#4980 - Tuner V. Grovit - Conflict of Laws BCL

Tuner v. Grovit (House of Lords)

Facts

Mr Gregory Paul Turner, the claimant, who is a British citizen and is, and has at all material times been, domiciled in the United Kingdom.

Mr Felix Fareed Ismail Grovit, the first defendant who is likewise a British citizen, described by the claimant as being domiciled in the United Kingdom and by Mr Grovit as being domiciled in Belgium. He appears to have residences in both countries. Harada Ltd, the second defendant, which is a company incorporated in the Republic of Ireland but carries on its business in the United Kingdom as a UK registered overseas company under the name 'Chequepoint UK' with its seat in the United Kingdom. Changepoint SA, the third defendant, which is a company incorporated in the Kingdom of Spain and carries on business there.

The two defendant companies are part of the 'Chequepoint Group'. The directing mind of the group is Mr Grovit who effectively controls what the group does. The principal business of the group isbureaux de changeand companies in the group carry on business in a number of different countries.

In 1990 Mr Turner entered the employment of China Security Ltd, a company in the Chequepoint group, incorporated in Hong Kong.

Mr. Turner moves to Spain: In November 1996 Mr Turner had indicated that he was minded to resign from his employment as he wanted to learn Spanish and would like to live in Spain while he was doing so. His employers were anxious to retain his services and agreed that he could move his office to Spain and do the work there that he would have done in London.

Proceedings initiated by Mr. Turner: However Mr Turner did not move to Spain until November 1997. He took a six month lease of a flat in Madrid. On 16 February 1998 he gave notice to Harada. He did not go into the Madrid office after 26 February. He had only worked in Spain for a total of 35 days. He did not renew the lease on the flat when it expired. He returned to London where on 2 March 1998 he commenced proceedings for unfair and wrongful dismissal against Harada in the Employment Tribunal in London.

The nature of the claim he made was that there had been repudiatory breaches of his contract of employment which were tantamount to dismissing him. He alleged that there had been attempts to involve him in unlawful and irregular conduct in relation to the misuse of, and failure to account for, deductions from the wages and salaries paid to the employees of group companies.

Proceedings by Changepoint in Spain: On 29 July 1998, Changepoint and (apparently) Harada asked for conciliation in Spain with Mr Turner. They issued the requisite documents. It appears that under Spanish law conciliation must be attempted before some legal proceedings may be started…. On 21 October 1998, Changepoint started legal proceedings against Mr Turner in the Madrid Court by issuing a summons with a statement of claim. The summons was served upon Mr Turner in London on about 15 December. Mr Turner did not accept service and protested the jurisdiction of the Madrid Court. Mr Turner has not taken any part in the proceedings in Spain.

Prayer for Injunction by Mr. Turner: The relevant claim made in the writ in the present action is a claim by Mr Turner for an injunction -

“To restrain the first and second defendants from procuring the third defendant to continue and the third defendant from continuing, the action commenced by the third defendant against the plaintiff in the court of first instance in Madrid on or about 21 October 1998.”

Grounds of Challenge

1. They first submit that the power of an English court to make a restraining order in relation to the continuation of proceedings in foreign jurisdictions covered by the Brussels Convention (and the other similar conventions and protocols) does not now exist in view of the ratification of the Brussels Convention by the United Kingdom and its incorporation into English law by the Act of 1982.

2. Secondly, they submit that to make any such restraining order on the ground of 'abuse of process' is inconsistent with the Brussels Convention.

3. Thirdly, they make the same submission in respect of any restraining order made on the ground that continuation of the foreign proceedings would be contrary to Article 21

Question referred to the European Court

Is it inconsistent with the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters signed at Brussels on 27 September 1968 (subsequently acceded to by the United Kingdom) for the courts of the United Kingdom to grant restraining orders against defendants who are threatening to commence or continue legal proceedings in another Convention country when those defendants are acting in bad faith with the intent and purpose of frustrating or obstructing proceedings properly before the English courts?

Summary of English Law on the Point

1. Order is not directed against a foreign court, but against the defendant in personam: The present type of restraining order is commonly referred to as an "anti-suit" injunction. This terminology is misleading since it fosters the impression that the order is addressed to and intended to bind another court. It suggests that the jurisdiction of the foreign court is in question and that the injunction is an order that the foreign court desist from exercising the jurisdiction given to it by its own domestic law. None of this is correct. When an English court makes a restraining order, it is making an order which is addressed only to a party which is before it. The order is not directed against the foreign court: Lord Goff,SNI Aerospatiale v Lee[1987] AC 871 at 892. The order binds only that party,in personam, and is effective only insofar as that party is amenable to the jurisdiction of the English courts so that the order can be enforced against him

2. An Order is based on wrongful conduct by the Defendant: The power to make the order is dependent upon there being wrongful conduct of the party to be restrained of which the applicant is entitled to complain and has a legitimate interest in seeking to prevent. In British Airways v Laker Airways [1985] AC 58 at 81, Lord Diplock said that it was necessary that the conduct of the party being restrained should fit "the generic description of conduct that is 'unconscionable' in the eye of English law". The use of the word "unconscionable" derives from English equity law. It was the courts of equity that had the power to grant injunctions and the equity jurisdiction was personal and related to matters which should affect a person's conscience. But the point being made by the use of the word is that the remedy is a personal remedy for the wrongful conduct of an individual. It is essentially a 'fault' based remedial concept. Other phrases have from time to time been used to describe the criticism of the relevant person's conduct, for example, "vexatious" and "oppressive", but these are not to be taken as limiting definitions; it derives from "the basic principle of justice" (per Lord Goff, SNI Aerospatiale v Lee, at 893). Sometimes, as in the present case, the phrase "abuse of process" (borrowed from another context) is used to express the same general ideas but with particular reference to...