Posts Tagged UK
Thank you Chloe Oakshett for flagging  CSOH 45 BN Rendering Limited v Everwarm Ltd, in which the Commercial Court in Edinburgh considered its jurisdiction to enforce an adjudicator’s award. Bone of contention was choice of court (ditto law) in the underlying contracts in favour of the courts at England (and English law). Both parties are domiciled in Scotland. Relevant works had to be carried out in Scotland. The Brussels I Recast Regulation does not formally apply between them: Scots-English conflicts are not ‘international’ within the meaning of that Regulation.
However Lord Bannatyne (at 16) points out that even for intra-UK conflicts, the Civil Jurisdiction and Judgements Act 1982 (per instruction in section 20(5) a) must be interpreted taking into account the Brussels regime and its application by the CJEU. It is in this context that Case 24/76 Colzani resurfaces: ‘real consent’ needs to be established without excess formality.
At 28 Lord Banatyne lists claimant’s arguments: the party’s contract was not signed by both parties; nevertheless the defender’s subcontract terms and conditions form part of the contract; the subcontract order refers expressly to the defender’s subcontract terms and conditions which includes the jurisdiction exclusion clause and lastly, that express reference meets the test for real consent to the jurisdiction clause.
Put in summary: At 49: Is an express reference in the defender’s subcontract order (sent to the pursuer) to the defender’s subcontract terms and conditions, which contain the jurisdiction clause (which document is unsigned by the pursuer) sufficient to satisfy the test that it is clearly and precisely demonstrated that the parties agreed to the clause conferring jurisdiction on the English courts? Or put another way, in order to satisfy the said test is it not only necessary for there to be an express reference to the defender’s subcontract terms and conditions but for the subcontract order to have been signed by the pursuer to demonstrate that the parties agreed to the clause conferring jurisdiction on the English courts?
The judge considers the answer to the above questions to be question 1, yes and question 2, no – and I believe he is right.
Kennedy v National Trust for Scotland. Applying forum non conveniens within the UK. And how to make a case ‘international’.
In  EWHC 3368 (QB) Kennedy v National Trust for Scotland, Eady J considers two important (for this blog at least) issues leading to dicta: when a prima facie domestic case may turn out to be international really; and following his ruling on same, the application of forum non conveniens intra-UK. I reviewed the latter issue, also intra-UK, in my analysis of Cook & McNeil (v Virgin & Tesco).
First the issue of the case being purely domestic or international. It is only when it is the latter, that the Brussels I Recast regime is engaged and, per Owusu, forum non conveniens excluded.
The Claimant, who is domiciled in Scotland, seeks damages and other remedies in this jurisdiction against the National Trust for Scotland in respect of a number of allegations published in both jurisdictions as well as in Italy, France and Brazil. He relies not only on defamation but also on negligence and on alleged breaches of the Data Protection Act 1998. The dispute arises over the Claimant’s attendance at Craigievar Castle in Aberdeenshire on 23 February 2012, when he took a series of photographs of a naked model for commercial purposes. He claims that he did so pursuant to an oral contract, entered into with a representative of the Defendant, which expressly authorised that activity. Some years later, this episode came to the attention of the daughter of Lord Sempill who had gifted the castle to the Defendant (more than 50 years ago) and she protested that it had been used for the purpose of taking nude photographs. Her remarks caught the attention of a journalist who made enquiries and was given a statement by or on behalf of the Defendant on 24 February 2016 which was reported in the Scottish Mail on Sunday of 28 February. Thereafter, the Defendant also issued a press release which denied that the taking of the photographs had been authorised. This was sent to a number of media outlets including a reporter on the (London) Metro newspaper.
Claimant suggests that this is not “a purely domestic case” by referring to re-publication of the defamatory words in France and Italy. At 51 Eady J, with reference to the aforementioned Cook v Virgin Media, suggests the purpose of the regulation, and of the rule of general jurisdiction in particular, is to regularise issues of jurisdiction as between different states, and that no such question arises here, because the only potential competition is between the courts of Scotland and England & Wales (i.e. internal to the United Kingdom). I do not think this is the effect of CJEU precedent, Lindner in particular, as well as Maletic and Vinyls Italia (the latter re Rome I). The potential competition between the England and Scotland only arises if, not because, the Brussels I Regulation does not apply: the High Court’s argument is circular. In Linder and in Maletic, the CJEU upheld the application of Brussels I even though competing jurisdiction elsewhere in the EU was only potential, not actual. Given the potential for jurisdiction with courts in France and Italy, I would suggest the Lindner logic applies.
Eady J though applies forum non conveniens to establish Scotland as the more appropriate forum in the UK, and to stay the English case.
He then obiter (had FNC not applied), at 86 ff suggests the court develop a novel sub-national model of Shevill, such that only courts of the sub-national place where the publisher is domiciled would have jurisdiction to award global damages – and all other courts within the United Kingdom would be restricted to awarding damages for harm occurring within their relevant regions. Importantly, even for post-Brexit use, Eady J suggest the importation of CJEU case-law in applying English law of conflicts is appropriate for Parliament has approved rules in parallel to those under the Recast Regulation.
A little gem of a judgment.
(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 22.214.171.124.
A concise note (I am currently tied up mostly in writing research grants. And and and… I hope to return to the blog in earnest later in the week) to signal prof Hess’ excellent short paper on Brexit and judicial co-operation. Prof Hess focuses on the possibility to use the Lugano Convention. (See here for a draft of Michiel Poesen’s overview). I agree that Lugano would not be a good route if one’s intention is to safeguard as much as possible co-ordination between the UK’s common law approach to private international law, and the EU’s. Neither evidently if one aims to facilitate smooth cross-border proceedings.
Prof Hess has an interesting side consideration on schemes of arrangements. (Including reference to Apcoa). Again I agree that the English courts’ approach to same is not entirely without question marks (particularly jurisdictional issues in the event of opposing creditors: see here). I do not though believe that they would justify hesitation at the recognition and enforcement stage in continental Europe – even after Brexit. At least: not in all Member States. For of course post Brexit, UK judgments become those of a ‘third country’, for which, subject to progress at The Hague, we have no unified approach.
(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 5.
Away to Scotland with thee! CA applies forum non conveniens to intra-UK conflicts in Cook & McNeil (v Virgin & Tesco)
A great example of internal forum shopping and the application of forum non conveniens in the Court of Appeal. (Just before Christmas. I am still hacking away at my end-of-year queue).
Claimants claim damages for personal injuries they alleged they sustained in accidents in Scotland as a result of the negligence and/or breach of statutory duty of the defendants. The claims were issued in the Northampton County Court. The registered offices of the defendants are situated in England and Wales. Both claimants are domiciled in Scotland. Liability has been admitted in the case of Cook, but denied in the case of McNeil. Since the claims related to accidents in Scotland, the claims were allocated to Carlisle County Court, which is the court geographically closest to Scotland. The claims were struck out on forum non conveniens grounds, with Scotland being the appropriate forum.
The most important issue that arises on these appeals (and the reason why Tomlinson LJ gave permission for a second appeal) is whether the doctrine of forum non conveniens can apply in a purely domestic context where the competing jurisdictions are England and Scotland. Put simply, the question is: does the English court have the power in such a case to stay or strike out a claim on the ground that the natural and more appropriate forum is Scotland?
As Floyd MR notes (at 7) it is surprising that there was no authority on this point.
He correctly holds that the ‘international element’ required for the Brussels I regime to apply, as it did in Owusu and Maletic (but also Lindner) is absent in the case at issue. There is nothing in the facts which renders the case international in the Brussels I (Recast) sense. Relevant precedent which did have some calling was Kleinwort Benson, Case C-346/93, in which the CJEU refused to interpret the (then) Brussels Convention in a purely domestic UK situation, even if the internal UK rules were modelled on the Brussels regime.
Forum non conveniens could be applied. Though not under appeal, Floyd MR does suggest that in his view the claim in which liability was admitted (Cook), should not have been struck out but rather stayed under the relevant rules.
In Buccament Bay, 2014 EWHC 3130 (Ch), Strauss QC (DJ) dealt with the preliminary jurisdictional issue of whether the court should exercise its jurisdiction to hear winding-up petitions, based on largely undisputed debts, when neither of the companies concerned is incorporated in England (they are incorporated in Saint Vincent and the Grenadines, ‘SVG’).
[I have a copy of the judgment courtesy of Richard Clark, who with Patrick Cook authored this review of the judgment. Judgment was issued on 3 October but has not yet appeared in BAILII].
The judgment does not start with what logically it ought to have done, namely application of COMI per the EU’s Insolvency Regulation. Instead, Strauss DJ first considers the application of Section 221(1) of UK the Insolvency Act 1986, which i.a. gives the court jurisdiction to wind-up foreign companies as ‘unregistered’ companies, provided, subject to relevant case-law, that there be sufficient connection with England. He decides there is not (in particular because the condition is not satisfied, required under relevant precedent, that the petitioners derive benefit from the winding up). It is only after having rejected application of Article 221(1) that the court summarily returns to COMI under the Insolvency Regulation. Arguments pro and contra (which also fed into the Section 221(1) analysis) are helpfully summarised by Anna Jeffrey here. They led, justifiably I believe (albeit that reference to ECJ precedent here, would have been helpful) to a finding on COMI being outside the EU.
This is then where the High Court comes to the most interesting part of the judgment, even if it was obiter (at 25). Namely that even had COMI being in the UK, the English court could still exercise constraints /room for manoeuvre, applying Section 221(1), including recourse to forum non conveniens. In the words of Strauss DJ, ‘the only effect of Article 3(1) [of the Insolvency Regulation] is to give the court jurisdiction, which it has anyhow under English domestic law, to open insolvency proceedings. Where a company’s COMI is in this country, it is highly likely that, by definition, the court will be satisfied that there is a substantial connection with this country, but otherwise the discretionary factors will be the same. In this case, even if I had been satisfied that the respondents’ COMI was here, it would still have made no sense to make winding up orders in a case which is obviously much more suitable for the SVG courts.‘
Respectfully, I disagree. Article 3(1) simply supersedes Section 221(1) in cases where COMI is in the UK. It generally supersedes national jurisdictional rules, again, provided COMI is in the EU. Article 221(1) being a jurisdictional rule and not one of substantive UK insolvency law (which applies as lex concursus), it cannot have calling had COMI been in England.
That leaves the overall question, whether the Insolvency Regulation accommodates forum non conveniens (it certainly does not have a formal rule on it, in contrast with the Brussels I recast). Although there is to my knowledge no ECJ case-law on this, it is quite likely that neither Regulation nor most definitely the ECJ have sympathy for FNC. (See my posting on Kemsley for the issue of anti-suit injunctions and the Regulation).
Forum shopping alive and well outside the EU Insolvency Regulation. High Court (Bankruptcy) in Kekhman.
In Kekhman, the High Court (Kekhman) refused to reverse an earlier decision establishing jurisdiction for personal bankruptcy. COMI was not in the EU- the Insolvency Regulation therefore does not apply. Jurisdiction was upheld even though the applicant had only been personally been in the UK for one or two days.
Applicant argued pro jurisdiction mainly on the basis of
(a) the absence of a personal bankruptcy regime in the Russian Federation;
(b) the availability of assets in the jurisdiction (£200,000 which was to be made available to the official receiver);
(c) connection to the jurisdiction in the form of contractual English law/jurisdiction provisions;
(c) the opinion of a Russian lawyer, that the courts of the Russian Federation would recognise the bankruptcy;
(d) the fact that an English bankruptcy would allow for the investigation of Mr Kekhman’s affairs and an orderly realisation of Mr Kekhman’s assets for the benefit of his creditors as opposed to realisation on a first come first served basis;
(e) the promise that Mr Kekhman would cooperate with the official receiver and any trustee appointed;
(f) the prospect of Mr Kekhman’s financial rehabilitation.
Personal presence has long been withheld as sufficient ground for jurisdiction in England.
Section 265 Insolvency Act 1986 now provides
“Conditions to be satisfied in respect of debtor. (1) A bankruptcy petition shall not be presented to the court (…) unless the debtor(a) is domiciled in England and Wales, (b) is personally present in England and Wales on the day on which the petition is presented, or (c) at any time in the period of 3 years ending with that day (i) has been ordinarily resident, or has had a place of residence, in England and Wales; or (ii) has carried on business in England and Wales’.
Once jurisdiction has so been established, the Court has discretion to confirm or refuse jurisdiction in the case at issue, on the basis of relevant authority in case-law (and further instruction in the Act).
Baister CR reviewed precedent at length (including recent case-law on schemes of arrangement in the English courts) and held pro jurisdiction. Where his arguments are mostly likely to catch attention is his review of forum shopping, good and bad: The authorities, and in particular the corporate ones, demonstrate that the courts here are prepared to countenance what is in reality forum shopping, albeit of a positive, by which I mean a legitimate, kind’ (at 104). There is no suggestion in this case that the bankruptcy order was sought for an improper purpose (…) beyond, the Applicants would say, Mr Kekhman’s seeking to avoid the harsh consequences of Russian law (much as it might be said the companies in the two scheme cases [i.e. schemes of arrangement, GAVC] mentioned above sought to avoid the potential consequences for them of the lack of a scheme jurisdiction in their respective countries). (at 110) Rather, it seems to me that Mr Kekhman has come to this jurisdiction to fill a lacuna in the laws of the country where he is domiciled and resides. Many of the cases we have looked at, though primarily, I accept, in the corporate realm, indicate that the courts here have often been content to assist in such circumstances (at 111).
Russian assets can still be gone after by the Banks in Russia, using Russian law. English will be credited to them by the English courts using English law.
A refreshing defence of forum shopping which in my view unfairly has been utterly blacklisted in the Insolvency Regulation.