
positive obligation to refer any dispute to the English court and not to
any other Court. So far as Article 23 is concerned I do not need to decide
whether the exclusive jurisdiction of the English Court under Article 23
excludes the jurisdiction of the courts of other Member States to grant
provisional measures under Article 31 because in my view it is clear that,
even if the French Courts have parallel jurisdiction under Article 31, in the
circumstances of this case Unika has no right to obtain the particular relief
they seek from a French Court under Article 31. For the same reason, I
do not need to consider whether clause 20 the Contract precludes any
application under Article 31. Any qualification of clause 20 or Article 23
can only be to permit proper applications under Article 31.
37. The particular relief sought by Unika in the French proceedings is
relief which the French Court could not grant under Article 31 in any
event because Comet has no assets in France so that on the evidence the
French Court cannot make an order relating to specific assets of Comet
within its jurisdiction.
38. The injunction to restrain the French proceedings is sought to enforce
a clear contractual right of Comet. The balance of convenience is in
favour of putting an end to the French proceedings save for one thing;
the judgment of the Meaux Tribunal stands and unless set aside on
appeal, might be enforced elsewhere than in this country. The question
of the injunction against continuance of the French proceedings needs,
therefore, to be considered together with the question of an injunction
that Unika should seek the discharge of the order.
39. I turn therefore to Comet's application for a mandatory injunction that
Unika should apply to the French Courts for the discharge of the judgment
made on 10 January 2003. The Court has in personan jurisdiction over
Unika and can grant such an injunction. Before a mandatory injunction
is ordered the case must be unusually strong and clear. Mandatory
injunctions are not normally granted on interlocutory applications but, if
the case for such an injunction is sufficiently clear and justice requires
that a mandatory injunction should be granted, then the Court should
grant one. One of the circumstances in which mandatory injunctions are
regarded as appropriate is where the injury complained of is in breach
of an express agreement, such as clause 20 of the Contract (see Lord
Manners v Johnson (1875) 1 ChD 673) and in such cases a mandatory
injunction is usually granted at trial (ibid at 679-680). In Shepherd Homes
Ltd v Sandham [1971] Ch 340 Megarry J reviewed that case and other
authorities in the context of an application for an interlocutory mandatory
injunction, and (at 349) went on:-
"The subject is not one in which it is possible to draw firm lines or impose
any rigid classification. Nevertheless, it is plain that in most circumstances
a mandatory injunction is likely, other things being equal, to be more
drastic in its effect than a prohibitory injunction. At the trial of the action,
the Court will, of course, grant such injunctions as the justice of the case
requires; but at the interlocutory stage, when the final result of the case
cannot be known and the Court has to do the best it can, I think the
case has to be unusually strong and clear before a mandatory injunction
will be granted, even if it is sought in order to enforce a contractual
obligation. If, of course, the defendant has rushed on with his work in
order to defeat the plaintiff's attempts to stop him, then upon the plaintiff
promptly resorting to the Court for assistance, that assistance is likely to
be available; for this will in substance be restoring the status quo, and the
plaintiff's promptitude is a badge of the seriousness of his complaint".
I also bear in mind the statement of the relevant principles by Chadwick J
in Nottingham Building Society v Eurodynmics Systems [1993] F.S.R. 468
at 474.
40. It is clear that the Tribunal de Commerce de Meaux should not have
made the order it did in reliance upon Article 31. I imagine that it would
not have done so if the relevant decisions of the European Court had
been drawn to its attention. The order was obtained by Unika in clear
breach of Unika's contractual obligations in clause 20 of the Contract. The
contractual case for obtaining the discharge or reversal of the order is in
my view unusually strong and clear.
41. When considering whether to grant a mandatory injunction or not
to do so the Court must decide which course of action involves the
lesser risk of injustice, if what the Court does turns out subsequently
to be wrong (Nikitenko v Leboeuf Lamb Greene & Macrae (1999) The
Times 26 January). If Unika is ordered to obtain the discharge of the
French judgment in its favour and it turns out that Comet owes Unika
the sum ordered to be paid by the French Court, Unika will get judgment
against Comet in this Court with the advantage of easier enforcement.
The judgment which would be discharged is one which is not entitled to
recognition or enforcement here. Unika can be compensated by interest
for any delay in payment. The only way in which Unika could obtain
money from the French judgment would be by enforcing it in another
country (if there is one) where Comet has assets. That enforcement would
involve injustice to Comet as it would be enforcement of a judgment
that Unika should never have been able to obtain. This is a clear case
where there is risk of injustice to Comet if a mandatory injunction is not
granted and no risk of injustice to Unika if one is granted. This is not,
therefore, a case where the Court needs to be concerned about the effect
of a mandatory injunction.
42. A further point in favour of the grant of an injunction is that, if Unika
were to enforce, or seek to enforce, the French judgment elsewhere,
damages would, in the words of the Court of Appeal in Continental
Bank (at 598), be "a relatively ineffective remedy". In my view courts
should preserve the value of exclusive jurisdiction clauses and uphold the
autonomy of the parties not merely by preventing future breaches by a
restraining injunction but also by taking appropriate steps to remove any
advantage gained by the party in breach.
43. One of the cases where an interlocutory mandatory injunction is
appropriate is to remove a benefit obtained by a defendant stealing a
march on the claimant (see, for example, Van Joel v Hornsey [1895] 2
Ch 774). Unika's French lawyers did not respond to the letter sent by
Comet's Solicitors on 20 June 2002 pointing out that Unika was precluded
from taking action in France Unika issued proceedings in France which
were served on Comet in early November 2002. The claim form notified
Comet of the hearing on 20 December 2002. On 28 November 2002
Comet's French lawyers wrote to Unika's French lawyers saying that in
view of clause 20 of the Contract and the Brussels Regulations, Unika
were precluded from taking proceedings in the French courts and warning
that Comet would seek an injunction from the English courts if they
continued. Unika's French lawyers in their response did not address any
of the legal issues of jurisdiction raised by Comet's lawyers. Instead
they questioned whether the terms of the letter of 28 November were in
accordance with the ethical rules of the Paris Bar. Unika proceeded with
the hearing on 20 December 2002 and informed Comet that they would
not respond to Comet's application in this court for an injunction.
44. I have considered whether, instead of a mandatory injunction to
discharge, a prohibitory injunction against any enforcement of the
judgment anywhere would be appropriate. This was not suggested
as an alternative by either party, but the court should consider the
alternative of a more usual form of order since mandatory injunctions
at the interlocutory stage are granted with caution. The existence of an
unsatisfied judgment can have adverse consequences on the judgment
debtor's creditstanding, especially where, as in this case, it is a judgment
for a significant sum of money. The Court cannot, therefore, conclude that
a prohibition against enforcement would prevent all possible damage to
Comet. Moreover, in the circumstances of this case, where it is clear that
at trial Comet would be entitled to such an order, there is no reason to
delay granting Comet the relief to which it is clearly entitled.
45. In my view, therefore, this is a case for a mandatory injunction to
require Unika either to obtain the discharge of the order by the Tribunal
de Commerce de Meaux or its reversal by the Paris Court of Appeal.
I make it clear that this order is directed at the conduct of Unika and
requires Unika to take steps as a party before the French Courts. It is for
the French Court to decide what order to make in response to whatever
application Unika makes to comply with the order.
46. Since it is appropriate to grant such an order in this case, it is also
appropriate, therefore, to grant an injunction against Unika continuing
the French proceedings with the qualifications mentioned in paragraph 33
above.
47. When I hand down this judgment I will hear submissions as to the
exact form of the orders and, in particular, as to the time scale within
which Unika must obtain the discharge or reversal of the order of the
French Court.
48. At the hearing Counsel agreed that costs should follow the event but
that either could make written submissions to the contrary following the
delivery of this judgment. Subject to that, I order Unika to pay the costs
of Comet's application, which I summarily assess at £ 13,500.
49. The real dispute between these parties is whether Comet owes money
to Unika or vice versa. Accordingly at the end of the hearing I gave
directions for the service of pleadings so that this issue is properly set out
by both sides, and can be determined by this Court.