RESIDUAL JURISDICTION OVER DEFENDANT WITH NO LUGANO STATE DOMICILE: ARTICLE 4

General

Article 4 of the Lugano Convention provides that:

( 1 ) If the defendant is not domiciled in a State bound by this Convention, the jurisdiction of the courts of each State bound by this Convention shall, subject to the provisions of Articles 22 and 23, be determined by the law of that State. (2) As against such a defendant, any person domiciled in a State bound by this Convention may, whatever his nationality, avail himself in that State of the rules of jurisdiction there in force, andin particular those specified in Annex I, in the same way as the nationals of that State.

If the defendant is not domiciled in the United Kingdom or in any other Lugano State, Article 4 of the Convention directs a court to exercise the rules of jurisdiction found in its own national or common law in civil or commercial proceedings against such a defendant. The Convention may not have adopted the terminology of ‘residual jurisdiction’ for the rules picked up and made applicable in such cases, but it is a convenient description. It has two principal advantages. One is that it is accurate: the jurisdictional rules deal with the residue of cases for which the Convention has not made, or has not yet made, more specific jurisdictional provision. The second is that it serves to distinguish the rules picked up and applied by virtue of Article 4 from the same rules as applied to cases which are not within the scope of the Convention. Superficially these are the same rules, but in practice their effect is substantially different.

Article 4 draws specific attention to two provisions of the Convention which will apply even though the defendant does not have a domicile in a Lugano State: exclusive jurisdiction regardless of domicile, and prorogation of jurisdiction by agreement. Indeed, if the advice given in this book to address the jurisdictional questions in the order presented here is taken, these qualifications to Article 4 will not arise because jurisdiction will be decided before this point is reached.

When the court finds that the defendant does not have a domicile in any of the Lugano States, and none of the provisions of the Convention has operated to allocate jurisdiction to the courts of a Lugano State, the defendant falls outside the direct jurisdictional provisions of the Convention. The Convention states in its preamble that the parties to it were ‘determined to strengthen in their territories the legal protection of persons therein established’; when dealing with a defendant who is not domiciled in a Lugano State, there is a rather different reason for the Convention to lay down the rules for the taking of jurisdiction. The Convention proceeds by taking the jurisdictional rules of national law and incorporating them into itself by reference, by means of Article 4, for the residual cases for which it makes no more specific provision. Jurisdiction under Article 4 is therefore within, not external to, the Convention.

It follows that Article 4 jurisdiction is subject to the other constraints upon jurisdiction which are derived from the Convention. For one thing, Title III of the Convention will provide for the recognition and enforcement of judgments given against those without a domicile in a Lugano State.^[1] For another, and perhaps because of the previous point, the Convention is still concerned to prevent the possibility of irreconcilable judgments being handed down by the courts of Lugano States, so the Us abili pendens provisions will apply in their full force: a conclusion was confirmed in Overseas Union Insurance Ltd v New Hampshire Insurance Co.- In that case, the judgment pointed out that what is now Article 27 made no exception for the case of jurisdiction taken under the residual rules provided for by Article 4. On the contrary, it said, the provisions on Us alibi pendens were to be applied without regard to the basis upon which the two courts had or had taken jurisdiction. There is no more to be said.

Service of process on the defendant when the residual rules apply

If the English court is asked to take jurisdiction under Article 4, service out of the jurisdiction, if it is needed, will be available only with the permission of the court. This is because the requirement that permission be obtained, and the limitation of this grant of permission to claims falling within the paragraphs of the Practice Direction and Part 6 of the Civil Procedure Rules, form part and parcel of the residual rules of jurisdiction which Article 4 authorises the court to exercise. If the court refuses to grant permission, or having first granted it later rescinds the order, declares that it has no jurisdiction, and sets service aside, it will thereupon not be seised, and the claimant will have to find somewhere else to sue the defendant.

If the residual rules of jurisdiction are applicable by reason of Article 4, and the defendant is within the jurisdiction, so that he may be served as of right, the court may be seised without further ado. If this happens, but the defendant wishes to contend, for example, that England is a forum non conveniens, and that proceedings should be stayed in favour a foreign court which is the forum conveniens, the question whether the court may do so is one which is considered in Chapter 19 below, as part of the broader question of when there may be discretion to decline to exercise a jurisdiction which has been conferred by the Convention. But the short answer is that the court may stay the proceedings.

• [1] As to this, see Chapter 33, below. 2 C-351/89, [1991] ECR 1-3317. 3 See Chapter 24, and CPR r. 6.36. It is otherwise if the matter is one which the court has jurisdiction to hear, even though the defendant is out of the jurisdiction: CPR r. 6.33(3) allows service to be made out of the jurisdiction without permission; see further, Chapter 24.