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#13633 - Jurisdiction Selection Challenging Jurisdiction - Commercial Dispute Resolution

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Brussels Regulation Recast (1215/2012).

Apply the rules of jurisdiction to cases involving Defendant inside EU and advise client of appropriate jurisdiction

It is possible to seek interim relief such as injunction in the courts of any MS in aid of proceedings being taken elsewhere in the EU if it is just and convenient to do so (client gets a choice if more than one article is satisfied)

Is it a Civil or Commercial Matter? (Art 1)

Brussels regulations does not apply to:

  • Para 2(a) - Questions of status or legal capacity of natural persons, rights in matrimonial property, wills or succession

  • Para 2(b) – bankruptcy or winding up of companies

  • Para 2(d) Does not apply to arbitration (including disputes as to whether there is an arbitration agreement)

  • Para 2(e) maintenance obligations arising from a family relationship

  • Para 2(f) wills and succession

Client who enters into agreement whereby all disputes will be resolved by arbitration England has by-passed the Brussels Regulation (recast) (Recital 12) – does not prevent courts from determining if arbitration clause operative

YES

Is there exclusive jurisdiction? (Art 24)

Parties cannot alter the rules by agreement and do not have option of suing in D’s local courts for the following:

  • 24(1) Land = courts where the property is situated (minor exception for short leases). Equitable interests and declaration of trusts also outside of scope

  • Companies – 24(2) = validity of constitution/dissolution of co, association, other legal person jurisdiction where co has seat

  • 24(4) IP = registration/validity of patents/TP/designs and other registered intellectual property rights must be taken in state where reg was applied for or has taken place (infringement not covered and subject to the normal rules)

  • Entries in public reg 24 (3)= State where the register is kept

  • Enforcement 24(5) State where judgement is being enforced

NO

Has there been submission to a particular jurisdiction? (Art 26)

If D voluntarily submits to the jurisdiction of a foreign court then irrespective of 1215/2012 that court will usually be entitled to deal with case

  • Any clause in contract is overwritten if D does this.

  • If acting for D do not submit to jurisdiction otherwise will not be able to challenge it:

  • E&W acknowledge service of claim form to prevent Default Judgement and challenge jurisdiction under CPR 11 within 14 days (28 days in commercial/mercantile court) don’t file defence (CPR 11 extends time for filing defence until court rules on jurisdiction)

  • Another EU country – contact solicitor in that country for advice on how to challenge

  • It is not possible to submit to jurisdiction if exclusive jurisdiction (above) applies

NO

Is it an insurance (Art 10-16)?

  • Insured can also sue insurer in courts of state where inured is based, but may use insurers local court if prefers (Art 11)

  • Insurer must sue in insured’s local courts art 14(1)

  • Liability insurers and insurers of immovable property can be sued in courts for state where harm giving rise to the claim occurred (Art 12)

  • Jurisdiction can only be altered by agreement after dispute has arisen (Art 15)

  • Above doesn’t apply to reinsurance

Or consumer (Art 17-19) contract?

  • Consumer can usually “play at home” – although there is special rules for transport contracts

  • Jurisdiction can only be altered by agreement after dispute has arisen (Art 19)

  • Consumer = person entering into contract for purpose outside of his trade/profession

  • Consumer contract = SOG on instalment credit terms/loan repayable by instalments/credit [HPA]/ contract for activities outside of a persons commercial or professional activities in the consumers MS of domicile [internet selling]

NO

Is there a jurisdiction agreement between the parties? (Art 25)

  • Parties to contract/dispute may agree to confer jurisdiction on courts of whichever state they choose

  • In writing, evidenced in writing or capable of being inferred from international trade/commercial activity

  • Should also state which country’s laws apply and if doesn’t then Rome convention applies

  • Should analyse the jurisdiction clause along with limitation clause to see if valid

  • Where there is a valid jurisdiction clause conferring the right on a particular court to hear the case and the claimant issues in a different court the defendant has a very strong ground for challenging the jurisdiction of that court.

  • If not, must challenge the proceedings using the appropriate procedure and within the specified time limits of the country in which the action has been commenced

  • if a defendant wishes to challenge the right of the courts of England and Wales to hear a case they must:

    • acknowledge service of the claim form to prevent default judgment being entered against them;

    • then challenge the jurisdiction of the court with an application under CPR 11 within 14 days, on the ground that there is a valid clause in the contract conferring the right to hear the case in another court in the EU.

    • The defendant must take care not to file a defence or they will lose their right to challenge under CPR 11 as they would be deemed to have submitted to the jurisdiction to the courts of England and Wales.

NO

BASIC RULE – Where is D domiciled/have its seat? (Art 4)

  • D must be sued in his home courts

  • D domicile is ascertained on basis of facts as they exist when proceedings issued

  • Individual

    • s.41 CJJA 1982 – domicile = place with which a person has a substantial connection, bearing in mind the nature and circumstances of his residence indicate a substantial connection

    • 3 months residence will prima facie establish domicile (rebuttable presumption)

Note: defendants can be served with proceedings whilst they are in E&W however briefly, then the courts will have jurisdiction

  • Company/Corporate Body

    • Corporate body (article 63) – seat = registered office or other official address or place where centrally managed/controlled

    • Can be sued where branch, agency or other establishment is located (Art 7(5)) where foreign branch then check with the Registrar of Companies for identity of person authorised to accept service

UNLESS

Exceptions to basic rule

Contract (Art7(1))

  • Courts of the state for the place of performance of the obligation in question

  • Contract may specify (e.g. clause as to where payment to be made)

  • If not specified:

  • goods = where the goods were to be delivered

  • services = where the services were to be provided

  • More than one obligation, the principle obligations courts have jurisdictions.

  • Obligations rank equally = D local court will be able to hear entire claim and court elsewhere will only be able to deal with that part of dispute which related to the term to be performed in its jurisdiction

Tort (Art 7(3))

  • Jurisdiction on courts of state where the physically harmful event occurred or may even occur (this includes where the harm caused by the tort occurred)

  • C can choose to sue either where the tort was committed OR where the damage occurred

  • Courts where D domiciled/had seat could deal with the harm caused in all MS whereas court for state where occurred could only award remedies for harm which occurred in that state

  • Court for state where C commences decides whether D conduct is a tort or has caused a harmful event under laws of state

  • Misrepresentation cases = jurisdiction with state where misrepresentation made not where it was received

Branch (Art 7(5))

  • Co domiciled in one EU state but the dispute arises out of activities of a branch, agency of other establishment in another EU state then C can elect to sue in the courts of that state instead

  • Merely instructing an independent trader to represent interests in a country isn’t enough

  • If a foreign company has an established place of business within the jurisdiction, proceedings can be served on it there under s 1139 of the Companies Act 2006 in order to give the English court jurisdiction.

  • Co-Defendants (Art 8(1))

  • Only applies where court has jurisdiction over primary D under basic rule (alternatives to basic rule do not allow Co-D’s to be joined)

  • 1 D domiciled in England, can be sued here then C can join other D’s even if domiciled elsewhere

  • D can issue part 20 proceedings joining parties over whom English courts would not have had jurisdiction

  • Third party (Art 8(2))

  • Claims must be so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgement resulting from separate proceedings

  • Counterclaim (Art 8(3))

The UK Convention:

  • UK convention (deals with Scottish and English courts) Sch 4 CJJA 1982 [ same rules as Brussels Regulation Recast apart from]

    • IP rights are not civil and commercial matters and disputes are subject to common law rules which apply to rest of the world

    • No special rules on insurance contracts

    • Does not require jurisdiction agreements to be written, they may also be oral

2007 Lugano Convention

  • non-EU Western European countries of Iceland, Norway and Switzerland

  • Excludes the Channel Islands, Isle of Man (not part of UK or EU).

The following questions can be used to determine if the court/s of a Member State of the EU has jurisdiction under the Brussels Regulation...

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Commercial Dispute Resolution