Posts Tagged LAP
Forum non conveniens, lis alibi pendens ex-EU following Brussels I Recast. High Court adopts limiting approach in UCP v Nectrus.
Update 8 July 2019 on the subsequent merits see  EWHC 1732 (Comm).
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 22.214.171.124.2.
C-523/14 Aertssen is not a corner piece of the Brussels I jigsaw. Rather, a necessary if unexciting piece of the puzzle’s main body. Aertssen NV, of Belgium, had a gripe with VSB Machineverhuur BV and others, of the Netherlands. Aertssen alleged fraud in VSB’s dealings with the company. It employed a well-known feature of Belgian (and French, among others) civil procedure, which is to file complaint with the investigating magistrate. This launches a criminal investigation, to which civil proceedings are attached.
Aertssen’s subsequent action of attachment of VSB’s accounts in The Netherlands, risked being stalled by the Dutch courts’ insistence that the group launch new legal action in The Netherlands. Aertssen obliged pro forma with this initiation of new proceedings, subsequently to aim to torpedo them. Aertssen would rather the Belgian courts continue with their own, criminal investigation and that action in The Netherlands, other than action in attachment, be put on hold, at least until the Belgian proceedings be finalised.
In essence therefore, the case before the CJEU needs to determine whether the Aertssen action in Belgium is of a ‘civil and commercial’ nature, and if it is, whether the actions in Belgium and The Netherlands meet the requirements of the lis alibi pendens rule of Article 27 (old) of the Brussels I-Regulation. The CJEU replied in the affirmative to both.
Precedent for the ‘civil and commercial’ issue, other than the usual suspects, was available per Sonntag, Case C-172/91, where the Court held that civil matters within the meaning of the first sentence of the first paragraph of Article 1 of the Brussels Convention, cover an action for compensation for damage brought before a criminal court. In Aertssen, The CJEU used the term ‘private law relationship’ to describe the legal relationship between the parties concerned. Even though, other than in Sonntag where the criminal proceedings were launched by the State prosecutor, Aertssen itself had triggered the criminal investigation, its ultimate aim is to obtain monetary compensation.
The subsequent question was whether per Article 27, lis pendens exists. Reference is best made to the judgment itself for the application of the The Tatry criteria (Case C-406/92): the two cases pending need to involve the same parties, pursuing the same cause of action (the facts and the rule of law relied on) and with the same object (meaning the end the action has in view). The CJEU held among others that the question whether the parties are the same cannot depend on the position of one or other of the parties in the two proceedings.
The remainder of the judgment deals with the meaning of the term ‘court first seized’ in Article 30 of the Regulation, and the relevance of national rules of civil procedure in same.
It is not often that a party aims to torpedo its own proceedings and the procedural intricacies of the case are rather complex. However the CJEU keeps a level head, with in the end transparent results.