The Race to Hear the Case: Post-Brexit jurisdiction

June 22, 2020

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2 min read

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What's going on here?

On Wednesday 8 April 2020 the UK submitted its application to accede to the 2007 Lugano Convention after the Brexit transition period ends on Thursday 3t December 2020.

What does this mean?

If the UK’s application is accepted then the Convention will govern questions of jurisdiction and the recognition and enforcement of judgments in civil and commercial matters between the UK and the Convention’s current contracting parties: the EU Member States, Norway, Iceland and Switzerland.

The UK is currently governed by Brussels Recast, the 2015 amendment to Brussels Regulations. Brussels Recast placed a stopper on what is commonly termed the “Italian torpedo”: a common tactic in cross-border disputes to frustrate your opponent by first bringing an action in another state  that has a reputation for a slow or inefficient judicial system. It came about because of the wording of Article 27 of the Brussels Regulations, which suggests that “action pending elsewhere” should be paused to deal with the issue of jurisdiction in the first court that was seised. The result? A delay and expense that, in many cases, forces the unfortunate torpedoed victim to settle. The classic example of Trasporti Castelletti v Hugo Trumpy I [1999]C-159/97 shows the Italian courts took over 10 years to decide it had no jurisdiction to hear the claim. Article 31(2) of Brussels Recast amended this by giving primacy to the court that was originally chosen to hear the issue, even if other proceedings have been issued in another Member State first. This amendment is not mirrored in the Lugano Convention.

What's the big picture effect?

The recent Judgment given by Mr Justice Wakesman in Mastermelt Ltd v Siegfried Evionnaz SA [2020] EWHC 927 (QB), serves as a reminder that in the post-Brexit world, we can expect to see more disputes over jurisdiction, and potentially the return of the Italian torpedo. This is a case between a Convention member, and a Brussels Recast member. The defendant sought to argue that the relevant provisions of the Convention (Article 27) should be read in light of 31(2) of Brussels Recast. They wanted proceedings in Switzerland to conclude first. Wakesman J held that there was: “no basis for reading the Convention this way and that the UK court, as the court first seised, did not have to stay its proceedings pending the outcome of the Swiss proceedings.” 

The UK has previously accepted (Research in Motion UK LTD v Visto Corporation [2008] EWHC Civ 153) that it is an appropriate tactic to race into a court not selected to hear the issue, to decide jurisdiction, in order to wear down the other party, either by hearing the case in multiple jurisdictions at once or by reverting to an Italian torpedo. The only problem with businesses using this tactic under the Convention would be if the EU put into place a counter-regulation that enabled a court to conclude it was unlawful litigation and file damages. This could come in the form of a counter-anti-suit-injunction (which you can read about here).

So, should the application to accede to the Convention be accepted, will it prove to be a suitable substitute for Brussels Recast post-Brexit?

Report written by Josie Laidman

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