LORD JUSTICE LAWS: This is a plaintiff’s appeal brought with leave of
Aldous LJ against a decision of Mr David Donaldson QC, sitting as a judge
of the Chancery Division, on 24 February 1999 whereby he declined to
grant the relief sought in a Notice of Motion filed by the plaintiff on 31
December 1998 and discharged an earlier interlocutory injunction granted
by Pumfrey J on 22 December 1998. He refused the plaintiff leave to
appeal, but stayed his order for discharge pending an application for leave
being made to this court. In the result the injunction of 22 December
1998 has remained in force until and during the hearing before us. The
plaintiff seeks, and was by Mr Donaldson’s order denied, what is called
an „anti-suit“ injunction: that is, an order to restrain the commencement
or continuance of proceedings against him outside the jurisdiction on the
grounds that on the facts such proceedings are or would be abusive. In
fact, having regard to events which have happened since Mr Donaldson
made his order, the plaintiff now seeks an injunction in a revised form,
namely to require the defendants to cause the foreign proceedings (which
I shall shortly describe) to be discontinued. We indicated at the close of
argument that we would consider the appropriate form of relief if the
question arose in light of our judgments as to the substance of the case.
The first defendant, Mr Grovit, is alleged to be the guiding mind,
controller and ultimate owner of the second and third defendant
companies (to whom I will refer as „Harada“ and „CSA“ respectively).
Harada and CSA are part of the Chequepoint Group of Companies. CSA
was incorporated in Spain and carries on business there. On 10 April 1990
the plaintiff commenced full-time employment with a company called
China Security Ltd, whose undertaking was, however, transferred on 10
April 1991 to Chequepoint UK Ltd. In December 1997 Chequepoint UK
Ltd was taken over by Harada, an Irish offshore company which had been
recently incorporated as part of the Chequepoint Group.
The Plaintiff’s employment from the beginning was as Group Solicitor.
Clause 3 of his original contract provided that he was to be based in
London or „as you may be directed“. On or about 22 October 1997 he
moved to the Group’s Madrid office. It seems to be beyond contest that
before this move his contract of employment was with Chequepoint UK
Ltd. The plaintiff asserts that they remained his employers after the move
until Harada succeeded them upon their take-over of Chequepoint UK Ltd;
after that his contract was with Harada. But there is a question, arising
in circumstances which I will describe, whether upon his move to Spain
there was a novation of the contract, substituting CSA for Chequepoint UK
Ltd as the other contracting party. In relation to that it is convenient at
this stage to set out the terms of a letter to the plaintiff of 21 May 1997,
whose importance will shortly appear. It is written on Chequepoint headed
notepaper and signed by a Mr Dodson „for and on behalf of Chequepoint
UK Ltd“. Mr Dodson would be one of Harada’s witnesses in proceedings
the plaintiff was to bring before the Employment Tribunal, which are very
much at the core of the issues falling for decision on this appeal. This is
what the letter says:
„Dear Paul
Further to our discussions, I set out the agreed terms of the Company’s
offer of relocation as follows:
1. Your present salary of £65,000 will continue.
2. The Company’s present contribution to your pension will continue at
the rate of 6% of gross salary per annum.
3. The Company will continue to pay medical cover at the present level.
4. The Company will continue to provide a company car at the present
level and will continue to pay any MOT or its equivalent, insurance, road
tax, servicing and repairs of the business mileage. The Company will
continue not paying any non-business mileage.
5. You will continue to be entitled to 4 weeks holiday per annum.
6. Your notice period will continue to be 6 months.
7. The Company will continue to pay for the cost of the annual practising
certificate and Law Society membership.
8. The commencement date of your relocation to Madrid will be not later
than 21 October 1997.
Please sign the attached copy of this letter in acknowledgement of
receipt.“
And the plaintiff duly signed it. I shall make findings about the effect of
this letter at a later stage.
On 16 February 1998 the plaintiff sent a fax to Mr Grovit resigning his
employment. It stated:
„I regret that because executing and defending certain commercial
decisions have caused me overwhelming personal conflict I have decided
to give notice of termination of my contract of employment.“
On 26 February 1998 without warning he left the office where he was
working in Madrid. On 5 March 1998 Mr Bermudez, signing himself „Group
Internal Auditor“ wrote to him on CSA paper as follows:
„Last Thursday February 26 1998 you walked out of this office without
any explanation. Since then you have not returned, not been available nor
have you answered the phone to the many attempts to contact you on our
part.
In consequence, your responsibilities as Group Solicitor have been
abandoned with extensive and predictable damage to the company.
Therefore, by means of this letter, you are hereby notified that your
employment contract is terminated.“
Three days before that, however, on 2 March 1998 the plaintiff
commenced proceedings in the Industrial Tribunal in London (The
Employment Tribunal as it is now known), claiming against Harada
compensation for unfair dismissal and damages for wrongful dismissal
(the Tribunal having the jurisdiction to deal with the latter claim under
the provisions of the Industrial Tribunals (Extension of Jurisdiction) Order
1994). His case was that he had been constructively dismissed. In his
application form to the Tribunal (Form IT1) he alleged that he had been
„instructed to justify and defend the withholding by my employer and
its predecessor Chequepoint UK Ltd trading as Chequepoint UK, of
employees’ PAYE and national insurance contributions in the UK and their
equivalents in the Netherlands, and their use without the employees’
consent to fund my employer’s business, which was in extreme financial
difficulties“.
Harada contended that the Employment Tribunal had no jurisdiction to
hear the claim. Its written response, on Form IT3, contains the assertion
„the applicant ordinarily worked for the respondent outside Great Britain
and accordingly does not have a right to make a claim to this Tribunal
which does not have jurisdiction to hear the claim...“
The Tribunal conducted a preliminary hearing at which this issue was gone
into (as also was a submission by Harada to the effect that the Tribunal
was biased). A reasoned decision was issued by the Tribunal on 10
September 1998, to the effect that it possessed jurisdiction (and rejecting
the argument as to bias). At the hearing, as the tribunal recorded in
paragraph 7 of its decision:
„Both Mr Dodson and Mr Bermudez gave their evidence and were cross-
examined by counsel and were questioned by the Tribunal. They were
peripheral figures who in the absence of the applicant’s line manager Mr
Grovit did not add much to the evidence by the applicant.“
In relation to the claim for compensation for unfair dismissal the question
of the Tribunal’s jurisdiction depended upon the application of s. 196(2)
of the Employment Rights Act 1996, which it is unnecessary to set out for
the purposes of this appeal. The issue under the subsection was whether
the applicant ordinarily worked outside Great Britain; if so the Tribunal
would lack jurisdiction. The Tribunal held (Paragraph 12):
„The relevant clause in the employment contract is set out in paragraph 1
above [„he would be based in London or as he might be directed“]. That
was the provision which remained binding at all times and the letter of 21
May 1997 does little more than confirm the continuation of the existing
terms with a posting to Madrid. The terms of the 1991 contract were clear
and the applicant was at all times ordinarily working within Great Britain...
The relocation was temporary and the applicant was ultimately expected
to return to London.“
As regards the wrongful dismissal claim, s. 196(2) was not in point; the
Tribunal stated (Paragraph 12):
„The respondent maintains that the applicant habitually carried out his
work in respect of the contract upon which he claims in Spain and that
there is a jurisdictional hurdle under the Brussels and Lugano Conventions
enacted in England by the Civil Jurisdiction and Judgments Act 1982
(as amended). It is understood that the respondent contends that the
applicant should sue in Spain and reliance is placed on Article 5.1 of the
Brussels Convention.“
Paragraph 13 of the Tribunal’s decision reads:
„The relevant Articles under the Brussels Convention are Articles 2, 5.1
(alternatively 5.5). Under each of these Articles, the court with jurisdiction
is England. The domicile of the respondent [Harada] is determined by s.
42 of the Civil Jurisdiction and Judgments Act 1982. It has a registered
office in the United Kingdom and its central management and control is
exercised in that country“.
There was an alternative submission by Harada to the effect that the
applicant should sue in Ireland. That too was rejected by the Tribunal,
which concluded its decision with the sentence:
„We are therefore satisfied that, by virtue of all these Articles, the
applicant has established jurisdiction to have his claim considered by
these Tribunals.“
Harada appealed this decision to the Employment Appeal Tribunal. We
were told in the course of the hearing before us on 12 May 1999 that
the EAT had ruled that the merits of the plaintiff’s claims advanced
before the Tribunal should be tried out before the jurisdiction appeal is
determined. The appeal to this court was, however, listed for further
argument on 26 May 1999, in circumstances which I will describe later.
On that occasion a further affidavit of the plaintiff was placed before us,
from which it appears that on 24 May 1999 the Employment Tribunal held
in a unanimous decision that the plaintiff had been unfairly and wrongfully
dismissed.
On 7 October 1998 CSA issued proceedings against the plaintiff in the
Court of First Instance, Madrid. They alleged that there was a contract of
service between the plaintiff and themselves, CSA, and claimed damages
estimated at pta. 85 million (£400,000 - £500,000) for breach of contract.
In their statement of claim CSA made this allegation as regards the
existence of a contract between themselves and the plaintiff:
„The economic conditions were also fixed in the 21 May 1998 [sic]
document signed by Mr Turner and the representative of the Chequepoint
group, Mr Colin Dodson, thus perfecting the service agreement stipulated
between the parties for further performance of Mr Turner’s services in
Spain, for the benefit of the Spanish subsidiary Changepoint SA.“
Though the year is wrongly stated, it is plain (as Mr Supperstone QC
for the respondents accepted) that the „21 May 1998 document“ is a
reference to the letter of 21 May 1997.
A number of documents were annexed to the statement of claim. They
included the letter of 21 May 1997, the plaintiff’s application Form IT1
and his witness statement in the Tribunal proceedings, together with a
Spanish translation. But Harada’s response on Form IT3 was not annexed.
Moreover the statement of claim included this assertion:
„... this unjustified departure [that is the plaintiff’s departure from the
Madrid office in February 1998] was accompanied by a baseless court
claim in Great Britain against the client for the amount of £130,000
sterling, as if the agreement had been terminated for expiration of the
term covenanted by both parties - which was not the case - and he was
owed monetary amounts by Changepoint SA, which were unfounded by all
lights, concealing the truth from the English court.“
The statement of claim is a detailed document. Neither its contents, nor
any of the documents annexed to it, gave the Spanish court the least
indication of the terms of the ruling on jurisdiction which had been made
by the Employment Tribunal the previous month.
The Spanish proceedings were sent to, or served on the plaintiff. One
of the documents annexed to CSA’s statement of claim, a certificate
of posting with a note attached, strongly suggests that the Spanish
proceedings were sent to the plaintiff on Mr Grovit’s instructions.
The plaintiff did not, and to date has not, appeared to respond to the
proceedings in Madrid. Rather on 18 December 1998 he issued the writ in
this action claiming an injunction to restrain Mr Grovit and Harada from
procuring CSA to continue, and to restrain CSA itself from continuing,
the action in the Madrid court. He also sought an injunction to restrain
the defendants from commencing or procuring the commencement of
any other proceedings against him outside England and Wales. On 22
December 1998 the matter came before Pumfrey J ex parte on notice.
The defendants’ counsel indicated that his clients desired to file evidence,
and that would take three weeks. Pumfrey J made an order to hold the
ring meantime
„that until judgment on the motion or further order in the meantime the
defendants and each of them be restrained from taking or procuring any
other person or persons to take any step in the action commenced by one
or more of the defendants against the plaintiff in the Court of First Instant
of Madrid or about 21 October 1998“.
In a succinct paragraph on p. 4 of his judgment Pumfrey J encapsulated
the nature of the plaintiff’s complaint:
„The proceedings in Spain were started, it will be observed, after the
decision of the industrial tribunal, at which the representatives of the
respondent, Harada Ltd, left the tribunal during the hearing. Mr Turner
says that this is an example of a manner of conducting proceedings which
is entirely characteristic of companies under the control of Mr Grovit. He
says that the Spanish claim is effectively an abuse of process designed to
place him under financial pressure by making him defend himself in Spain
in proceedings in which he is obliged to employ a local lawyer, that in
fact the proceedings are baseless and that this is normal conduct for the
Chequepoint companies. Accordingly, he says the Chequepoint companies
concerned in these proceedings should be restrained from carrying on the
Spanish proceedings and that Mr Grovit ought to restrained from making
them do so.“
So it was that the plaintiff’s application came before Mr Donaldson QC as
a motion by order on 24 February 1999. As I have said, he discharged
the injunction granted Pumfrey J (subject to a stay on the order for
discharge) and held that in principle the order sought by the plaintiff
should not be granted.
In order to understand the basis of the deputy judge’s reasoning, and
the nature of the issues on this appeal, it is convenient at this stage
to refer to certain provisions in the Convention on Jurisdiction and
the Enforcement of Judgements in Civil and Commercial Matters - the
Brussels Convention - enacted into English law by the Civil Jurisdiction
and Judgments Act 1982. The text of the Convention is in the form in
which it was amended in 1990, on the accession of Spain and Portugal.
Here are the relevant provisions:
„Article 2
Subject to the provisions of this Convention, persons domiciled in a
Contracting State shall, whatever their nationality, be sued in the courts
of that State.
Article 5
A person domiciled in a Contracting State may, in another Contracting
State, be sued -
1. In matters relating to a contract, in the courts for the place of
performance of the obligation in question; in matters relating to individual
contracts of employment, this place is that where the employee habitually
carries out his work, or if the employee does not habitually carry out his
work in any one country, the employer may also be sued in the courts for
the place where the business which engaged the employee was or is now
situated.
5. As regards a dispute arising out of the operations of a branch, agency
or other establishment, in the courts for the place in which the branch,
agency or other establishment is situated.
Article 17
If the parties, one or more of whom is domiciled in a Contracting State,
have agreed that a court or the courts of a Contracting State are to have
jurisdiction to settle any disputes which have arisen or which may arise in
connection with a particular legal relationship, that court or those courts
shall have exclusive jurisdiction...
Article 21
Where proceedings involving the same cause of action and between the
same parties are brought in the courts of different Contracting States,
any court other than the court first seised shall of its own motion stay its
proceedings until such time as the jurisdiction of the court first seised is
established.
Where the jurisdiction of the court first seised is established, any court
other than the court first seised shall decline jurisdiction in favour of that
court.
Article 22
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.
Article 24
Application may be made to the courts of a Contracting State for such
provisional, including protective, measures as may be available under the
law of that State, even if, under this Convention, the courts of another
Contracting State have jurisdiction as to the substance of the matter.“
The deputy judge considered that it would be „wrong in principle“ to grant
the injunction sought. He took the view that even if the English court were
persuaded that the Spanish court had no jurisdiction to enter into the
proceedings before it, still it would be for the Spanish court to decide that
question. Paragraph 19 of his judgment reads:
„Nor would it change matters if the courts of Convention state A were to
consider it clear beyond serious argument that the courts of Convention
state B have no jurisdiction. Even in such a case, the decision on the
jurisdiction of the courts of state B is for the courts of that state, and they
are all the more likely to rule against having jurisdiction if the contrary
conclusion is indeed unarguable (an evaluation which is in itself often
uncertainly subjective). In any event in the present case I do not take the
view that the plaintiff is plainly correct beyond argument in his contention
that the Spanish courts do not have jurisdiction, nor did counsel for the
plaintiff aim his submissions that high.“
He proceeded to discuss a decision of this court in the case of Continental
Bank NA v Aeokas Cia Naviera SA [1994] 4 All ER 540. That was a case
in which this court granted an order to enforce an exclusive jurisdiction
clause in a contract, to which Article 17 of the Brussels Convention
applied. The deputy judge said:
„22. By contrast in the present case CSA was and is under no obligation
not to bring suit in Madrid. There is at best for the plaintiff, if his
submissions are correct, an absence of jurisdiction in the Spanish courts.
But that means simply that the Madrid court if it were in agreement with
the plaintiff’s submissions on the question, would in due course have
to decline jurisdiction. It does not mean that CSA is in breach of any
obligation to the plaintiff in even commencing proceedings in the Spanish
court or continuing them until the Spanish court rules on its jurisdiction.
Aeokas therefore provides no authority for the grant of an injunction in
the present case.
23. Whether or not the Madrid court has jurisdiction under Articles 5(1) or
is obliged to dismiss or stay the proceedings under Articles 21 and 22 are
therefore in my judgment matters for the Madrid court to consider and
decide, and cannot properly form the basis for an injunction ordered by
this court...
24. The plaintiff further contends that the claim in the Madrid action is
manifestly ill-founded in law and fact and submits that such absence
of proper basis for the claim justifies the English court in enjoining its
continued prosecution, even if the Madrid court does have jurisdiction
over the claim. In my judgment, that submission is inconsistent with
the principles and scheme of the Convention. Such an injunction, in
so far as it based on the claim in the foreign court being manifestly ill-
founded, would necessarily involve an adjudication of the substance of
the claim. But if the court seised by the claimant has jurisdiction, the
Convention requires it to accept and exercise that jurisdiction, ie to decide
the substantive claim, and Article 21 is designed to ensure that no other
court may do so...“
The deputy judge lastly addressed the plaintiff’s submission
„that there was no legitimate juridical advantage in bringing the claim in
Spain rather than in England: that the claim was therefore vexatious and
oppressive...“
He stated (paragraph 26):
„No court can decline a jurisdiction assigned to it by the Convention
on the ground that there is a more appropriate parallel jurisdiction in
another Convention state... In the world of the Convention all permitted
jurisdictions are ex hypothesi appropriate, and none superior to another
(save for cases of exclusive jurisdiction such as Article 17). For the
same reasons it would be wrong for a court by injunction to prevent a
claimant from proceeding in any other forum also permitted to him by the
Convention.“
All these passages seem to me to exemplify a single proposition: where
the foreign court may arguably possess jurisdiction in light of the Brussels
Convention provisions, the question whether in fact it possesses such a
jurisdiction must be left to that court to decide. The deputy judge appears
to me to have treated this proposition as having overriding force, so that
all other considerations must yield to it. I consider this was an erroneous
approach to the case, for two reasons. First, it gives no weight whatever
to the plaintiff’s contention that on the facts the Spanish proceedings
have been launched purely in order to oppress the plaintiff, and not
for any reason that could in good faith be justified, and so ought to be
regarded as abusive of the proceedings here. Secondly, I am satisfied
that on the facts, and in light of the material provisions of the Brussels
Convention, the Employment Tribunal has exclusive jurisdiction over the
issues sought to be raised in Madrid.
Abuse of Process
I turn first to the case concerning abuse. I entertain not the slightest
doubt but that, were the English court to find that proceedings had been
launched in another Brussels Convention jurisdiction for no purpose other
than to harass and oppress a party who is already a litigant here, the
English court possesses the power to prohibit by injunction the plaintiff
in the other jurisdiction from continuing the foreign process. It has to be
remembered that the carefully constructed system of mutual recognition
between jurisdictions established by the Brussels Convention is built on
the premise that the courts of one State only will hear the case, and its
judgment may be enforced, without further consideration of the merits,
in any of the other contracting States. To my mind it follows that where
a party in the courts of one State seeks to vex and oppress his opponent
by process against him in another State, directed to issues which are
being or could be litigated within the proceedings in the first State,
the case is to all intents and purposes the same as one where, within
this jurisdiction, one party oppresses his adversary by the issue and
prosecution of multiple actions.
„... the process of the Court must be used bona fide and properly and
must not be abused. The Court will prevent the improper use of its
machinery, and will, in a proper case, summarily prevent its machinery
from being used as a means of vexation and oppression in the process of
litigation“.
The bringing of multiple actions upon the same issue is a well-recognised
category of abuse: see for example Ashmore v British Coal Corporation
and Yat Tung Investment Co. Ltd v. Dao Heng Bank Ltd. In any event, an
action not brought bona fide for the purpose of obtaining relief but for
some other ulterior or collateral purpose may be struck out as an abuse of
the process of the court; see per Stuart-Smith LJ in Lonrho v. Fayed (No.
5).
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 Convention (which, of course, by
virtue of the executive provisions of the Act of 1982 constitutes domestic
statute law) which imposes any such restriction. Mr Hickey for the plaintiff
suggested that Article 24 (which I have set out) assists his case for an
injunction. I entertain some doubt as to that; I consider that the primary
focus of Article 24 is to allow the courts of one State to take interim
measures, such as the grant of a freezing injunction, so as to protect
the integrity and efficacy of proceedings even though another State has
jurisdiction in relation to them. I would rest my view of the power to
prevent abuse by an anti-suit injunction on the inherent jurisdiction of the
English court.
In the present case, on the abuse issue, I attach importance to the
following features in whose description I will incorporate any necessary
findings of fact, where there is a factual dispute.
(1) The Spanish proceedings were launched by CSA within a month or so
of the ruling of the Employment Tribunal to the effect that it possessed
jurisdiction under the Brussels Convention to hear the plaintiff’s dismissal
claim; and at almost exactly the same time (on, I think, 14 October 1998)
Harada filed Notice of Appeal to the EAT against the Tribunal’s ruling.
(2) CSA failed - and it can only have been done deliberately - to
inform the Spanish court of the Tribunal’s ruling, or of the fact that any
jurisdictional issue had arisen in the Tribunal. If the proceedings in Madrid
were brought in good faith, it seems to me simply obvious that CSA would
have made clear to the court at the outset that there was an extant ruling
to the effect that an English tribunal had jurisdiction to decide whether
the plaintiff had been wrongly or unfairly dismissed in the very same
factual context as they, CSA, were deploying in the Spanish proceedings.
In fact, although as I have said they annexed to the statement of claim
Form IT1 and the plaintiff’s witness statement made for his application to
the Tribunal (but not Harada’s Form IT3), the text of their pleading where
that application was described was in my judgment seriously misleading:
„a baseless court claim in Great Britain against the client [sc. CSA; but of
course the claim was against Harada] for... £130,000, as if the agreement
had been terminated for expiration of the term covenanted by both
parties - which was not the case [but the Tribunal application was not a
claim brought, after expiry of the contract by effluxion of time, for money
due under it and allegedly unpaid] - and he was owed monetary amounts
by Changepoint SA [there was no such allegation]...“
It is in relation to this part of the case that I should explain why the
appeal was restored for further argument before us on 26 May 1999.
At the earlier substantive hearing on 12 May certain documents were
produced, exhibited to an unsworn affidavit of Mr Grovit, which were
deployed to suggest that the Spanish court is satisfied as to its own
jurisdiction and is in some way insisting that the proceedings before
it go ahead. There was no document from the court itself. We were
entirely unpersuaded that we had any clear material to demonstrate
what, if any, view the Spanish court had taken as to the jurisdiction
question. Moreover this affidavit of Mr Grovit has still not been sworn.
When we reserved judgment on 12 May, we expected that some helpful
enquiry might be made so that we might ascertain the true position. The
defendants’ solicitors wrote to the court on 19 May 1999 stating that the
Spanish court had been made aware by the plaintiff himself of the issue
of jurisdiction arising in the Tribunal, and of the Tribunal’s decision, and
yet had determined that they possessed jurisdiction over the Spanish
proceedings. The solicitors asserted that the plaintiff, who was present at
the hearing before us on 12 May, had failed to disclose to this court his
own statement to the court in Madrid. They enclosed a „certificate“ dated
11 May 1999, made by one of the defendants’ (or CSA’s) lawyers, Senor
Jimenez-Poyato. It sets out what is said to be the plaintiff’s response to
the Spanish claim:
„I do not accept the notification. It concerns proceedings relating
to the same subject which are currently in hand between the same
parties through the Employment Tribunal, which, on September 10
1998, declared itself competent in all matters relating to my contract of
employment.“
There is another document signed by Senor Jimenez-Poyato, stated to
be an affidavit signed on 26 May 1999, asserting that the Spanish court
had read the Tribunal’s decision of 10 September 1998 before determining
that it possessed jurisdiction.
Seeing that there is still no material whatever from the Spanish court
itself, Mr Supperstone made it admirably plain that he did not seek to
make any application to us based on any allegation of non-disclosure by
the plaintiff. In fact there was produced a further affidavit of the plaintiff,
which shows that his so-called „response“ to the Spanish claim was in
fact taken from the text of a letter he had written to the Senior Master
on 15 December 1998. He had not asked the Senior Master to have the
letter sent to Spain, though that in fact was done. It appears that after
the injunction granted by Pumfrey J, the defendants had had the letter
translated into Spanish and re-lodged at the Spanish court. The plaintiff’s
affidavit also exhibits a letter from a Spanish lawyer, Senor Lopez-Ibor
Alino, making it entirely clear that Harada and CSA can discontinue the
Spanish proceedings, and Mr Grovit can procure them to do so.
(3) CSA mounted a case in Spain whose viability depended on the
Spanish court being satisfied that a contract of employment had subsisted
between the plaintiff and themselves. They relied on a document (the
letter of 12 May 1997) which, far from demonstrating the existence of
such a contract, in fact, in my judgment, demonstrated the opposite. It
is common ground that before his deployment to Spain the plaintiff was
employed by Chequepoint UK Ltd. To my mind the terms of the letter put
it wholly beyond doubt that the identity of his employer remained the
same thereafter („The Company will continue to pay... “ etc).
Mr Supperstone QC, displaying much valour in a spectacularly hopeless
cause, submitted that there were some indications in the evidence that
a contract might have been concluded between CSA and the plaintiff. He
referred to the affidavit sworn in these proceedings by Mr Bermudez who,
it will be recalled, signed himself „Group Internal Auditor“ on the dismissal
letter of 5 March 1998, and gave evidence before the Tribunal on behalf of
Harada. In his affidavit he described himself as „manager of Changepoint
SA“. The passage referred to by Mr Supperstone appears in paragraph 6:
„He [sc. the plaintiff] had been brought in as a lawyer but clearly had to
work closely with and take advice from the Third Defendant’s Spanish
lawyers and was accountable to me as the manager of the business.“
But this, assuming its truth, demonstrates no more than what is common
ground, namely that the plaintiff had been sent to work at CSA’s offices
in Madrid; and if he took instructions from Mr Bermudez in the latter’s
capacity as CSA’s manager, that is wholly unsurprising and entirely
consistent with his remaining, as a matter of privity of contract, an
employee of Chequepoint UK Ltd or (after December 1997) Harada. Mr
Supperstone referred also to a sentence in paragraph 22 of Mr Grovit’s
first affidavit:
„The cost of his [the plaintiff’s] salary was claimed from and paid by the
Third Defendant to the Second Defendant.“
But this, to my mind, plainly contradicts the proposition that the plaintiff
was the employee of CSA rather than Harada. If he was employed by
CSA, Harada would have nothing to do with payment of his salary.
Mr Supperstone also submitted that it would be wrong for this court
to pre-empt the Spanish court by holding that there was no contract
between CSA and the plaintiff. Evidence might be led in Spain to cast
a different light on the matter, notwithstanding that there is not at
present the slightest trace of such evidence anywhere to be found. But
this submission merely replicates the deputy judge’s error. This court is
obliged to look into the facts in order to ascertain whether the Spanish
proceedings are in the circumstances an abuse of the process here.
The plaintiff has produced an affidavit sworn by the Spanish lawyer to
whom I have referred, Senor Lopez-Ibor Alino. In it he states that a
change of the identity of the plaintiff’s employer, from Chequepoint UK Ltd
to CSA, would by Spanish law have required a novation expressly agreed
to by the plaintiff; and on the documents he has seen (which include all
those to which I have referred and others) no such novation took place.
The truth is that from first to last there is not a shred of evidence of any
contract between CSA and the plaintiff. There was no suggestion to that
effect by Harada in the Employment Tribunal; indeed in Form IT3 Harada
affirmed themselves as the contracting party:
„The applicant ordinarily worked for the respondent [Harada] outside
Great Britain...“
If the Spanish proceedings were launched by CSA in the knowledge that
the plaintiff’s contract was with Harada, as I find they were, they must in
my judgment have been launched in bad faith.
(4)It is not disputed that Harada and CSA belong to the same group
of companies, the Chequepoint Group; Mr Grovit asserts as much
himself (paragraph 4 of his first affidavit). As I have indicated, the
plaintiff says that Mr Grovit is the guiding mind, controller and ultimate
owner of Harada and CSA. Mr Supperstone submitted that there is
no evidence to support this assertion. The contrary is true. Mr Grovit
admits (first affidavit, paragraph 14) to some „operational influence“
over the companies within the Chequepoint Group. The plaintiff swears
(first affidavit, paragraph 5) that before the Employment Tribunal Mr
Dodson (to whom I have already referred and who seems to have been
an employee of Harada; the plaintiff describes him as Mr Grovit’s personal
assistant) gave evidence to the effect that „the decisions are always taken
by Mr Grovit“. There is nothing in the respondents’ affidavits filed in these
proceedings to suggest that this evidence was not given.
There is a welter of evidence in the plaintiff’s first affidavit, giving much
chapter and verse, as to the controlling hand of Mr Grovit, with most of
which, however, Mr Grovit joins issue in his equally detailed affidavit. I
bear firmly in mind (and I shall refer to this further below) that we have
not heard the witnesses cross-examined. But it is entirely obvious, for the
reasons I have already given in (1) - (3), that the Spanish proceedings
were an orchestrated response to the plaintiff’s application before the
Employment Tribunal; and there is no candidate for the orchestra’s
conductor but Mr Grovit. There is moreover, what is to my mind a plain lie
in paragraph 33 of his affidavit:
„The third defendant is not party to any proceedings in England and the
issues in the Spanish proceedings, as I am advised, are quite distinct
from those raised by the plaintiff in his application before the English
Employment Tribunal.“
No less mendacious is the following passage in paragraph 35, whose vice
is compounded by its evasiveness:
„There are a set of proceedings commenced in Spain which seek
substantial relief on behalf of the third defendant as the equivalent of the
plaintiff [sic] in those proceedings involving as I am advised completely
separate issues and causes of action in Spanish law, principally by a
Spanish company which is not party to any English proceedings.“
It is clear that at the very least there is a considerable overlap between
the issues in the two sets of proceedings, relating to the rights and
wrongs of the plaintiff’s dismissal or resignation from his employment.
It is inconceivable that this was unknown to Mr Grovit when he swore
his affidavit. And it is astonishing that Mr Grovit nowhere deposes to
the identity - Harada or CSA - of the plaintiff’s employer. Indeed no one
on the respondents’ behalf has gone on oath to say that there was any
contract between the plaintiff and CSA.
On the question of abuse of process, it is to my mind plain beyond the
possibility of argument that the Spanish proceedings were launched in
bad faith in order to vex the plaintiff in his pursuit of the application
before the Employment Tribunal here. The proceedings before the deputy
judge, and so before us, were and are in the nature of an interlocutory
application, in form at least. I accept at once that it must be unusual
for any court to arrive at such findings of fact as I think it right to make
in this case without the benefit of hearing the evidence tested. But
all the credible evidence points one way. The documents lead to the
ineluctable conclusion that, as I have said, the Spanish proceedings were
intended and intended only to oppress the plaintiff and as such fall to be
condemned as abusive as a matter of elementary principle.
Exclusive Jurisdiction
Mr Hickey submitted that the Employment Tribunal was the court „first
seised“ and that its jurisdiction in the case was „established“, within the
meaning of Article 21 of the Convention. If that is right (as it plainly is
subject to Mr Supperstone’s submission to which I will come directly),
then if the Spanish proceedings are upon the same cause of action and
between the same parties as those before the Tribunal, the Spanish
court is obliged by Article 21 to decline jurisdiction. But Mr Supperstone
submitted that the parties and the cause of action were different, so that
the premise of Article 21 is not fulfilled and the Article has no application
to the case.
Gubisch v Palumbo was a case where an action had been brought
by a party in one Brussels Convention State for the rescission of an
international sales contract whilst a claim by the other party to enforce
the same contract was pending in another State. There was a reference to
the European Court of Justice seeking a preliminary ruling on the question
whether such a situation fell „within the scope of lis pendens pursuant to
Article 21“. The Court said:
„14. It must be observed first of all that according to its wording Article
21 applies where two actions are between the same parties and involve
the same cause of action and the same subject-matter; it does not lay
down any further conditions. Even though the German version of Article
21 does not expressly distinguish between the terms `subject-matter’ and
`cause of action’, it must be construed in the same manner as the other
language versions, all of which make that distinction.
15. In the procedural situation which has given rise to the question
submitted for a preliminary ruling the same parties are engaged in two
legal proceedings in different Contracting States which are based on the
same `cause of action’, that is to say the same contractual relationship.
The problem which arises, therefore, is whether those two actions have
the same `subject-matter’ when the first seeks to enforce the contract
and the second seeks its rescission or discharge. [my emphasis]
16. ... The question whether the contract is binding... lies at the heart
of the two actions. If it is the action for rescission... that is brought
subsequently, it may even be regarded as simply a defence against the
first action...
17. In those procedural circumstances it must be held that the two
actions have the same subject-matter, for that concept cannot be
restricted so as to mean two claims which are entirely identical.“
The two sets of proceedings before us are manifestly both concerned with
the plaintiff’s contract of employment, and in particular the circumstances
of its termination. To that extent they are based on the same cause
of action - that is, as the Court of Justice said in Gubisch, the same
contractual relationship. Mr Supperstone submitted that allegations are
made in the Spanish proceedings of alleged breaches of contract by the
plaintiff which are quite discrete from the circumstances of the contract’s
termination. That is so; but every one of them could have been raised by
way of counterclaim in the Tribunal proceedings. In my judgment such
a state of affairs demonstrates, consistently with Gubisch, a sufficient
identity of subject-matter as well as cause of action.
As regards identity of parties, it is of course true that Harada, the English
respondent, and CSA, the Spanish claimant, are distinct legal entities.
There is, in fact, some material suggesting that Harada has participated
in the Spanish proceedings, though I think only for the purpose of filing
what is called a „pre-trial conciliation claim“. But this merely muddies the
waters. CSA is put forward in Madrid as the substantial claimant.
However for the purposes of Article 21, once it is clear (as I would hold it
is) that there is an identity of cause of action and subject-matter, I do not
consider that Mr Supperstone can be heard to say that there is no identity
of parties. Here the argument overlaps with that relating to abuse: the
deployment of CSA, a Spanish company, as claimant in Madrid is nothing
but a device to confer putative jurisdiction on the Spanish court. That is
not only in the circumstances of the case abusive upon ordinary principles
of our domestic law. In addition, for this court to treat it as reality rather
than the sham and pretence which it plainly is, and accordingly to deny
what is otherwise the clearly established jurisdiction of the Tribunal under
Article 21, would in my judgment tend to undermine what Lord Goff of
Chieveley has called „the primary purpose of the Convention [viz] to
ensure that there shall be no clash between the jurisdictions of member
states of the Community“.
Moreover there is jurisprudence of the Court of Justice to show that the
issue of identity of parties, in the context of Article 21, is to be regarded
pragmatically, just as is that of identity of cause of action. In Drouot the
Court held:
„19. It is certainly true that, as regards the subject matter of two
disputes, there may be such a degree of identity between the interests
of an insurer and those of its insured that a judgment delivered against
one of them would have the force of res judicata as against the other.
That would be the case, inter alia, where an insurer, by virtue of its right
of subrogation, brings or defends an action in the name of its insured
without the latter being in a position to influence the proceedings. In such
a situation, insurer and insured must be considered to be one and the
same party for the purposes of the application of art 21 of the convention.
20. On the other hand, application of art 21 cannot have the effect of
precluding the insurer and its insured, where their interests diverge, from
asserting their respective interests before the courts as against the other
parties concerned.“
In all these circumstances I would hold that for the purposes of Article 21
the cause of action, subject-matter and parties as between these two sets
of proceedings are the same. If that is right, it is beyond the argument
that the Employment Tribunal was the court „first seised“, and that its
jurisdiction was established by the ruling of 10 September 1998.
For all the reasons I have given I would allow this appeal. I wish to
emphasise that the reinstatement of injunctive relief in favour of the
plaintiff entails not the slightest disrespect to the Spanish court. It is of
course elementary that there is no question of our requiring that court
to do or refrain from anything. I consider that the grant of relief would
underpin and support the proper application of the Brussels Convention,
to which, it goes without saying, the Spanish courts are as loyal as are
those of this jurisdiction.
As I stated at the outset, we indicated at the close of argument that we
would consider the appropriate form of relief if the question arose in light
of our judgments as to the substance of the case.
MR JUSTICE JONATHAN PARKER: I agree.
LORD JUSTICE STUART-SMITH: I also agree.
Order: Appeal allowed with costs; costs be fixed at £15,000; application
for permission to appeal to the House of Lords refused.