Declining jurisdiction, lis alibi pendens and related claims in the EU
Declining jurisdiction of one EU Member State court in favour of another when a claim is filed that relates to one already filed, and there is an exclusive jurisdiction agreement or exclusive competence in favour of another EU Member State, is regulated in Articles 25 and 24 of the Brussels I Regulation (recast). Article 26(1) provides jurisdiction in favour of a ‘court of a Member State before which a defendant enters an appearance’ (implied submission), unless that ‘appearance was entered to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 24’.
‘Italian torpedo actions’ intended as a tactic to delay proceedings in breach of an exclusive jurisdiction agreement in a charterparty or a B/L under the prior in tempore, potior in jure principle under the original Brussels I Regulation 44/2001 are no longer available under Brussels I (recast). Section 9 of Brussels I (recast) (lis alibi pendens and related actions) clearly states the mechanism to resolve pending decisions in related cases over the same cause of action and with the same parties. Article 29(1), under which ‘any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established’ (such information to be provided on request, under Article 29(2)), should be read together with Article 31 (2), which resolves the previous situation under Brussels I Regulation 44/2001, setting out that ‘where a court of a Member State on which an agreement as referred to in Article 25 confers exclusive jurisdiction is seised, any court of another Member State shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement’.
Another important issue is that of jurisdiction agreements in favour of non-EU states, which introduces a lis alibi pendens rule with a limited and discretional scope of application. In Owusu v. Jackson, the English Court of Appeal referred the interpretation of Article 2 of the Brussels Convention (now Article 4 of the Brussels I Regulation (recast)) to the CJEU. The CJEU ruled that jurisdiction could not be excluded in favour of a more appropriate forum, due to the mandatory nature of the article.[1] As Lord Aikens remarked:
To the consternation of many common lawyers, the CJEU ruled that courts of the Regulation countries could not invoke the doctrine of forum non conveniens, even where, to a common lawyer, it is plain that it should be exercised in favour of a non-Regulation State. The CJEU held that where the original jurisdiction in the courts of a Regulation State was correctly founded under Article 2 of Regulation 44/2001, based on the domicile of the defendant, there was no scope for the operation of the forum non conveniens doctrine.
Articles 33 and 34 of the Brussels I Regulation (recast) introduce two new provisions in respect of lis alibi pendens and the connectedness of actions and proceedings between EU Members and non-EU states. These Articles reverse the Owusu v Jackson decision. As stated by Aikens:
Under certain conditions they permit the court of a Member State to stay an action which is the same as or related to one in proceedings in a ‘third State’. This introduces an approach akin to the common law doctrine of forum non conveniens, allowing a stay if certain conditions are fulfilled including a condition that the court of the Member State is satisfied that a stay ‘is necessary for the proper administration of justice’. Article 33 applies where the causes of action in the two proceedings are the same and Article 34 applies when they are related, mirroring the distinction in (what are now) Articles 29 and 30 [of the Brussels I Regulation (recast)].
Article 34 of the Brussels I Regulation (recast) sets out that where jurisdiction is based on Article 4 (domicile of the defendant) or Articles 7,8 or 9 (special jurisdiction) and an action is pending in a non-EU court, when an EU court is seised relating to that pending action, the EU Member State court may stay proceedings if:
- a) it is expedient to hear and determine the related actions together to avoid the risk of irreconcilable judgments resulting from separate proceedings;
- b) it is expected that the court of the third State will give a judgment capable of recognition and, where applicable, of enforcement in that Member State; and
- c) the court of the Member State is satisfied that a stay is necessary for the proper administration of justice.
Article 34 goes on to set out the circumstances when the proceedings may be continued in the court of the Member State or dismissed.
Proceedings may therefore be stayed if a related action is pending in a non-EU court. The action must have been filed first in the non-EU State, and the EU Member State must be capable of recognising and enforcing the judgment of the non-EU State, and the listed conditions must be satisfied.
In this author’s opinion, Articles 33 and 34 of the Brussels I Regulation (recast) are an improvement on the previous position. They include the rules on lis alibi pendens and related claims in third states, allowing a stay of the proceedings in an EU Member State court when, among other conditions, the judgment issued in a third state is capable of recognition and enforcement.[2] As stated in Recital 24:
When taking into account the proper administration of justice, the court of the Member State concerned should assess all the circumstances of the case before it. Such circumstances may include connections between the facts of the case and the parties and the third State concerned, the stage to which the proceedings in the third State have progressed by the time proceedings are initiated in the court of the Member State and whether or not the court of the third State can be expected to give a judgment within a reasonable time.
That assessment may also include consideration of the question whether the court of the third State has exclusive jurisdiction in the particular case in circumstances where a court of a Member State would have exclusive jurisdiction.
Baatz considers it an unfortunate restriction on party autonomy that a mere residual discretion is available to the judge since Articles 33 and 34 of the recast Regulation are intended to be exclusive, save only for the exceptions in Articles 4, 7, 8 or 9. Under Article 31(2), priority is given to the chosen court rather than the court first seised. She highlights that since there is no reciprocity between EU Member States and third states (unlike between EU Member States), third states that wish to protect their position when parties have chosen their tribunals can choose to ratify the Hague Choice of Court Convention. Under Recital 22 of the recast Regulation, the designated court ‘has priority to decide on the validity of the agreement and on the extent to which the agreement applies to the dispute pending before it’ even if the court is the second seised or another court has already stayed the proceedings.
The prior in tempore, potior in jure principle applies when two courts have been designated as competent under the jurisdiction agreement. According to Recital 22, paragraph 2: ‘This exception should not cover situations where the parties have entered into conflicting exclusive choice-of-court agreements or where a court designated in an exclusive choice-of-court agreement has been seised first. In such cases, the general lis pendens rule of this Regulation should apply’. No EU Member State court has the discretion to apply the forum non conveniens doctrine when there is a valid exclusive or non-exclusive jurisdiction clause in favour of another EU Member State, although limited discretion is allowed under Articles 33 and 34 when no EU Member State has jurisdiction under Article 25.[3] Baatz suggests that these provisions are a major improvement because they reverse previous CJEU case law based on the Brussels Convention. The Gasser decision has been reversed by Article 31(2) of the Brussels I Regulation (recast), which, in combination with Recital 22, aims 'to enhance the effectiveness of exclusive choice-of-court agreements and to avoid abusive litigation tactics’.
A stay of proceedings by the court of an EU Member State exercising its discretion under Articles 33 and 34, in circumstances when a non-EU state court is first seised, is subject to its domestic law; but it is less clear what happens when it is the second seised. The court will determine whether there is an exclusive jurisdiction agreement in favour of another court or if the defendant enters into appearance. According to Article 28(2) of the recast Regulation, the defendant is worthy of protection: ‘The court shall stay the proceedings so long as it is not shown that the defendant has been able to receive the document instituting the proceedings or an equivalent document in sufficient time to enable him to arrange for his defence, or that all necessary steps have been taken to this end'.
When dealing with clauses in favour of non-EU state courts, declining jurisdiction is subject to domestic law in relation to lis alibi pendens, or related actions, and exclusive dispute resolution clauses. Spanish courts can decline jurisdiction in non-EU forum agreements (see Chapter 3, section 3). The defendant must raise a specific motion called a declinatoria. In England, however, the courts are reluctant to permit sendee out of the jurisdiction in such cases, requiring strong arguments for submission to a foreign court to be overlooked.
- [1] However, the English High Court stayed proceedings m favour of a non-EU state court in Ferrexpo AG v. Gilson Investments Ltd [2012] EWHC 721 (Comm). 2 Richard Aikens, Richard Lord and Michael Bools, Bills of Lading (2nd edn, Informa 2015) ch 14. 3 ibid. 4 Brussels I Regulation (recast), Art 34. 5 The EU Member State court ‘ does not have a discretion to stay where its jurisdiction is founded on Article 25’ of the Brussels I Regulation (recast); see UCPplcv. Nectrus Ltd [2018] EWHC 380 (Comm); Baughen, Shipping Law (n 19) 389. 6 Adam Johnson, Anna Pertoldi, Nick Peacock and Hannah Ambrose, ‘The recast Brussels Regulation: Implications for commercial parties’ PLCMagazine (29 January 2015) 19-26.
- [2] Marta Requejo Isidro, ‘Recognition and Enforcement in the New Brussels I Regulation (Regulation 1215/2012, Brussels I recast): The Abolition of Exequatur’ (European Judicial Training Network 2014)
- [3] Article 29(1): 'Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. ’ Article 31(2): 'Without prejudice to Article 26, where a court of a Member State on which an agreement as referred to in Article 25 confers exclusive jurisdiction is seised, any court of another Member State shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement.’ 2 CaseC-l 16/02Erich Gasser GmbHv. AflSdTSWEU:C:2003:657, [2003] ECRI-14693. 3 Baatz, ‘The Conflict of Laws’ (n 22) 24-25. 4 Fernandez Rozas, ‘Alternatives and uncertainties of the dispute settlement clauses in international maritime contracts’ (n 2) 336 5 M Virgos and A Cambronero, 'Comparative Study of “Residual Jurisdiction” in Civil and Commercial Disputes in the EU: Spam’ (2007) European Commission online publication. 6 Chris Woodniff and Karen Reed, ‘Comparative Study of “Residual Jurisdiction” in Civil and Commercial Disputes in the EU: National Report for England’ (2007) European Commission onlme publication. 7 Mackender v. FeldiaAG [1967] 2 QB 590 (CA).
