Court seised second considers it has ‘exclusive’ jurisdiction by agreement

It is obvious, in the light of what has just been said, that if the court seised second considers that it has ‘exclusive’jurisdiction by reason of Article 23, and that for this reason the court seised first does not have jurisdiction, the rules so far examined leave the court seised second powerless to act. Although the English courts refused - for reasons which were unassailably prudent but very wrong - for some years to accept this, the European Court in Erich Gasser GmbH v MIS AT Sri'⁵⁰ made it clear beyond argument. It was dismissive of the reasons which might be offered in support of letting a party who has agreed upon the jurisdiction of a court in a Lugano State take advantage of that agreement without interference from a party whose disregard of that agreement may be blatant and cynical: it considered that the arguments advanced in favour of allowing the chosen court to exercise jurisdiction ‘are not such as to call in question the interpretation of any provision of the [Lugano] Convention, as deduced from its wording and its purpose’.^[1] Perhaps it was simply saying that its hands were tied.

The judgment was not without rational justification. For it may not be right to assume that, whenever one party to litigation alleges the existence of a jurisdiction agreement which is valid and which on its true construction applies to the matter in question, right is on that party’s side. A litigant who says that he is not bound by such an agreement may be correct, and if that may be so, a rule of strict temporal priority in ruling on jurisdiction is justifiable. On the other hand, in the light of Erich Gasser, it may not be justifiable enough.

As explained above, the Brussels Regulation was amended, to make better provision for jurisdiction agreements. It is, however, impossible to infiltrate its substance into the Lugano Convention whose text remains (in this sense) unamended. It may very well be that Erich Gasser is open to serious objection, but it is not open to the courts to do anything about it.

Court seised first in another part of the United Kingdom

Article 27 of the Convention applies in cases where the courts of another Lugano State were seised first. Unless the Convention has given jurisdiction directly to the courts for a place within a Lugano State, the regulation of national jurisdiction within a State raises a question of internal or national, but not one of international, jurisdiction. Within the United Kingdom, therefore, any such problem will be determined by application of the principles of forum non conveniens, and not by application of rules based on Article 27, which is not reproduced in the internal rules of United Kingdom law. The principle of forum non conveniens may still be applied even if there are no proceedings yet pending in the courts of another part of the United Kingdom.

On the other hand, in those cases for which the Convention specifies the part of the United Kingdom whose courts have jurisdiction, the Convention determines the international and the national jurisdiction of the court. There is, therefore, no question of national jurisdiction for the internal law of the United Kingdom to answer, and as a result, no opportunity for the doctrine of forum non conveniens to be applied.

Related action pending in another Lugano State: Article 28

Article 28 of the Lugano Convention provides that:

(1) Where related actions are pending in the courts of different States bound by this Convention, any court other than the court first seised may stay its proceedings (2) Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof. (3) For the purposes of this Article, actions are deemed to be related where they 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.

Article 28 is most conveniently treated as the provision which may apply if the English court is seised second but the conditions for the application of Article 27 are not met. It contributes to the coordination of adjudication, but in a discretionary fashion. It speaks only to the court seised second. It permits it to stay its proceedings to await the outcome of an action which is still pending in the court seised first, whether it is pending at first instance or on appeal. It also allows it to decline jurisdiction over and dismiss the action before it, if this action may be consolidated into the action which is pending at first instance in the court seised first, though (of course) only if the court seised first would have jurisdiction over the action which is proposed to be dismissed. This is because Article 28 does not provide a ground for jurisdiction over the second claim but provides only a mechanism for consolidation of two actions over each of which the first-seised court does or would have jurisdiction;^[2] though if a defendant is willing to submit to the jurisdiction of the first-seised court, that condition will be satisfied. And, of course, Article 28 also allows the court to conclude that neither form of relief is appropriate, but to press on and adjudicate. In particular, if proceedings in the court seised first are going to be slow, and especially if the foreign court may not take proper account of an English decision given in the meantime, it may well be correct to refuse to grant relief but require the parties to get on with it in England.

The question whether a court is first or second seised in a case in which the actions are related, and relatedness may be shown from the claim and defence, raises some complexity which does not really arise in relation to Article 27. The issue is therefore revisited below; for the purpose of the paragraphs which follow it is assumed that there is no issue as to which court is first and second seised in the relevant sense.

• [1] C-l 16/02, [2003] ECR 1-14693. The reference was made from the Austrian courts; the court seised first and in breach of contract was the Italian. 2 At [53]. The reasoning in support of the conclusion was paltry. 3 Paragraph 18.05, above. 4 Or so one would think, and as it confirmed by Mastermelt Ltd v Siegfried Evionnaz SA [2020] EWHC 927 (Comm). Evidently the Handelsgericht, Zurich, thought otherwise: it was wrong to do so. 5 C-386/05 Color Drack GmbH v Lexx International Vertriebs GmbH [2007] ECR 1-3699: an exception may be where the Convention gives (special) jurisdiction to the courts of two places in the United Kingdom.
• [2] 150/80 Elefanten Schuh GmbH v Jacqmain [1981] ECR 1671. 2 Even if the proceedings before the second court were based on an exclusive jurisdiction agreement. 3 A suggestion that the court did not have this third possibility was correctly regarded as unarguable in The Alexandras Г [2013] UKSC 70, [2014] 1 Lloyd’s Rep 223, [97]; Lotus Cars Ltd v Marcassus Sport Sari [2019] EWHC 3128 (Comm). 4 Trademark Licensing Co v Leofelis SA [2009] EWHC 3285 (Ch), [2010] ILPr 290; Cooper Tire & Rubber Co Europe Ltd v Dow Deutschland Inc [2010] EWCA Civ 864, [2010] Bus LR 1697. Or if the English proceedings were brought on the basis of an exclusive jurisdiction clause, which may not be decisive but is certainly very significant: Lopesan Touristik SA v Apollo European Principal Finance Fund III (Dollar A) LP [2020] EWHC 2642 (Comm).