SPECIAL JURISDICTION: OVER DEFENDANT DOMICILED IN ANOTHER LUGANO STATE (2)
Special jurisdiction under Article 6
The opening words to Article 6 of the Lugano Convention state that
A person domiciled in a State bound by this Convention may also be sued:
They are followed by four sets of circumstance in which this possibility of suing a defendant away from the domicile of his or her home State may be available. Article 5 was formulated on the basis that the particular claim would be likely to have a sufficiently close practical connection to a court to make it an appropriate place to give jurisdiction which, if invoked, would override the general jurisdiction of the defendant’s domicile. Article 6 has a different focus: on claims which, by virtue of their connection to claims over which a court does have jurisdiction, ought to be permitted to be brought in the same set of proceedings. To put it another way, Article 5 is framed by reference to the connection between a claim and a place; Article 6 by the connection between a claim and legal proceedings.
Article 6 provides for special jurisdiction over defendants domiciled in another Lugano State in certain - but certainly not in all - proceedings involving claims which are connected or interrelated. Its principal impact is in proceedings involving claims brought against two or more defendants, in relation to third-party proceedings, and in relation to counterclaims. To English eyes, at least, it has obvious and very significant shortcomings, for there are some contexts in which the efficient resolution of disputes calls for the joinder of claims into a single proceeding by which all will be bound, yet Article 6 does not allow for it. It was said in Kalfelis v Bankhaus Schroder Miinchmeyer Hengst & Cox that Article 6 must be given a narrow interpretation, so as not to call into question the general jurisdiction of the courts of the defendant’s domicile. But in this respect the decision, as well as those subsequent decisions which have repeated it, is a bad one which ought to be reconsidered. If the purpose of Article 6 is to secure the rational and efficient disposal of complex proceedings, and, in particular, to avoid the risk of irreconcilable judgments which would follow if co-defendants, or third-party claims, or counterclaims, were tried in separate proceedings, there is no reason to interpret it narrowly or to regard it as subversive of Article 2. One would have hoped to see the law develop in that light. But as will be seen, the signs are not promising.
1 189/87, [1988] ECR 5565.
Special jurisdiction over co-defendants where one is sued at home: Article 6(1)
Article 6(1) of the Lugano Convention provides that:
A person domiciled in a State bound by this Convention may also be sued: (1) where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.
If proceedings are brought against two or more defendants who have domiciles in different Lugano States,[1] it is not possible for each defendant to defend at home without there being a waste of resources and a risk of two separate proceedings resulting in irreconcilable judgments. The Convention therefore makes it possible, subject to conditions, for proceedings to be brought against all the defendants before the courts of the domicile of any one of them.
The special jurisdiction created by Article 6(1) is good as far as it goes. But it does not go quite far enough. It does not, for example, permit a co-defendant to be joined into proceedings in a court in a Lugano State in which no defendant has a domicile but which is exercising jurisdiction over a defendant in accordance with Article 23. The same is true, and Article 6(1) is unavailable, if proceedings are brought before a court which has jurisdiction over a defendant by reason of his voluntary appearance in accordance with Article 24, or if the court has special jurisdiction on the basis of Article 5. Only if the claims are made in proceedings which are before a court which has general jurisdiction over at least one defendant, the ‘anchor’ defendant, on the basis of domicile will the joinder of another be permitted by this provision for special jurisdiction. This makes no sense, but it is the law.
One further point may be disposed of quickly. The meaning of ‘tried together’ was examined in Masri v Consolidated Contractors International (UK) Ltd. It was held that Article 6(1) allowed jurisdiction to be taken over a defendant domiciled in another Lugano State, if separate proceedings were instituted by the same claimant against a defendant in England, and an application were made to consolidate them. This looks rather odd if it means that proceedings over which the court would not have had jurisdiction are later brought within its special jurisdiction by a procedural application for consolidation; but it looks sensible if the alternative of applying to amend the proceedings against the English defendant, by adding a new claim against the codefendant, would have brought the case within Article 6(1) in any event. However, if A has a claim against D1, and B has a claim against D2, then even if the claims against DI and D2 are very closely connected indeed, Article 6(1) will not be available, as it is implicit in the Article that the two claims are brought by the same claimant.
As Article 6(1) does not provide for special jurisdiction over another defendant unless the court has general jurisdiction over one defendant to the claim, the defendant who is sued on the basis of Article 2 is often referred to, as it was above, as the ‘anchor’ defendant. The fact that there is such a defendant is, however, not enough, for additional requirements must also be satisfied, some of which are apparent from the text of the Article, but some others of which are not. Article 6(1) does not work well, and this is not surprising. The common law’s approach to joinder depends for its successful operation on a number of textual requirements, and on a flexible judicial discretion which is capable of responding to all manner of issues and sub-issues which need to be considered before a proposed co-defendant is subjected to a jurisdiction from which he is otherwise safe.[2] Article 6(1) offers only a very terse text, and provides no opportunity for a judge to weigh and balance the case for and against exercising jurisdiction.
The rule operates on the basis of claims, and the necessity of trying them together. It does not say, and probably does not mean, claims which have a reasonable prospect of success, or claims which raise a serious issue that should be tried, or anything like that. Such considerations may be a part of the common law’s jurisdictional apparatus, but the structure and assumptions of the Convention are entirely different. However, there is bound to be unease if it appears that the proceedings against the anchor defendant are, in reality, spurious, and would be liable to be struck out on the merits if such an application were possible to be made. In those circumstances, it may be argued that reliance on Article 6(1) is abusive, not in accordance with the purpose for which the rule of special jurisdiction was made. The point is dealt with below, but the law in relation to it is still incompletely developed.
- [1] It is obvious that Art. 6(1) is not available to establish jurisdiction over a defendant who does not have a domicile in a Lugano State. The decision to this effect in C-645/11 Land Berlin v Sapir EU:C:2013:228, [2013] ILPr 481 is obvious; so also C-51/97 Réunion Européenne SA v Spliethoffs Bevrachtingskantoor BV [1998] ECR 1-6511, where the same point had been made. 2 [2005] EWCA Civ 1436, [2006] 1 WLR 830. A further appeal to the House of Lords was not proceeded with. 3 Moreover, the Convention does not harmonise procedure. Different national systems organise the structure and nature of their courts and adjudications differently, and nothing of importance ought to turn on the question whether there are bifurcated, conjoined, or otherwise organised proceedings: see C-18/02 DFDS Torline AIS v SEKO [2004] ECR 1-1417. 4 Madoff Securities International Ltd r Raven [2011] EWHC 3102 (Comm), [2012] ILPr 275.
- [2] For the common law - relevant here only for the purpose of comparison - see AK Investment CJSC v Kyrgyz Mobile Tel Ltd [2011]UKPC 7, [20Î2] 1 WLR 1804. 2 See Chapter 24. 3 Paragraph 15.06. 4 Canada Trust Co v Stolzenberg (No 2) [2002] 1 AC 1. 5 C-51/97 Reunion Européenne SA v Spliethoff's Bevrachtingskantoor SR[1998] ECR 1-6511, where the anchor defendant was sued on the basis of what is now Art. 6, the claims were described by the referring court as ‘indivisible’, and it was held, inevitably, that Art. 6(1) was not available; see also C-645/11 Land Berlin v So/ur EU:C:2013:228, [2013] ILPr 481. 6 For example, on the basis of a jurisdiction agreement for the courts of another Lugano State.
