Managing jurisdictional disputes arising from agreements

It is convenient to address at the outset the practical difficulty which faces a court which has to decide whether it has jurisdiction when there is disagreement between the parties whether there is an effective and operative agreement on jurisdiction.

First, suppose there is a disputed agreement for the English courts, which would not otherwise have jurisdiction over the defendant, and that if the agreement is not effective, the courts of another Lugano State will have jurisdiction. The point of departure is that as a matter of common law, jurisdictional facts, which means the facts and matters which justify the English courts in taking jurisdiction, are generally required to be shown to the standard of a good arguable case. This is capable of meaning that though the court would accept that the argument for its having jurisdiction may not be as persuasive as the argument that it does not, there is enough of a case for the taking of jurisdiction, given that the facts are, at this stage, incomplete and untested.

This ‘good arguable case’ test was developed to deal with questions concerning the inherent jurisdiction of the English court, and to regulate those cases in which English legislation permitted service out of the jurisdiction with the permission of the court. There is no obvious reason to assume that it applies where jurisdiction is not inherent but is created by a European instrument;^[1] and there is no reason to suppose that it applies to questions about the application of Article 23. It could not be correct for an English court to exercise jurisdiction, and by doing so prevent the jurisdiction of the court of another Lugano State by finding there to be only a good arguable case that it has jurisdiction by virtue of an agreement. It would amount to its saying that ‘we consider that on balance we do not have jurisdiction and that another Lugano State does, but the case for saying that the agreement is inapplicable is not hopeless, so we will proceed to confirm our jurisdiction to hear the case’. That would not be a satisfactory answer.

In the context of Convention jurisdiction, therefore, the English courts now ask who has ‘the better of the argument’ on the issue of jurisdiction. The question will be whether the arguments advanced to demonstrate the existence of jurisdiction (in the context of an Article 23 agreement for the English courts) are more persuasive than those advanced in order to establish its unavailability or invalidity. A test which asks who has the better of the jurisdictional argument is neutral as between the litigating parties; it is neutral as between the party who asserts and the party who denies the jurisdiction of the English court. In many cases the court will be all too aware that it can do no more than decide whose contentions on jurisdiction are the more persuasive, or the least unpersuasive, while entertaining significant doubts about what the facts will prove to be if the matter proceeds. The question of who has the better of the argument, on the basis of whatever material was available at the time, is a rational, comprehensible, manageable, standard.

Second, suppose there is said to be a jurisdiction agreement for the courts of another Lugano State, but the claimant seeks to seise the English court by arguing that, for whatever reason he may have, the agreement does not derogate from the jurisdiction of the English court. Given what has just been said, the court will, if its jurisdiction is contested, apply the test of who has the better of the argument on the question of jurisdiction.

Where something similar arose in a case falling under Regulation 1215/2012, the party who was seeking to uphold the agreement was entitled, if he wished, to have the court designated by the agreement (rather than the court seised first) take the decision whether the agreement was applicable to the proceedings. This alteration, which was generally considered to be beneficial and to be liable to prevent chicanery by a party trying unmeritoriously to pour sand in the works of a jurisdiction agreement, was inserted into the recast Regulation,^[2] but it does not apply to the Lugano Convention.

The result is that the English court will address the question whether the jurisdiction agreement is valid and effective by using the ‘better of the argument’ test described above. It will be disposed, as we shall see, to give the jurisdiction agreement the widest scope it can realistically have. If the English court rules that it does not have jurisdiction because the agreement gives jurisdiction to the courts of another Lugano State, its ruling on the point will be liable to be recognised under Title III of the Convention. If the English court rules that it does have jurisdiction because the alleged agreement on jurisdiction does not apply to remove its jurisdiction, it ought to follow that its decision is also entitled to recognition.

• [1] The English courts cannot be faulted for applying English procedural law to the question whether jurisdiction under the Convention has been established when this is contested by the defendant: C-68/93 Shevill v Presse Alliance SA [1995] ECR 1-415;
• [2] With its numbering adapted to show how it would work if included in the Lugano Convention, the new and improved procedure provided as follows: (2) Without prejudice to Article [24], where a court of a Member State on which an agreement as referred to in Article [23 ] 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. (3) Where the court designated in the agreement has established jurisdiction in accordance with the agreement, any court of another Member State shall decline jurisdiction in favour of that court. This rule will bind the Member States when dealing with a case in which there is an agreement for the courts of a Member State; it will not apply when they are dealing with a jurisdiction agreement for the United Kingdom. 2 C-456/11 Gothaer Allgemeine Versicherung AG v Samskip GmbH EU:C:2012:719, [2013] QB 548, below. Chapter 33.