Introduction
On 18th May 1992 M. plc, who is the claimant in the present proceedings,
entered into a licence agreement with G.D S.p.A., an Italian company
which is located in Bologna. Under this agreement, M. granted to G.D and
its affiliates, a world wide sole licence under various identified patents and
applications for patents to make, have made, use and to sell Rejection
Devices fitted to new cigarette packing machinery made by G.D and to
retrofit Rejection Devices to other cigarette packing machinery made by
G.D The patent is concerned with the rejection of faulty cigarettes during
the cigarette packing process. The claims, at least so far as the United
Kingdom patent is concerned, are apparatus claims. Clause 5 of the
agreement provides for a minimum royalty subject to a right on or before
31st December 1993 to G.D to convert the licence into a non-exclusive
licence, in which case the minimum royalty is reduced. By Clause 9.1,
the agreement shall be construed and interpreted under English law.
By Clause 9.4, notices provided by the agreement shall be deemed
effectively given if in writing and sent by registered mail to the party
to be notified at that party's last known address and shall be deemed
to have been received on the fifth day following the day of mailing. The
agreement is signed for and on behalf of M. and for and on behalf of G.D.
2. The effect of Clause 5 of the agreement is that minimum royalties
due under the licence agreement since 1994 have been of the order
of £100,000-£150,000, G.D never having given notice to make the
licence non-exclusive. In mid-1994, G.D requested that the 1994 royalty
payment be deferred, and M. agreed to this subject to the payment of an
additional consideration of £30,000. In 1995, 1996 and 1997 no royalty
payments were, it would seem, made by G.D, and a suggestion by M. that
a similar deferment of royalty to that which had taken place in 1994 (for
a similar consideration) was not accepted. On 14th August 1998, M. wrote
to G.D formally requesting payment of the minimum royalties due under
the agreement. After some correspondence which I have not seen, G.D
wrote to M. on 30th March 1999 in the following terms:-
"Further to our letter dated September 8th 1998 and the letter signed by
Mr Chris Horton dated March 30th 1999, we have now been able to take
legal advice on your request for payment of outstanding royalties under
the above licence.
As mentioned in our previous letters dated September 8th 1998 and June
11th 1997, we entered into the licence in reliance on representations by
M. plc that:
"(a) The patented invention covered by the licence disclosed the Rejection
Device which enabled rejection of single cigarettes and so eliminated the
need for a group expeller.
(b) By using a device as patented, we would be able to develop a
commercially marketable packing machine for which no group expeller
would be required.
It is now clear that these representations were untrue.
We understand from our lawyers that in these circumstances G.D S.p.A. is
entitled to the rescission of the licence and to the refund of the royalties
already paid under the licence".
Without prejudice discussions took place at the offices of the English
solicitors instructed by G.D, L..
3. On 22nd June 1999, M.' solicitors, B., wrote a letter before action to L..
On 30th June 1999, L. replied to this letter saying that they would seek
instructions, and on 6th July 1999 B. chased them for a reply. The reply
from L. on 7th July was that instructions were still awaited from G.D.
4. On 13th July B. issued a claim form seeking payment of £523,600 and
interest. The case as set out in the particulars of claim accompanying the
claim form is that this sum is the total of the unpaid minimum royalties
due and owing to M. under the provisions of the agreement. On 13th July
1999, B. wrote to L. informing them that the claim form had been issued
and asking whether L. had instructions to accept service in the United
Kingdom, in order to avoid the expense of serving in Italy. The reply to
this letter which is dated 15th July 1999 merely says that L. are awaiting
instructions, and on 21st July 1999 L. wrote to B. saying that they had no
instructions to accept service. Two days earlier, on 19th July 1999, G.D
had issued proceedings in the civil court of Bologna against M. seeking
to terminate the agreement on the grounds that the agreement was
invalid for a mistake under English law, and was entered into pursuant to
a misrepresentation made by or on behalf of M., the misrepresentation
in question being sufficient so it is alleged, to entitle G.D to rescind the
agreement.
5. By an application to the President of the Court in Bologna, G.D sought
authorisation to serve the proceedings so issued on M. by fax. The
certified translation of this application is as follows:
G.D S.p.A. (hereinafter, for the sake of brevity, referred to as "G.D") with
its registered office located in Bologna, via P. n. 10, in the person of its
present legal representative, Mr G. C. De M., acting in his capacity as
Managing Director; represented and defended – according to the power of
attorney attached hereto marginally – by the lawyers G. P. di S. from the
Court of Milan and P. A. M. from the Court of Bologna; electively domiciled
at the latter's office, located in Bologna, Via D'A. n.21.
WHEREAS
- the aforesaid company intends to start legal proceedings against
M. plc – an English company having its registered office located in
Blakelands, M. K. – with the purpose of obtaining the rescission of a
licence agreement entered into by the applicant and by M. on 18th May
1992, which has finally turned out to be inevitably vitiated by a mistake,
and to be therefore voidable;
- in spite of all the efforts repeatedly made by G.D in order to settle
the controversy amicably, M. has recently escaped any contact with the
applicant;
- the judicial paper being examined is to be translated into English;
- specially during the holidays it would be extremely easy for M. to try
and prevent the execution of the service of process according to the
methods provided for by the international Agreements;
All this stated first
G.D, represented and defended as referred to herein in the caption,
Asks
for Your Excellency The Presiding Judge of this Court to authorise serving
the writ of summons attached hereto in copy, together with the respective
sworn translations into the English language, to M. plc, 11 T. Drive,
Blakelands, M. K., Buckinghamshire MK14 5LU, by faxing it to the latter
company's fax number 0044-…"
The application is dated 19th July 1999 and signed by the two lawyers.
The authorisation is endorsed on the application in the following words:
"After having taken note of the above-stated request, the needed
authorisation is hereby granted."
The authorisation is dated 20th July 1999 and is signed by the Clerk of
the Court and by the President.
6. The fax transmission to M. of the process thus authorised had, it would
seem, been completed by about 4.00pm on 20th July 1999. M. served the
claim form on G.D on 3rd August 1999. The application before me is to
stay the English proceedings on the ground that the Italian court is first
seised of the dispute.
Article 21 of the Brussels Convention
7. By Article 21 of the Brussels Convention, "when 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. A court which would be required to decline jurisdiction may stay
its proceedings if the jurisdiction of the other court is contested." It is
accepted on the part of M. that the two proceedings here involve the
same cause of action and the same parties and that, accordingly, the
question for me is which court is first seised.
8. Put shortly, the case advanced by M. is first that there has been no
good service under Italian law, and accordingly the Italian court is not
seised of the dispute; second, that G.D falsely led B. to believe that it was
still considering whether to accept service of English proceedings, when
in fact it had determined not to do so and was preparing a pre-emptive
strike in Italy; and third that the order for service by fax was obtained
by making representations to the Italian court which G.D and its lawyers
knew to be false. Thus, if I am against M. and hold that the Italian court
is seised of the dispute, I should not accede to G.D's application to stay
these these proceedings since to do so would be to give tacit approval
to the misrepresentation which was made to the Italian court. On the
contrary I should grant an injunction to restrain G.D from proceeding
with the action in Bologna, since that action is an abuse of process. G.D
contend that whether or not any misrepresentation was made to the
President of the Bologna Court the service was good service in any event
since the authorisation of the President of the Court was not needed to
effectuate service by fax. If that submission is wrong, and authorisation of
the President of the Bologna Court was necessary for good service by fax,
they submit that the question of any misrepresentations made to him is
not one which I can investigate on this application.
Service of the Italian proceedings
9. The first question is the law of service. The starting point is the
provisions relating to service to be found in the Brussels/Lugano
Convention, in Article IV of the annexed protocol. This article provides as
follows:
"Judicial and extrajudicial documents drawn up in one Contracting State
which have to be served on persons in another Contracting State shall
be transmitted in accordance with the procedures laid down in the
conventions and agreements concluded between the Contracting States.
Unless the State in which service is to take place objects by declaration
to the Secretary-General of the Council of the European Communities,
such documents may also be sent by the appropriate public officers
of the State in which the document has been drawn up directly to the
appropriate public officers of the State in which the addressee is to be
found. In this case of the officer of the State of origin shall send a copy
of the document to the officer of the State addressed who is competent
to forward it to the addressee. The document shall be forwarded in the
manner specified by the law of the State addressed. The forwarding shall
be recorded by a certificate sent directly to the officer of the State of
origin."
10. I am not concerned with the second paragraph of Article IV. The first
paragraph preserves bilateral arrangements for service arrived at between
the Contracting States. In the case of the United Kingdom and Italy, these
are to be found in the Convention Regarding Legal Proceedings in Civil
and Commercial Matters Cmd 4105, dated 17th December 1930 and
ratified on 7th June 1932, to which I shall refer hereafter as the 1930
Convention.
11. Alternative provisions are to be found in the Hague Convention on
the Service Abroad of Judicial and Extrajudicial Documents in Civil and
Commercial Matters (to which the United Kingdom and Italy are both
signatories). By Article 15 of the Hague Convention service is effective if
the document in question was either (a) served by a method prescribed
by the internal law of the State addressed for the service of documents
in domestic actions upon persons who are within its territory, or (b) the
document was actually delivered to the defendant or to his residence by
another method provided for by the Hague Convention itself.
12. It is common ground between the parties in the present dispute that
the 1930 Convention and the Hague Convention provide two gateways to
valid service in the United Kingdom which do not depend for validity upon
the authorisation given by the President of the Bologna Court. Only if
service is not valid under either of the Conventions do I need to consider
the validity of the service under Italian law, as to which there is a dispute
between experts.
Service under the Hague Convention
13. It is convenient to deal with the provisions of Article 15 of the Hague
Convention first. It will be observed that service is effective under that
article if the document in question was served by a method prescribed
by the internal law of the State addressed for the service of documents
in domestic actions upon persons who are within its territory. The
Italian proceedings in this case were served by fax and accordingly it is
necessary to consider the provisions of the Civil Procedure Rules relating
to service by fax. By Rule 6.2(1)(e) a document may be served by fax or
other means of electronic communication in accordance with the relevant
practice direction. Paragraph 3.1 of the practice direction supplementing
part 6 of the CPR provides as follows:
"Subject to the provisions of paragraph 3.2 below, where a document is to
be served by... fax;
(1) The party who is to be served or his legal representative must
previously have indicated in writing to the party serving -
(a) that he is willing to accept service by fax, and
(b) the fax number to which it should be sent,
(2) If the party on whom the document is to be served is acting by a legal
representative, the fax must be sent to the legal representative's business
address and
(3) A fax number -
(a) provided in writing expressly for the purpose of accepting service
where the party to be served is acting in person, or
(b) set out on the writing paper of the legal representative of the party
who is to be served...
shall be taken as sufficient written indication for the purposes of
paragraph 3.1(1)."
14. It appears from the correspondence exhibited that M. plc place a
fax number on the letterhead which they use in the ordinary course
of business. It should be noted that the requirements of paragraphs
3.1(1), (2), and (3) are cumulative with the consequence that it is a
condition of English procedural law that fax service can only be effective
if either an express assent to service by fax within paragraph (1) or a
deemed acceptance in accordance with paragraph (3) has been given.
Undoubtedly, having regard to the provisions of paragraph (3)(b) service
by fax on Messrs B. would have been good service.
15. However, no such indication as is required by paragraph 3.1(1) of
the Practice Direction has been given, and since none of the deeming
provisions of paragraph 3.1(3) have any application to the fax number of
M. to which this document was sent, it seems to me that the service was
not good service under the CPR. Mr Silverleaf QC, who appeared on behalf
of G.D, submitted that the use in the letterhead of a fax number indicated
to the recipient a general willingness to accept service at that number.
I was attracted by this submission, which seems to me to gain some
force from the provisions relating to service by post. Since a company
incorporated in England and Wales may be served by post at any place
of business of the company within the jurisdiction which has a real
connection with the claim, service by post at the address stated on M.'
letterhead, whether or not that was the registered office, would it seems
to me have been good service. Mr Silverleaf also pointed to paragraph 3.4
of the practice direction which provides that where a document is served
by fax the party serving the document is not required in addition to send
a copy by post or by document exchange, but if he does not do so and
the document is proved not to have been received then the court may, on
any application arising out of that non-receipt, take account of the fact
that a hard copy was not sent. So Mr Silverleaf submits that there is no
practical objection to permitting service in the manner which took place
in this case by fax to the number appearing on the ordinary commercial
letterhead of the recipient. While I am attracted by this submission as I
have indicated, it seems to me that the rules for service do reflect a real
difference in the way that post and fax communications are frequently
dealt with in the ordinary course of business. Accordingly, although with
some doubt, I reject Mr Silverleaf's submission that the gateway provided
the Hague Convention and Part 6 of the Civil Procedure Rules is open to
his clients.
Service under the 1930 Convention
16. I turn to the provisions of the 1930 Convention. Part II of this
Convention is entitled "Service of Judicial and Extra-judicial Documents". I
am concerned with Articles 2, 3 and 4, which provide as follows:
ARTICLE 2
When judicial or extra-judicial documents drawn up in any of the
territories (to which this Convention applies) of one of the High
Contracting Parties are to be served on persons (including corporations)
in any territory (to which this Convention applies) of the other, such
documents may, at the option of the party interested, be served on the
recipient in any of the ways provided in Articles 3 and 4.
ARTICLE 3
(a.) The request for service shall be transmitted:–
In Italy by a British consular officer to the Procuratore Generale presso la
Corte d'Apello of the district in which the document is to be served;
In England by an Italian consular officer to the Senior Master of the
Supreme Court of Judicature in England.
(b.) The request, containing the name of the authority from which the
document transmitted emanates, the names and descriptions of the
parties, the address of the recipient and the nature of the document
in question, shall be drawn up in the language of the country in which
the documents are to be served. The document to be served shall be
drawn up in the language of the country in which it is to be served, or
be accompanied by a translation in such language. The said translation
shall be certified as correct by a diplomatic or consular agent of the High
Contracting Party making the request, or by an official or sworn translator
of one or other of the two countries concerned.
(c.) Service shall be effected by the competent authority of the country
where it is to be served, who shall serve the document in the manner
prescribed by the municipal law of such country for the service of similar
documents, or, should a wish to that effect be expressed in the request,
in a special form which is not incompatible with such law. If the authority
to whom a document has been transmitted is not competent to deal with
it, such authority shall of its own motion transmit the document to the
competent authority of its own country.
(d.) The execution of the request for service can only be refused if the
High Contracting Party in whose territory it is to be effected considers it
such as to compromise his sovereignty or safety.
(e.) The authority which receives the request shall send to the consular
officer by whom it was transmitted the documents proving the service or
explaining the reason which has prevented such service. Proof of service
shall be furnished by a certificate from the authority of the country where
service has been effected, setting forth the fact, the manner and the date
of such service. The document to be served, and the translation, if any,
shall be forwarded in duplicate and the certificate shall appear on one of
the copies, or be attached to it.
ARTICLE 4.
The document to be served may also be served on the recipient, whatever
his nationality, without the intervention of the authorities of the country in
which service is to be effected:–
(a.) By a diplomatic or consular officer of the High Contracting Party from
whose territory the document emanates; or
(b.) By an agent appointed by the judicial authority of the country from
which the document emanates, or by the party on whose application the
document was issued. In the case of documents to be served in Italy,
such agent shall always be either a Notary Public or an Advocate, who
shall employ for the act of service an official competent by Italian law for
this purpose.
The document to be served shall be drawn up in the language of the
country in which service is to be effected, or shall be accompanied by a
translation in such language, unless the recipient is a subject of the High
Contracting Party from whose territory the document emanates.
17. It is clear from Article 2 that Articles 3 and 4 provide a series of ways
in which service may be effected under the Convention. The principal way
of effecting service is provided for in Article 3(a.). This is service between
judicial authorities as Article 3(c.) makes clear. Article 4 provides an
alternative method of service which is intended to avoid the intervention
of the authorities of the country in which service is to be effected. Article
4 first provides for service under paragraph (a.) by diplomatic or consular
officer of the contracting party from whose territory the document
emanates and this can be disregarded. Paragraph (b.) provides for service
by an agent appointed by the judicial authority of the country in which the
document emanates or by the party on whose application the document
was issued.
18. In the present case, the fax communication was sent by an operator
specifically authorised so to do by the act of the President of the Court in
Bologna. The words "or by the party on whose application the document
was issued" envisage appointment of the agent by the private party. I do
not find it easy to give the words any other meaning. It follows that if this
is a case under Article 4 at all, it is a case under the first branch of Article
4(b.). Assuming, therefore, that the fax operator in Bologna was "an
agent appointed by the judicial authority", the question is how the service
is to be effected. Mr Males QC submits that the effect of Article 4 is to
provide an alternative person to effect service within the jurisdiction but
not an alternative to the manner of service, which is prescribed by Article
3. It follows, he submits, that service must be effected "in a manner
prescribed by municipal law of the country for the service of similar
documents" as Article 3(c.) requires, and this brings one back to Part 6
of the CPR. I think that this submission is correct. It seems to me to be
clear that the 1930 Convention is not in Articles 3 and 4 contemplating
any form of service which would not also be good service by the municipal
law of the territory in which service is taking place. Otherwise, Article 4
would render the provisions of Article 3 nugatory.
19. In my judgment, both the gateways to service which would be good
independently of the authorisation given by the President of the Court in
Bologna are closed to the defendants in the present proceedings and I
must turn to the question of this authorisation.
Service under Italian domestic law
20. The effect of the authorisation given by the President of the Court
in Bologna is a matter of Italian law. In case C-351/89 Overseas Union
Insurance Ltd v. New Hampshire Insurance Company [1991] ECR I-3317,
the Court of Justice was concerned in a reference from the Court of
Appeal with the effect of Article 21 of the Brussels Convention. One of
the questions which arose was whether Article 21 of the Convention has
to be interpreted as meaning that if the court second seised does not
decline jurisdiction it is obliged to stay its proceedings, or whether Article
21 permits or requires it to examine whether the court first seised has
jurisdiction and, if so, to what extent. At paragraph 21 of the judgment
the Court of Justice said this:
"In the case of a dispute over which it is not claimed that the court
second seised has exclusive jurisdiction, the only exception to the
obligation imposed by Article 21 of the Convention on that court to decline
jurisdiction is where it stays proceedings, an option which it may exercise
only if the jurisdiction of the court first seised is contested.
22. It appears from the report of the committee of experts which drafted
the Convention (Official Journal 1979 C59 page 1) that the rule was
introduced so that the parties would not have to institute new proceedings
if, for example, the court first seised of the matter were to decline
jurisdiction. However, the objective of the provision, which is to avoid
negative conflicts of jurisdiction, may be achieved without the court
second seised examining the jurisdiction of another court.
23. Moreover, it should be noted that in no case is the court second seised
in a better position than the court first seised to determine whether the
latter has jurisdiction. Either the jurisdiction of the court first seised is
determined directly by the rules of the Convention, which are common to
both courts and may be interpreted and applied with the same authority
by each of them, or it is derived, by virtue of Article 4 of the Convention,
from the law of the State of the court first seised,in which case that court
is undeniably better placed to rule on the question of its own jurisdiction.
24. Moreover, the cases in which a court in a Contracting State may
review the jurisdiction of a court in another Contracting State are set
out exhaustively in Article 28 and the second paragraph of Article 34
of the Convention. Those cases are limited to the stage of recognition
or enforcement and relate only to certain rules of special or exclusive
jurisdiction having a mandatory or public-policy nature. It follows that,
apart from those limited exceptions, the Convention does not authorise
the jurisdiction of a court to be reviewed by a court in another Contracting
State.
25. It therefore appears, both on the wording of Article 21 and from the
scheme of the Convention, that the only other possibility available, as an
alternative solution, to the court second seised, which should normally
decline jurisdiction, is to stay the proceedings if the jurisdiction of the
court first seised is contested. However, it cannot itself examine the
jurisdiction of the court first seised."
21. I consider that this is perfectly clear. I should not permit any
examination of the Italian court's jurisdiction, if I am satisfied that it
is seised of the dispute. Mr Males submits that in deciding whether
the Italian court is seised, I must nonetheless examine whether the
requirements of Italian law for good service are satisfied. Basing himself
on the decision of the Court of Justice in Zelger v. Salinitri [1984] ECR
2397 he submitted that the "court first seised" is the court before
which the requirements for proceedings to become definitively pending
have first been fulfilled. These requirements are to be determined in
accordance with the national law of the court concerned. In AGF v.
Chiyoda [1992] 1 Ll. Rep 325, Judge Diamond QC considered that it
was open to him sitting in the Commercial Court to decide whether as a
matter of Italian law the proceedings with which he was concerned had
become definitively pending, even though the point was already on foot
for decision by the relevant Italian court, which was the court in Milan.
Judge Diamond considered that nothing in the Overseas Union Insurance
Company case threw any doubt upon the correctness of this investigation.
22. The case upon which Judge Diamond principally relied, case 129/83
Zelger v. Salinitri [1984] ECR 2397 was a case which established the
proposition that I have already stated and said in terms that any court
considering the question which court is first seised must determine
according to the law of the court in question whether proceedings were
definitively pending in that court. Paragraphs 14 and 15 of the judgment
in that case are as follows.
14. It may properly be inferred from Article 21, read as a whole, that a
court's obligation to decline jurisdiction in favour of another court only
comes into existence if it is established that proceedings have been
definitively brought before a court in another State involving the same
cause of action and between the same parties. Beyond that, Article 21
gives no indication of the nature of the procedural formalities which must
be taken into account for the purposes of considering whether or not
to recognise the existence of such an effect. In particular, it gives no
indication as to the answer to the question whether a lis pendens comes
into being upon the receipt by a court of an application or upon service or
notification of that application on or to the party concerned.
15. Since the object of the Convention is not to unify those formalities,
which are closely linked to the organisation of judicial proceedure in the
various States, the question as to the moment at which the conditions for
definitive seisin for the purposes of Article 21 are met must be appraised
and resolved, in the case of each court, according to the rules of its own
national law. That method allows each court to establish with a sufficient
degree of certainty, by reference to its own national law, as regards itself,
and by reference to the national law of any other court which has been
seised, as regards that court, the order or priority in time of several
actions brought within the conditions laid down by the Convention.
So, in Grupo Torras v. Al-Sabah [1996] 1 Lloyds Reports 7, the Court of
Appeal said this:
"The court first seised is the one before which the requirements for
proceedings to become definitively pending are first fulfilled.
It is this test which in our judgment is decisive of the questions which
arise in the present case. It is also to be noted that the Zelger judgment
expressly recognises that a court considering an Article 21 or 22 question
will have not only to consider the pendency of the action before it under
its own national law but also the pendency under the national laws of
other States of any relevant actions pending before the Court of the other
States (par.15). Thus it recognises that the Courts of the one State will
have to reach a decision regarding the pendency of an action before the
Courts of another State notwithstanding that the question involves the
national law of that other State."
23. It seems to me to follow from this case and the passage from Case
C351/89 Overseas Union Insurance Ltd v. New Hampshire Insurance
Company quoted above that a case may become "definitively pending"
even though the question of jurisdiction of the court over the persons or
over the subject matter of the proceedings remains to be established.
Article 21 assumes that this is the position, since it provides for the case
in which the court first seised declines jurisdiction. It follows, I think,
that it is sufficient if proceedings in which the question of jurisdiction will
be decided are definitively pending in the foreign court for that court to
be first seised of the proceedings. Such a case would, of course, be an
appropriate one for the court in this country to stay its proceedings to
await the decision of the foreign court as to whether it had jurisdiction
over the substantive questions in the case.
24. In the present case, the question arises in this way. The service by fax
which was authorised by the order of the President of the Court to which I
have already referred was authorised under Article 151 of the Italian Civil
Procedural Code of which an agreed translation is as follows:
"Form of service ordered by judge. The judge may order either on
request or on his own initiative, by way of decree at the foot of the writ
of summons that service may be effected in a manner other than that
established by law, even by telegram (c. 2706) with a note of receipt by
return, when particular circumstances or need for greater speed advise
it."
Had this been a domestic Italian case there is no doubt, subject to the
defendant's contentions as to the manner in which the President of the
Court was misled, that the service authorised by fax would have been
authorised in accordance with Italian law. The contention of M. in the
present case is that so far as service outside the Italian jurisdiction
is concerned, reliance may not be placed on Article 151 of the Civil
Procedural Code. Mr Cuonzo who is a practising lawyer in Italy with
eighteen years experience states as his opinion that it is a requirement
of the Italian constitution that Italian law shall conform to generally
recognised international law. Therefore he says where a provision of
an Italian statute conflicts with provisions of international conventions,
the latter will prevail over the Italian legislation and the Italian statute
will not be applied by the courts in Italy. Among the international
obligations binding upon the Italian courts are the provisions of the Hague
Convention. These provisions find themselves mirrored in Article 142 of
the Italian Civil Code which provides for a particular manner of service in
respect of persons non-resident, non-dwelling and non-domiciled in the
Italian Republic.
142. Service on persons non-resident, non-dwelling and non-domiciled in
the Italian Republic
(i) Save as provided for in paragraph 3, if the addressee is not resident,
does not dwell nor is domiciled in Italy and has not elected domicile or
granted a power of attorney in accordance with Article 77, the document
is served by affixing a copy on the roll of the court office where the
proceedings are taking place and by sending a further copy to the
addressee by registered post.
(ii) A third copy is delivered to the Public Prosecutor which is responsible
for the transfer to the Ministry of Foreign Affairs for delivery to the person
to whom it is addressed.
(iii) The above provisions only apply in cases in which it is impossible to
carry out the service in one of the ways provided for by the international
conventions and by articles 30 and 75 of Law no 200 of 5.1.1967.
This provision is essentially service by registered post accompanied by a
further service through diplomatic channels, and by paragraph 142(iii) it
is provided that the provisions of Article 142 only apply in cases in which
it is impossible to carry out the service in one of the ways provided for by
the international conventions. Thus he says, only where the competent
authorities of the foreign state refuse to effect service may documents
be served by the means described in Article 142. He expresses the view
that Article 142 is not subordinate to Article 151 which I have quoted and
that, accordingly, as a matter of Italian domestic law it was not open to
the judge of the court in Bologna to authorise service by fax.
25. The consequences of this conclusion, if correct, are of some
complexity. Mr Cuonzo says that in Italian procedural law there are
different classes of invalid acts which he describes as acts which are
irregular, acts which are void and acts which are legally non-existent. In
the last case, it is not possible to cure the defect retrospectively, but if
the act is merely void or irregular retrospective cure is possible. Whatever
the correct characterisation of the defect in the present case however, he
says that in no circumstances can it be said that the court is definitively
seised of the proceedings since in each case a further validating act,
which may be a judicial act or an act of the party concerned, is necessary.
Accordingly, he says that the English court should not take the view that
the Italian court is definitively seised of the proceedings.
26. Professor Luzzatto, who gives evidence on behalf of G.D, expresses
the view that Article 151 does indeed apply to service of proceedings
abroad, and if that is wrong, any validation of service will have
retrospective effect, with the consequence that so far as Italian domestic
law is concerned the Italian court will have been definitively seised from
the date of service by fax. Furthermore, he says that it is the practice to
permit service on persons outside the Italian jurisdiction under Article
151.
27. There is no doubt that the procedural steps which have been taken
have resulted in the appointment of a hearing in Bologna. One can say
that the lever which puts the mechanism in motion has been pulled. At
that hearing, it will be open to M. to challenge the service upon them
of the proceedings, and to challenge the jurisdiction of the court on
Brussels Convention grounds. It appears to be common ground between
the experts that were M. to appear in the Bologna court to dispute the
validity of service or the jurisdiction of the Bologna court having regard to
the Brussels Convention, the service by fax of the proceedings will have
achieved its object and would not subsequently be declared void.
28. I consider that proceedings are definitively pending before the Italian
court. It seems to me that, where it is open to the English court not
to dismiss but merely to stay proceedings to await what must on any
reading of the Convention be a substantial challenge to the jurisdiction
of the Bologna court which must be decided by that court, it would in
general terms be a wrong exercise of the discretion which I have to
investigate complicated questions of Italian procedural law which, if I
determine them against the plaintiffs in the Italian proceedings, will
have to be accompanied by injunctive relief to make that determination
effective. So far as the question of the adequacy of service under
Italian law is concerned, I think that I must in the present case exercise
the discretion which I undoubtedly have under Article 21 to stay the
proceedings but not to dismiss them and leave all issues both of service
and of jurisdiction to the Italian court in which proceedings in which these
questions will be determined are definitively pending.
Abuse of process
29. But the matter does not stop there. M., the claimants in the English
proceedings, say that the prosecution of the Italian proceedings is
effectively an abuse of process since the Italian court has obtained first
seisin of the proceedings, if it has obtained first seisin, by means of
a trick. It is suggested that the English court has a jurisdiction which
survives the effect of the Convention to ensure that parties do not start
proceedings in a manner which amounts to an abuse of process. Before
turning to the law it is necessary to set out the nature of the abuse of
process of which G.D is said to be guilty.
30. First, it is said that G.D falsely led M.' solicitors, B., to believe that it
was still considering whether to accept service of English proceedings,
when in fact it had determined not to do so and was preparing a
pre-emptive strike in Italy; and second, it is said that G.D made
representations to the Italian Court which it knew to be false, or ought to
have known were false.
31. It is beyond argument that G.D had decided to make a pre-emptive
strike in the Italian court, and was stalling B.. However, it left its English
solicitors without instructions (it is not suggested that L. knew what was
going on, since if they did the only honest answer to B. letters would have
been that they had instructions not to accept service). Moreover, there is
every advantage to G.D in starting proceedings in Bologna, as it appears
not to be disputed that the proceedings in Bologna would take from three
to five years to reach a decision at first instance. In the Patents Court, I
would hope that a realistic figure would be eighteen months or less. It is
nonetheless the fact that the whole structure of the Brussels Convention
is based on the principle that it is unacceptable for the courts of the
various states to embark on an investigation of their relative merits in
the resolution of disputes. The Convention requires me to assume that
it is neither better, nor worse, to litigate in Bologna rather than London,
provided the requirements of the Convention as to jurisdiction are met.
The effect of the deception, if deception it was, practised by G.D on M.
must be viewed rather as if the result were that M. was the defendant
in the Queen's Bench Division rather than the claimant in the Chancery
Division. Accordingly I do not consider that the fact that G.D stalled M.
while the Italian proceedings were under preparation is relevant.
32. The second question is more serious. The request to the Italian court
for an order permitting service by fax recites the following facts:
- in spite of all the efforts repeatedly made by G.D in order to settle
the controversy amicably, M. has recently escaped any contact with the
applicant;
...
- specially during the holidays it would be extremely easy for M. to try
and prevent the execution of the service of process according to the
methods provided for by the international agreements;
The first fact is obviously untrue. The solicitors were in regular contact,
and indeed the correspondence about service was taking place. The
second fact is equally untrue: it is not possible for an English company
to evade service, which is always possible at its registered office. Mr
Silverleaf for G.D could not find any justification for either of these
statements, and I proceed on the footing that they are lies, and are to be
condemned.
33. Two points arise. G.D obtained accelerated service by fax by telling
lies to the Italian court. So, Mr Males submits, I should not exercise
any discretion I have to stay the current proceedings in their favour.
Alternatively, he submits that the Italian proceedings are an abuse of
process, and I should not decline jurisdiction in their favour. For these
propositions Mr Males relies on the decision of the Court of Appeal in
Turner v Grovit [1999] 3 WLR 794. This was a remarkable case. The facts
were complex, but it is authority by which I am bound for the proposition
that even in cases which fall within the Convention the court retains a
jurisdiction to prevent an abuse of process, and such an abuse of process
includes starting foreign proceedings which are either known to be or are
obviously baseless with a view to the oppression of the defendant. In this
context, "baseless" includes both a lack of basis in fact and a lack of any
basis which could give the foreign court jurisdiction. There are a number
of points about Turner v Grovit which need to be borne in mind. First,
it was a case in which on the facts the English court (the employment
tribunal) had exclusive jurisdiction under Article 17. It was not a case
of possible concurrent jurisdictions. Second, the employment tribunal
was undoubtedly first seised. It has already ruled on its jurisdiction.
Notwithstanding these facts, Laws LJ, with whom Stuart-Smith LJ and
Jonathan Parker J agreed, said this:
The court's power to protect its own process by the grant of an anti-suit
injunction is not in my judgment confined, in the Brussels Convention
context, to a case where the English court or tribunal has established
jurisdiction under Article 21, or plainly possesses exclusive jurisdiction
as for instance under Article 17. If it were so confined, it would not be a
general power to prevent abuse of process at all: it would be a restricted
power exercisable only to protect or vindicate the Brussels Convention
rules as to jurisdiction. But the English court's right and duty to prevent
abuse is inherent and at large. It could only be restricted by statute.
In my judgment, there is nothing in the Brussels Convention (which,
of course, by virtue of the executive provisions of the Act of 1982, as
amended, constitutes domestic statute law) which imposes any such
restriction.... I would rest my view of the power to prevent abuse by an
anti-suit injunction on the inherent jurisdiction of the English court.
If I may respectfully say so, it seems to me to be essential that the court
retains a power to prevent abuses of process which would otherwise be
facilitated by a narrow reading of the provisions of the Convention. At
the same time, it must be recognised that the jurisdiction is directed at
preventing abuse of process, not at alleviating inconvenience or assuaging
resentment. It is not an abuse of process merely to require a litigant to
litigate in a tribunal of a Convention country if that tribunal in fact has
jurisdiction under the convention. Nor is it an abuse of process to bring
a defendant before a foreign tribunal by a trick when that tribunal has
no jurisdiction: it must be assumed that the tribunal will recognise that
fact and will deal with the fact that its jurisdiction has been sought to be
invoked by a trick in its own way. To find an abuse of process justifying
intervention by the English court more is required, and it seems to me
that the element of oppression, overpoweringly present in Turner v Grovit,
is crucial.
34. I am satisfied that the facts of the present case, as I have set
them out above, do not amount to an abuse of process justifying my
intervening in the manner contemplated by Turner v Grovit. Unless
I were satisfied that I should intervene in that way, I would not be
justified in refusing to apply the ordinary rules of Article 21 and stay
the proceedings. It is one of the objects of the Convention to prevent
concurrent proceedings, and I do not think that to mark my disapproval
of G.D's activities by refusing to accede to their application to stay
these proceedings would be desirable. Accordingly I do not think that I
should refuse this application for a stay on the grounds that the Italian
proceedings are an abuse of process.
Conclusions
35. The present action will be stayed to await the decision of the Italian
court on its jurisdiction to entertain the action under the Brussels
Convention. I shall hear the parties as to the appropriate relief. I do not
reach this conclusion with any satisfaction, but it seems to me to be the
inevitable consequence of the rules for jurisdiction established by the
Convention.