#3618 - Jurisdiction Under Brussels I Regulation 1 - Conflict of Laws

JURISDICTION UNDER BRUSSELS I REGULATION (PART 1)

• Brussels I Regulation will govern grounds for exercising jurisdiction if:

1. Regulation applies to subject matter of the dispute; and

2. There is sufficient connection with the EU

1. When Does BIR Apply?

1. Subject-Matter of Proceedings

‘Civil and Commercial Matters’

• Article 1: Regulation only applies to civil and commercial matters.

• Exercise of public law powers by public authority fall outside scope of Regulation.

• However if relationship between public authority and other party to case is governed solely by private law, is inside scope of BIR.

• Case falls inside scope of regulation insofar as it does not involve an exercise of powers by State going beyond that existing under rules governing private relations

• Preservatrice Fonciere TIARD SA v Netherlands [2003]

• Even where a body is acting in exercise of public law powers, case still inside scope of Regulation if the subject-matter of proceedings is private.

• Verein fur Konsumenteninformation v Henkel [2002]

Excluded Matters

Bankruptcy

• For case to fall outside BIR, bankruptcy must form ‘principal subject matter of proceedings’

• Thus even where dispute arises out of bankruptcy, may still fall under BIR.

• e.g. where trustee in bankruptcy makes order for sale of property

• Ashurst v Pollard [2001]

Arbitration

• Arbitration proceedings themselves fall outside scope of Regulation

• Marc Rich [1991] (ECJ)

• However when determining whether court proceedings to do with arbitration fall within Regulation, test is whether essential nature of substantive dispute is within Regulation.

• The Wadi Sudr [2010]

• Thus judgment may fall in BIR if arbitration is preliminary to main issue of proceedings

• hinted at in Marc Rich [1991] (ECJ)

• The Wadi Sudr [2010]

• ECJ had earlier held that applications for interim relief measures under (what is now) Art 31 Regulation where a valid arbitration clauses existed was not excluded from BIR

  • i.e. as for Art 31, the subject-matter of proceedings on merits is irrelevant

  • is relevant factor is the aim of interim measures sought

    • where measures are to protect C from financial loss, fall within Regulation

    • Van Uden [1998]

• Regulation however does not apply to proceedings “in support” of arbitration:

1. decisions on whether arbitration agreement is valid or not

• Van Uden Maritime [1998] (ECJ)

2. injunctions against parties continuing arbitration once it has been decided an arbitration clause is invalid

• Van Uden Maritime [1998] (ECJ)

3. nor decisions of a court asked to appoint an arbitrator under an arbitration clause

• Marc Rich [1991] (ECJ)

2. Sufficient Connection to EU

Regulation is engaged where matter is ‘civil and commercial’ and if either:

1. D is Community-domiciled

2. D is not Community-domiciled, but either Art 22 or 23 apply.

Article 4

• If D is not domiciled in any Member State, jurisdiction falls to be determined by the national rules of relevant Member State.

• unless Art 22/23 apply

• Domicile of claimant is irrelevant to application of Brussels Regulation.

• Thus can be jurisdiction under BIR even if C is domiciled in a third-State.

• Group Josi Reinsurance [2000] (ECJ)

1. Domicile

Individuals

• Article 59: a party’s domicile falls to be determined by national law.

• i.e. if D claims he is domiciled in Member State A, law of Member State A must be applied to see if this is case.

• even if claim is being heard in a different MS to one in which D claims domicile

• Even if D resides in non-Member State, may still fall under BIR if he has ‘special business domicile’ in an MS (under that MS’s law)

• Haji-Ioannu v Frangos [1999]

Civil Jurisdiction and Judgments Order 2001

Para 9, Schedule 1

• C is domiciled in UK only if:

1. Resident in UK; and

2. Nature and circumstances of residence show C has substantial connection with UK

• Where C has been resident in UK for three months or more, C presumed to be domiciled in UK unless contrary is proven.

Corporations

Article 60

• For purposes of Regulation, company or legal entity is domiciled at place in which it has its:

1. statutory seat; or

2. central administration; or

3. principal place of business

• For purposes of companies domiciled in UK, “statutory seat” means registered office/place of incorporation.

• Principal place of business is place at centre of company’s operation

• King v Crown Energy Trading AG [2003]

• Thus not necessarily place in which most of company’s business is carried out

• Rather it is place where company is controlled or managed

• Ministry of Defence of Iran v FAZ Aviation [2007]

• Thus under rules for domicile in BIR, is possible for individual or a company to be domiciled in more than one Member State

• e.g. where central administration and principal place of business in different MSs.

2. Special Jurisdiction

• Where D is not domiciled in EU:

1. case falls under Article 23 if C is EU-domiciled

2. if both D and C are not EU domiciled

• case only falls under BIR if Article 22 applies.

• if Art 22 does not apply, jurisdiction allocated by Article 4

2. Bases of Jurisdiction

• Where shown that a case falls under BIR, bases of jurisdiction are:

1. Special interest

2. Consent of parties

3. Submission

4. Domicile

5. Special jurisdiction

6. Special Contracts

• Are two ways in which priority of jurisdictional bases is allocated:

1. Hierarchy

• certain bases of jurisdiction are stated by Regulation to have priority over others

2. Chronology

• where no country has exclusive jurisdiction, country of courts first seised by claimant have jurisdiction

1. Hierarchy

1. Article 22 has priority

• This clear from wording of Arts 23+24

2. Article 24 (subsequent agreement) overrides Art 23 agreement

3. Article 23 – an exclusive prior jurisdiction clause overrides general grounds.

4. if none of these exist

• Article 2, Article 5, Article 23 (if jurisdiction clause non-exclusive)

2. Chronology

• Where no grounds has priority, jurisdiction allocated on basis of chronology (see sup 2)

Exclusive

1. Special interest – Article 22

• Allows jurisdiction where a MS has special interest in matter under dispute.

2. Submission – Article 24

• Member State has jurisdiction over a defendant where the defendant enters an appearance in that State’s courts.

• unless that appearance was simply in order to contest that court’s jurisdiction

• Article 24 does not override Article 22.

3. Consent of Parties – Article 23

• Prior agreement that disputes will be settled in courts of a particular country.

• Jurisdiction derived from such agreement is exclusive ‘unless the parties have agreed otherwise’

• An exclusive jurisdiction agreement overrides non-exclusive grounds

• A non-exclusive jurisdiction agreement does not override non-exclusive grounds.

• Even an exclusive Art 23 clause cannot override Art 24.

Non-Exclusive

4. Domicile – Article 2

• is the basic rule

• where defendant is domiciled in a Member State, may be sued in courts of that State.

  • ‘domicile’ determined by Articles 59+60 (see above)

• Subject-matter

  • however even where UK has jurisdiction under Article 2, court will not rule on matter falling outside their subject-matter jurisdiction

  • e.g. where a claim relates to ownership of property outside the UK

  • Lucasfilm v Ainsworth [2009] (CA)

5. Subject-matter jurisdiction – Articles 5+6

• Despite basic rule, are various special jurisdiction provisions which provide for D to be sued in a Member State in which he is not domiciled.

  • Article 5: close connection between claim and the forum.

  • Article 6: more convenient for the claim to be heard in another forum.

• Art 5+6 are exceptions to general principle in Article 2, and are therefore to be interpreted strictly.

  • Kalfelis v Bankhaus Schroder [1988]

SUBJECT MATTER JURISDICTION

‘Matters Relating to a Contract’

Article 5(1)

1. In matters relating to a contract, person domiciled in a Member State may be sued in another Member State if that is place of performance of obligation in question.

2. For:

• contracts for sale of goods, place of performance is place where goods were or should have been delivered

• contracts for provision of services, place of performance is place where services were or should have been provided

1. Meaning

• Has autonomous community meaning.

• Matter is relating to a contract in situations where there is an obligation freely assumed by one party towards another.

• Jacob Handte [1992]

• Thus national law as to what constitutes a contract not determinative

• if any of obligations under national law are imposed, will not be contractual.

• Jacob Handte [1992]

2. Contracts of Disputed Existence

• If contract is void ab initio, claims to recover money under it are not ‘matters relating to contract’.

• Kleinwort Benson v Glasgow City Council [1997]

• If contract is merely voidable, case still falls under Art 5(1)

• Agnew [2000]

• Where either D or C dispute the existence of contract, case is a ‘matter relating to contract’.

• fact that contract’s existence is disputed does not prevent Art 5 jurisdiction

• Effer v Kantner [1982] (ECJ)

• Boss Group v Boss Group France [1996] (CA)

3. Burden of Proof

• C must show good arguable case that court has jurisdiction.

• This is less than balance of probabilities

  • however must be shown to stronger level than that at which cases can be struck out as disclosing no reasonable cause of action

  • Kongress Agentur [1990]

Article 5(1)(a) – Place of Performance of Obligation in Question

Brussels Convention did not use to distinguish between contracts for sale of goods/provision of services and other contracts. Hence case law prior to 2001 concerns these contracts as well.

• Under BIR, where...