Tag: [2020] EWHC 2979 (Comm)

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(Rejected) appeal in PIFSS v Banque Pictet leads to renewed criticism of the intensity of jurisdictional litigation – as well as continuing uncertainty on anchor jurisdiction.

The appeal in The Public Institution for Social Security v Banque Pictet & Cie SA & Ors [2022] EWCA Civ 29 has been dismissed. I reviewed the first instance judgment here. I conclude that review writing ‘Those criticising the intensity of jurisdiction squabbles will find ammunition in this 497 para judgment.’ The Court of Appeal judgment is another 152 paras and as Andrew Dickinson also notes, Carr LJ, too, is critical: [12]

There will of course be cases where a novel and/or complex point of law needs to be debated fully and decided and, as foreshadowed above, this litigation raises some new, albeit relatively short, legal issues. Further, the sums involved are substantial and the allegations made are serious. However, these features did not create a licence to turn a jurisdictional dispute into an extensive and essentially self-standing piece of litigation. The costs incurred below ran to many, many millions of pounds: the interim payment orders in respect of the Respondents’ costs amounted to £6.88 million against a claimed total of some £13.5 million.

The issues on appeal are listed [41] ff and they of course reflect the discussion I summarised in my post on the first instance findings. I list them below and summarise the Court’s findings.

Article 23 formal requirements (involving Banque Pictet and Mr Bertherat only):

i) For the purposes of the requirement in Article 23(1)(a) that a jurisdiction agreement must be in or evidenced in writing, was the Judge right to conclude that it was unnecessary for the GBCs containing the EJCs (‘exclusive jurisdiction clauses, GAVC) actually to have been communicated to PIFSS?

ii) If so, was the Judge right to find that Banque Pictet did not have the better of the argument that the GBCs were communicated to PIFSS prior to 2012?

Lady Justice Carr is right in my view e.g. [67] that CJEU authority does not require material communication of GTCs etc which contain EJCs. Rather, the judge needs to establish ‘real consent’,  in the spirit of the Raport Jenard with a rejection of excessive formality.

Article 23 material validity (involving all Pictet and Mirabaud Respondents (save for Pictet Asia, Pictet Bahamas and, for the avoidance of doubt, also Mr Amouzegar and Mr Argand)):

i) Was the Judge right to conclude that the “particular legal relationship(s)” in connection with which the EJCs were entered into for the purpose of Article 23 was the totality of the legal relationships between the parties forming part of the banker/customer relationship between them?

ii) Was the Judge right to conclude that the relevant Respondents had the better of the argument that the disputes relating to (a) the Pictet/Mirabaud bribery claims; (b) the Pictet/Mirabaud accessory claims “ar[o]se out of” those “particular legal relationship(s)”?

The term ‘material validity’ is employed both in first instance and at the Court of Appeal although it is not quite correct; what is really meant is what Henshaw J called the ‘proximity’ requirement: which ‘disputes’ ‘relate to’ the matters covered by the EJCs? Here, Carr LJ sides eventually [98] with the judge mostly as a matter of factual analysis: neither CJEU Apple nor CDC require a restrictive approach where parties have formulated the EJC very widely. The judge carefully considered the wording of the clause and on contractual construction was right to find that the disputes at issue fell within it.

Scope of EJCs (as a matter of the relevant domestic law) (involving all Pictet and Mirabaud Respondents (save for Pictet Asia and Pictet Bahamas and again, for the avoidance of doubt, Mr Amouzegar and Mr Argand)):

i) Was the Judge right to find that PIFSS had the better of the argument that, on the true construction of the relevant EJCs, the disputes relating to the wider accessory claims fell outside the scope of the applicable EJCs?

ii) (Mr Mirabaud only): Was the Judge right to conclude that PIFSS had the better of the argument that claims against Mr Mirabaud relating to events after 1 January 2010 fell outside the scope of the relevant EJCs?

This issue relates to whether the EJCs, as a matter of construction under Swiss (or Luxembourg) law – which the judge had discussed obiter, did not extend to cover the wider accessory claims. [101]: in summary the relevant parties suggest that, having correctly recognised that what was alleged by PIFSS were unitary schemes arising out of continuing courses of conduct, the Judge was then wrong to conclude that they did not have the better of the argument that the wider accessory claims also fell within the EJCs.

Carr LJ deals rather swiftly with these discussions, again I feel finding mostly that the judge’s analysis was mostly factual (albeit seen from the viewpoint of Swiss and /or Luxembourg law) and not incorrect.

Article 6: (the number of Respondents to whom the Article 6 challenge is relevant will depend on the outcome of the appeals on the issues above, but on any view the issue of principle arises in relation to Mr Amouzegar and Mr Argand):

i) Was the Judge right to conclude that, for the purpose of Article 6, the Court was not required to consider solely the risk of irreconcilable judgments between the claim against the anchor defendant and the claim(s) against the proposed Article 6 defendant(s) but rather was permitted to consider other relevant circumstances including, in particular, the risk of irreconcilable judgments between the claims sought to be made against the proposed defendant and other claims in other member states?

ii) Did the Judge apply the test correctly in relation to each relevant Respondent?

This I find is the most important part of the judgment for it is in my view the one which most intensely deals with a point of law. Readers may want to refer to my earlier post for a summary of the A6 (Lugano) issues. The judge had found against A6 jurisdiction, also following Privatbank‘s ‘desirability’ approach. Parties upon appeal argue [110] that the Judge’s interpretation results in exclusive jurisdiction clauses having practical effects well beyond the scope of their application, with the collateral effect of conferring on them a “gravitational pull” which is inconsistent with the proper interpretation of A23 Lugano. PIFSS submits that it undermines the drive for legal certainty that motivates the strict approach to A6 identified in the authorities. They also suggested (in oral submission) that for A6 purposes only actual, and not merely potential, proceedings are properly to be taken into account. 

The CA however [112] confirms the relevance of future as well as extant claims and generally supports the flexible approach to A6. Carr J concedes [131] that this approach can be said to give “gravitational pull” to A23 and suggests ‘(t)here is nothing objectionable about that, given the respect to be accorded to party autonomy.’

I do not think this is correct. Including broadly construed ‘related’ claims in choice of court would seem to deny, rather than protect party autonomy: for if parties had really wanted to see them litigated in the choice of court venue, they ought to have contractually include them.

The issue of desirability per Privatbank is not discussed and therefore remains open (compare EuroEco Fuels).

Forum non conveniens: Pictet Asia and Pictet Bahamas:

i) Depending on the outcome of the issues above, was the Judge right to conclude that PIFSS had not shown that England was clearly the appropriate forum for the resolution of the claims against Pictet Asia and Pictet Bahamas?

Here the swift conclusion [143] is that the judge’s finding that PIFSS had not shown that England was clearly the proper forum is unimpeachable.

A lot is riding on this jurisdictional disagreement.  Permission to appeal to the Supreme Court was refused by the CA but may still be sought with the SC itself.

Geert.

EU Private International Law, 3rd ed. 2021, big chunks of Chapter 2.

 

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PIS v Al Rajaan. An intensive Brussels Ia and Lugano choice of court (by incorporation) and anchor defendant discussion.

The Public Institution for Social Security v Al Rajaan & Ors [2020] EWHC 2979 (Comm) engages in lengthy discussion anchor jurisdiction (A6) and choice of court (A23) under the Lugano Convention which of course, albeit with some important mutatis mutandis, echoes Brussels I and Brussels Ia.

Henshaw J summarises the key issues at 74:

i)                    whether the exclusive jurisdiction clauses (‘EJCs’) relied on were agreed between the parties and incorporated into their respective contracts, applying;

a)                  the formal validity requirements set out in Lugano Convention Article 23/Recast Brussels Regulation Article 25, and

b)                 if relevant, the laws governing the contracts i.e. Swiss or Luxembourg law;

ii)                  if so, whether the EJCs satisfy the requirements for material validity under Lugano Convention Article 23/Recast Brussels Regulation Article 25;

iii)                if so, how the EJCs are to be interpreted under their respective governing laws;

iv)                whether, and if so to what extent, the EJCs apply to claims against the applicants;

v)                  if and to the extent that the EJCs apply to only some claims against particular applicants, or apply to some but not all of the applicants, whether this court has jurisdiction over the remainder of the claims pursuant to Lugano Convention Article 6(1)/Recast Brussels Regulation Article 8(1); and

vi)                whether the court should decline jurisdiction over the claims against Pictet Asia and Pictet Bahamas (seeing as they are neither EU or Lugano States domiciled) on forum non conveniens grounds.

 

The judgment is lengthy. These are my highlights:

  • At 107 following review of CJEU authority including Refcomp and Hoszig, the finding that the issue of validity of choice of court by incorporation are to be addressed solely by reference to the requirements of what is now A25 BIa and the corresponding provision in Lugano Convention Article 23. This requires real consent which is discussed with reference ia to Profit Investment Sim at 109 ff.
  • At 127 ff Henshaw J discusses the issue obiter under Swiss cq Luxembourg law as putative leges contracti for choice of court. At 142 the judge concludes that under Swiss law, as under EU law, it is sufficient, in order to incorporate a jurisdiction agreement into the parties’ contract, that the parties have made a written agreement which incorporates by reference general terms including a jurisdiction clause. Ditto with less discussion under Luxembourg law, at 148.
  • At 187 ff: the issue of material validity under EU law. This discussion kicks off with a review of what one of the parties calls the ‘proximity requirement’: per C-214/89 Powell Duffryn (CDC, too, is discussed), the fact that choice of court (only) extends to a ‘particular legal relationship’ (reference here is also made to Etihad, at the time of the judgment this had not yet benefitted from the Court of Appeal‘s judgment). At 201 ff Justice Henshaw takes a broad view:

In principle I would agree that if a jurisdiction clause is not clear, then it may be restrictively construed, consistently with the policy expressed in the relevant EU case law of promoting certainty and avoiding parties being taken by surprise.  On the other hand, I see no reason why parties cannot make a jurisdiction clause in deliberately wide-ranging terms which covers many, or indeed all, of their present and future contractual relationships.  I do not read the Opinion of the Advocate General in Refcomp as indicating the contrary.  Refcomp was essentially concerned with whether a jurisdiction clause could be relied on against a sub-purchaser of goods, and it is notable that the CoJ referred in its judgment to “the principle of freedom of choice on which Article 23(1) is based” (§ 40).  Nor do I read Powell Duffryn as restricting the parties’ ability to choose the scope of the particular legal relationships to which a jurisdiction clause is to apply.

  • Whether the claims at issue meet the ‘proximity’ requirements is then discussed at length, under EU law and again, obiter, under Swiss and Luxembourg law, largely leading to a conclusion of lack of jurisdiction in England and Wales for many of the claims.
  • Anchor jurisdiction is discussed for some of the claims at 403 ff, leading to a classic discussion of the (CJEU Kalfelis introduced) close connection requirement, and at 418 support for the fragile Court of Appeal finding in Privatbank, that that the word “expedient” in the context of the lis alibi pendens provision in Lugano Convention Article 28 must mean “desirable” as opposed to merely practicable or possible. At 427 the issue of fragmentation of proceedings is discussed: what should the court do where a claimant is required to sue a defendant in an overseas jurisdiction under A23 Lugano in relation to some claims, but seeks to pursue in this jurisdiction (a) connected claims against the same defendant, or (b) connected claims against another defendant, in reliance on A6? Henshaw J concludes the E&W courts should not entertain the accessory claims.
  • Forum non is discussed at 480 ff, with the final conclusion being that E&W does not have jurisdiction for any of the claims.

I fully expect there is scope for appeal.

Those criticising the intensity of jurisdiction squabbles will find ammunition in this 497 para judgment.

Geert.

EU Private International Law, 3rd ed. 2021, big chunks of Chapter 2.

 

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