Posts Tagged Choice of court
Forum non conveniens, lis alibi pendens ex-EU following Brussels I Recast. High Court adopts limiting approach in UCP v Nectrus.
In  EWHC 380 (Comm) UCP Plc v Nectrus Limited Cockerill J takes the same conclusion on the new lis alibi pendens rule ex-EU in the Brussels I Recast, which I had suggested in the Handbook (p.182). A court in a Member State seized of an action other than those based on Articles 4, 7, 8 or 9 cannot refuse jurisdiction in favour of a court based ex-EU.
From Herbert Smith’s summary of the case: Nectrus, a Cypriot company, commenced proceedings in the Isle of Man seeking payment of sums withheld by UCP, an Isle of Man company, on the sale of a company, Candor. UCP then commenced proceedings in England claiming that Nectrus was in breach of an Investment Management Agreement (IMA), the loss being the amount by which the sale consideration of Candor had been reduced, hence the amount withheld on its sale.
The IMA contained a non-exclusive jurisdiction agreement in favour of the English courts. UCP disputed the jurisdiction of the Manx court, but in the event the proceedings continued, indicated they would raise the cause of action relied on in the English proceedings by way of equitable set off. Nectrus disputed their right to do so.
Nectrus disputed the jurisdiction of the English court on the basis that the Manx courts were the most appropriate forum to determine the dispute and were first in time.
Other than for the articles listed above, the CJEU’s findings in Owusu continue to apply. That includes English jurisdiction on the basis of non-exclusive choice of court, covered by Article 25 of the Recast Regulation. Justice Cockerill is entirely correct in unhesitatingly (at 39) rejecting forum non conveniens.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.4 (International impact of the Brussels I Recast Regulation), Heading 18.104.22.168.2.
In BDO Cayman v Argyle Funds, reported by Harneys, the Grand Court of the Cayman Islands followed English and Australian authority in having an anti-suit injunction followed by a cost order against the party that had infringed choice of court. Costs including not just the domestic proceedings (that would be obvious) but also the foreign proceedings (here: in the US).
It is this type of measure which makes jurisdictions stand out and be noticed in civil procedure regulatory competition – not, as I flagged earlier, half-baked attempts to add some gloss via international business courts.
Saey Home: The CJEU on choice of court and invoices, and place of performance of concession contracts.
C‑64/17 Saey Home, is yet another illustration of, mercifully for us conflicts lawyers, even fairly sophisticated businesses often fail properly to conclude commercial agreements. Here: what is said to be a semi-exclusive concession agreement, was concluded verbally only.
Saey Home & Garden is a company with its registered office in Kortrijk (Belgium), which specialises in the manufacture and sale, inter alia, of kitchen equipment and utensils bearing the trademark ‘Barbecook’. That company does not have a branch or establishment in Spain. Lusavouga has its registered office in Cacia, Aveiro (Portugal). Its premises are in Portugal. Its network covers Spain, inter alia, where it has no branch or establishment. Parties to the main proceedings concluded a commercial concession agreement concerning the exclusive promotion and distribution (with the exception of one client) in Spain.
First up, has choice of court in favour of the courts at Kortrijk (referred to by its French synonym Courtrai, but then without the ‘r’ in referral documents and by the CJEU) been validly made if this choice was only included in the general terms and conditions included in the invoices? Hoszig (where a jurisdiction clause is stipulated in the general conditions, such a clause is lawful where the text of the contract signed by both parties itself contains an express reference to general conditions which include a jurisdiction clause) and Leventis (the purpose of the requirements as to form imposed by Article 25(1) is to ensure that consensus between the parties is in fact established) are the most recent CJEU precedent referred to. Both of them build on standing CJEU principle: one must not be overly formalistic when assessing the existence of agreement, but one must be certain that such agreement exists. While it is up to the national court to assess this in fact, the Court does indicate it is unlikely to be the case when no written agreement has been made (neither initially nor subsequently confirming an earlier verbal agreement) and all one has are the invoices.
Choice of court being unlikely, next up is the application of Article 7(1) to determine which court has jurisdiction to hear an application for damages relating to the termination of a commercial concession agreement concluded between two companies, each established and operating in a different Member State, for the marketing of goods on the domestic market of a third Member State in which neither of those companies has a branch or establishment.
Referring to Corman-Collins, the Court classifies concession agreements as being service contracts, which per Article 7(1) second indent, leaves to be determined the ‘place in
a Member State where, under the contract, the services were provided or should have been provided;’. Note: the place in a Member State. Not different places. Per Wood Floor Solutions, when there are several places of performance of the obligation characteristic of a contract for the supply of services the ‘place of performance’ must be understood as the place with the closest linking factor, which, as a general rule, will be at the place of the main provision of services. This place of ‘main provision’ follows from the provisions of the contract and, in the absence of such provision, of the actual performance of that contract and, where it cannot be determined on that basis, the place where the agent is domiciled (still per Wood Floor Solutions). This specific determination is left to the referring court.
One imagines different national courts may have treated all of this as acte clair – except perhaps for the peculiarity of Spain being a Member State where neither of the parties has either domicile or branch.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 22.214.171.124.
 EWHC 2598 (Comm) Kaifer Aislimientos, is a good illustration of the limits of Article 25 juncto recital 20’s lex fori prorogati rule.
Claimant argues that the Court has jurisdiction pursuant to Article 25 Brussels I Recast because the relevant contract contains an English exclusive jurisdiction clause and further contends that the relevant contract was concluded by AMS Mexico and/or AMS on behalf of AT1 and Ezion as undisclosed principals and that, as undisclosed principals, the contract – together with the jurisdiction agreement – was binding on AT1 and Ezion.
That is the only part of the judgment to feature the Brussels Regulation at all. Peter MacDonald Eggers DJ could have referred to CJEU precedent pro inspiratio, including Refcomp for instance. He could certainly also have referred to recital 20, and equally failed to do so.
In substance he applies the Brussels I Recast rule by applying lex fori prorogati (here: English law) to all but the formation of consent questions relevant to the validity of choice of court (here: under what circumstance undisclosed principals are subject to choice of court).
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 126.96.36.199.
Many thanks to Andrew Savage and Nick Payne for flagging  EWHC 1968 (Comm) Bestolov v Povarenkin a little while ago, and for sending me copy of the judgment at the time. Apologies for late reporting: frustratingly even at gavclaw we cannot always devote the amount of time to the blog we would wish. Dr Maganaris in the meantime also has summary here.
As readers no doubt are aware, the Brussels I Recast Regulation (Article 62) does not define ‘domicile’: it defers to national private international law on the issue. The Civil Jurisdiction and Judgments Order 2001 establishes that a person is domiciled in England for the purpose of the Brussels Regulation (recast) if: the person is “resident” in England; and (cumulatively) the person has a “substantial connection” to England. Bryan DJ takes us through the relevant (and often colourful) precedent and notes, importantly, at 28 that the consequence of the English rules is that the same person can be resident in two different jurisdictions at the same time. At 44, he summarises with a list of criteria, and decides on the facts of the case that Mr Povarenkin is indeed domiciled in England (the substantial connection test having been more easy to determine than that of residence).
Subsequently the High Court reviews at length whether there was a valid choice of court agreement under Article 25 of the Regulation – which at this jurisdictional stage of the proceedings Bryan DJ decides there was not (choice of law for the relevant contracts being English law, was justifiably not considered definitive in this respect), at least not clearly. Obiter, the judge reviews forum non conveniens, at lenght in fact (and in a very clear way with a keen eye on relevant precedent as well as court practice in England) however he holds both before and after the obiter that evidently given Owusu, forum non conveniens has no calling.
A well written judgment, the approach of which on domicile evidently goes beyond having relevance merely for the English courts: for under the Regulation, courts in other Member States, too, may have to consider whether parties are domiciled in an EU Member State other than their own including, for the time being, the United Kingdom.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.3, Heading 188.8.131.52.
Thank you Stefanie Roosen for flagging the issue in what after a bit of searching I take it to be Delta Lloyd v Witsen. At issue is not immediately a conflict of laws concern however the case does highlight a discussion often occurring with respect to choice of court and choice of law: when do mere references to general terms and conditions (GTCS) become binding upon parties, all the more so when these refer to industry standards. Here: HISWA standards, the ‘Nederlandsche Vereeniging voor Handel en Industrie op het Gebied van Scheepsbouw en Watersport’ est.1932. The Netherlands are a seafaring nation: HISWA is big.
During repairs to the yacht Kontiki, the rear cable of the shipyard’s portal crane broke, the Kontiki fell and she suffered severe damage. The shipyard had in the course of negotiation, agreement and confirmation referred to no less than three different HISWA sets. The Rechtbank Noord-Holland held that as a result, none was validly incorporated into the contract (neither incidentally was a mere sign quayside, limiting liability).
As I have reported on this blog before (e.g. here), there is no magic wand when it comes to GTCS: all that is required is due diligence. Neat filing and dito reference. Electronically or otherwise: it is elementary for all things legal.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 184.108.40.206.1.