The relief which the court seised second may order
It bears repeating that the court is given two powers to grant relief, as well as the power to not grant relief. A stay may be ordered by the court seised second, in accordance with Article 28(1), if the related actions are pending at first instance: if those conditions are met the court has a discretion to stay its proceedings or to not do so.
The second power given to the court seised second, by Article 28(2), is to dismiss the action before it, with a view to its being brought before, and consolidated into an action pending at first instance in, the courts of the Lugano State which had been seised earlier in time. For this to happen, four conditions need to be satisfied. The two actions must be related in the sense already examined; the action in the court which was seised first must still be pending at first instance; the court which was seised first must itself have jurisdiction over the related action which was instituted before the court seised second; and the law of the court seised first must permit the consolidation to take place. If those conditions are met the court seised second may dismiss the action for consolidation or decide to not do so. However if, for example, the law of the court seised first will not permit the consolidation of the two actions into a single proceeding or, perhaps, into back-to-back proceedings but before the same panel of judges for example, dismissal of the action pending before it is not open to the court second seised. If the law of the first court would not allow consolidation because, for example, the action pending before it is very close to trial and this will delay the entire process, it is entitled to take this view, and dismissal will not then be open to the court seised second.
The court seised second may properly decide that it is inappropriate to order any relief, and that it should press on to hear the case and give judgment. The grounds upon which it may do that may be delicate, but if it is shown that the proceedings in the first court will be extremely slow, for example, it may properly conclude that the interests of justice are best served by its getting on with the matter before it. It may also take the view that if, for example, the action before it falls within the terms of a jurisdiction agreement, there is good reason to adjudicate rather than stay.
Even though a court may have concluded that the criteria for the application of Article 28 are satisfied, and that relief of one kind or the other would be appropriate, Article 28 gives no guidance as to which power is to be preferred. It seems rational to suppose that the court should lean in favour of whichever order will reduce or eliminate the possibility of irreconcilable judgments.[1] Though Jenard observed, without further explanation, that the first duty of the court was to stay its proceedings, and though the Advocate General in Owens Bank Ltd v Bracco'1'' evidently agreed, this does not mean that the power to dismiss proceedings is subordinate to the power to stay. A court, choosing between the relief it may order, will have to decide what principles -assuming that the selection between the remedies is amenable to exercise on grounds of principle - assist it to a decision. The Opinion in Bracco does expressly accept that a court seised second may legitimately ask itself which court is best placed to decide the issues raised in the action before it. The court in The Alexandras Tappears to have taken and acted on that advice in exercising its discretion against the ordering of any such relief: no doubt a perception that the Greek proceedings appeared to have been brought to undermine a settlement agreement and a jurisdiction agreement inclined the Supreme Court against the view that the Greek court was the court best placed to decide the matters raised in the action before the English court.
In cases where further guidance may be looked for, a suggestion follows: there is no authority to vouch for it. One may see Article 28 as covering, and making provision for, two situations in which there are related actions before the courts of two Lugano States. The first occurs where there are different parties in the two sets of proceedings, but the underlying claim is essentially the same in each action. This was so in The Tatry,m for example, where the cargo claims which were brought against a shipowner in England and the Netherlands were identical but for the fact that they involved different cargo-owners. The proceedings were related, in that there was a real risk of conflicting outcomes if the two actions proceeded to trial independently of each other. If the court seised second had dismissed its proceedings for them to be consolidated with those pending at first instance in the court first seised, the outcome would have been a single piece of litigation, resulting in a decision in which all parties would have been bound: a result which is in accordance with the overall scheme of the Convention. By contrast, there would have been little point in staying the English proceedings. No doubt the Dutch court would have made its findings of fact, but these would have been of legal relevance only to the parties to the Dutch litigation. Those claimants in the English proceedings not involved in the Dutch action would not be affected or bound by what the Dutch court had decided in proceedings in which they had played no part and had had no right to be heard, and there is therefore no
B JURISDICTION ACCORDING TO LUGANO/BRUSSELS reason to suppose that a stay of proceedings would have meant, when it was lifted, that the English trial would be reduced in length or complexity, or that it would alleviate the risk of factual inconsistency with the decision in the Dutch proceedings. In this type of case, therefore, there is good reason to use the dismissal power given in the second, rather than that contained in the first, paragraph of Article 28.
By contrast, where the parties to the litigation in the two courts are the same, but the issues in the two actions, though related, are not identical, there is sense in the court seised second staying its proceedings until the first court has adjudicated. The court first seised will determine issues as between those who are also parties to the proceedings in the court seised second. The consequence of this potential binding of the parties in relation to the second action may be to make the second trial shorter, or even unnecessary. A stay will then have served the purpose of producing an efficient use of time and resources, and will assist the goal of producing consistent judgments. But the same advantage would not be generated by a dismissal-for-consolidation. This is because the probable result of the consolidation would be to increase the length and complexity of the first trial. Not only that, but the first court may in fact be called upon to determine more issues than would be necessary if the two trials were to take place sequentially. This would not be so consistent with the aims of the Convention.[2]
For these reasons, it is submitted that the decision as to which of the powers in Article 28 should be applied should be guided by asking whether it is a ‘same issue, different parties’ case, or a ‘same parties, different issue’ case. It may be persuasive in every imaginable case, but it does give a workable structure to the unstructured powers apparently conferred by Article 28 in the event that the court decides that some form of relief is appropriate.
It must be admitted that the decision of the House of Lords in Sarrio SA v Kuwait Investment Authority'*4 does not support this analysis. There, though the parties were the same, the English action was dismissed for consolidation with the proceedings pending in Spain. If one asks why the court chose this, rather than a stay of the English proceedings, the explanation appears to lie in the very definition of related actions: they are related if it is expedient to hear and determine together to avoid the risk of irreconcilable judgments. If the two actions satisfy this definition, one may suppose that they ought to be tried together. But this would make nonsense of Article 28(1). It is perfectly true that this involves reading Article 28(3) as though it stated that it was ‘expedient to coordinate the hearing and determination of the two actions to avoid the risk of irreconcilable judgments resulting from uncoordinated parallel proceedings’. A purposive reading of Article 28(3) could achieve that with ease.
The material date of seisin for the purpose of Article 28
It would be easy to suppose that ‘first seised’ means the same for the purpose of Article 28 as it did for Article 27. That may not be wrong. But a court cannot be seised; it must be seised of something. If it is correct that the focus of Article 27 is onclaims, and Article 28 on actions, it is arguable that the operation of Article 30 reflects that difference.
The issue was examined and explained by the Supreme Court in The Alexandras T.'ss The question whether the court is first or second seised for the purpose of Article 28 directs attention to when the court was seised of the action, in the sense of the proceedings, not in the sense of particular causes of action within those proceedings.[3] Insofar as the amendment added (or drew out) claims which were inherent in the original claim, the English court was able to find that it had been (and was still) seised long before the Greek court was. Insofar as the amendment to the English proceedings introduced new parties to the proceedings, after they had started their Greek proceedings, the English court was seised second. As the court was clear that, if and to the extent that the English court was seised second, there was no proper basis for granting relief under Article 28, no more needed to be said; but it was accepted that had the decision turned on the proper interpretation of the date of seisin for the purpose of Article 28, a reference to the European Court would have been appropriate. After Completion Day it will, should the question arise before an English court, be a matter for the Supreme Court.
Concurrent exclusive jurisdictions: Article 29
Article 29 of the Lugano Convention provides that:
Where actions come within the exclusive jurisdiction of several courts, any court other than the court first seised shall decline jurisdiction in favour of that court.
For the sake of completeness, if a claim falls within the exclusive jurisdiction of the courts of two Lugano States, the court seised second with such jurisdiction is required to decline jurisdiction in favour of the court seised first with such jurisdiction. On the footing that this refers to the exclusive jurisdiction conferred by Article 22, it will be an event which occurs only rarely, though as Article 22(1) now allows for concurrent exclusive jurisdictions, the occurrence will not be quite as rare as it once was.
- [1] Masri v Consolidated Contractors International Co SAL [2011] EWHC 1780 (Comm). 2 [1979] OJ C59/1,41. Cf Centro Internationale Handelsbank AG v Morgan Grenfell [1997] CLC 870, denying the existence of such ‘first duty’. 3 C-192/92, [1995] ECR 1-117; referred to without dissent in The Alexandras 7*[2013] UK.SC 70, [2014] 1 Lloyd’s Rep 223, [92]. 4 C-406/92, [1994] ECR 1-5439. The Court disposed of the case on other grounds and did not need to deal with this issue. 5 The fact that the Dutch claim was brought by the shipowner for a declaration of his non-liability to the cargo-owner is irrelevant for the purposes of this argument: the essence of the claims was the same. 6 In the sense that, although the judgments might not be technically irreconcilable, as the one would not be a complete defence to the other, they would still contain inconsistent factual and legal analyses. 7 For though the Dutch judgment would qualify for recognition, it would not be given against, and would not therefore bind, those cargo-owners not party to it.
- [2] For an illustration - a very instructive illustration - of the circumstances in which a stay of proceedings is the proper order in a matter to which Art. 28 applies, where the proper progress of the English proceedings needed to be informed by the decision of a foreign court, already seised, see Lehman Brothers Bankhaus AG I Ins v CMA CGM [2013] EWHC 171 (Comm), [2013] 2 All ER (Comm) 557. 2 As distinct from being strictly driven. 3 [1999] 1 AC 32.
- [3] [2013] UKSC 70, [2014] 1 Lloyd’s Rep 223. The judgment draws significantly on the analysis of the Court of Appeal in Stribog Ltd v FKI Engineering Ltd[20 1] EWCA Civ 622, [2011] 1 WLR 3264, but which, in the light of the Supreme Court’s analysis, does not require detailed treatment. 2 At [79]. See also Koninklijke Philips NV v Tinno Mobile Technology Corp [2020] EWHC 2553 (Ch). 3 It may also operate in the instance of proceedings which have as their object a tenancy of land which, as a single parcel, straddles the border between Lugano States: cf 158/87 Scherrens v Maenhout [1988] ECR 3791 (not a case on concurrent proceedings).
