Choice of Court Agreements and Brussels I Recast: The End of 'Torpedo' Actions

AuthorChukwudi Ojiegbe
PositionLLB, BL, LLM, CPD, currently a PhD student at the University of Aberdeen
Pages126-142
© 2013 Chukwudi Ojiegbe and Dublin University Law Society
CHOICE OF COURT AGREEMENTS AND
BRUSSELS I RECAST THE END OF
‘TORPEDO’ ACTIONS
CHUKWUDI OJIEGBE*
Introduction
Choice of court agreements are contractual agreements between two or
more parties designating a specific court for the purpose of deciding
disputes which have arisen or may arise in connection with a particular
legal relationship, to the exclusion of the jurisdiction of any other courts.
1
The need to enhance the efficiency of choice of court agreements within
the EU was one of the reasons for the review of the Brussels I Regulation.2
The Brussels I Regulation unifies the rules of conflict of jurisdiction in
civil and commercial matters and also simplifies the formalities for the
recognition and enforcement of judgments of Member State courts.3 The
Brussels I Regulation bestows jurisdiction upon courts of Member States
and views the courts of Member States as a single judicial system in
matters falling within its material scope.4 Thus, the judgments of Member
States are recognisable and enforceable amongst Member States.5
The notion of choice of court agreements is rooted in the principle of
party autonomy, which enables commercial parties to choose the Court or
* LLB, BL, LLM, CPD, currently a PhD student at the University of Aberdeen. The author
would like to express his gratitude to Dr Katarina Trimmings at the University and Senior
Editor Andrew Desmond for his helpful comments and suggestions on an earlier draft of this
paper.
1 Hague Convention, infra note 104.
2 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the
recognition and enforcement of judgments in civil and commercial matters OJL12/1, 16
January 2001
0023:en:PDF> (visited 6 October 2013).
3 Ibid., Recital 2.
4 Markus Lenenbach, “Antisuit Injunction in England, Germany and the United States: Their
Treatment under European Civil Procedure and the Hague Convention” (1998) 20 Loy LA
Int’l and Comp L J 257, at 307.
5 Brussels I Regulation, note 2, Article 34.
2014] Brussels I Recast 127
Tribunal to determine their disputes.
6 The parties’ choice of court
agreement is deemed sacrosanct and enforceable under private
international law.7 The English Court of Appeal reaffirmed this position in
Continental Bank NA v Aeakos Compania Naviera SA and Others, 8
wherein the Court held that an English choice of court agreement
(formerly Article 17 of the Brussels Convention,9 now Article 23 of the
Brussels I Regulation), deprives the courts of other Member States of
jurisdiction.10 In other words, choice of court agreements prevail over lis
pendens (formerly Article 21 of the Brussels Convention, now Article 27
of the Brussels I Regulation). The lis pendens mechanism is designed to
reduce the incidence of conflicting judgments by preventing situations
where two courts may have jurisdiction in relation to the same or related
actions.11 It can be used as a defence to a claim, alleging that the same
matter is pending between the same parties in another court.12 Article 27 of
the Brussels I Regulation has a rigid set of lis pendens rules13 that give
priority to the first seised court of Member States in matters involving the
same cause of action and between the same parties pending in the courts of
different Member States.14 It follows that once a court of a Member State is
seised of a matter all other courts must stay their proceedings irrespective
of any choice of court agreement. 15 In Gasser, the ECJ rejected the
decision of the English Court of Appeal in Continental Bank and held that
Article 27 took priority over Article 23 of the Brussels I Regulation.16 The
decision in Gasser undermined choice of court agreements and also
encouraged parties to initiate torpedo actions by commencing proceedings
in a non-competent EU court, thereby barring all other courts from
6 Janeen Carruthers, “Party Autonomy in the Legal Regulation of Adult Relationships: What
Place for Party Choice in Private International Law?” (2012) 61 ICLQ 881, at 881.
7 Charles Chatterjee, “The Legal Effect of the Exclusive Jurisdiction Clause in the Brussels
Convention in Relation to Banking Matters” (1995) 10 JIBL 334, at 334.
8 Continental Bank NA v Aeakos Compania Naviera SA and Others [1994] 1 WLR 588.
9 Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in
Civil and Commercial Matters.
11 CMV Clarkson and Jonathan Hill, The Conflict of Laws (4th ed., Oxford University Press,
2011), at 66.
12 David Walker, The Oxford Companion to Law (Clarendon Press Oxford, 1980), at 772.
13 Will Hueske, “Rule, Britannia! A Proposed Revival of the British Antisuit Injunction in the
EU Legal Framework” (2009) 41 Geo Wash Int’l L Rev 433, at 433.
14 Brussels I Regulation, note 2, Article 27.
15 Case C-116/02 Erich Gasser GmbH v MISAT Srl [2003] ECR 1 14693, at 14741 [54].
16 Case C-116/02 [2003] ECR 1 14693, at 14737 [37].
128 Trinity College Law Review [Vol 17
assuming jurisdiction in a bid to frustrate the other party.
17 Torpedo actions
are actions commenced by litigants acting in bad faith for the purpose of
blocking proceedings against them in other courts. For instance, a party
can quickly commence proceedings in a court of a Member State since the
court first seised takes priority over other courts of Member States.18
The conflict between Article 23 (choice of court agreements) and
Article 27 (lis pendens) of the Brussels I Regulation yet again attracted the
attention of the European Commission in making rules to enhance the
effectiveness of choice of court agreements in the European Union.19 The
view of the European Commission generally was that the principle of party
autonomy was of considerable importance and that choice of court
agreements should be given adequate protection in the Brussels I
Regulation.20 The conflict has now been settled by Brussels I Recast.21
Brussels I Recast made several important changes to choice of court
agreements and reversed the ECJ decision in Gasser by giving priority to
the court chosen by the parties.22 Brussels I Recast will repeal the Brussels
I Regulation23 upon entering into force on 10 January 2015.24 This paper
will examine the conflict between choice of court agreements and lis
pendens. It will also consider the impact of Brussels I Recast on choice of
court agreements and lis pendens, in particular the novel provisions
regarding third state courts. Furthermore, it will be argued in this paper
that Brussels I Recast will prevent parties acting in bad faith from
17 Hueske, note 13, at 453-454; James George, “International Parallel Litigation – A Survey
of Current Conventions and Model Laws” (2002) Tex Int’l LJ 499, at 511.
18 The term ‘torpedo’ was first used by Mario Franzosi, describing the ability of a party to
commence an action in a court with a slow judicial process in order to frustrate or block
proceedings against them in other European courts. See Mario Franzosi, “Worldwide Patent
Litigation and the Italian Torpedo” (1997) 7 EIPR 382, at 384.
19 COM/2010/748 proposal for a regulation of the European Parliament and of the Council on
jurisdiction and the recognition and enforcement of judgments in civil and commercial
matters (recast)
(visited 6 October 2013).
20 Paul R Beaumont and Peter McEleavy, Anton’s P rivate International Law (3rd ed., Scottish
University Law Institute, 2011), at 258.
21 Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12
December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and
commercial matters (recast), OJ L351/1, 20 December 2012
(visited 6 October 2013).
22 Neil A Dowers and David Holloway, “Brussels I Recast Passed” (2013) 16(2) Int ALR 18,
at 20.
23 Brussels I Recast, Article 80.
24 Ibid., Article 81.
2014] Brussels I Recast 129
initiating torpedo actions in order to delay the resolution of the dispute in
the agreed court by first seising a non-competent EU court. Finally, this
paper will show that the adoption of Brussels I Recast will provide legal
certainty and predictability of forum in the EU for the resolution of
disputes in international commercial litigation.
I. Choice of court agreements and
lis pendens
Article 23 of the Brussels I Regulation guarantees the autonomy of
commercial parties in choosing a Member State court in which to resolve
their disputes. It provides that where one or more parties domiciled in a
Member State have agreed that a court of a Member State is to have
jurisdiction to settle any disputes which have arisen in connection with a
particular legal relationship, that court shall have jurisdiction.
25 In order for
Article 23 to apply, such an agreement shall either be in writing, or in a
form which accords with practices that the parties have established
between themselves, or in a form that accords with a usage of which the
parties ought to have been aware.26 It follows that the requirements laid
down in Article 23 as to the form of the agreement must be complied with
before Article 23 can be relied on.
On the other hand, Article 27 of the Brussels I Regulation contains a
lis pendens provision which states that where a matter involving the same
cause of action and between the same parties is brought before the courts
of different Member States, any court other than the court first seised
should stay its proceedings until the jurisdiction of the court first seised
has been established.27 Furthermore, when the court first seised assumes
jurisdiction, all other courts should decline jurisdiction in favour of the
court first seised.28 These provisions are necessary in order to prevent the
problems of parallel proceedings, conflicting judgments and forum
shopping29 as different courts of Member States can have jurisdiction
under the Brussels I Regulation in a particular case.30 For instance, a court
of a Member State can have jurisdiction based on the domicile of the
25 Brussels I Regulation, note 2, Article 23.
26 Ibid.
27 Ibid., Article 27(1).
28 Ibid., Article 27(2).
29 Case C-406/92 The owners of the cargo lately laden on board the ship 'Tatry' v The owners
of the ship 'Maciej Rataj' [1994] ECR 1 5439, at 5473 [32].
30 Bernardo M. Cremades and Ignacio Madalena, “Parallel Proceedings in International
Arbitration” (2008) 24(4) Arb Int’l 507
/97/97.pdf> (visited 22 July 2013).
130 Trinity College Law Review [Vol 17
defendant, while another Member State court can have jurisdiction under
Section 2 of the Brussels I Regulation.
31 In such a situation, Article 27 will
apply to give priority to the court first seised of the matter, particularly
where the matter involves the same cause of action and parties.32 From the
above, it could be said that the provisions of Article 27 of the Brussels I
Regulation are a uniform set of strict “first come, first served” rules.33 It
does not permit the second court to assume jurisdiction, irrespective of the
claim before it. Hence, where the matter in question involves the same
cause of action and is between the same parties, the court second seised of
the matter must either stay its proceedings or decline jurisdiction in favour
of the court that first established jurisdiction.
Article 27 prohibits the court second seised from ascertaining
whether the court first seised has jurisdiction. In Overseas Union
Insurance Ltd,34 the ECJ held that in no case is the court second seised in a
better position than the court first seised to determine whether the court
first seised has jurisdiction. 35 From the above statement, it can be
understood that on no account should the court second seised review the
jurisdiction of the court first seised. The position taken by the ECJ in
Overseas Union Insurance Ltd is justifiable having regard to the structure
of the Brussels I Regulation, which is founded on the principle of mutual
trust and respect amongst Member State courts. 36 The Brussels I
Regulation views all courts of Member States as an equal part of a single
judicial system. 37 Thus, it would be incompatible with the Brussels I
Regulation for a court of a Member State to review the jurisdiction of
another Member State court. However, Article 27 does not apply where
the court second seised has exclusive jurisdiction by virtue of Article 22 of
the Brussels I Regulation.38 This is because any judgment given by the
31 Janeen Carruthers, James Fawcett and Peter North, Cheshire, North and Fawcett: Private
International Law (14th ed., Oxford University Press, 2008), at 304.
32 Ibid.
33 Clarkson and Hill, note 11, at 117.
34 Case C-351/89 Overseas Union Insurance Ltd and Deutsche Ruck UK Reinsura nce Ltd
and Pine Top Insurance Company Ltd v New Hampshire Insurance Company [1991] ECR 1
3317, at [25-26].
35 Case C-116/02 [2003] 1 14693, at 14735 [32].
36 Case C185/07 Allianz SpA (formerly Riunione Adriatica Di Sicurta SpA) and Others v
West Tankers Inc [2009] ECR 1 00663, at [28]; Case C185/07 Opinion of Advocate
General Kokott delivered on 4 September 2008.
37 Lenenbach, note 4, at 306.
38 Case C-116/02 [2003] 1 14693, at 14736, 36-14738, [44].
2014] Brussels I Recast 131
court first seised in a total disregard of the exclusive jurisdiction of the
court second seised cannot be recognised by the Member States.
39
II. Interaction between choice of court agreements and
lis pendens
The competing influences of Article 23 and Article 27 of the Brussels I
Regulation was first dealt with by the English Court of Appeal in
Continental Bank. 40 The Court controversially held that Article 23
prevailed over Article 27 of the Brussels I Regulation.41 The Court of
Appeal held that the English court, which was the second seised court, did
not have to stay its proceedings in favour of the Greek court, which was
the first seised court, where its jurisdiction was derived from Article 23 of
the Brussels I Regulation. 42 It follows that if Article 23 applies, its
provisions take precedence over the provisions of Article 27 of the
Brussels I Regulation.43 The reason behind the English Court of Appeal
decision was that if Article 27 was allowed to prevail over Article 23,
parties would be able to override an exclusive choice of court agreement
by preemptively suing in the court of another Member State.44 This would
undermine the principle of party autonomy, which the Brussels I
Regulation otherwise seeks to safeguard through its general scheme.
However, the decision demonstrated a fundamental misinterpretation of
both the structure and spirit of the Brussels I Regulation45 and has been
criticised for being incompatible therewith.46 Though the decision was
criticised for being incompatible with the Brussels I Regulation, the
practical considerations of the decision support the position taken by the
English Court of Appeal, as any other approach by the Court would have
undermined the choice of court agreement.47
The position taken by the English Court of Appeal in Continental
Bank was rejected by the ECJ in Gasser. The Court held that Article 27
39 Brussels I Regulation, note 1, Art 35; See also Case C-116/02 [2003] 1 14693, at 14739
48.
41 [1994] 1 WLR 588, at 597.
42 [1994] 1 WLR 588, at 597.
43 [1994] 1 WLR 588, at 597.
44 [1994] 1 WLR 588, at 596.
45 Lenenbach, note 4, at 314.
46 Cheshire, North and Fawcett, note 31, at 119.
47 Trevor Hartley, “Brussels Jurisdiction and Judgment Convention: Jurisdiction Agreement
and Lis Alibi Pendens” (1994) ELR 549, at 551.
132 Trinity College Law Review [Vol 17
took priority over Article 23 of the Brussels I Regulation. Thus, once it is
established that a court of a Member State is first seised of a matter, the
court second seised must stay its proceedings pending determination by
the court first seised. Moreover, when the court first seised assumes
jurisdiction, the court second seised must decline its jurisdiction in favour
of the court first seised regardless of any choice of court agreement in
favour of the court second seised.
48 The lis pendens rule enshrined in
Article 27 of the Brussels I Regulation has often been criticised for
encouraging commercial parties to manipulate a choice of court agreement
by allowing the parties to approach a court of a Member State other than
that chosen by the parties. 49 For instance, a party can commence
preemptive proceedings before a court that lacks jurisdiction, thereby
barring all other courts from assuming jurisdiction. Furthermore, the
decision in Gasser encourages parties to race to court (forum shopping),
and also gives the parties the opportunity to deploy a delay tactic to
frustrate the other party by commencing proceedings in the Member State
court they believe will be favourable to them rather than the chosen
court. 50 For instance, parties acting in bad faith may commence
proceedings in the court of a Member State where they believe they will
most likely achieve the optimal outcome, whether that is the result of a
final judgment or a commercial settlement.51 It follows that a party to an
international commercial transaction can bring an action in a court of a
Member State that has a slow judicial process, irrespective of a valid
choice of court agreement for a declaratory judgment of no liability, and
all other courts of Member States are subsequently prohibited from
assuming jurisdiction pending the determination of the matter by the court
first seised.52 As a consequence, the other party will be subjected to the
cost, inconvenience and time of defending a matter in a court that does not
have jurisdiction. For instance, Italian courts are known for having a
particularly slow judicial system within the EU, 53 and a party may
commence an action there just to frustrate the other party, with all other
Member State courts having to stay their proceedings. In Trasporti
48 Case C-116/02 [2003]1 14693, at 14737, 37.
49 George, note 17, at 511.
50 Clarkson and Hill, note 11, at 120.
51 Christopher Stothers, Mark Gardner and Sue Hinchliffe, ”ForumShopping and ‘Italian
Torpedoes’ in Competition Litigation in the English Courts” (2011) 2 GCLR 67.
52 Cheshire, North and Fawcett, note 31, at 311.
53 Trevor Hartley, “The European Union and the Systematic Dismantling of the Common
Law of Conflict of Laws” (2005) ICLQ 813, at 816.
2014] Brussels I Recast 133
Castelletti,
54 it took the Italian court ten years to determine that it had no
jurisdiction.55 This raised the question of whether the Italian courts were
breaching the requirement of Article 6(1) of the European Convention on
Human Rights, which grants everyone the right to a fair and public hearing
within a reasonable time by an independent and impartial tribunal
established by law. 56 The Italian courts were condemned by the old
European Commission of Human Rights in over 1,400 reports, and the
European Court of Human Rights gave more than 65 judgments against
the Italian courts for breaching the requirement of Article 6 ECHR.57
In Gasser, the UK Government vehemently argued that Article 27 of
the Brussels I Regulation should be read in conformity with Article 6 of
the ECHR.58 The UK Government stated that there should be an exception
to Article 27 in order to prevent a party from commencing proceedings
which they know will go on for a long time with the intention of delaying
a judgment against them.59 The UK Government suggested that the court
second seised should be allowed to examine the jurisdiction of the court
first seised where a party brings an action in bad faith with the intention of
frustrating the other party and where the court first seised has not
determined its jurisdiction within a reasonable time. 60 However, this
proposal was rejected by the ECJ. The ECJ, relying on the principle of
mutual trust between the Member States, held that Article 27 could not be
derogated from on the grounds of the duration of proceedings before the
courts of the Member State in which the court first seised is established
being excessively long.61 In other words, the court second seised must stay
its proceedings until the jurisdiction of the court first seised has been
established.
III. The
lis pendens
rule under the new Brussels I Recast
Following the ECJ decision in Gasser, there has been a lengthy review
process seeking to enhance the efficiency of choice of court agreements
54 Case C-159/97 Trasporti Castelletti Spedizioni Internazionali SpA v Hugo Trumpy SpA
[1999] ECR 1-1597.
55 Although two years were taken up by a reference to the ECJ. See Hartley, note 53, at 816.
56 ECHR, Art 6(1). See also ibid.
57 Ibid., at 817.
58 Case C-116/02 [2003] ECR 1 14693, at [61].
59 Case C-116/02 [2003] ECR 1 14693, at [61].
60 Case C-116/02 [2003] ECR 1 14693, at [63].
61 Case C-116/02 [2003] ECR 1 14693, at [73].
134 Trinity College Law Review [Vol 17
under the Brussels I Regulation.
62 In 2009, the European Commission
published its Green Paper on the Review of the Brussels I Regulation.63 In
2010, the Commission published its proposal to recast the Brussels I
Regulation.64 After protracted discussions in the Council and the European
Parliament,65 a revised version of the Brussels I Regulation was adopted in
December 2012 (‘Brussels I Recast’).66 Brussels I Recast and its recital
were endorsed by the European Parliament,67 and the subsequent adoption
was based on the Committee on Legal Affairs report.68 The European
Commission believed that the then Article 27 of the Brussels I Regulation
enabled litigants acting in bad faith to delay the resolution of the dispute in
the agreed court by first seising a non-competent court.69 This creates
additional costs and delays for parties, as well as undermining the legal
certainty and the foreknowledge of the means of dispute resolution, which
choice of court agreements are supposed to provide.70 Thus, Article 27 of
the Brussels I Regulation and the decision of the ECJ in Gasser have been
reversed by Brussels I Recast, which will enter into force in 2015.71
Article 31(2) of Brussels I Recast reads as follows:
Without prejudice to Article 26, where a court of a Member State on
which an agreement as referred to in Article 25 confers exclusive
62 Dowers and Holloway, note 22, at 19.
63 COM/2009/175 Green Paper on the Review of Council Regulation (EC) No 44/2001 on
Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial
Matters 21 April 2009
2009:0175:FIN:EN:PDF> (visited 16 August 2013).
64 Recast Proposal, note 19.
65Andreas Estrup Ippolito and Morten Adler-Nissen, “West Tankers Revisited: Has the New
Brussels I Regulation Brought Antisuit Injunctions Back into the Procedural Armoury?”
(2013) 79 Arbitration 158, at 159.
66 Brussels I Recast, note 21.
67 COM(2010)0748 C7-0433/2010 2010/0383(COD) European Parliament legislative
resolution of 20 November 2012 on the proposal for a regulation of the European Parliament
and of the Council on jurisdiction and the recognition and enforcement of judgments in civil
and commercial matters (recast)
TA&language=EN&reference=P7-TA-2012-412> (visited 6 August 2013).
68 COM(2010)0748 C7-0433/2010 2010/0383(COD) The Committee on Legal Affairs of
15 October 2012 on the proposal for a regulation of the European Parliament and of the
Council on jurisdiction and the recognition and enforcement of judgments in civil and
commercial matters (recast)
201210/20121017ATT53785/20121017ATT53785EN.pdf> (visited 6 August 2013).
69 Recast European Parliament Legislative Resolution, note 67, at [1.2].
70 Ibid.
71 Elizabeth B Crawford and Janeen M Carruthers, “Brussels I bis: The Brussels Regulation
Recast: Closure (for the Foreseeable Future)” (2013) SLT (News) 89, at 91.
2014] Brussels I Recast 135
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.
The significance of Article 31(2) of Brussels I Recast is that it overrides
the lis pendens rule.
72 Although Article 31(2) is subject to Article 26,
which enables a court of a Member State to assume jurisdiction where a
defendant enters an appearance without challenging the jurisdiction of the
court, the effect of Article 31(2) is that where there is an exclusive choice
of court agreement, any court other than the chosen court must decline its
jurisdiction in favour of the chosen court regardless of whether the court
was first seised of the matter. 73 In other words, the chosen court has
jurisdiction to determine the validity of the choice of court agreement and
it is the priority of the chosen court to do so. The position of Article 31(2)
of Brussels I Recast was also confirmed by Recital 22 of Brussels I
Recast.74 It is imperative to note that in EU legislation, recitals of a
Preamble provide how substantive provisions of a Community Act are to
be interpreted.75 However, the Preamble to a Community Act has no
binding legal force and cannot be relied on as a basis to derogate from the
actual provisions of the Act in question.76 Recital 22 of Brussels I Recast
Proposal states that there is a need for an exception to the general lis
pendens rule in order to enhance the effectiveness of exclusive choice of
court agreements and to avoid abusive litigation tactics in concurrent
proceedings involving the court first seised and the court second seised,
which has exclusive jurisdiction. It further provides that the court first
seised should be required to stay its proceedings as soon as the chosen
court has been seised and until such time as the chosen court declares that
it has no jurisdiction under the exclusive choice of court agreement.77
It follows that Article 31(2) of Brussels I Recast has reversed the
rule in Gasser by giving priority to the chosen court, which will
consequently negate the possibility for parties to engage in delay tactics
through first seising a non-competent court of a Member State in order to
72 Trevor Hartley, “Choice-of-court Agreements and the New Brussels I Regulation” (2013)
LQR 309, at 311.
73 Ibid.
74 Recast Proposal, note 19, Recital 22.
75 Hartley, note 72, at 312.
76 Case C-162/97 Criminal proceedings against Gunnar Nilsson, Per Olov Hagelgren and
Solweig Arrborn [1998] ECR 1 07477, at [54]; See also Case C-136/04, Deutsches Milch-
Kontor GmbH v Hauptzollamt Hamburg-Jonas [2005] ECR 1 10095, at [32].
77 Brussels I Recast Proposal, note 19, Recital 22.
136 Trinity College Law Review [Vol 17
frustrate the other party.
78 Parties acting in bad faith will no longer be able
to initiate torpedo actions in order to delay the resolution of the dispute in
the agreed court by first seising a non-competent court. The adoption of
Brussels I Recast will provide legal certainty and predictability of forum in
the EU for the resolution of disputes in international commercial litigation.
Furthermore, Brussels I Recast demonstrates that the European
Commission’s quest to respect and give effect to choice of court
agreements is in line with the Hague Convention on Choice of Court
Agreements.
However, there is still a small problem with Article 31(2) of
Brussels I Recast. The Article obliges any court other than the chosen
court to stay its proceedings and such an obligation arises when a court of
a Member State is chosen by the parties. It follows that there is a
possibility that a dispute may arise before the non-chosen court as to
whether a court of a Member State is chosen.79 For instance, a party can
allege before the non-chosen court that there is no valid choice of court
agreement. This problem is, however, resolved by Recital 22, which
provides that the non-chosen court has the priority to rule on the validity of
the choice of court agreement and the chosen court can proceed
irrespective of whether the non-chosen court has ruled on the stay of
proceedings.80 In other words, the party acting in bad faith can initiate
torpedo actions in the non-chosen court, alleging the existence of a choice
of court agreement.81 This can pose a threat for any claimant relying on an
ordinary jurisdiction rule of Brussels I Recast and can also lead to
improved torpedo actions being lodged by claiming a choice of court
agreement, even after the claimant has initiated proceedings in another
valid jurisdiction.82 It has been argued that in such a situation all a party
needs to do is to establish a prima facie case that there exists a choice of
court agreement and the non-chosen court will stay its proceedings in
favour of the chosen court in accordance with Article 31(2). 83
78 Dowers and Holloway, note 22.
79 Hartley, note 72, at 313.
80 Brussels I Recast Proposal, note 19, Recital 22.
81 Florian Horn, Review of the Commission Proposal for a Recast of the Brussels I Regulation
(COM [2010] 0748) (European Parliament, Directorate-General for Internal Policies, Legal
Affairs, 2011)
languageDocument=EN&file=49437> (visited 5 December 2013).
82 Ibid.
83 Hartley, note 72, at 313.
2014] Brussels I Recast 137
IV. Brussels I Recast and Third State Courts
Under the Brussels I Regulation, the General Jurisdiction of courts of
Member States is determined by the domicile of the defendant.
84 Declining
jurisdiction by means of any equitable mechanism, such as forum non
conveniens, on the grounds that the dispute should be resolved in a more
appropriate court of a non-Member State, is not permissible according to
the Brussels I Regulation.85 This is so even if a third state court is already
seised of the dispute or is a more appropriate court to determine the
dispute.86 The ECJ emphasised the mandatory nature of Article 2 of
Brussels I Regulation in Owusu v Jackson.87 The Court, relying on its
previous decisions in Turner v Grovit88 and Gasser,89 held that Article 2 of
the Brussels I Regulation is mandatory in nature and that consequentl,
there can be no derogation from the principle it lays down except in the
cases expressly provided for in the regulation.90 Therefore, allowing the
application of forum non conveniens, which allows the court seised a wide
discretion regarding the question of whether a foreign court would be a
more appropriate forum for the trial of an action, would undermine the
predictability of the rules of jurisdiction laid down by the Brussels I
Regulation, in particular that of Article 2. 91 The decision in Owusu
attracted much commentary, especially for the limited reasoning regarding
the key areas of the scope of European harmonisation in the field of
private international law and staying proceedings in favour of a third state
court.92 While the provisions of the Brussels I Regulation are silent on the
effect of lis pendens on third state courts, the English courts are willing to
84 Brussels I Regulation, note 2, Art 2.
85 Gilles Cuniberti, “Forum non conveniens and the Brussels Convention” (2005) ICLQ 973,
at 974.
86 Simon James, Recast Brussels I Regulation enhances jurisdiction agreements in the EU
(Clifford Chance LLP, January 2013)
/publicationviews/publications/2013/01/recast_brussels_iregulationenhance.html> (visited 6
December 2013).
87 Case C- 281/02 Owusu v Jackson [2005] 2 WLR 942.
88 Case C- 159/02 Gregory P aul Turner v Felix F areed Ismail Grovit and Others [2005] 1
AC 101, at 113[24].
89 Case C-116/02 [2003] ECR 1 14693, at [72].
90 Case C- 281/02 [2005] 2 WLR 942, at [37].
91 Case C- 281/02 [2005] 2 WLR 942, at [41].
92 Cuniberti, note 85; See also Jonathan Harris, “Stays of Proceedings and the Brussels
Convention” (2005) 54(4) ICLQ 933; Christopher Knight, “Owusu and Turner: The Shark in
the Water?” (2007) 66(2) CLJ 288.
138 Trinity College Law Review [Vol 17
stay proceedings in favour of third state courts where to do so would give
‘reflexive’ effect to the Brussels rules.
93
The European Commission's original proposal to recast the Brussels
I Regulation sought to remedy the operation of the Regulation in the
international legal order by comprehensively including provisions that
would regulate the jurisdiction of courts of Member States and third state
courts. 94 During the recasting of the Brussels I Regulation, some
stakeholders and Member States supported the extension of the jurisdiction
rules to third state courts, particularly with the aim of ensuring access to
justice before the courts in Europe, while most stakeholders thought that
the recognition and enforcement of judgments of third state courts should
be left to a multilateral framework which would ensure reciprocity at
international level.95 However, Articles 33 and 34 of Brussels I Recast
have now addressed one aspect of the turf war between courts of
Member States and third state courts, a battle which sometimes has been
conducted covertly through arguments on reflexive effect.”96 Articles 33
and 34 give the courts of Member States the discretion to stay their
proceedings in favour of third state courts where some conditions are met.
On the one hand, Article 33 of Brussels I Recast provides that where
the jurisdiction of a court of a Member State is based on Article 4 (General
Jurisdiction) or on Articles 7, 8 or 9 (Special Jurisdiction), and
proceedings are pending before a court of a third state while 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) a judgment
given by the third state court can be enforced in the EU Member State
concerned; and (b) the court of the Member State is satisfied a stay is
necessary for the proper administration of justice. 97 Article 33(2) of
Brussels I Recast provides that 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 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.
93 Harris, ibid., at 947.
94 James, note 86.
95 Recast Proposal, note 19, at 5.
96 Crawford and Carruthers, note 71, at 92.
97 Brussels I Recast, note 19, Article 33.
2014] Brussels I Recast 139
On the other hand, Article 34 provides that where the jurisdiction of
courts of Member States is based on Article 4 (General Jurisdiction) or on
Articles 7, 8 or 9 (Special Jurisdiction), and an action is pending before a
court of a third state while 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.
98 Article 34(2) of Brussels I Recast provides that
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 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.
Recital 24 of Brussels I Recast encourages the Member State court
to assess all the circumstances of the case before it. The “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.”99 The practical
importance of the novel provisions contained in Articles 33 and 34 of
Brussels I Recast is that they provide exceptions to the strict lis pendens
rule, especially where the conflicting proceedings take place between a
first seised third state court and a second seised court of a Member State
whose jurisdiction is based on Articles 4, 7, 8 or 9 of Brussels I Recast.100
It follows that the proceedings in the third state court must have been
commenced first before the court of a Member State can exercise its
discretion to stay the proceedings in favour of the third state court. The
98 Brussels I Recast, note 21, Article 34.
99 Brussels I Recast, note 21, Recital 24.
100 Crawford and Carruthers, note 71, at 92.
140 Trinity College Law Review [Vol 17
problem with this provision is that it may encourage more litigation
101 by
enabling the parties to first commence pre-emptive proceedings in the
third state court in order to ensure that the third state court is first seised.102
Furthermore, the provision does not cover the situation in Owusu, in which
the defendants hoped to persuade the English court to defer to a court in
Jamaica, where litigation had not yet been commenced.103
V.
Lis pendens
and Hague Choice of Court Agreements
The decision in Gasser undermines the concept of choice of court
agreements, which has been recognised as one of the bedrocks of private
international law. The 2005 Hague Convention on Choice of Court
Agreements 104 aims to ensure the effectiveness of choice of court
agreements between parties to international commercial transactions. It
grants exclusive jurisdiction to the court chosen by the parties in an
exclusive choice of court agreement 105 and prohibits the use of any
equitable mechanism such as forum non conveniens 106 to decline
jurisdiction on the grounds that the dispute should be resolved in a more
appropriate court of another state. 107 It also mandates a court of a
contracting state other than that of the chosen court to suspend or dismiss
proceedings to which an exclusive choice of court agreement applies
unless: the agreement is null and void; one of the parties lacked the
capacity to conclude the agreement; the agreement would lead to a
manifest injustice and/or be contrary to public policy, and the chosen court
has decided not to hear the case. 108 The provisions of the Hague
Convention no doubt strengthen parties’ choice of court agreements.
However, no matter how robust the Hague Convention looks, the reality is
that the law has yet to come into force. 109 Hence the lis pendens
101 Sarah Garvey, Reform of the Brussels Regulation: are we nearly there yet? (Allen and
Overy LLP, 26 April 2013)
of-the-Brussels-Regulation-are-we-nearly-there-yet.aspx> (visited 8 December 2013).
102 James, note 86.
103 Crawford and Carruthers, note 71, at 92.
104 Hague Conference on Private International Law Convention of 30 June 2005 on Choice of
Court Agreements, Article 3(a) Convention.net/upload/conventions/
txt37en.pdf> (visited 16 August 2013).
105 Ibid., Art 5(1).
106 Hueske, note 13, at 441.
107 The Hague Convention, note 104, Article 5(2).
108 Ibid., Article 6.
109 The Hague Choice of Court Convention was concluded on 30 June 2005. It is not yet in
force but has been signed by the European Union (on behalf of all its Member States except
2014] Brussels I Recast 141
mechanism enshrined in Article 27 of the Brussels I Regulation remains
the governing law on resolving parallel litigation in the EU.
110
Brussels I Recast will strengthen choice of court agreements by
giving priority to the chosen court to decide on its jurisdiction. This new
rule, enshrined in Article 31(2), accords with the system established in the
Hague Convention, thus ensuring a coherent approach within the EU and
at international level.111 However, the provisions of both instruments are
entirely different with regards to the obligations of the non-chosen court.
On the one hand, Article 6 of the Hague Convention obliges the non-
chosen court to suspend or dismiss its proceedings where there is an
exclusive choice of court agreement unless the agreement is null and void
or one of the parties lacked capacity.112 It follows that the non-chosen court
can determine the validity and existence of the choice of court agreement
under the Hague Convention in order to ascertain whether the agreement is
null and void. On the other hand, Article 31(2) of Brussels I Recast obliges
the non-chosen court to stay its proceedings in favour of the chosen court
until such time as the chosen court has declared it has no jurisdiction under
the agreement.113 The non-chosen court can only proceed with the matter
where the chosen court has declined jurisdiction. Furthermore, Article 25
of Brussels I Recast will apply once a court of a Member State is chosen
and the requirements as to the form of the agreement are complied with,
regardless of the domicile of the parties.114 In other words, the parties need
not be domiciled within the EU for an exclusive choice of court agreement
to be valid.
Conclusion
Brussels I Recast has now resolved the prolonged debate regarding the
conflict between choice of court agreements and lis pendens. Brussels I
Recast has reversed the decision of the ECJ in Gasser by giving priority to
the parties’ choice of court agreement. Thus the parties’ choice of court
agreement is protected under Brussels I Recast. Article 31(2) of Brussels I
Denmark) and the United States (which has not yet ratified it). Mexico acceded to the
Convention on 26 September 2007. The Convention will enter into force upon the
Ratification of one more Country. See the Status Table on
Convention.net/index_en.php?act=conventions.status&cid=98> (visited 03 December 2013).
110 Hueske, note 13, at 441.
111 Brussels I Recast, note 19, at 5.
112 The Hague Convention, note 104, Article 6.
113 Brussels I Recast, note 19, Article 31(2).
114 Ibid., Article 25.
142 Trinity College Law Review [Vol 17
Recast enhances the effectiveness of exclusive choice of court agreements
and avoids abusive litigation tactics by commercial parties. The novel
provisions contained in Articles 33 and 34 of Brussels I Recast also
improve the operation of the EU regime in the international legal order,
particularly with regard to third state courts. Furthermore, Brussels I
Recast shows the European Commission’s quest to respect and give effect
to the right of commercial parties to choose a court in which to resolve
their disputes. Finally, Brussels I Recast will provide legal certainty and
predictability of forum in the EU for the resolution of disputes in
international commercial litigation.

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