Wright v Granath. Lis alibi pendens in defamation. The Court of Appeal on Norwegian harpoons and ‘same cause of action’ under Lugano..

Wright v Granath [2021] EWCA Civ 28 is not the only litigation involving Mr Wright, defamation and bitcoin gossip: see my review of Wright v Ver [2020] EWCA Civ 672 (judgment to which Popplewell LJ refers for connections between Mr Wright and the UK) here. The judgment appealed here is Wright v Granath [2020] EWHC 51 (QB). Jurisdictional grounds evidently include the CJEU case-law right up to Bolagsupplysningen.

The title of this post is courtesy of Greg Callus, one of counsel for the claimant.

Defendant, Magnus Granath, is a citizen of Norway, resident in Oslo. He has tweeted on various technology issues, including cryptocurrencies, and has an interest in Bitcoin and its development. He believes that Dr Wright’s claim to be Satoshi Nakamoto (the developer of bitcoin) is false, a statement that was also tweeted at the since deleted @Hodlonaut account. By 15 May 2019 Dr Wright’s advisers thought they had identified Mr Granath as the owner of the @Hodlonaut account, and sent a further letter via Facebook and LinkedIn seeking confirmation. The letter was served by hand on Mr Granath on 20 May 2019. Meanwhile on the previous day, 19 May 2019, Mr Granath issued proceedings in the Oslo District Court seeking in effect a declaration of non-liability aka NDR: Negative Declaratory Relief: a classic (and as Popplewell LJ justifiably suggests, CJEU-blessed) flip side of the coin action to avoid jurisdiction of the English courts. 

It is common ground that the Norwegian court was first seised. Jurisdiction was accepted by the Norwegian courts right through to the Supreme Court (talk about speedy proceedings: within a year the jurisdictional issue was considered at first instance, appeal and SC) on the basis that the relief sought was “global” in the sense that it was not limited to any harm or loss suffered in Norway, and that A5(3) Lugano was applicable because the “harmful event” occurred in Norway, that being where Mr Granath lived and published the tweets (locus delicti commissi).

CJEU Gubish Machinenfabrik and The Tatry clarify for the English version of Brussels I hence also of Lugano (assuming the requirement of parrallel interpretation of the lis alibi pendens rule) what was already clearer in other language versions:  A27 Lugano requires three identities: identity of parties; identity of object or ‘ subject-matter ’; and identity of cause.

In the establishment of identity of cause of action, the ‘ cause of action’ comprises the facts and the rule of law relied on as the basis of the action (CJEU Gubbisch). 

Coming then to the decision, Popplewell J dissented, with Singh LJ and Moylan LJ allowing the appeal. At 41 ff Popplewell J discusses the cause of action criterion, with the core at 48-49: he identifies two core differences between the English and the Norwegian claims: 

there are two differences between the English and Norwegian Claims whose significance requires examination. The first is that the Norwegian Claim identifies negligence as a necessary ingredient of liability under Norwegian law, and asserts the absence of negligence on Mr Granath’s part. This gives rise to the possibility that Mr Granath could succeed in Norway on a basis that would not be inconsistent with liability to Dr Wright in England under English law: if the Norwegian Court were to hold that the tweet was untrue because Dr Wright is Satoshi Nakamoto, and there was no defence of lawfulness by way of public interest or freedom of expression, but that Mr Granath was entitled to his declaration on the grounds that although the tweet was wrong it was not negligently so, Dr Wright would have established all the ingredients of an English law defamation claim. However the consequence of the Court now declining jurisdiction under article 27 would be to preclude him from pursuing that English law claim or obtaining the relief it would provide.

The second difference between the claims is that were Mr Granath to fail in full in Norway, the relief available there to Dr Wright by way of counterclaim would not be co-extensive with that available in a successful English law claim. It would not include a s.12 statement; and it might not include an injunction. I say “might not” because it was in dispute as to whether that was so. Dr Wright sought to adduce expert evidence of Norwegian law before the Judge below, but permission was refused on the grounds that it came too late, with the result that there was no relevant evidence of Norwegian law or practice before the Court. Mr Tomlinson asserted that an injunction must be available in Norway as an effective remedy guaranteed by the EU Charter, but later confirmed that Norway was not a signatory to the Charter and not bound by it. He submitted in the alternative that such relief would be available as part of Dr Wright’s article 8 rights under the European Convention on Human Rights, but that is not self-evident to me and the point was not explored in argument. I shall assume for the purposes of my analysis that an injunction is not available in Norway because for the reasons explained below I do not regard any such unavailability as precluding the application of article 27.

At 51 ff, Popplewell J’s important take-aways from Gubisch, are that  when considering objet, the search is not for complete identity, but for identity on a question “which lies at the heart of” the two actions. Same does not mean same. The two claims need not be “entirely identical” (at 55). And at 56 that there can be the necessary identity of cause without complete identity of legal issues in the two sets of proceedings. Here too same does not mean same.

Further precedent is considered extensively (much of it discussed on the blog) leading to summary of the principles at 90 and application in fact at 93 ff: Popplewell J would have held that the claims have the same cause and the same objet and that A27 Lugano requires the EN claim to be dismissed.

At 99 ff he dismisses the argument,  which was encouraged (wrongly in my view, as readers know) by Vedanta and EuroEco, that the application of A27 to Mozaic claims as here, be an abuse of EU law. There is no authority to suggest that A27 is inapplicable to defamation claims, and no sound reason for restricting its applicability, and on this Singh LJ and Moylan LJ agree.

Of note is that Popplewell LJ is spot on at 101 where he says

in any tort claim in which article 5(3) confers a choice of jurisdiction on the claimant for a global claim, the choice is equally conferred on a defendant by way of an NDR claim; in each case the option is circumscribed by the simple and automatic mechanism (per Gantner paragraph 30) in article 27 of who starts first. That is not an abuse of the regime established by the Convention, but rather its implementation.

Singh LJ and Moylan LJ allowed the appeal, however: Moylan LJ for the majority summarises at 160 ff, largely on the basis of the same authority as that discussed by Popplewell (with The Alexandros at the core). At 168:

Although I agree with Popplewell LJ when he says, at paragraph 81, that irreconcilability may be a helpful tool in evaluating whether the article 27 test is met, the potential for conflicting decisions will not determine whether the causes of action are the same.

I should like to refer to the litmus test proposed by Adrian Briggs and applied eg in Awendale: whether a decision in one set of proceedings would have been a conclusive answer in the other. If it would, then there is identity of cause of action.

The appeal is allowed, the case may continue in E&W – clearly irreconcilability at the recognition stage might still be an issue.

Should the UK be successful in its Lugano accession attempt, this case will be crucial authority post The Alexandros. In the alternative, it will be among the last echoes of Lugano in the E&W courts.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.15.1.

Mastermelt v Siegfried Evionnaz highlights the continuing torpedo under Lugano, as opposed to the Brussels regime. Suggests cautious application of the Privatbank authority on reflexivity.

In Mastermelt v Siegfried Evionnaz [2020] EWHC 927 (QB), at issue is negative declaratory relief on contractual performance. 

Claimant Mastermelt is an English company specialising in the reclamation of precious metals. The defendant, Siegfried Evionnaz SA (“Siegfried”), is a Swiss company. There is a dispute between the parties over the quality of Mastermelt’s performance. Siegfried’s standard terms and conditions of contract (“STC”) include a clause stating that the governing law is Swiss law and that the Swiss courts have exclusive jurisdiction.

Relevant pending proceedings, are: very shortly after Siegfried had informed Mastermelt that it was going to issue proceedings against Mastermelt in Switzerland, Mastermelt issued the present claim in England on 5 February 2019. It seeks negative declaratory relief against Siegfried. Proceedings were subsequently issued by Siegfried against Mastermelt in the Zurich Commercial Court on 23 July 2019. Meanwhile, on 24 May 2019, Siegfried applied to the High Court in London for a declaration that it had no jurisdiction to try Mastermelt’s claim and so the Claim Form and service should be set aside, alternatively stayed. Further, on 29 January 2020 Mastermelt applied to the Swiss court (1) for a stay of those proceedings pending the UK decision, or (2) for the Swiss proceedings to be limited at that stage to a consideration of the court’s own jurisdiction there and nothing else, or (3) an extension of time for service of a response to Siegfried’s claim. By an order of 4 February 2020, the Swiss court rejected all three applications. On 7 February Mastermelt filed an appeal to the Federal Supreme Court of Switzerland which initially suspended enforcement of the Zurich Commercial Court’s decision pending the appeal. However, on 13 February Siegfried objected to any such suspension. The Supreme Court directed Mastermelt to file any response to that objection by 9 March. As far as the English courts know, that has been done but at the moment the Supreme Court has not given its decision on the suspension issue, let alone any substantive appeal, nor has there been any decision yet on the jurisdiction or otherwise of the Swiss court to hear the claim.

Siegfried argues, and has convinced the Swiss courts, that A27 Lugano needs to be applied ‘in harmony’ with A31(2) Brussels Ia: this now provides that regardless of which court was seised first, the court which was the subject of the putative exclusive jurisdiction clause, must decide the question of its jurisdiction first and the other proceedings must be stayed in the meantime. At 13 Waksman J refers to the Swiss court’s reasoning, where it takes an expansionist view of the Lugano Convention‘s protocol no2, that the Lugano States shall take ‘due account’ of each other’s courts decisions. The Swiss court suggests that in principle it should follow CJEU authority in Gasser (which introduced the torpedo mechanism by giving strict interpretation to the lis alibi pendens rule, even in case of choice of court) but that it has reasonable justification to deviate from Gasser given that the judgment has become ‘obsolete’ following A31(2) BIa.

Waksman J is first invited to accept the Swiss court’s reasoning as res iudicata, per CJEU C-456/11 Gothaer. (I did say at the time the CJEU may find its ruling in Gothaer would come back to haunt it). This he finds is a stretch of that authority but also not applicable given the limited findings of the Swiss court at any rate: ‘here the actual and only decision of the Swiss court thus far is simply to refuse to stay its own proceedings’.

He then discusses how A27 Lugano needs to be applied. A first reference is to the Court of Appeal’s most problematic view in Privatbank, to my mind, of applying Article 28 Lugano reflexively to third States. At 23-24 Waksman J distinguishes Privatbank (clearly he cannot hold it no relevant authority should he think so); then holds correctly that Gasser is not entirely obsolete following BIa; and finally at 30 that the harmonised regime per Lugano’s Protocol does not mean that one should now interpret Article 27 Lugano like 31.2 and (b) i Brussels Ia.

I agree most firmly. Note this has Brexit implications: one of the routes post Brexit, as readers know, is for the UK to become part of Lugano. In doing so it will surrender BIa’s forum non-light regime (Articles 33-34) in favour of Lugano which most definitely does not have a forum non-application – as well as, as is at issue here, re-arming the Italian torpedo. (Update 7 May 2020 Many thanks to Elijah Granet for pointing in the comments section to A6 of the Hague Choice of Court Convention which in future might serve towards disarming the torpedo to some degree: pursuant to Article 6 of that Convention, a court of a Contracting State other than the contractually chosen court must suspend or dismiss proceedings in that court to which an exclusive choice of court applies. There are exceptions however and in my view these could be used quite extensively: asymmetric choice of court, for instance, might well by some jurisdictions be classed as ordre public). (Update 28 May 2020 see also Aygun Mammadzada in the meantime here for similar and further comments re Lugano).

This leaves the issue of the putative choice of court agreement. England is the forum contractus per Article 5(1)a Lugano, hence will have jurisdiction less choice of court stands. Authority is well-known and recently applied in Pan Ocean, referred to here at 85. After much factual consideration it is accepted to a good arguable case standard that the parties contracted on the basis of the STC for the obligations concerned.

In conclusion therefore the action is stayed.

Quite a few relevant issues here. I for one note the cautious approach of the Court, in handling the Court of Appeal’s Privatbankauthority – following SCOR v Barclays.

Geert.

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

 

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