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England and Wales Court of Appeal (Civil Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Perform Content Services Ltd v Ness Global Services Ltd [2021] EWCA Civ 981 (01 July 2021) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2021/981.html Cite as: [2021] 1 WLR 4146, [2021] WLR(D) 375, [2021] EWCA Civ 981, [2021] ILPr 34, [2021] 2 CLC 383, [2021] WLR 4146, [2022] 2 All ER 887, [2022] 1 All ER (Comm) 323, [2021] BLR 485 |
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ON APPEAL FROM THE QUEEN'S BENCH DIVISION
LONDON CIRCUIT COMMERCIAL COURT
Mr Stephen Houseman QC (sitting as a Deputy High Court Judge)
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE HENDERSON
and
LADY JUSTICE NICOLA DAVIES
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PERFORM CONTENT SERVICES LTD |
Appellant |
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- and - |
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NESS GLOBAL SERVICES LTD |
Respondent |
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Ms Anna Dilnot QC (instructed by Cleary Gottlieb Steen & Hamilton LLP) for the Respondent
Hearing date : Tuesday 25 May 2021
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Crown Copyright ©
Sir Julian Flaux C:
Introduction
Factual background
"Governing Law and Jurisdiction.
The Agreement shall be governed by and construed in accordance with the laws of England and Wales and the parties hereby irrevocably submit to the non-exclusive jurisdiction of the Courts of England and Wales as regards any claim, dispute or matter arising under or in connection with this Agreement."
The legal framework
"SECTION 1
General provisions
Article 4
1. Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.
[…]
Article 5
1. Persons domiciled in a Member State may be sued in the courts of another Member State only by virtue of the rules set out in Sections 2 to 7 of this Chapter.
[…]
SECTION 7
Prorogation of jurisdiction
Article 25
1. If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. The agreement conferring jurisdiction shall be either:
(a) in writing or evidenced in writing;
(b) in a form which accords with practices which the parties have established between themselves; or
(c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.
2. Any communication by electronic means which provides a durable record of the agreement shall be equivalent to 'writing'.
3. The court or courts of a Member State on which a trust instrument has conferred jurisdiction shall have exclusive jurisdiction in any proceedings brought against a settlor, trustee or beneficiary, if relations between those persons or their rights or obligations under the trust are involved.
4. Agreements or provisions of a trust instrument conferring jurisdiction shall have no legal force if they are contrary to Articles 15, 19 or 23, or if the courts whose jurisdiction they purport to exclude have exclusive jurisdiction by virtue of Article 24.
5. An agreement conferring jurisdiction which forms part of a contract shall be treated as an agreement independent of the other terms of the contract.
The validity of the agreement conferring jurisdiction cannot be contested solely on the ground that the contract is not valid.
Article 26
1. Apart from jurisdiction derived from other provisions of this Regulation, a court of a Member State before which a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 24.
[…]
SECTION 9
Lis pendens — related actions
Article 29
1. Without prejudice to Article 31(2), where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.
2. In cases referred to in paragraph 1, upon request by a court seised of the dispute, any other court seised shall without delay inform the former court of the date when it was seised in accordance with Article 32.
3. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court.
Article 30
1. Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings.
2. Where the action in the court first seised is pending at first instance, any other court 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 31
1. 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.
2. Without prejudice to Article 26, where a court of a Member State on which an agreement as referred to in Article 25 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.
4. Paragraphs 2 and 3 shall not apply to matters referred to in Sections 3, 4 or 5 where the policyholder, the insured, a beneficiary of the insurance contract, the injured party, the consumer or the employee is the claimant and the agreement is not valid under a provision contained within those Sections.
Article 33
1. Where jurisdiction is based on Article 4 or on Articles 7, 8 or 9 and proceedings are pending before a court of a third State at the time when a court in a Member State is seised of an action involving the same cause of action and between the same parties as the proceedings in the court of the third State, the court of the Member State may stay the proceedings if:
(a) it is expected that the court of the third State will give a judgment capable of recognition and, where applicable, of enforcement in that Member State; and
(b) the court of the Member State is satisfied that a stay is necessary for the proper administration of justice.
2. The court of the Member State may continue the proceedings at any time if:
(a) the proceedings in the court of the third State are themselves stayed or discontinued;
(b) it appears to the court of the Member State that the proceedings in the court of the third State are unlikely to be concluded within a reasonable time; or
(c) the continuation of the proceedings is required for the proper administration of justice.
3. The court of the Member State shall dismiss the proceedings if the proceedings in the court of the third State are concluded and have resulted in a judgment capable of recognition and, where applicable, of enforcement in that Member State.
4. The court of the Member State shall apply this Article on the application of one of the parties or, where possible under national law, of its own motion.
Article 34
1. Where jurisdiction is based on Article 4 or on Articles 7, 8 or 9 and an action is pending before a court of a third State at the time when a court in a Member State is seised of an action which is related to the action in the court of the third State, the court of the Member State may stay the proceedings if:
(a) it is expedient to hear and determine the related actions together to avoid the risk of irreconcilable judgments resulting from separate proceedings;
(b) it is expected that the court of the third State will give a judgment capable of recognition and, where applicable, of enforcement in that Member State; and
(c) the court of the Member State is satisfied that a stay is necessary for the proper administration of justice.
2. The court of the Member State may continue the proceedings at any time if:
(a) it appears to the court of the Member State that there is no longer a risk of irreconcilable judgments;
(b) the proceedings in the court of the third State are themselves stayed or discontinued;
(c) it appears to the court of the Member State that the proceedings in the court of the third State are unlikely to be concluded within a reasonable time; or
(d) the continuation of the proceedings is required for the proper administration of justice.
3. The court of the Member State may dismiss the proceedings if the proceedings in the court of the third State are concluded and have resulted in a judgment capable of recognition and, where applicable, of enforcement in that Member State.
4. The court of the Member State shall apply this Article on the application of one of the parties or, where possible under national law, of its own motion."
"(15) The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile. Jurisdiction should always be available on this ground save in a few well-defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor. The domicile of a legal person must be defined autonomously so as to make the common rules more transparent and avoid conflicts of jurisdiction.
(16) In addition to the defendant's domicile, there should be alternative grounds of jurisdiction based on a close connection between the court and the action or in order to facilitate the sound administration of justice. The existence of a close connection should ensure legal certainty and avoid the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen. This is important, particularly in disputes concerning non-contractual obligations arising out of violations of privacy and rights relating to personality, including defamation.
(19) The autonomy of the parties to a contract, other than an insurance, consumer or employment contract, where only limited autonomy to determine the courts having jurisdiction is allowed, should be respected subject to the exclusive grounds of jurisdiction laid down in this Regulation.
(21) In the interests of the harmonious administration of justice it is necessary to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in different Member States. There should be a clear and effective mechanism for resolving cases of lis pendens and related actions, and for obviating problems flowing from national differences as to the determination of the time when a case is regarded as pending. For the purposes of this Regulation, that time should be defined autonomously.
(23) This Regulation should provide for a flexible mechanism allowing the courts of the Member States to take into account proceedings pending before the courts of third States, considering in particular whether a judgment of a third State will be capable of recognition and enforcement in the Member State concerned under the law of that Member State and the proper administration of justice.
(24) When taking into account the proper administration of justice, the court of the Member State concerned should assess all the circumstances of the case before it. Such circumstances may include connections between the facts of the case and the parties and the third State concerned, the stage to which the proceedings in the third State have progressed by the time proceedings are initiated in the court of the Member State and whether or not the court of the third State can be expected to give a judgment within a reasonable time.
That assessment may also include consideration of the question whether the court of the third State has exclusive jurisdiction in the particular case in circumstances where a court of a Member State would have exclusive jurisdiction."
The judgment below
"Irrespective of the internal hierarchy, it is now clearly established that Article 25 operates mandatorily irrespective of whether there is an EJA [exclusive jurisdiction agreement] or Non-EJA [non-exclusive jurisdiction agreement]. In other words, both exclusive and non-exclusive prorogated jurisdiction are (equally or indistinguishably) mandatory, such that the court so chosen has no residual power or discretion to stay the proceedings before it on domestic private international law grounds such as forum non conveniens: see UCP plc v. Nectrus Ltd [2018] EWHC 380 (Comm); [2018] 1 WLR 3409 at [39]; Citicorp Trustee Co Ltd v. Al-Sanea [2017] EWHC 2845 (Comm) at [49]-[50]."
"…assuming that Articles 33 and 34 cannot apply where there is prorogated jurisdiction, whether exclusive or non-exclusive, it is difficult to see why the existence of additional connections to (the courts of) the 'second seised' forum should activate a flexible discretionary power to stay such proceedings in favour of a 'first seised' forum where none otherwise exists via Article 25. If anything, the co-existence of jurisdictional basis under Article 4 or Articles 7-9 ought to diminish the need for such discretionary power rather than increase it where the parties have made such a choice for themselves."
"The flaw in Perform's analysis is that it relies upon splitting Article 25 for the purposes of answering the simple and separate question of whether the court's jurisdiction is "based upon" domicile. In so far as such distinction forms part of the internal hierarchy, there is no good reason to apply such hierarchy to the present situation in the absence of any conflict between provisions and in order to determine the application of a provision which itself forms part of such hierarchy."
He noted in that context at [93] that both Professor Briggs and David Joseph QC assume that Articles 33 and 34 are not available where there is "prorogated jurisdiction" drawing no distinction between exclusive and non-exclusive prorogated jurisdiction and without resort to the internal hierarchy.
"112 Without engaging in a full granular balancing exercise, given that this is a hypothetical inquiry in the present case, I am not persuaded that it is or would have been necessary for the proper administration of justice to stay these proceedings in favour of the NJ Proceedings. The parties bargained for or at any rate accepted the risk of jurisdictional fragmentation and multiplicity of proceedings by agreeing clause 20(f). That risk has manifested, largely through the tactical choice made by Perform to commence proceedings pre-emptively in New Jersey. The continuation of these proceedings, notwithstanding the existence of the NJ Proceedings, is a foreseeable consequence of the parties' free bargain and a risk that Perform courted by suing first elsewhere.
113 I reach this contingent conclusion without acceding to the primary contention of Ness in this context, i.e. that the most important circumstance or consideration to be taken into account in the court's exercise of discretion under Article 33 is the Non-EJA in favour of this court. The existence of that jurisdictional bargain nevertheless enables the court to sense-check its overall evaluation as to the proper administration of justice under Article 33."
Grounds of appeal
(1) The Court was wrong as a matter of law to interpret Article 33 to mean that jurisdiction was not "based on" domicile by reason of a non-exclusive English court jurisdiction clause that conferred prorogated jurisdiction on the English Court pursuant to Article 25;
(2) The Court was wrong to conclude that a stay was not necessary for the proper administration of justice within the meaning of Article 33(1)(b). The court wrongly failed to place any or any sufficient weight on the fact that the NJ and English proceedings were mirror image proceedings giving rise to the risk of irreconcilable judgments, the core purpose of Article 33 and a core feature of the concept of the administration of justice under the Article. The court wrongly took account of the non-exclusive English court jurisdiction clause and/or an English governing law clause and/or wrongly took account of its assessment that the centre of gravity was Slovakia and/or failed to place any or any sufficient weight on the material connections between the parties and the United States and/or wrongly placed significant reliance on connections between the parties, the dispute and the UK.
Summary of the parties' submissions
"A defendant not domiciled in a Member State should in general be subject to the national rules of jurisdiction applicable in the territory of the Member State of the court seised.
However, in order to ensure the protection of consumers and employees, to safeguard the jurisdiction of the courts of the Member States in situations where they have exclusive jurisdiction and to respect the autonomy of the parties, certain rules of jurisdiction in this Regulation should apply regardless of the defendant's domicile."
Article 6 provides:
"If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall, subject to Article 18(1), Article 21(2) and Articles 24 and 25, be determined by the law of that Member State."
"61 In paragraphs 106 and 107 of his Report, Professor Pocar discussed "The exclusive or the non-exclusive nature of the prorogation clause". He said this:
"106. The 1988 Convention lays down that a prorogation clause that meets the requirements of the Convention always confers exclusive jurisdiction on the designated court or courts. But under the laws of some of the States bound by the Convention - under English law in particular - the parties will often agree a choice of forum clause on a non-exclusive basis, leaving other courts with concurrent jurisdiction, and permitting the plaintiff to choose between several forums; and English case-law has accepted that a non-exclusive clause constitutes a valid choice of forum under the Convention. On a proposal from the United Kingdom delegation, the ad hoc working party re-examined the question of the exclusive effect of a choice of forum clause, and reached the conclusion that, since a clause conferring jurisdiction was the outcome of an agreement between the parties, there was no reason to restrict the parties' freedom by prohibiting them from agreeing in the contract between them that a non-exclusive forum should be available in addition to the forum or forums objectively available under the Convention.
A similar possibility was in fact already provided for, though within certain limits, by the 1988 Convention, Article 17(4) of which allowed a choice of forum clause to be concluded for the benefit of only one of the parties, who then retained the right to bring proceedings in any other court which had jurisdiction by virtue of the Convention, so that in that case the clause was exclusive only as far as the other party was concerned. That provision was obviously to the advantage of the stronger party in the negotiation of a contract, without producing any significant gain for international commerce. The 1988 Convention has now been amended to give general recognition to the validity of a non-exclusive choice of forum clause, and at the same time the provision in the 1988 Convention that allowed a clause to be concluded for the benefit of one party only has been deleted.
107. Article 23 does still give preference to exclusivity, saying that the agreed jurisdiction "shall be exclusive unless the parties have agreed otherwise". A choice of forum clause is therefore presumed to have exclusive effect unless a contrary intention is expressed by the parties to the contract, and not, as was initially proposed, treated as a non-exclusive clause unless the parties agree to make it exclusive."
62 Mr Joseph relied on this passage as providing an authoritative explanation of how the wording of what is now Article 25 of Brussels Recast achieved its present form. With that I can readily agree. He also submitted that the passage provides further support for his taxonomy because Professor Pocar's discussion of the English proposal shows that the working party had asymmetric jurisdiction agreements firmly in mind, and it dealt with them not by providing that they were to count as exclusive jurisdiction clauses, but rather by recognising that parties were free to enter into a non-exclusive jurisdiction agreement in the interests of party autonomy. That may be so, but I can find nothing in this passage to suggest that Professor Pocar was addressing his mind to the question whether the exclusive part of an asymmetric jurisdiction clause can properly be regarded as an exclusive agreement in relation to claims brought by the party who is bound by it and does not have the benefit of a wider choice of forum. The focus of the discussion is on the validity of the non-exclusive part of the agreement, not on the exclusive nature of the agreement for the party who has no choice of forum."
"If parties have concluded a non-exclusive jurisdiction agreement, then the parties will have conferred jurisdiction on the identified court or courts in addition to the courts that have jurisdiction by virtue of the general rule regarding domicile and the special jurisdiction provisions."
Second, at 3.15 where it is stated:
"However, where parties have agreed that an identified court or courts shall have non-exclusive jurisdiction, this does not oust the substantive jurisdiction of other courts under the provisions of [the Regulation]. By way of example, parties who have agreed that the English courts shall have non-exclusive jurisdiction do not oust the substantive jurisdiction of the courts of the domicile of the putative defendant so long as that court is first seised."
"These provisions [Articles 33 and 34] are designed to address some of the unsatisfactory aspects of the decision of the CJEU in Owusu, in the particular context of lis pendens. The new provisions do not give a general discretion to stay proceedings on the grounds of forum non conveniens. The discretion which is introduced is targeted towards the proper administration of justice in the context of lis pendens in a third state."
"That wording [of Article 17 of the original Brussels Convention], which is based on the most widespread business practice, cannot, however, be interpreted as intending to exclude the right of the parties to agree on two or more courts for the purpose of settling any disputes which may arise. This interpretation is justified on the ground that Article 17 is based on a recognition of the independent will of the parties to a contract in deciding which courts are to have jurisdiction to settle disputes falling within the scope of the Convention, other than those which are expressly excluded pursuant to the second paragraph of Article 17. This applies particularly where the parties have by such an agreement reciprocally conferred jurisdiction on the courts specified in the general rule laid down by Article 2 of the Convention [the predecessor of Article 4]."
Discussion
"They [Articles 33 and 34] therefore proceed solely by reference to the domicile and special jurisdiction regime set out in Article 4 and Articles 7, 8 and 9. There is no mention of a reservation in the event jurisdiction is established under Article 25. This carries with it, in my judgment, an inference that there is intended to be no discretion to decline jurisdiction in other cases, in particular where the jurisdiction is founded under Article 25."
"The decision in Owusu, to which I have already made reference in the context of the strike out application, was directed, at least in part, against the risk that the application of the broad discretion afforded by the common law doctrine of forum non conveniens was liable to undermine the predictability of the rules imposed by the Brussels Convention and its successors. It follows that a defendant cannot circumvent the requirements of Article 34, simply by taking a forum non conveniens shortcut however cunningly disguised. It does not mean, however, that, provided the jurisdictional prerequisites have been satisfied, the court is required when considering the proper administration of justice criterion to jettison any consideration of factors thereunder which might also have been theoretically relevant to a forum non conveniens argument. Such an approach would achieve the object only of throwing the baby out with the bathwater."
Lord Justice Henderson
Lady Justice Nicola Davies