Nigeria v Shell et al at the High Court. Yet more lis alibi pendens and cutting some corners on case-management.

One does not often see Nigeria sue Shell. Federal Republic of Nigeria v Royal Dutch Shell Plc & Anor [2020] EWHC 1315 (Comm) engages Article 29 Brussels Ia’s lis alibi pendens rule in a period in which (see other posts on the blog) the High Court intensely entertained that section of Brussels Ia. Royal Dutch Shell Plc (RDS) is the anchor defendant for the other EU-domiciled defendants. Quite a few of the defendants are not domiciled in the EU.

The case concerns Nigerian allegations that monies paid by it under an earlier settlement following alleged expropriation, which had led to bilateral investment treaty arbitration under ICSID rules, had been channeled to pay bribes. Nigeria is pursuing the case in the criminal courts in Italy, too.

Nigeria therefore are already pursuing claims in Italy to obtain financial relief against 4 of the defendants including the anchor defendant. Defendants contend that those claims are the same claims as the English ones and that the court should decline jurisdiction in respect of those claims pursuant to A29 BIa. Defendants then further contend that, if the court so declines jurisdiction over the claims against RDS and Eni SpA, the entire proceedings should be dismissed. This is because RDS is the ‘anchor defendant’ under A8(1) BIa in the case of three of the EU-domiciled defendants and under English CPR rules against the other defendants. In the alternative to the application under Article 29, Defendants seek a stay of the proceedings under A30 BIa (related cases) or, in the further alternative as a matter of case management, pending a final determination, including all appeals, of the claim that the FRN has brought in Italy.

Butcher J refers at 41 to the UKSC in The Alexandros, and to Rix J in Glencore International AG v Shell International Trading and Shipping Co Ltd, at 110: ‘broadly speaking, the triple requirement of same parties, same cause and same objet entails that it is only in relatively straightforward situations that art [29] bites, and, it may be said, is intended to bite. After all, art [30] is available, with its more flexible discretionary power to stay, in the case of ‘related proceedings’ which need not involve the triple requirement of art [29]. There is no need, therefore, as it seems to me, to strain to fit a case into art [29].’

Same parties. Per CJEU The Tatry A29 applies to the extent to which the parties before the courts second seised are parties to the action previously commenced. Butcher J correctly holds that the fact that there may be other parties to the second action does not prevent this. Nigeria nevertheless argue that the involvement of the Italian Public Prosecutor in the Italian case, and not in the English case, and its crucial role in the Italian proceedings, means that the proceedings nevertheless are not between the ‘same parties’. Defendants call upon CJEU C-523/14 Aertssen to counter this: there BE and NL proceedings were considered to be caught by A29 even though the BE proceedings concerned criminal proceedings and the Dutch did not.

At 47 Butcher J holds that the prosecutor is not a ‘party’ in the A29 sense and that even it were, it is nevertheless clear from The Tatry that there does not have to be complete identity of the parties to the two proceedings for Article 29 to be applicable. (Ditto Leech J in Awendale v Pixis).

Same cause of action. Nigeria accept that there is no material difference in the facts at issue in the two proceedings, however contends that the legal basis of its claim in England is different.

Butcher J refers to Lord Clarke in The Alexandros, that in order to consider same cause of action, one must look ‘at the basic facts (whether in dispute or not) and the basic claimed rights and obligations of the parties to see if there is coincidence between them in the actions in different countries, making due allowance for the specific form that proceedings may take in one national court with different classifications of rights and obligations from those in a different national court’. Doing that, at 55 he holds that these basic claimed rights in the IT and EN proceedings, which he characterises as being the right not to be adversely affected by conduct of RDS which involves or facilitates the bribery and corruption of the FRN’s ministers and agents, and the right to redress if there is such bribery and corruption’, are the same.

That seems to me an approach which is overly reliant on the similarity of underlying facts. (At 70, obiter, Butcher J splits the claims and suggests he would have held on a narrower similarity of cause of action for some claims and not the others, had he held otherwise on ‘same cause of action’; and at 80 that he would have ordered a stay under Article 30 or on case management grounds on the remainder of the action).

Same object. Nigeria contend that its present proceedings do not have the same objet as the civil claim in the Italian proceedings. It contends that the only claim made in the Italian proceedings is for monetary damages, while in the English action claims are also made of a declaration of entitlement to rescind the April 2011 Agreements, other declaratory relief, an account of profits and tracing remedies.

Butcher J disagrees. Per Lord Clarke in The Alexandros, he holds that to have the same object, the proceedings must have the ‘same end in view’, per CJEU Aertssen at 45 interpreted ‘broadly’. At 61; ‘that ‘end in view’ is to obtain redress for RDS’s alleged responsibility for bribery and corruption…. Further, it is apparent that a key part of the redress claimed in the English proceedings is monetary compensation, which is the (only) relief claimed in the Italian proceedings. On that basis I consider that the two sets of proceedings do have the same objet.’

That the English action also seeks to rescind the original 2011 agreements is immaterial, he finds, for RDS were not even part to those proceedings. Moreover, that aim included in the English action serves to support the argument that if the two sets of proceedings go ahead, (at 64) ‘there would be the possibility of the type of inconsistent decisions which Article 29 is aimed at avoiding’. ‘If the English proceedings were regarded as involving a significantly different claim, namely one relating to rescission, and could go ahead, that would give rise to the possibility of a judgment in one awarding damages on the basis of the validity of the April 2011 Agreements and the other finding that those Agreements were capable of rescission. That would appear to me to be a situation of where there is effectively a ‘mirror image’ of the case in one jurisdiction in the other,..’

At 66 ff Butcher J adopts the to my mind correct view on the application of A29 to proceedings with more than one ‘objet’: one does not look at all claims holistically, one has to adopt a claim by claim approach, in line with CJEU The Tatry. At 68: ‘Difficulties which might otherwise arise from the fragmentation of proceedings can usually be addressed by reference to Article 30..’

At 71 he then concludes that the stay must be granted, and that he has no discretion not to do so once he finds that the conditions of A29 are fulfilled. He also holds that with the case against the anchor defendant stayed, A8(1) falls away. He appreciates at 72 that this may expose Nigeria to limitation issues in the Italian proceedings, however those are of their own making for they were under no obligation to sue in Italy.

 

At 74 ff Article 30 is considered obiter, and Butcher J says he would have stayed under A29. At 77 he notes the continuing debate on the difference at the Court of Appeal between Privatbank and Euroeco. At 75(2) he summarises the distinction rather helpfully as

‘In the Kolomoisky case, it was decided that the word ‘expedient’ in the phrase ‘it is expedient to hear and determine them together’ which appears in Article 28.3 of the Lugano Convention (as it does in Article 30.3 of the Regulation), is more akin to ‘desirable’ that the actions ‘should’ be heard together, than to ‘practicable or possible’ that the actions ‘can’ be heard together: paras. [182]-[192]. In the Euroeco Fuels case, having referred to the Kolomoisky case, the Court of Appeal nevertheless appears to have proceeded on the basis that the court had no discretion to order a stay under Article 30 when there was no real possibility of the two claims being heard together in the same foreign court’

At 75(5) he then without much ado posits that

‘In any event, even if not under Article 30, there should be a stay under the Court’s case management powers, and in particular pursuant to s. 49(3) Senior Courts Act 1981 and CPR 3.1(2)(f). Such a stay would not, in my judgment, be inconsistent with the Regulation, and is required to further the Overriding Objective in the sense of saving expense, ensuring that cases are dealt with expeditiously and fairly, and allotting to any particular case an appropriate share of the Court’s resources. Given that the Italian proceedings are well advanced, and that after the determination of the Italian proceedings English proceedings may well either be unnecessary or curtailed in scope, there appear good grounds to consider that a stay of the English proceedings will result in savings in costs and time, including judicial time.’

Whether such case-management stay under CPR 3.1(2)(f) is at all compatible with the Regulation in claims involving EU domicileds, outside the context of Articles 29-34 is of course contested and, following Owusu, in my view improbable.

Most important lis alibi pendens considerations at the High Court these days.

Geert.

(Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2, Heading 2.2.14.5.

 

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