Neutral Citation Number: [
 2015]
  
EWCA
  
Civ
  
226 
  Case No: A3/ 2013/314 2 
IN THE COURT OF APPEAL (
 CIVIL
  DIVISION)  
ON APPEAL FROM THE HIGH COURT OF JUSTICE  
QUEEN'S BENCH DIVISION  
COMMERCIAL COURT  
THE HONOURABLE LADY JUSTICE GLOSTE R 
[2013] EWHC 3065 (Comm)   
 
  Royal Courts of Justice  
Strand, London, WC2A 2L L 
  18/03/
 2015 
B e f o r e :  
THE RIGHT HONOURABLE LORD JUSTICE LONGMORE  
THE RIGHT HONOURABLE LORD JUSTICE RYDER  
and 
THE RIGHT HONOURABLE LORD JUSTICE FLOY D 
____________________  
Between:  
 
 DEUTSCHE BANK AG LONDON 
BRANCH  Respondent/Claimant  
 - and -  
 PETROMENA ASA (in bankruptcy, 
represented by the chairman of the 
board of directors, Enterprise No. 987 
727 713)  Appellant/  
Defendant  
____________________  
Mr Richard Handyside QC and Mr David Murray (instructed by Allen & Overy 
LLP) for the Respondent/Claimant  
Mr Alain Choo -Choy QC and Mr Henry Forbes Smith (instructed by Quinn 
Emanuel) for the Appellant/Defendant  
Hearing dates: 11th & 12th February 
 2015
   
____ ________________  
HTML VERSION OF JUDGMENT
 
____________________  
Crown Copyright ©  
Lord Justice Floyd :   
Introduction  
1. This is an appeal by the first defendant, Petromena ASA ("Petromena") 
against the order of Gloster LJ (as she now is) refusing a declaratio n that the 
English Court has no jurisdiction over the claim. In this action the claimant, 
Deutsche Bank AG ("DB"), seeks declarations of non -liability in respect of 
claims which Petromena has brought against DB in Norway. Petromena says 
the English court h as no jurisdiction to entertain DB's claim for a negative 
declaration.  
2. DB contends by its respondent's notice that, whatever the position in relation 
to Petromena's grounds of appeal, the court now has jurisdiction as a result of 
events which occurred sub sequent to the hearing before Gloster J. The critical 
event is that on 30 October 2013 Petromena filed a second acknowledgment of 
service. DB submits that, under CPR Part 11(8), the filing of this second 
acknowledgment of service amounts to a submission to  the jurisdiction of the 
English court. It is logical to consider this point first of all, because if DB is 
right and Petromena has submitted to the jurisdiction, it is common ground 
that Petromena's grounds of appeal will be moot.  
3. I start by setting out the chronology relevant to this point.  
4. On 10 October 2012 Petromena filed a first acknowledgment of service on 
form N9, having ticked the box against the words "The Defendant intends to 
contest jurisdiction". This is one of four options available on the f orm, the 
other three allowing the defendant to indicate an intention to admit the claim, 
to defend all of the claim or to defend part of the claim. None of these were 
ticked.  
5. On 7 November 2012 Petromena applied to the English court for an order 
declaring  that it did not have jurisdiction. Gloster J (as she then was) heard the 
application on 4 March 2013. The judge reserved her judgment. On 3 
September 2013 Gloster LJ (as she had by then become) circulated a copy of 
her draft judgment on Petromena's jurisd iction challenge to the parties' 
representatives, in accordance with the usual practice. The parties filed and 
exchanged written skeletons as to the appropriate form of order. In its written 
submissions Petromena asked for permission to appeal. Permission was 
opposed by DB. DB's draft order included a provision stating that 
"[Petromena] may file a further acknowledgment of service within 14 days". 
Petromena's representatives made no comment on this provision.  
6. Judgment was formally handed down on 14 October. There was no formal 
representation in court at the handing down. Gloster LJ refused permission to 
appeal, and made an order including the provision permitting (but not 
requiring) Petromena to file a further acknowledgment of service within 14 
days, as permitted by CPR Part 11(7)(b).  
7. On the same day, 14 October 2013, Petromena filed an appeal to the Supreme 
Court of Norway. The appeal raised two issues: (i) whether the Norwegian 
(rather than the English) court was the court first seised of the matt er and (ii) 
whether the causes of action in England and Norway were the same or related.  
8. The sealed order disposing of the jurisdiction challenge was received by DB's 
solicitors on 28 October 2013. On 29 October 2013 DB's solicitors wrote to 
Petromena's s olicitors in the following terms:  
"As you will be aware, pursuant to CPR 11(7), the acknowledgment of service 
previously filed by your client ceased to have effect when the Court declined 
to make the declaration sought by your client. The Order provided, amongst 
other things, that your client could file a further acknowledgment of service 
within 14 days of the date of the Order. We understand from the Court that no 
such acknowledgment of service has yet been filed. As this 14 day period has 
now passed plea se confirm by return whether your client intends to file a 
further acknowledgment of service.  
9. It appears that Petromena's solicitors had not yet received a copy of the sealed 
order because, by email on the evening of 29 October, they requested such a 
copy from DB's solicitors. DB complied with that request within an hour. The 
following morning, 30 October, Petromena's solicitors emailed that an 
acknowledgment of service was being filed with the court that morning.  
10. On 30 October Petromena filed its second a cknowledgment of service. A copy 
was provided to DB's solicitors. On the acknowledgment of service form only 
the box saying that Petrmomena intended to defend the whole of the claim was 
ticked.  
11. On 31 October 2013 Petromena's solicitors wrote to inform DB of Petromena's 
intention to apply to this court for permission to appeal the order of Gloster 
LJ. The letter continued:  
"as you will no doubt be aware, Petromena filed an appeal with the Norwegian 
Supreme Court on 16 October 2013 from the decision of Norw egian Court of 
Appeal on the issue of whether the Norwegian courts were first seised of this 
dispute.  
Our client seeks Deutsche Bank's consent to a stay of the High Court 
proceedings pending the outcome of the abovementioned appeals. Given that 
either of t he appeals may determine the issues in England, it is sensible that 
the underlying proceedings should be adjourned until those appeals are 
concluded."  
12. DB's response on 1 November 2013, through its solicitors, was that there was 
no basis for any stay of the  English proceedings. As to the English 
proceedings, in accordance with CPR 11(8) Petromena had submitted to the 
jurisdiction of the English court when it filed its second acknowledgment two 
days previously. An appeal would therefore be pointless. They add ed that they 
were not clear as to the basis on which the Norwegian appeal provided support 
for a stay of the English proceedings.  
13. On 4 November 2013 Petromena filed an appellant's notice with this court 
seeking permission to appeal. By a letter of the sam e date its solicitors rejected 
the assertion that, by filing its second acknowledgment of service, Petromena 
had "somehow submitted to the jurisdiction in England". They expressed the 
view that the steps taken by Petromena were consistent with its position  that 
the English court has no jurisdiction to hear the dispute.  
14. In due course Petromena obtained permission to appeal to this Court. DB 
applied to set aside that permission under CPR 52.9 on the grounds that the 
appeal was moot given Petromena's submissi on to the jurisdiction. Tomlinson 
LJ, hearing the application as a single Lord Justice, considered that the point 
was better considered by the full court hearing the rest of the appeal.  
15. I should first set out the provisions of Article 24 of the Lugano Con vention 
and CPR Part 11.  
"Article 24 Implied prorogation of jurisdiction  
Apart from jurisdiction derived from other provisions of this Convention, a 
court of a State bound by this Convention before which a defendant enters an 
appearance shall have jurisdiction. This rule shall not apply where appearance 
was entered to contest the jurisdiction, or where another court has exclusive 
jurisdiction by virtue of Article 22."  
16. CPR Part 11 provides:  
"(1) A de fendant who wishes to – 
(a) dispute the court's jurisdiction to try the claim; or  
(b) argue that the court should not exercise its jurisdiction  
may apply to the court for an order declaring that it has no such jurisdiction or 
should not exercise any jurisd iction which it may have.  
(2) A defendant who wishes to make such an application must first file an 
acknowledgment of service in accordance with Part 10.  
(3) A defendant who files an acknowledgment of service does not, by doing 
so, lose any right that he m ay have to dispute the court's jurisdiction.  
(4) An application under this rule must – 
(a) be made within 14 days after filing an acknowledgment of service; and  
(b) be supported by evidence.  
(5) If the defendant – 
(a) files an acknowledgment of service; an d 
(b) does not make such an application within the period specified in paragraph 
(4), 
he is to be treated as having accepted that the court has jurisdiction to try the 
claim.  
(6) An order containing a declaration that the court has no jurisdiction or will 
not exercise its jurisdiction may also make further provision including – 
(a) setting aside the claim form;  
(b) setting aside service of the claim form;  
(c) discharging any order made before the claim was commenced or before the 
claim form was served; and  
(d) staying the proceedings.  
(7) If on an application under this rule the court does not make a declaration – 
(a) the acknowledgment of service shall cease to have effect;  
(b) the defendant may file a further acknowledgment of service within 14 days 
or suc h other period as the court may direct; and  
(c) the court shall give directions as to the filing and service of the defence in a 
claim under Part 7 or the filing of evidence in a claim under Part 8 in the event 
that a further acknowledgment of service is f iled. 
(8) If the defendant files a further acknowledgment of service in accordance 
with paragraph (7)(b) he shall be treated as having accepted that the court has 
jurisdiction to try the claim.  
17. Both parties relied on ECJ jurisprudence for the purposes of interpreting 
Article 24 of the Lugano Convention. Most of the jurisprudence to which we 
were referred is concerned with the scope of the exception in the second 
sentence of Article 24 and in particular what is meant by an "appearance … 
entered to contest the jurisdiction." Previous English language versions of 
Article 24 limited the exception to appearances entered "solely" to contest the 
jurisdiction, whilst other versions (e.g. the French " si la comparution a pour 
l'objet  de contester la compétence" ) arguably had no equivalent restriction. 
This gave rise to problems in countries where the procedural law required the 
defendant to advance a case on the merits at the same time as any challenge to 
the jurisdiction. Where a sub stantive defence was served in parallel with a 
challenge to the jurisdiction, would the entering of an appearance be solely for 
the purposes of challenging jurisdiction?  
18. In Case C -150/80 Elefanten Schuh GmbH v Pierre Jacqmain [1982] 3 CMLR 
1, the defendants had raised their objection to jurisdiction some nine months 
after filing their defence on the merits. The national court asked t he ECJ 
whether the exception in Article 24 applied if the defendant had not only 
challenged jurisdiction but also made submissions in the action itself. The ECJ 
held at [17] that the equivalent provision of the 1968 Brussels Convention:  
"must be interpret ed as meaning that the rule on jurisdiction which that 
provision lays down does not apply where the defendant not only contests the 
court's jurisdiction but also makes submissions on the substance of the action, 
provided that, if the challenge to jurisdict ion is not preliminary to any defence 
as to the substance, it does not occur after the making of the submissions 
which under national procedural law are considered to be the first defence 
addressed to the court seised."  
19. More recently, in Case C -1/13 Cartie r Parfums -Lunettes v Ziegler France SA  
[2014] IL Pr 25 , the ECJ was concerned with the date at which, under Article 
27 of the Convent ion, the jurisdiction of a court first seised could be regarded 
as "established". In reviewing the overall scheme of the Convention, the Court 
relied on its previous interpretation of Article 24 in Elefanten Schuh , in 
holding that:  
"the jurisdiction of th e court first seised must be regarded as being established 
… if that court has not declined jurisdiction of its own motion and none of the 
parties has contested its jurisdiction prior to or up to the time at which a 
position is adopted which is regarded in  national procedural law as being the 
first defence on the substance submitted before that court."  
20. We were not referred to any authority which lays down an autonomous 
definition of "enters an appearance" in the first sentence of Article 24. I do not 
unders tand the ECJ to be saying in Elefanten Schuh  that the making of 
submissions on the substance of the action defines the entry of an appearance 
within the first sentence of Article 24. Rather, the court is explaining that after 
such submissions have been mad e, it is too late to take advantage of the 
exception in the second sentence. Likewise, Cartier -Parfums, to the extent 
that it is concerned with Article 24 at all, is concerned with the scope of the 
exception in the second sentence.  
21. Professor Briggs and Mr  Rees QC, in 
 Civil
  Jurisdiction and Judgments (5th 
edn. 2009) ("Briggs and Rees"), while recognising that "enters an appearance" 
may have an autonomous meaning, go on to say at paragraph 2.83 that 
precisely how and when the entering of an appearance takes place is governed 
by rules of local procedural law, provided always that these rules do not 
impair the effectiveness of the Convention. That view is consistent with the 
general approach of the ECJ to procedural rules: see Case 365 -88 Kongress 
Agentur Hagen  GmbH v Zeehaage BV  [1990] ECR I -1845  cited by Simon 
Brown LJ in Harada Limited (trading a Chequepoint) v Turner  [2003] 
EWCA
  
Civ
  1695 at [30]. Thus national law must not contain rules which 
compel a defendant to enter an appearance and thereby submit to the 
jurisdiction in order to protect his position on the merits. Such rules would 
impair the operation of the Convention.  
22. It is therefore to national procedur al rules that one must look, in the first 
instance, to determine whether an appearance has been entered. Once one has 
determined that question as a matter of national procedural law, it is necessary 
to ask whether the result is consistent with the effectiv e operation of the 
Convention.  
23. Two cases are of particular importance in relation to the interpretation of CPR 
Part 11, and its predecessor in Order 8 of the Rules of the Supreme Court. 
They are the combined cases of Sage v Double A Hydraulics and Chamber s v 
Morgan Starkings  (unreported Court of Appeal 28 March 1992 
("Sage/Chambers ")), and Hoddinott v Persimmon Homes  (Wessex) [2008]  1 
WLR 806  ("Hoddinott ").  
24. Sage/Chambers was concerned with the former RSC Order 12 rule 8, but the 
parties were agreed that the mechanism for challenging the jurisdiction of the 
court did not differ in substance from CPR Part 11.  
25. Mr Sage claimed against his employer for injuries he sustained in the course 
of his employment. The writ was not served until after the period for its 
service had expired. The defendants applied, in time, to set aside service but, 
due to an oversight, failed to attend the hearing  of their summons, which was 
in consequence dismissed. In the meantime the statement of claim had been 
served, and during the period when there was no pending application to set 
aside the writ, the defendants issued a summons seeking an extension of time 
for the defence. The defendants subsequently applied to reinstate the 
application to set aside the writ.  
26. Mr Chambers' writ for damages for injuries sustained in a motor accident was 
also served out of time. The defendant applied, also in time, to set the w rit 
aside and the plaintiff applied to extend the time for service of the writ. The 
district judge dismissed the defendant's application and extended time for 
service of the writ. The defendant thereupon served a further acknowledgment 
of service and on th e same day issued a notice of appeal against the judge's 
order. She also filed a defence. On the appeal, the defendant was permitted to 
withdraw the second acknowledgment of service and her appeal was heard on 
the merits.  
27. Farquharson LJ delivered the judg ment of the court, which also included Lord 
Donaldson MR and Stocker LJ. In a passage dealing with the law applicable to 
both appeals, he said this:  
"The danger inherent in doing anything further after [the defendant] has issued 
a summons to set aside, lies in the risk that he may be taken to have waived his 
right to challenge the writ or the court's jurisdiction. It is necessary in each 
case to determine whether any step taken, looked at objectively, falls i nto this 
category. A useful test is whether a disinterested bystander with knowledge of 
the case, would regard the acts of the defendant (or his solicitor) as 
inconsistent with the making and maintaining of a challenge to the validity of 
the writ or to the  jurisdiction."  
28. Applying this disinterested bystander test to the facts of Sage,  the court 
regarded the issue of a summons seeking an extension of time, in the period 
when there was no extant challenge to the jurisdiction, as an act inconsistent 
with the m aintenance of such a challenge. The challenge to the validity of the 
writ therefore failed. By contrast, in Chambers, the court considered that, 
when the second acknowledgment of service was returned, the disinterested 
bystander with knowledge of the facts  would have been in no doubt that a 
challenge to jurisdiction had been mounted and was being vigorously 
maintained. There was thus no waiver of the defendant's rights.  
29. In Hoddinott  the claimant applied without notice to the defendant and shortly 
before th e expiry of the four month period for service of a claim form for an 
extension of time for its service. A two month extension was granted, 
whereupon the defendant applied to set aside the extension of time on the 
ground that no good reason had been advance d for the extension. The 
defendant subsequently filed the acknowledgment of service but did not make 
an application under rule 11(1) challenging the jurisdiction of the court.  
30. Dyson LJ (giving the judgment of the Court of Appeal, which also included 
Sir A nthony Clarke MR and Jacob LJ) held that the meaning of CPR Part 11 
paragraphs (1) to (5) was clear. In particular, if a defendant filed an 
acknowledgment of service and failed to make an application under paragraph 
11(1) within the specified period he was , as the rule states, "to be treated as 
having accepted that the court has jurisdiction to try the claim". This was so 
despite the existence of the defendant's application to set aside the order 
granting the extension of time, which no doubt carried with i t the implication 
that the defendant did not accept that the court had jurisdiction. The court held 
that that application was, by virtue of paragraph 11(5), treated as abandoned.  
31. It does not appear that Sage/Chambers was cited to the court in Hoddinott . 
The application of the disinterested bystander test was therefore not 
considered in Hoddinott . Given the co -pending application to set aside the 
extension of time for service of the writ, it might be suggested that an 
application of that test would have led to a different result. Sage/Chambers 
was, however, a case under the former RSC, whereas Hoddinott was decided 
under the CPR. Although there was no substantive change in the mechanism 
provided for in the two sets of rules for challenging  the jurisdiction, the CPR 
represented a significant change of culture in the court's attitude to the 
application and interpretation of rules. It was a "new procedural code": CPR 
Part 1.1(1). Whilst authorities under the RSC remain of persuasive authority 
on the construction of the CPR, they are not binding: Biguzzi v Rank Leisure 
plc [1999] 1 WLR 1926 .  
32. Quite apart from this, there is an important distinction between the cases of 
Sage  and Chambers . Sage was a case of what one might call common law 
waiver, the doing of an act inconsistent with maintaining a challenge to the 
jurisdiction. Such a waiver must clearly convey to the claima nt and the court 
that the defendant is unequivocally renouncing his right to challenge the 
jurisdiction, and the application of a bystander test is plainly apt. By contrast, 
Chambers was concerned with the effect, under the RSC, of a defendant 
returning a second acknowledgment of service. Order 12 rule 8(7) (which 
applied to both a first and second acknowledgment) provided that:  
"Except where a defendant makes an application in accordance with paragraph 
(1) the acknowledgment by a defendant of service of a  writ shall, unless the 
acknowledgment is withdrawn by the leave of the court under Order 21, rule 
1, be treated as a submission by the defendant to the jurisdiction of the court in 
the proceedings."  
33. It does not appear to have been argued in Chambers that, in the case of this 
statutory form of submission to the jurisdiction, a disinterested bystander test 
is simply not applicable. Instead the court applied the same test to both cases.  
34. It is true that a further distinction between Chambers and Hoddinott  is that the 
former is concerned with a second acknowledgment of service, and the latter 
is concerned with a first acknowledgment of service. This led Mr Choo -Choy 
QC, who appeared for Petromena, to submit that we should follow Chambers 
in preference to Hoddin ott as governing the position in relation to second 
acknowledgments under paragraph 11(8), leaving the Hoddinott rule in place 
only for first acknowledgments under the earlier paragraphs of the rule. He 
further submitted that it was possible to read a qual ification into 11(8) as a 
matter of construction. The qualification was that the deeming effect of the 
filing of a second acknowledgment of service only occurs when no 
jurisdictional challenge may be mounted by way of an appeal under CPR 52.4. 
Such a quali fication was necessary, notwithstanding the ability to request an 
extension of time for filing the acknowledgment of service, because otherwise 
the appeal against the rejection of the jurisdiction challenge becomes subject 
to collateral discretionary consi derations. It would also, in some cases, cut 
down the time a defendant has to appeal.  
35. I cannot accept these submissions. The language of CPR 11(8) is clear, and it 
is unlikely in the extreme that the draftsman intended the words in paragraphs 
(5) and (8) to have different meanings. The correct course for a defendant who 
has failed in a jurisdiction challenge and who wishes to appeal is to ask for an 
extension of time for filing the acknowledgment of service sufficient to enable 
his application for permissi on to appeal, or his appeal, to be determined. It is 
quite unrealistic to suppose that a sensible claimant, or if not the court, would 
refuse such an extension when the effect of such a refusal would be to render 
the appeal nugatory. It is unnecessary ther efore to read qualifying words into 
paragraph 11(8).  
36. In my judgment, the words "he shall be treated as having accepted that the 
court has jurisdiction to try the claim" in paragraphs (5) and (8) of CPR Part 
11 are to be given the same construction, namely  that preferred by this court in 
Hoddinott . The disinterested bystander test has no application to what I have 
called statutory submission to the jurisdiction. Thus, where the conditions of 
those paragraphs are met, the defendant is to be treated as having  submitted to 
the jurisdiction. The rigour of such a construction is mitigated by the fact that 
it remains possible to withdraw an acknowledgment of service with the 
permission of the court: see CPR Part 10 PD 5.4. The effect of the withdrawal, 
if permitte d, would no doubt be that there is no longer a submission to the 
jurisdiction. No such application was made at first instance in the present case, 
although, as I shall explain, one is informally launched in Mr Choo -Choy's 
skeleton before us.  
37. I do not see that there is any impediment in Article 24 of the Convention to 
construing the rules in this way. Jurisdiction is conferred under that Article 
where the defendant enters an appearance. One of the ways in which this 
occurs under English procedural law is wh en the defendant returns a second 
acknowledgment of service after an unsuccessful challenge to the jurisdiction. 
The defendant is not compelled to return the acknowledgment of service in 
order to protect his position on the merits: he may apply for a stay or an 
extension of time if he wishes to continue his challenge. The operation of 
these rules is fully consistent with, and does not impair the operation of, the 
Convention.  
38. Mr Choo -Choy submitted that a second acknowledgment of service filed 
subject to ex press or implied jurisdictional protest is not an appearance for the 
purposes of Article 24. He relies on Harada Limited (trading as Chequepoint) 
v Turner  [2003] 
 EWCA
  
Civ
  1695, in which the Court of Appeal rejected 
the suggestion that the appellant in an employment tribunal dispu te had 
submitted to the jurisdiction when the entire proceedings to date had been 
conducted subject to jurisdictional protest.  
39. I reject that argument. What was under consideration in Harada  was whether 
conduct in participating in proceedings under a jurisdictional protest amounted 
to a submission to the jurisdiction. The court rejected that suggestion on the 
basis of Elefanten Schuh . The only requirement was for the appellant to 
indicate he was challenging jurisdiction before filing a defence on the m erits. 
There was no provision equivalent to CPR 11 in play before the court in that 
case. The optional filing of a second acknowledgment of service in litigation 
under the CPR is, by contrast, an act which deems a party to have submitted to 
the jurisdictio n. It only does so if the defendant takes that step after he has had 
an opportunity of challenging the jurisdiction. I see no reason why the step of 
filing the acknowledgment of service should not be treated as the entry of an 
appearance for the purposes o f Article 24.  
40. I would add that, even if I had adopted the appellant's construction of the CPR, 
I would not have been persuaded that the application of the disinterested 
bystander test, on the facts of the present case, would have led to a different 
conclu sion. One factor which would, of course, heavily influence the 
disinterested bystander was that Petromena had filed a second 
acknowledgment of service at a time when it had been refused permission to 
appeal by Gloster LJ and not intimated any intention to continue its 
jurisdiction challenge by way of appeal. Against this, Mr Choo -Choy 
submitted that the bystander would understand from Petromena's pursuit of the 
Norwegian appeals that it was still continuing to challenge the jurisdiction of 
the English court .  
41. Assuming in favour of Mr Choo -Choy, without deciding the point, that it is 
correct to allow the disinterested bystander to raise his eyes above the horizon 
of the particular domestic proceedings concerned, and look to events in the 
foreign court, I was not persuaded that there was any inconsistency between 
Petromena's conduct in Norway and abandoning the challenge in England.  
42. The Norwegian proceedings were directed, from Petromena's perspective, to 
obtaining findings in Petromena's favour that Norway wa s the court first 
seised and that the causes of action in England and Norway were the same or 
related. A finding that Norway was first seised and that the causes of action 
were the same would have provided the ammunition for applying for a 
mandatory stay i n England under Article 27 of the Convention; a finding that 
they were related would be the basis for a discretionary stay under Article 28. 
Those articles provide as follows:  
"Article 27  
1. Where proceedings involving the same cause of action and betwee n the 
same parties are brought in the courts of different States bound by this 
Convention, 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 . 
2. 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 28  
1. Where related actions are pending in the courts of different States bound by  
this Convention, any court other than the court first seised may stay its 
proceedings.  
2. Where these actions are pending at first instance, any court other than the 
court first seised may also, on the application of one of the parties, decline 
jurisdicti on if the court first seised has jurisdiction over the actions in question 
and its law permits the consolidation thereof.  
3. 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."  
43. What would the disinterested bystander make of this? Mr Choo -Choy 
submitted that he would conclude that Petromena's conduct was not consistent 
with agreeing to the jurisdiction of the English court. He submitted that there 
would be no point in pursuing the Norwegian appeals whilst at the same time 
submitting to the jurisdiction here. Following success in Norway, Petromena's 
application for a mand atory stay would be met by DB's submission that it was 
no longer open to Petromena to challenge the jurisdiction even in the manner 
provided for by Article 27(1): see CPR 11(8). An application for a 
discretionary stay would also be susceptible to the argum ent that Petromena 
had already agreed to the jurisdiction of the English court.  
44. I do not accept this argument. Firstly, Article 27(1) is mandatory in its 
application. Where its conditions are made out, the court must grant a stay of 
its own motion and sub sequently decline jurisdiction if the foreign court's 
jurisdiction is established. Secondly, if Petromena had findings in its favour on 
the two preconditions for the operation of Article 27(1), it would be no answer 
for DB to say that Petromena had submitt ed to the jurisdiction. As pointed out 
at paragraph 2.10 of Briggs and Rees, Article 27 takes precedence over a 
number of earlier articles including Article 24.  
45. It follows that, had the disinterested bystander test been relevant, I would have 
held that th ere was no necessary inconsistency between Petromena's conduct 
in Norway and acceptance, at least until the decision of the Norwegian 
Supreme Court, of the jurisdiction of the English court to hear the claim. The 
bystander would consider, as Mr Handyside p ithily put it, that Petromena had 
decided to put all their jurisdictional eggs in the Norwegian basket.  
46. Finally I should deal with Petromena's application to withdraw its 
acknowledgment of service. There is no formal application before the court for 
this purpose. Paragraph 117 of Mr Choo -Choy's skeleton suggests that a 
common law submission to the jurisdiction can be withdrawn before it is 
relied on, and there is no evidence that the CPR 11(8) submission was relied 
on here, or that DB would be prejudiced i n any way by the withdrawal.  
47. I am not prepared to entertain this informal application. If such an application 
were made in accordance with the rules it would have to be supported by 
evidence: see CPR Part 10 PD paragraph 5.5. No such evidence has been filed. 
The court therefore has no explanation of why Petromena filed the 
acknowledgment of service, rather than seeking an extension of time for filing 
it. Moreover Petromena's solicitors were informed immediately of the 
consequen ces of the filing of the acknowledgment, but did not take any steps 
to seek to withdraw it until its skeleton argument was filed in this appeal. They 
should have applied promptly to the Commercial Judge for this relief, and they 
did not.  
48. I would therefore  uphold the judge's order on the ground that the English court 
has jurisdiction under Article 24 of the Convention by reason of Petromena's 
appearance by filing a second acknowledgment of service.  
Lord Justice Ryder  
49. The Article 24 question is whether Petr omena submitted to the jurisdiction of 
the courts of England and Wales when they filed the second acknowledgement 
of service on 30 October 2013 in the context of their previous declared 
position, their appeal to the Norwegian Supreme Court and their applic ation 
for a declaration. That depends on whether Petromena entered an appearance 
here within the meaning of Article 24 of the Lugano Convention.  
50. For the reasons he sets out, I agree with Floyd LJ that one must look to the 
CPR provided that the effectivene ss of the Convention is not impaired by 
those rules. I have no difficulty accepting that our domestic rules are 
consistent with the Convention. As to whether this court should follow 
Sage/Chambers or Hoddinott  I am firmly of the view that the new procedura l 
code provided by the CPR required a change of culture which is reflected in 
Hoddinott . The words in CPR 11 are clear and unambiguous and the 
consequence of their application must be that Petromena are to be treated as 
having submitted to the jurisdiction . I equally would not permit Petromena to 
withdraw its second acknowledgement of service by the informal application 
made in the face of this court.  
Lord Justice Longmore:   
  
51. I agree that Petromena has, on the facts of this case, submitted to the 
jurisdi ction. It is true that, before the enactment of the CPR, this court thought 
that the right test was "whether a disinterested bystander with knowledge of 
the case would regard the acts of the defendant (or his solicitor) as inconsistent 
with the making and maintaining of a challenge to the validity of the writ or to 
the jurisdiction", see page 4 of the unreported judgment of this court in Sage . 
It is also true that Sage  does not appear to have been cited to this court in 
Hoddinott v Persimmon Homes Ltd  [2008] 1 WLR 806 . But I am satisfied that 
we should follow the more recent authority, because the CPR, as Floyd LJ has 
pointed out , are "a new procedural code". It would be a recipe for muddle and 
inconsistency if we were to construe Part 11(8) differently from Part 11(5).  
52. The course to be followed by a defendant, who wishes to appeal from a judge's 
decision that the English court h as jurisdiction to try a claim and does not wish 
a judgment in default to be entered while it is appealing, is to ask the judge to 
extend the time for acknowledgment of service pending an appeal or (if she 
refuses permission to appeal) pending an applicati on for permission to this 
court and thereafter, if permission is given, the appeal.  
53. We do not know if the failure to do this was an oversight. If it was, an 
immediate application to the judge to withdraw the second acknowledgment of 
service could have bee n made once DB made it clear on 1st November 2013 
that its position was that Petromena had submitted to the jurisdiction. It is 
pointless to speculate now (15 months later) whether that application, if 
supported by evidence, would have had any chance of su ccess.  
54. I agree with Floyd LJ, therefore, that the respondent's notice should be upheld 
and that the English court has jurisdiction under Article 24 of the Lugano 
Convention.  
55. In those circumstances it is strictly unnecessary to consider whether the judge 
was right in her reasons for saying that the English court has jurisdiction in 
any event. But since permission to appeal was granted on the basis that she 
was arguably wrong and since the case might go further, it is right that we 
should deal with those ar guments in what will be a second part of our 
judgment.  
56. In summary, Petromena submits that its claims cannot be heard in England 
and should continue in Norway on the basis that: -  
i) jurisdiction is ousted in favour of Norway under Article 23 of the 2007 
Lugano Convention ("the Convention"), because the claims fall within the 
scope of a Norwegian exclusive jurisdiction agreement contained in a loan 
agreement dated 22nd May 2006 pursuant to which Petromena issued certain 
bonds ("the Loan Agreement");  
ii) the English Court does not have jurisdiction under Article 5 of the 
Convention because Petromena's claims fall to be characterised as contractual 
for the purposes of the Convention, and England is not the place of 
performance of the obligation in question under Article 5.1.  
57. DB, on the other hand, contends that its action should continue in England on 
the grounds that: -  
i) the Norwegian jurisdiction clause is irrelevant since the claims made by 
Petromena against DB do not arise out of, or in connection with , the Loan 
Agreement; the causes of action asserted by Petromena are founded upon an 
allegation that DB assumed the role of an adviser to Petromena, in addition to 
its role as bondholder; and it is DB's alleged assumption of that role of adviser 
to Petrome na, rather than any term of the Loan Agreement, that is said to have 
given rise to the various duties that were allegedly breached;  
ii) Article 5.1 of the Convention does not apply, since the claims sought to be 
asserted by Petromena, are plainly claims in  tort/delict and not contractual; 
accordingly, the English Court has jurisdiction under Article 5.3 on the basis 
that the place where the harmful event alleged by Petromena occurred, was 
England; alternatively, if the claim is to be characterised as contra ctual, the 
place of performance was England.  
58. Petromena now accepts that, if its claims are not to be characterised as 
contractual, they are claims in tort/delict and that there will be jurisdiction in 
England pursuant to Article 5.3 of the Convention.  
59. It is the terms of the Convention that apply in this case (rather than the usual 
Regulation (EC) No. 44/2001) because the Member States of the European 
Union and Norway agreed to be bound by the terms of the Convention which 
came into force on 1st January 201 0.  
The relevant provisions of the Convention  
60. In so far as material, the relevant provisions of the Convention provide as 
follows (in the same terms as the Regulation): -  
"General provisions  
Article 2  
1. Subject to the provisions of this Convention, person s domiciled in the State 
bound by this Convention shall, whatever their nationality, be sued in the 
courts of the State …  
Special jurisdiction  
Article 5  
A person domiciled in a State bound by this Convention may, in another State 
bound by this Convention, be sued:  
1 (a) in matters relating to a contract, in the courts for the place of 
performance of the obligation in question;  
b) for the purpose of this provision and unless otherwise agreed, the place of 
performance of the obligation in question shall be:  
- in the case of the sale of goods, the place in a Member State where, under the 
contract, the goods were delivered or should have been delivered,  
- in the case of the provision of services, the place in a Member State where, 
under the contract, the service s were provided or should have been provided,  
c) if subparagraph (b) does not apply then subparagraph (a) applies;  
… 
Prorogation of jurisdiction  
Article 23  
1. If the parties, one or more of whom is domiciled in a State bound by 
Convention have agreed that a court or the courts of a State bound by 
Convention 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 cou rts shall have jurisdiction. Such jurisdiction shall be exclusive unless 
agreed otherwise. …"  
Factual background  
61. I can recite the facts as found by the judge. Most of them are not in dispute.  
62. Petromena was a holding company registered in Norway which unde rtook no 
operational activity of its own. It had four wholly owned subsidiaries, 
Petromena Limited, PetroRig 1 Pte Ltd, PetroRig II Pte Ltd and PetroRig III 
Pte Ltd. The first of these subsidiaries was registered in Cyprus and the other 
three were register ed in Singapore. Petromena Limited owned an oil drilling 
ship (SS Petrolia), and the other subsidiaries were the owners of oil rigs which 
were being constructed for them at the Jurong Shipyard in Singapore. 
Petromena was listed on the Oslo Stock Exchange, but it is now in bankruptcy 
in Norway. It raised funds to finance the construction of oil rigs through its 
subsidiaries, which are now also in bankruptcy. Petromena was represented in 
the relevant events by its director, Mr Berge Gerdt Larsen, and by its 
managing director, Mr Lars Moldestad, both based in Norway.  
63. DB is a German financial institution incorporated under the laws of Germany. 
It has a London branch, registered in London as such ("DB London"). Under 
English law, the place of registration, DB Lo ndon is not a separate legal entity 
from DB. The complaints made by Petromena against DB all relate to the 
alleged conduct of DB London. DB London was represented in the relevant 
events by Mr Ivan Capriello and Mr Håkan Wohlin. Mr Capriello is a 
structured  credit trader and, at the time, was a director in DB London's Credit 
Solutions Group. He was based in London at DB London's office at 1 Great 
Winchester Street. From time to time Mr Capriello was assisted by Mr 
Wohlin, who was then the Co -Head of the West ern Europe Desk in the Debt 
Capital Markets team and covered inter alia  the Nordic market.  
64. In about May 2006, Petromena issued a series of bonds ("the bonds") in the 
amount of NOK 2 billion in order to raise funds that would be lent or 
contributed by Petr omena to PetroRig 1 Pte Ltd and PetroRig II Pte Ltd in 
order to part -finance the rigs that were to be constructed for them. The terms 
of the bonds were contained in the Loan Agreement of 22nd May 2006 
between Petromena as borrower and Norsk Tillitsmann ASA  ("Norsk 
Tillitsmann"), a Norwegian company based in Norway, as trustee ("the Loan 
Trustee") on behalf of the holders of the bonds ("the Bondholders").  
65. Clause 21.1 of the Loan Agreement contained a Norwegian jurisdiction and 
choice of law clause in the fo llowing terms: -  
"Disputes arising out of or in connection with the Loan Agreement which are 
not resolved amicably, shall be resolved in accordance with Norwegian law 
and in the Norwegian courts."  
66. By purchasing the bonds, the Bondholders acceded to and bec ame bound by 
the Loan Agreement (including the Norwegian exclusive jurisdiction clause). 
The Loan Agreement provided on page 3: -  
"Through their subscription in the Loan the Bondholders have accepted to the 
Loan Agreement (i.e.):  
* The Bondholders are boun d by the terms of the Loan Agreement provided 
that information about the accession was given in the subscription 
documents…"  
67. Clauses 3 and 4 of the Loan Agreement provided for the bonds to be listed on 
the Oslo Stock Exchange and registered with Verdipapir registeret ("VPS"), a 
Norwegian depositary. The bonds were registered with VPS, but in fact were 
never listed or traded on any Norwegian stock exchange. Sales of the bonds 
were settled through the Euroclear trading platform, based in Brussels, 
Belgium.  
68. The Loan Agreement provided that Bondholders could not sue Petromena 
directly to enforce the bonds, but could only recover the bonds through action 
taken by the Loan Trustee. Thus clause 15.5 provided that "the individual 
Bondholder cannot of his own accord recover his bond(s) directly from the 
Borrower". However, the holder(s) of at least 10% of the bonds had the right 
under clause 15.3(a) to require the Loan Trustee by written demand to 
accelerate repayment under the bonds in the event of a defined Event of  
Default.  
69. In the autumn of 2008, the Petromena Group was facing considerable financial 
difficulties, since significant additional funding was required in order to 
complete the three rigs that were under construction in Singapore. At this time, 
DB, through  DB London, had become the holder of approximately 26.3% of 
the bonds, which were trading well below par.  
70. In or around November 2008 Mr Capriello was asked by his superiors at DB 
London to take over responsibility for managing a portfolio of distressed 
assets owned by DB London, which included DB's holding of 26.3% in the 
bonds. DB London performed an internal analysis with a view to identifying 
the best way to maximise its recovery in respect of its holding of the bonds. It 
concluded that the optimal cour se would be for Petromena to obtain further 
funding to enable the rigs to be completed and put into operation.  
71. Mr Wohlin approached Petromena in December 2008 and stated that he was 
"responsible for debt capital markets in Europe for [DB], based in London"; 
he indicated that DB was supportive of Petromena's desire to complete the 
construction of the rigs and to put them into operation, since, despite the steep 
fall in Petromena's bond prices, DB believed in Petrom ena's role in the long -
term future of the ultra -deepwater market. Mr Wohlin stated that DB might be 
willing to provide additional debt financing in order to fill Petromena's short -
term liquidity shortfall and to complete the rigs. Petromena referred DB 
London to its financial advisers, Pareto Securities A/S ("Pareto"). In February 
2009 DB London's holding was increased to 33.4%.  
72. Thereafter, various discussions and communications took place between DB 
London and Pareto (and/or Petromena) regarding the possi bility of DB 
London participating in a new US$100 million bond issued by Petromena, 
which would have had a different priority ranking from the bonds themselves. 
However, no such additional funding was ever agreed to be, or was in fact, 
provided by DB, whet her through its London Branch or otherwise.  
73. According to Mr Capriello (and to some extent this evidence may be in 
dispute), on 26th March 2009 one of the Bondholders alerted other 
Bondholders (including DB London) that it had been approached by a broker, 
Fearnley Fonds ASA ("Fearnley"), with an unsolicited offer to purchase its 
bonds. After discussions between DB London, and certain other Bondholders, 
and the discovery that the broker was acting for Seadrill, a major Norwegian 
oil drilling company and a co mpetitor of Petromena, DB London and the other 
Bondholders each conditionally agreed to sell their respective bonds to 
Fearnley. According to Mr Capriello, the decision to sell DB London's bonds 
was made by him in London, after taking instructions from his  superiors in 
London. DB London's sale of its bonds was made to a Bermuda affiliate of 
Seadrill, through the Euroclear system. According to Petromena, the 
agreement for sale was made without notice to Petromena.  
74. On 2nd April 2009, DB London, in its capaci ty as Bondholder, sent by email a 
written letter to Norsk Tillitsmann, the Loan Trustee, making a demand in 
writing for the purposes of clause 15.3(a) of the Loan Agreement requiring the 
Loan Trustee immediately to declare the entire remaining Loan, includ ing 
accrued interest and costs, to be in default and due for payment. Other 
Bondholders made similar requests. In response, on 3rd April 2009, Norsk 
Tillitsmann, as Loan Trustee, accelerated the bonds and declared the entire 
outstanding amount in default a nd payable in accordance with clause 15.3 of 
the Loan Agreement.  
75. The three rigs which were under construction were sold between 26th June 
2009 and 8th December 2009, and Petromena subsequently went into 
bankruptcy in Norway on 21st December 2009.  
Petrome na's claim against DB  
76. Two years later in December 2011 Petromena instituted a claim against DB in 
Norway claiming (and I adopt the summary contained in paragraph 22 of the 
witness statement of Mr East filed in support of Petromena's application to the 
Comm ercial Court for an order that it had no jurisdiction to try DB's claim for 
a declaration of non -liability): -  
i) DB's conduct constituted the giving of investment advice;  
ii) DB should not have put itself in the position of giving advice since that was 
in conflict with its role as a bondholder;  
iii) DB failed to give priority to the interests of Petromena;  
iv) DB owed a duty of loyalty by reason of its conduct as adviser which it 
breached by selling its interest in the bonds to Petromena's competitor Seadr ill 
Ltd; and  
v) DB acquired and wrongly used insider information about the refinancing of 
the construction costs of Rig I.  
77. This claim was, as required by Norwegian law, initiated before the Oslo 
Conciliation Board but on 20th June 2012 the Board dismissed the proceedings 
as unsuitable for conciliation. The next day DB issued proceedings in England 
seeking declarations that it was not liable to Petromena in respect of the claims 
being brought against it but, before those proceedings were served on 
Petromena in Norway, Petromena filed its own proceedings in the Oslo 
District Court against DB making the claims set out in the previous paragraph, 
which were described as being "based on the general law of non -contractual 
damages". The "Writ to Oslo City Court" or (as I shall call it) the Oslo Writ is 
a complex 33 page document and I will recite only the summary as set out in 
paragraph 5.4.7 of the document: -  
"5.4.7 Summary regarding Deutsche Bank's violations  
Petromena will submit that with its conduct Deutsche Ba nk has violated 
several norms of conduct laid down in Norwegian law and which must also be 
internationally applicable, including in the London market.  
First we would like to point out that there must be a general and basic norm 
that a bank is not entitled to give advice in a situation where there might be a 
conflict of interest between the bank and its client. The principle is expressed 
in the Securities Trading Act Section 10 -10 for investment firms and in the 
Financial Contracts Act Section 89 for financi al advisors.  
Deutsche Bank has in several respects given priority to its own interests, in 
particular as bond holder, before giving priority to the interests of Petromena 
as a client. Furthermore Deutsche Bank infringed on the rules of good 
business practi ce and the equivalent principle in the MiFID by omitting to 
contribute to the reasonable terms presented by Petromena in connection with 
effectuating the approval of the financing of Rig I by the bond holders.  
Petromena will assert that Deutsche Bank in relation to Petromena acted 
contrary to the principle laid down in the Securities Trading Act Section 3 -
9(1) that "No one may employ unreasonable business methods when trading in 
financial instruments", which mus t be assumed to also apply as a general norm 
of conduct irrespective of which country's securities trading legislation that 
will formally be the basis for the due care standard. The preparatory works to 
the provision states that it shall, among other thing s, form the basis "for 
application of private -law sanctions in favour of one party that has suffered 
losses due to unreasonable business methods".  
Furthermore Petromena will assert that Deutsche Bank through its conduct 
violated the international acknowled ged principle that information about a 
bank's clients is confidential, commonly referred to as "bank secrecy". When 
the bank offered to Seadrill Ltd to buy the bonds and then sold the bonds, the 
bank violated this secrecy by announcing to the public its pe rception of 
Petromena's (its client's) position and prospects.  
When Deutsche Bank, having full knowledge of Petromena's activity in its 
capacity as financial advisor, offered its bonds for sale to Seadrill Ltd at 70% 
face value, there is clearly a basis fo r maintaining that the offer represents a 
violation of the confidentiality provision in the Securities Trading Act Section 
3-4, which is also laid down in the Financial Institutions Act Section 3 -14, the 
Commercial Bank Act Section 18 and in the Securities  Trading Act Section 
10-9." 
78. The English court was first seised because the claim form was issued on 21st 
June 2012, but will not have jurisdiction if there was an agreement that the 
claims should be tried in Norway or if the claims are rightly to be catego rised 
as relating to a contract which is to be performed in Norway (or some other 
place than England).  
The Judgment  
79. By the time of the judgment Gloster J had become Gloster LJ. In relation to 
Article 5.1 she dealt with the conundrum that DB had to have an  arguable case 
that its claim was a "matter relating to a contract" when DB was denying that 
any such contract ever existed, by citing the judgment of Saville LJ in Boss 
Group Ltd v Boss France S.A.  [1997] 1 WLR 351. That held that it was 
sufficient that a  defendant was alleging that such a contract did exist for 
jurisdiction to exist in relation to a claim for negative declaratory relief. 
Gloster LJ then held that the expression "matter relating to a contract" had an 
autonomous meaning in European law whic h did not require that there should 
be a contract in English law but held that there did have to be an alleged 
agreement; the facts of the present case did not amount to an allegation of an 
agreement because the claim was that DB had foisted itself upon Pe tromena 
and undertook unilaterally to act as its advisor without any remuneration. If 
that was wrong she held that the services provided (and to be provided) under 
the "contract" were provided in England so that there was, in any event, 
jurisdiction pursua nt to Article 5.1 of the Convention, if there was a 
"contract". She then held that the actual claim was in tort/delict and there was 
jurisdiction under Article 5.3. She also held in a brief paragraph that the 
jurisdiction clause in the Loan Agreement had n o relevance to the dispute and 
that Article 23 of the Convention had no application.  
80. Mr Choo -Choy QC on this appeal presented his submissions in the opposite 
order. He placed most emphasis on the argument that Petromena's Norwegian 
claims fell within the jurisdiction clause in the Loan Agreement but 
alternatively that there was a claim relating to a contractual matter which was 
not to be performed in England so that neither Article 5.1 nor Article 5.3 
applied. I will deal with the submissions in that order .  
Article 23  
81. The question is whether Petromena's claims constituted disputes arising "out 
of or in connection with the Loan Agreement". If they do, then they are to be 
resolved in the Norwegian courts partly because the clause so says and partly 
because A rticle 23 itself provides that a jurisdiction clause is to be exclusive 
unless agreed otherwise. The judge accepted the submissions of Mr Handyside 
QC for DB that the jurisdiction clause must be construed as subject to some 
sort of limitation.  
82. Mr Choo -Choy submitted: -  
i) DB's role as an existing bondholder was an essential part of the background 
to the assertion that it became Petromena's adviser;  
ii) the question whether DB assumed a duty as adviser had to have regard to 
the fact of and the terms of the Loan Agreement;  
iii) if it was held that DB did assume a duty as adviser, those duties had to be 
considered in relation to its position as bondholder and must, therefore, arise 
in connection with the Loan Agreement;  
iv) the alleged breach of the duty of lo yalty was similar to the breach of 
morality alleged in Continental Bank v Aeakos  [1994] 1 WLR 588 which was 
there held to arise out of the terms of the agreement in that case; and  
v) the Oslo writ could well have alleged (and now purported to do so by way 
of an admittedly later amendment) that DB was in breach of clause 15.3(a) of 
the Loan Agreement in requiring the Loan Trustee to accelerate repayment of 
the bonds after the Event of Default.  
83. Attractively as these submissions were presented, I cannot accept  them. If 
parties make a loan agreement in what one may call traditional form and then 
some years later enter into an entirely different agreement or commitment 
which will impose fiduciary (or similar) duties of loyalty and avoidance of 
conflict on the par ty who originally made the loan, it is not at all obvious that 
the parties will intend or expect the jurisdiction provision of the Loan 
Agreement to apply to the entirely new relationship between them. The first 
relationship is an ordinary arms -length comm ercial one of lender and 
borrower; the second relationship of adviser and advisee is much more than an 
arms -length commercial relationship and effectively entirely different from it 
because of the requirement to put the advisee's interests first in prefere nce to 
the adviser's own. A dispute arising from a breach of this second relationship 
does not arise out of the original loan relationship; nor, to my mind, does such 
a dispute arise in connection with that relationship; the relationship of 
adviser/advisee  is so different from the arms -length relationship of 
commercial lender that the connection with the original relationship has 
virtually vanished and is, at most, only of historical relevance.  
84. Since Fiona Trust v Privalov  [2008] 1 Lloyds Rep 254 ; [2007] Bus LR 1719  it 
is axiomatic as a matter of E nglish law, that jurisdiction clauses and arbitration 
clauses should be widely and generously construed but this does not extend to 
all relationships however different even if they are assumed by the parties to 
an original relationship. The question in tha t case was whether a claim that 
contracts which had allegedly been induced by bribery fell within a standard 
form of arbitration clause. The House of Lords held that they did. In para 13 
Lord Hoffmann said: -  
"In my opinion the construction of an arbitrati on clause should start from the 
assumption that the parties, as rational businessmen, are likely to have 
intended any dispute arising out of the relationship into which they have 
entered or purported to enter to be decided by the same tribunal."  
The width of the clause is thus to apply to disputes arising out of the relevant 
"relationship". The dispute in the present case does not arise out of the 
relationship entered into by the parties which contains the jurisdiction clause 
but out of an altoget her different (and much closer) alleged relationship.  
85. English law cannot, however, be decisive of the matter in the European 
context. It is important to note that Article 23 is itself confined to agreements 
to settle disputes  
"which have arisen or which m ay arise in connection with a particular legal 
relationship."  
The emphasis on the "particular legal relationship" shows that a dispute 
arising from a second relationship is not likely to be included in an agreement 
for resolving disputes in an earlier, and  different, relationship. The European 
Court of Justice made exactly this point in Powell Duffryn Plc v M Petereit  C-
214/89; 1992 E.C.R. 1 -1769. Powell Duffryn was an English company which 
subscribed for shares in a German company which increased its capit al but 
subsequently went into liquidation; the liquidator (Mr Petereit) sued Powell 
Duffryn in Germany for sums due in respect of the increase in capital and for 
dividends paid by mistake, relying on a clause inserted into the company 
statutes on a show of  hands in a general meeting by which it was said that any 
shareholder submitted to the jurisdiction of the courts ordinarily competent to 
entertain suits against the company. Powell Duffryn asserted that it should be 
sued in the courts of its domicile. The  Court of Justice was asked to rule on a 
number of questions including: - 
"Does the jurisdiction clause satisfy the requirement that the dispute must arise 
in connection with a particular legal relationship within the meaning of Article 
17 of the Brussels C onvention?"  
(Article 23 of the Lugano Convention is in the same terms as Article 17 of the 
Brussels Convention).  
86. The court held that the requirements of Article 17 would be satisfied if the 
clause "may be interpreted as referring to the disputes between th e company 
and its shareholders", leaving it to the domestic court to determine whether the 
clause was to be so construed or not. In reaching that conclusion it said (para 
31) that the requirement that the dispute arise in connection with a particular 
legal  relationship: -  
"is intended to limit the scope of an agreement conferring jurisdiction solely to 
disputes which arise from the legal relationship in connection with which the 
agreement was entered into. Its purpose is to avoid a party being taken by 
surprise by the assignment of jurisdiction to a given forum  as regards all 
disputes which may arise out of its relationship with the other party to the 
contract and stem from a relationship other than that in connection with which 
the agreement conferring juri sdiction was made."  
87. Continental Bank v Aeakos  is readily distinguishable from the present case 
because the claim by the borrower, based on Article 919 of the Greek 
 Civil  
Code, was that the bank exercised its rights under the loan agreement contrary 
to business mo rality. That claim was said to come within clause 21.02 of the 
loan agreement by which the borrower agreed to submit to the jurisdiction of 
the English courts. In giving the judgment of this court, Steyn LJ said: -  
"The complaint in the Greek proceedings m akes clear that the thrust of the 
defendants' case is that the bank performed the loan agreement in a manner 
which was contrary to business morality. The issue in the Greek proceedings 
is inextricably interwoven with the contractual rights and duties of th e 
parties."  
The court accordingly upheld an injunction restraining the defendants from 
continuing the proceedings in Greece.  
88. No comparable claim is made in the Oslo writ in the present case. I have set 
out the summary of the proceedings in that lengthy doc ument and no such 
claim can be discerned.  
89. It is true that in a subsequent document somewhat confusingly also called an 
Oslo Writ, Petromena come somewhat closer to such a claim when asserting 
for the first time: -  
"3 New evidence in the matter  
In the case brought by Deutsche Bank's London branch before the High Court 
in London, evidence was presented last week which has an impact on 
Petromena's suit materially and procedurally.  
The evidence consists of a letter sent from Deutsche Bank to Norsk 
Tillitsmann on 2nd April 2009. From this letter it is clear that it was Deutsche 
Bank that claimed Petromena was in default of the 9.75% Loan (see the Bond 
Loan Agreement, exhibit 5 to the writ of claim). Thus far, Petromena has not 
had access to this infor mation, and Petromena has therefore assumed that it 
was Seadrill that alleged the default.  
Bilag 1  Declaration of Default from Deutsche Bank to Norsk Tillitsmann, 
dated 2nd April 2009  
In light of this information, Petromena wishes to specify the following:  
o Deutsche Bank's declaration of Default pursuant to the Bond Loan 
Agreement clause 15.3(a) strengthens the circumstance that the dispute 
that has arisen is a dispute arising from or in connection with the Bond 
Loan Agreement clause 21, which reads as follo ws: "[d]isputes arising 
out of or in connection with the Loan Agreement which are not 
resolved amicably, shall be resolved in accordance with Norwegian 
law and the Norwegian Courts." This legal venue is exclusive, 
pursuant to the Lugano Convention Article 23,"  
But this later addition is subservient to and parasitic upon the main 
proceedings complaining of breach of duty as advisers and it is clear that the 
"thrust" of Petromena's claim (to use Steyn LJ's word) is the allegation of 
breach of the duty comprised in that relationship, not in the relationship of 
debtor and creditor.  
Article 5 – is the claim "a matter relating to contract"?  
90. As a matter of English law the allegations made by Petromena would not be 
regarded as  alleging a contract with DB but would arguably give rise to a 
claim for negligence pursuant to Hedley Byrne v Heller  [1964] AC 465  and/o r 
claims for breach of fiduciary duty, if it were held that DB had entered a 
fiduciary relationship with Petromena. They would be regarded as coming 
within Article 5.3 of the Lugano Convention rather that Article 5.1. 
Petromena's Norwegian lawyers, no doub t, came to a similar conclusion since 
the Oslo writ claimed "non -contractual damages" and relied on Article 5(3) to 
establish jurisdiction in Norway.  
91. The first page of the Oslo writ asserts that DB acted "on its own initiative" in 
contacting Petromena and  offering "to act as advisor, arranger and potential 
leader for supplementary financing" required by Petromena. Not entirely 
surprisingly, this led to the judge's conclusion in paras 52 -53.  
"52. The claim advanced in the Norwegian proceedings is not based  on any 
form of agreement between DB and Petromena, whether contractual or 
otherwise. The claim is rather that DB foisted itself upon Petromena and 
undertook unilaterally to act as its "advisor", in order to mitigate its own 
exposure to Petromena's bonds. The essence of the claim is that DB London 
became active (along with other bond holders) in Petromena's restructuring 
discussions with the Loan Trustee in relation to the possibility of a refinancing 
to fund the completion of the construction of one or bot h of the rigs, and that 
such participation in some way gave rise to an obligation imposed upon DB 
not to sell its Bonds. That this was the substance of the claims was supported 
by the correspondence between the parties which was in evidence before me. 
The facts, whether as pleaded by Petromena in the Oslo proceedings, or 
asserted by its witness statements in the English proceedings, simply do not 
rely upon allegations that DB was acting pursuant to any form of agreement 
between the parties or that Petromena  accepted any kind of offer from DB. 
Moreover, as Mr Handyside submitted, whilst the absence of consideration is 
not necessarily fatal to the engagement of Article 5.1, it is nonetheless relevant 
to the proper characterisation of the parties' relationship that DB was not to be 
paid for its alleged "services".  
53. In conclusion, neither the formulation of Petromena's claim in the Oslo 
proceedings, nor the evidence before this court, in any way supports 
Petromena's assertion that its claim falls to be charact erised as one involving 
"matters relating to a contract". The mere fact that DB, in its claim form, 
sought to include a negative declaration that it had no liability ion contract 
cannot, in my view, on its own bring the claim within Article 5.1."  
92. This conc lusion was attacked by Mr Choo -Choy on the basis that it got too 
much out of the word "initiative" in the Oslo writ. If the writ was read fairly it 
showed, he submitted, that there was an offer which was accepted by 
Petromena's conduct in responding to neg otiations and that was enough to 
make the claim a claim in a "matter relating to a contract" within the 
autonomous meaning of that phrase in European law.  
93. I do not find it necessary to come to any final conclusion on this question save 
to say Mr Choo -Choy 's submission has some force if one looks at the overall 
conduct alleged in the Oslo writ. The fact that the writ itself claims non -
contractual damages cannot be conclusive of the matter. The reason why it is 
unnecessary to form a view about this is that, on any view, if there was a 
contractual obligation, the place of performance of that obligation was, as the 
judge held, England and jurisdiction under Article 5(1) would therefore be 
established if the claim was a matter relating "to a contract".  
94. Mr Choo -Choy challenged this conclusion of the judge also, but authority is 
clearly against him. The leading case is Wood Floor Solutions Andreas 
Domberger v Silva Trade  [2010] 1 WLR 1900 , a case in which a commercial 
agent, an Austrian company sued its principal in Austria for wrongful 
termination of its agency. The Austrian court asked for a ruling stating the 
basis of the criteria for deter mining the place of performance of the contract. A 
commercial agent contract is not so far removed from the sort of contract 
alleged in this case which is said to have elements of mandate about it. Gloster 
LJ (para 57) set out all the relevant conclusions of the Court of Justice of the 
European Union but for the present purpose it suffices to set out para 40 of the 
judgment: -  
"40. If the provisions of a contract do not enable the place of the main 
provision of services to be determined, either because they  provide for several 
places where services are provided, or because they do not expressly provide 
for any specific place where services are to be provided, but the agent has 
already provided such services, it is appropriate, in the alternative, to take 
account of the place where he has in fact for the most part carried out his 
activities in the performance of the contract, provided that the provision of 
services in that place is not contrary to the parties' intentions as it appears from 
the provisions of th e contract. For that purpose, the factual aspects of the case 
may be taken into consideration, in particular, the time spent in those places 
and the importance of the activities carried out there. It is for the national court 
seised to determine whether it  has jurisdiction in the light of the evidence 
submitted to it: the Color Drack  case [2010] 1 WLR 1909 , para 41."  
95. If one has regard  to the factual aspects of the present case and, in particular, 
the time spent in England and the importance of the activities carried out in 
England it is evident, as the judge held, that the place where DB for the most 
part carried out its advisory activ ities (if, indeed, that was what it was doing) 
was London. The relevant employees engaged in putting together such advice 
spent the overwhelming majority of their time in London and carried out 
nearly all their activities there just as the commercial agent  in Wood Floor  
carried out nearly all its relevant activities in Austria. The most relevant 
meeting between the parties took place in London. Moreover, the judge held 
(in a conclusion not now challenged) for the purpose of Article 5(3) that the 
events whic h caused damage to Petromena occurred in England; that in itself 
is a strong pointer to the place where the services were to be provided.  
96. Mr Choo -Choy submitted that the parallel case in Article 5(1)(b) of sale of 
goods provided that the place of delivery  was the place of performance and, by 
analogy therefore, the place where the advice was received was the place of 
performance for the services of giving that advice. But that presses the 
analogy of sale of goods too far particularly since Wood Floor  expres sly took 
the case of sale of goods into account, see paras 24 -26. Counsel also asserted 
that the acts identified by the judge were merely preparatory and, on the 
authority of Rehder v Air Baltic Cpn  [2010] Bus. L.R. 549, should not be 
relevant to determine  the place of performance. That was, however, a different 
case which determined that an airline performs its contract for passenger 
carriage in the place of departure not in the place where its head office selects 
the aircraft and decides it is airworthy. An expert who is in the business of 
giving advice (whether he or she is a barrister, solicitor, financial or other 
adviser) essentially performs the service in the place where information is 
collated, relevant meetings are held and the advice is formulated  rather than in 
the place in which it happens to be received.  
97. I would therefore uphold the judge's decision that if (which is on any view a 
doubtful question) the claim is a matter relating to a contract, it is a claim 
relating to a contract which was to be (and was) performed in England and DB 
thus established jurisdiction in England if there was truly a contractual claim.  
98. So whether the claim is contractual or tortious does not matter. On either view 
England has jurisdiction and the judge was right to d ismiss Petromena's 
application that the English court did not have jurisdiction.  
Lord Justice Ryder  
99. I have had the benefit of reading in draft the judgments of my Lords. For the 
reasons they both give I agree that the courts of England and Wales have 
jurisdiction and that the judge was right to dismiss Petromena's application for 
a declaration that the courts here did not have jurisdiction.  
100. Given the difference of emphasis but not outcome as between my 
Lords i n relation to the question of whether the claim made by Petromena 
arises in connection with the Loan Agreement, I would add this. The question 
to my mind is not whether the relationship of debtor and creditor created by 
the Loan Agreement and the commitmen t created by the advisory relationship 
are different. The two relationships are different legal relationships. It is not 
necessary to look to the detail of the difference or the characterisation of the 
latter relationship, i.e. whether it is a contract or not, because the important 
question is whether the advisory relationship arose in connection with the 
Loan Agreement. I accept that in principle a dispute arising out of the advisory 
relationship may also be connected with the relationship arising out of t he 
Loan Agreement but not on the alleged facts of this case.  
101. Applying the principles described by Longmore LJ derived from Fiona 
Trust v Privalov  and Powell Duffryn Plc v M Petereit , the answer to the 
question must involve an enquiry which has regard to t he purpose of Article 
23 which is to avoid a party being taken by surprise by the assignment of 
jurisdiction. I agree with my Lords that an analysis of the claims made by 
Petromena in the Oslo writs shows that the claims do not in themselves 
demonstrate a sufficient connection with the Loan Agreement relationship. 
The thrust of Petromena's claim is the allegation of breach of duty comprised 
in the advisory relationship not in the relationship of debtor and creditor.  
102. I also agree that if the advisory relati onship was contractual, the place 
of performance was England.  
Lord Justice Floyd  
103. I agree with Longmore LJ that, assuming the claim made by Petromena 
is a matter relating to a contract, it is a contract where the place of 
performance was England. England t herefore has jurisdiction under Article 
5(1).  
104. I have had more difficulty than Longmore LJ with the argument that 
the claim made by Petromena in the Oslo Writs is not one which arises out of 
or in connection with the Loan Agreement. Whilst I entirely accep t that the 
relationship of debtor and creditor created by the Loan Agreement and the 
relationship of advisor and client allegedly created under a subsequent 
advisory agreement are fairly and accurately described as different legal 
relationships, my difficu lty lies in the fact that, at least in some circumstances, 
a dispute which arises under the advisory relationship may nevertheless 
properly be described as connected with the relationship created by the Loan 
Agreement.  
105. For my part, I do not read the speec h of Lord Hoffmann in Fiona Trust 
v Privalov  (cited by Longmore LJ in paragraph 29 above) as setting the outer 
limits of the grasp of exclusive jurisdiction clauses of this kind. The issue in 
that case was whether a dispute about the validity of the charte rparty was one 
arising "under" the agreement. The House of Lords rejected semantic 
arguments based on the absence of the phrase "in connection with" in the 
relevant clause. It does not follow that a claim for a breach of a separate 
contract can never arise  in connection with the contract in which the clause is 
contained.  
106. Moreover the language of Article 23 of the Convention – "in 
connection with a particular legal relationship" – does not seem to me 
obviously to exclude, at least on a first reading, a disp ute which arises "in 
connection with" two relationships.  
107. However, in Powell Duffryn  v M Petereit  (cited and analysed by 
Longmore LJ in paragraphs 84 and 85 above) the ECJ held that the purpose of 
the words "in connection with a particular legal relationsh ip" in Article 23 was 
to prevent a party from being taken by surprise by the assignment of 
jurisdiction to disputes which "may arise out of its relationship with the other 
party to the contract and stem from a relationship other than that in connection 
with which the agreement conferring jurisdiction was made". It went on to 
hold at paragraph 32:  
"In that regard, a clause conferring jurisdiction contained in a company's 
statutes satisfies that requirement [i.e. the requirement that it be for the 
purpose of  settling disputes "in connection with a particular legal 
relationship"] if it relates to disputes which have arisen or may arise in 
connection with the relationship between the company and its shareholders as 
such."  
108. It follows therefore that even if it ca n be said that there is some 
connection between the claims raised by the Oslo Writs and the Loan 
Agreement, such a connection is not sufficient for the purposes of Article 23. 
The claims do not arise out of or in connection with the relationship between 
DB as bondholder and Petromena as its debtor under the Loan Agreement "as 
such". I agree therefore in the result that the exclusive jurisdiction clause does 
not confer jurisdiction on the Norwegian courts .