JUDGMENT-1:
Mr Justice SHEEN: On Mar 25, 1987, the plaintiff's ship A. H. collided with
the defendant's ship L. when those ships were navigating in fog in the
Scheur Channel off the coast of Belgium. It is agreed for the purposes
of this motion only that the position in which the collision occurred is
in international waters. On Apr 14, 1987, the owners of L. arrested
A. H. at Flushing. Security for the claim was provided and A. H. was
released from arrest on that day. On Apr 16, 1987 the owners of L.
commenced proceedings in the District Court of Middelburg, Netherlands,
claiming damages from Arc Marine Ltd, who were the owners of A. H.. It
is accepted by the plaintiffs that the Middelburg Court was seised of the
dispute on that day.
On May 18, 1987, the owners of A. H. issued a writ in rem out of the
Admiralty Registry against the ship L.. That writ was served upon L.
in England, and L. was arrested. On May 22, 1987 L. was released
from arrest because the defendants gave security for the claim to the
satisfaction of the plaintiffs. The owners of L. have acknowledged service
of the writ. Thus the English action, which started in rem, has become
an action in personam and, by reason of the release of L., is no longer an
action in rem.
Counsel on behalf of the defendants moves the Court for an order that the
Court declines jurisdiction in the English action and and that the writ of
summons and all subsequent proceedings be set aside. In the alternative,
Counsel for the defendants moves the Court for an order that all further
proceedings in the English action be stayed. The notice of motion refers
to the Rules of the Supreme Court, O 12, r 8. But it was conceded by Mr
Teare that the defendants do not dispute the jurisdiction of this Court
by reason of any irregularity in the writ or service thereof. The notice
of motion also states that the Dutch Court has jurisdiction to hear the
action by reason of art 5(3) of the Convention on Jurisdiction and the
Enforcement of Judgments in Civil and Commercial Matters ("the 1968
Convention"). In matters relating to tort, art 5(3) confers jurisdiction
upon "the courts for the place where the harmful event occurred". As
already stated, it was agreed for the purposes of this motion only that the
place where the collision occurred was outside Dutch territorial waters.
There is a dispute between the parties as to whether the Dutch Court has
jurisdiction. However it is agreed that the Dutch Court was the first Court
seised of an action between the owners of each of the two ships.
On behalf of the defendants, Mr Teare moves for an order that this Court
declines jurisdiction in favour of the Dutch Court, pursuant to art 21 or
art 22 of the 1968 Convention as amended, which has the force of law by
reason of s 2 of the Civil Jurisdiction and Judgments Act, 1982 ("the 1982
Act").
The 1982 Act provides:
Section 2 -- (1) The Conventions shall have the force of law in the United
Kingdom, and judicial notice shall be taken of them.
Section 3 -- (1) Any question as to the meaning or effect of any provision
of the Conventions shall, if not referred to the European Court in
accordance with the 1971 Protocol, be determined in accordance with the
principles laid down by and any relevant decision of the European Court.
(2) Judicial notice shall be taken of any decision of, or expression of
opinion by, the European Court on any such question.
(3) Without prejudice to the generality of subsection (1), the following
reports (which are reproduced in the Official Journal of the Communities),
namely -- (a) the reports by Mr P Jenard on the 1968 Convention and
the 1971 Protocol; and (b) the report by Professor Peter Schlosser on the
Accession Convention may be considered by ascertaining the meaning or
effect of any provision of the Conventions and shall be given such weight
as is appropriate in the circumstances.
The English text of the 1968 Convention as amended by Titles II and III
of the Accession Convention is set out in schedule I of the 1982 Act.
Article 21 provides:
Where proceedings involving the same cause of action and between the
same parties are brought in the courts of different Contracting States,
any court other than the court first seised shall of its own motion decline
jurisdiction in favour of that court.
A court which would be required to decline jurisdiction may stay its
proceedings if the jurisdiction of the other court is contested.
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.
On behalf of the defendants, Mr Teare submitted that art 21 must be
applied because (1) the English and Dutch proceedings involve the same
cause of action, and (2) both proceedings are between the same parties,
and (3) the Dutch Court was the Court first seised. Therefore, says Mr
Teare, the English Court must of its own motion decline jurisdiction in
favour of the Dutch Court.
Before turning to the way in which Mr Macdonald opposed this motion, it
is necessary for me to set out art 57 of the 1968 Convention as amended.
Article 57 provides:
This Convention shall not affect any Conventions to which the Contracting
States are or will be parties and which, in relation to particular matters,
govern jurisdiction or the recognition or enforcement of judgments.
This Convention shall not affect the application of provisions, which in
relation to particular matters, govern jurisdiction or the recognition or
enforcement of judgments and which are or will be contained in acts
of the Institutions of the European Communities or in national laws
harmonised in implementation of such acts.
The first proposition advanced by Mr Macdonald was that if the Court were
to construe the 1968 Convention in the manner submitted by Mr Teare
this would "affect" the 1952 Arrest Convention because it would prevent
this Court from assuming jurisdiction under the Arrest Convention. I will
set out Mr Macdonald's argument more fully later.
In order to consider the rival contentions on this first issue, it is necessary
to go back in time and to look at the matter in perspective.
On Sept 27, 1968 Plenipotentiaries of the six countries which were the
High Contracting Parties to the Treaty establishing the European Economic
Community signed the 1968 Convention. The preamble to the 1968
Convention states that it was concluded because the six countries which
then formed the EEC desired to implement provisions of the Treaty by
virtue of which they undertook to secure the simplification of formalities
governing the reciprocal recognition and enforcement of judgments of
Courts or tribunals. The Official Journal of the European Communities
stated:
Underlying the Convention is the idea that the Member States of the
European Economic Community wanted to set up a common market
with characteristics similar to those of a vast internal market. Everything
possible must therefore be done not only to eliminate any obstacle to the
functioning of this market, but also to promote its development. From this
point of view, the territory of the Contracting States may be regarded as
forming a single entity: it follows, for the purpose of laying down rules on
jurisdiction that a very clear distinction can be drawn between litigants
who are domiciled within the Community and those who are not.
In relation to jurisdiction, the following principles were agreed:
1. If a person is domiciled in a Contracting State, he must in general be
sued in the Courts of that State in accordance with the rules of jurisdiction
in force in that State. (art 2)
2. If a person is domiciled in a Contracting State, he may be sued in the
Courts of another Contracting State only if the Courts of that State are
competent by virtue of sections 2 to 6 of Title II of the Convention. (art 3)
3. If a person is not domiciled in a Contracting State, that is, if he is
domiciled outside the Community, the rules of jurisdiction in force in each
Contracting State shall be determined by the law of that State. (art 4)
The 1968 Convention was silent upon Admiralty jurisdiction. However,
some of the members of the EEC were signatories of the International
Convention for the Unification of Certain Rules relating to the Arrest
of Seagoing Ships signed in Brussels on May 10, 1952 ("the Arrest
Convention"). There were numerous other international agreements which
governed jurisdiction on particular matters.
The Arrest Convention, as is well known, sets out a number of different
claims which are designated "maritime claims". That Convention also
provides that a ship flying the flag of one of the Contracting States may
be arrested in the jurisdiction of any of the Contracting States in respect
of any maritime claim but in respect of no other claim. Article 7 of the
Arrest Convention provides that the Courts of the country in which the
arrest was made shall have jurisdiction to determine the case upon its
merits if the domstic law of the country in which the arrest is made gives
jurisdiction to such Courts. The effect, as is well known, is that the owner
of a ship may be sued in a country in which he is not domiciled. The
venue or forum will usually be in the country in which the ship is arrested.
The provisions set out in art 57 make it clear that jurisdiction given to
a Court in accordance with the Arrest Convention is not affected by the
1968 Convention as amended. The general provisions give way to the
particular provisions. Thus the general rule that a person must be sued in
the Courts of the State in which he is domiciled gives way to the particular
provision that the State in which a ship is arrested shall have jurisdiction.
On behalf of the plaintiffs, Mr Macdonald submitted that arts 21 and 22
have no application when jurisdiction has been founded upon a statute
which was based upon the 1952 Arrest Convention. He relied upon art
57. Mr Macdonald relied on the words "shall not affect" in art 57. He
submitted that "affect" is a word with a very wide meaning and that if
this Court were to decline jurisdiction in this action that would "affect"
the Arrest Convention. I cannot accept that submission. Legislation
which gives effect to the 1952 Convention gives a Court jurisdiction
over maritime claims. That jurisdiction is not affected by the 1968
Convention. Article 21 of the 1968 Convention requires a Court to "decline
jurisdiction", which seems to me to mean "decline to exercise that
jurisdiction".
Before the enactment of the 1968 Convention as amended, the Admiralty
Court had jurisdiction to stay an action in rem although that action
was properly brought. As is apparent from art 21, the words "decline
jurisdiction" involve a concept which is different from staying an action.
But the action could not have been "brought" unless the Court had
jurisdiction. That jurisdiction is now derived from the Supreme Court
Act 1981, but it stems from the 1952 Arrest Convention, and it is not
"affected" by the possibility that thereafter the Court may decline to
exercise it. Ultimately any dispute as to the meaning of any provision of
the 1968 Convention as amended is a question for the European Court.
On this motion the task of this Court is to interpret the articles of the
Convention, bearing in mind that everything possible must be done
to eliminate obstacles to the functioning of the common market and
regarding the territory of the member countries as forming a single entity.
May I say in parenthesis that this is a far cry from the rather insular
doctrine which began to crumble with the decision in The Atlantic Star,
[1973] 2 Lloyd's Rep 197; [1974] AC 436.
The 1952 Arrest Convention does not contain any provisions which
prescribe what should happen if two actions arising out of the same
incident are commenced in different countries. Accordingly arts 21 and 22
of the 1968 Convention do not affect the Arrest Convention, and this court
must give effect to one or other of those Articles.
Mr Macdonald submitted that art 21 does not apply because its terms
show that it is inapplicable. That submission raises two questions.
They are (1) Do the two sets of proceedings involve the same cause of
action? and (2) Are the proceedings in both countries "between the same
parties"? I will consider these questions.
(1) Cause of action.
The owners of A. H. only have a valid claim against L. if it can be shown
that L. was negligently navigated. Their cause of action is negligence
in the navigation of L. which has caused damage to them. The cause
of action on which the owners of L. found their claim is negligence in
the navigation of A. H. whereby the owners of L. suffered damage. But
the validity of the claim made by one ship cannot be judged without
investigating the navigation of both ships, because the liability to make
good the damage is in proportion to the degree in which each vessel was
in fault. In my judgment to hold that the two sets of proceedings do not
"involve the same cause of action" would be not merely pedantic but also
totally out of keeping with the spirit and intention of the 1968 Convention.
I answer the first question "yes". The proceedings commenced by the
owners of L. in the Netherlands involve the same cause of action as is
involved in this action.
(2) The parties.
I have already said that this action was commenced as an action in rem
against L., but is now an action in personam and no longer in rem. In case
it is thought that there is any conflict between this judgment and that
of Mr Justice Hobhouse in The Nordglimt, [1987] 2 Lloyd's Rep 470, let
me emphasize the point that an action in rem retains the characteristics
of such an action only so long as it remains an action against a ship
or against the proceeds of sale of the ship. In The Nordglimt, the ship
remained under arrest. The action accordingly remained in rem. But
there are many occasions on which (a) solicitors offer to give contractual
security and undertake to accept service of a writ or to acknowledge
service of it in order to avoid the threatened arrest of a ship, or (b) a
ship under arrest is released because security to the satisfaction of the
plaintiffs has been given. In such circumstances the action proceeds as an
action in personam regardless of the form of the writ. As was said by Lord
Justice AL Smith in The Gemma, [1899] P 285 at p 292:
The action, though originally commenced in rem, becomes a personal
action against the defendants upon appearance.
While a ship is under arrest, or the proceeds of sale of a ship are in Court,
the action continues as an action in rem. If service of the writ has been
acknowledged, the action continues also in personam. But if a ship is not
arrested, or is released after arrest, there is no "res" against which the
plaintiff, or any other interested person, can proceed.
This action is between the owners of A. H. as plaintiffs and the owners
of L. as defendants. If the roles are reversed so that the owners of L.
are plaintiffs and the owners of A. H. are defendants, as they are in the
Netherlands, are the proceedings "between the same parties" for the
purposes of art 21? In my judgment the answer to that question must
be "yes". If the intention of those who drafted the 1968 Convention had
been to restrict the operation of art 21 to those cases in which the plaintiff
in the first action brought a second action involving the same cause of
action against the same defendant in a Court of a different Contracting
State it would have been easy to give effect to that intention. In this case
the reality is that both sets of proceedings are between the same parties.
In The Abidin Daver, [1984] 1 Lloyd's Rep 339; [1984] 1 AC 398, Lord
Diplock treated an action in Turkey and an action in England as being
between the same parties, even though their roles were reversed (see
pp 344 and 411). Lord Diplock also used the phrase "lis alibi pendens" to
describe an action in which the plaintiff in that "lis" was the defendant in
another.
Mr Macdonald submitted that art 21 is concerned with what he described
as "true lis alibi pendens", that is to say where the plaintiff is the same in
more than one action founded on the same cause of action. Mr Macdonald
submitted that in such a situation the plaintiff can properly be held to his
first election. But he contended that when considering cross-actions it
would be wrong to hold that the forum of the first action must necessarily
prevail over the second chosen forum even if the first forum appears
to be inappropriate. Mr Macdonald contended that where cross-actions
are concerned more flexibility is needed and that therefore art 22 is
the appropriate article to consider. That argument seems to me be an
invitation to use what may or may not be a desirable result as a guide
to the interpretation of the 1968 Convention. That is an invitation which
the Court must decline. Policy was a matter for those who agreed the
Convention. The policy of this Convention appears to be to avoid the risks
of irreconcilable judgments and to have a simple rule that litigation will
be conducted in the Court first seised of the matter. Under arts 21 and 22
the Court which must decline jurisdiction or stay its proceedings is "any
court other than the court first seised". The question: "Which court would
be the more convenient or the more appropriate?" does not arise.
One final point taken by Mr Macdonald was that in the Netherlands the
writ was issued on behalf of the owners of L. (a Dutch corporation) and
their insurers. The insurers are not a party in this action. The evidence
does not disclose what cause of action is relied upon by the insurers. If,
as I assume, the insurers have a right of subrogation, then adding their
names as plaintiffs may be a necessary procedure in the Netherlands, but
it adds nothing of substance. In my judgment art 21 applies and the Court
must give effect to it by declining jurisdiction.
If I am wrong in that decision, then art 22 must apply. The cross-actions
must be "related actions" within the definition given in the third paragraph
of art 22. If art 22 is applicable, then any Court other than the Court first
seised may stay its proceedings. As the Netherlands court has no power
under art 22 to say its proceedings, it would be absurd to decline to stay
these proceedings because to do otherwise would be to run the risk of
irreconcilable judgments resulting from separate proceedings.
Before concluding this judgment, it is right to add that there was much
debate by Counsel about whether the action should be stayed by reason
of the relative convenience of the two Courts. The doctrine of forum non
conveniens can have no relevance in cases to which art 21 or art 22
applies. Under those articles the question which has to be answered is
"Which court was seised of the matter first?" That is a simple test which is
clear and readily workable. It will encourage prospective litigants to avoid
delay.
DISPOSITION:
Judgment accordingly.