Jurisdiction

The Brussels Regime is a set of rules regulating which courts have jurisdiction in legal disputes of a civil or commercial nature between individuals resident in different member states of the European Union (EU) and the European Free Trade Association (EFTA). It has detailed rules assigning jurisdiction for the dispute to be heard and governs the recognition and enforcement of foreign judgments.

Brussels Regulation (recast) No. 1215/2012 (BRR) applies only to legal proceedings instituted on or after 10 January 2015: Article 66(1)

Brussels Regulation No. 44/2001 will continue to apply to judgments given in proceedings instituted before 10 January 2015: Article 66(2)

Civil Procedure Rules (CPR) govern jurisdiction over persons who are not domiciled within the European Union.

You can download BRR here: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:351:0001:0032:en:PDF

You can read CPR here: https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part07

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Traditional Rule – Presence within the jurisdiction

An action may be commenced by serving a claim form to the defendant while he is present in England and Wales.

A proceeding is started when the court issues a claim form at the request of the claimant: CPR r.7.2

The claim form must then be served to the defendant, within four months of the date of the issue or six months if it is to be served out of the jurisdiction: CPR r.7.5 

Following the CPR r.75, if the claim form could not be served to the defendant, the court cannot exercise jurisdiction over the claim; the court can exercise jurisdiction if the claim form is served.

English court may grant a stay or decline jurisdiction on the basis of forum non conveniens.

Traditional Rule – Presence within the jurisdiction: Individual

The English court has jurisdiction if the claim form is served to a defendant in England, irrespective of his nationality, or domicile, or usual place of residence or of the nature of the cause of action. A claim form is regarded as served to the defendant if it was served personally on him by leaving it with him: CPR r.6.5 (3)(a)

Mere brief presence in England is sufficient: Maharanee of Baroda v Wildenstein (1972)

As long as the defendant was not fraudulently induced to come to England (abuse of process is not allowed): Watkins v North American Land and Timber Co Ltd (1904)

If the D cannot be served personally, he may be served at his ‘usual or last known residence’ in England: Varsani v Relfo (2013) and CPR r. 6.9 (2)

Traditional Rule – Presence within the jurisdiction: Companies

A company which is not domiciled in a MS (BRR not applicable) but has a place of business in England may be used in England in accordance with the provisions of the Companies Act 2006 and CPR r.6.9.

In Dunlop Pneumatic v AG Motor (1902), a foreign company occupying a temporary stand at a trade exhibition in England is sufficient so long as claim form served on the stand during the exhibition.

Section 1139(1) CA 2006 provides that a claim form may be served on a company registered in England by leaving it at, or sending it by post to its registered office.

Section 1044 CA 2006 defines ‘Overseas companies’ as companies incorporated outside the UK. Section 1139(2) provides that a claim form may be served on an oversea company:

• By leaving it at, or sending it by post to its registered office of any person registered in the UK, authorized to accept service on the company’s behalf
• If there is no such person, or the person refuses service, by leaving it or sending it by post to any place of business of the company in the UK

Where the claim form is served on a person whose name and address have been registered as someone who can receive service on behalf of the company, it is not necessary that the company should still be doing business in England when the claim form is served: Rome v Punjab National bank (No. 2)

By virtue of section 1140(2)(a) of the CA 2006, a director or secretary of a company is to be regarded as an authorized person.

Traditional Rule - Submission to the jurisdiction

The English courts have jurisdiction to entertain a claim against a person who submits to jurisdiction of the court.

Any steps taken by the defendant to defend the claim on the merits is amounts to submission: Global Multimedia International v Ara Media Services (2007)

An acknowledgment of service to protest that the court does not have jurisdiction does not constitute submission : Re Dulles’s Settlement (No.2) (1951)

An application for a stay is not a submission to the jurisdiction: Williams & Glyn's Bank Plc v Astro Dinamico Compania Naviera SA (1984)

It is possible to submit to the jurisdiction of the court by agreeing in a contract that the English court shall have jurisdiction. But choosing English law to govern the contract does not amount to an agreement to submit to the jurisdiction: Dunbee Ltd v Gilman & Co (Australia) Pty Ltd (1968)

The parties cannot by submission confer jurisdiction on the English court to entertain proceedings beyond its authority (for example a dispute about title to foreign land).

Traditional Rule – Service out of jurisdiction

The CPR gave the court a discretionary power to permit service out of jurisdiction. This is regarded as ‘long-arm’ or ‘exorbitant’ jurisdiction. The CPR r.6.20 provides that a claimant may serve a claim form out of the jurisdiction. 

According to the HOL in the case of Seaconsar Far East v Bank Markazi (1993), the claimant has to prove that:

1. There is a serious issue to be tried
2. The claim comes within one of the paragraphs of CPR r.6.20
3. England is the forum conveniens

In Seaconsar Far East v Bank Markazi (1993), the element of ‘there is a serious issue to be tried’ is satisfied as there is a substantial question of law/ fact which the claimant bona fides desires to have tried.

The court will not give permission unless satisfied that England is ‘the proper place in which to bring the claim’: CPR r.6.20(2A). It can be satisfied if the claimant can prove that the dispute is closely connected with England.

If a court has already dealt with a related aspect of some specialized or very complex litigation, it may well be appropriate that other aspects are dealt with by that court: Spiliada Maritime Corp v Cansulex Ltd (1986)

If England is the centre of gravity of the dispute, permission will be granted: Lincoln National life Insurance Co v Employers Reinsurance Corp (2002)

Even if there is a more appropriate forum, the claimant may still succeed by arguing that justice will not be done aboard: Spiliada Maritime Corp v Cansulex Ltd (1986)

There are 19 grounds for service outside the jurisdiction. It includes proceedings in relation to contract, tort, property, restitution and multiple defendants.


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Brussels Regulation – Primary Jurisdictional Ground

Article 1(1) states that the Regulation only applies to civil and commercial matters and Article 1(2) lists several legal issues that are not to be governed by the Regulation. The term ‘civil and commercial matter’ shall be given a wide and autonomous meaning: LTU v Eurocontrol (1976)

Article 4(1) states that a claim shall be brought at where the defendant is domiciled, regardless of their nationality. It is the domicile of the defendant that is matters, and the claimant’s domicile is not relevant: Société Group Josi Reinsurance Company v Compagnie d'Assurances Universal General Insurance (2000)



Article 62(1) provides that the court first seized will apply their internal domiciliary rules.

A company is domiciled at the place where it has its statutory seat or its central administration or its principal of business: Article 63(1)

A statutory seat means the registered office, or where the place of incorporation, or the place under the law which the formation took place: Article 63(2)

In case where Article 24 or Article 25 apply, the defendant’s domicile is no longer relevant the general jurisdiction rule under Article 4(1) shall not apply.

Special jurisdiction

Article 5(1) states that the general rule that a claim shall be brought at where the defendant is domiciled can be departed if any rules set out in sections 2 to 7 apply.

Under the special jurisdiction, the claimant has a choice that either to sue at where the defendant is domiciled or where there is special jurisdiction: Article 5(1)

Special Jurisdiction - Contract

Article 7(1) provides that in matters relating to a contract, the claim shall be brought at the place where of performance of the ‘obligation’.

It must first be determined whether it is ‘matters relating to a contract’.

• In Jakob Handte v Traitements Mécano (1992), the CJEU held that Article 5(1) (now Article 7(1)) does not cover situation where there is no obligation freely assumed by one party towards another.
• In Agnew v LÄNSFÖRSÄKRINGSBOLAGENS A.B. (1997) , the claimant tried to avoid reinsurance contract saying that the D failed to comply with duty to make fair representation of the risk (which is a duty outside of the reinsurance contract – actually pre-contractual duty). The HOL says that ‘extra-contractual obligation’ is still contractual under Article 5(1) (now Article 7(1)).
• However in Tacconi spA v Heinrich Wagner (2002), the CJEU says that ‘extra-contractual obligation’ is not within Article 5(1) (now Article 7(1)). The case involves a pre-contractual obligation to act in good faith during negotiations. 
• In Kleinwort Benson v Glasgow City Council (1997) , House of Lord held (by 3-2) that non-contractual claim in restitution of money based upon the principle of unjust enrichment did not fall within Article 5(1) (now Article 7(1)). The obligation must arise out of the contract itself.

According to Clarkson and Hill, the cases are distinguishable. In Agnew, there was already a contractual relationship but in Tacconi, a contract has not been concluded yet. As for Kleinwort Benson, the invalidity of the contract is not in dispute as the contract was held to be void (thus Article 5(1) (now Article 7(1)) has no application to begin with). Clarkson and Hill agreed with HOL in Kleinwort Benson that in policy terms, there is no reason why an unjust enrichment claims should be forced to be within the scope of Article 5 (now Article 7).

A claim under Article 7(1) may be invoked even if the defendant is denying the existence of the contract, because the denial of contract is a contractual issue: Effer v Boss France SA (1997). 

• This is so even if the claimant is denying the existence of the contractual relationship and seeks declaration that he is not bound by any obligation: Boss Group Ltd v Boss France SA (1996) 

Secondly, it must be determined what the is an 'obligation'.

The ‘obligation’ in question is the obligation which is the basis of the action: De Bloos Sprl v Bouyer SA (1976) 

Where the claim is based on more than one obligation, jurisdiction is determined by the principal obligation: Union Transport plc v Continental Lines SA (1992)

If there are two independent obligations of equal significance, to be performed in two different MS, proceedings can be brought in two jurisdictions: Leathertex Divisione Sintetici SpA v Bodetex BVBA (1999)

However if the action can be brought under many different jurisdictions, the general jurisdictional rule under Article 4(1) shall prevail: Clarkson and Hill & Besix SA v WABAG (2002) 

Thirdly, it must be determined where the place of performance is.

Article 7(1)(b) provides that the place of performance of the obligation is

• In the case of the sale of goods, where the goods were delivered or should have been delivered under the contract
• In the case of the provision of services, where the services were provided or should have been provided under the contract

If there is no ‘place of delivery’ specified, it should be the final destination of the sales transaction: Car Trim GmbH. v. KeySafety Systems Srl. (2010)

In case where there is a number of ‘places of delivery’ and the ‘place of principal obligation’ is not clear, the CJEU held that Article 5(1)(b) should allocate jurisdiction to a single place of performance: Color Drack GmbH v Lexx International Vertriebs GmbH (2007)

Following the above, if the contract involves an agent, the claim shall be brought at where the agent is domiciled: Wood Floor Solutions Andreas Domberger GmbH v Silva Trade SA (2010)

If the provision of services occurs at both the place of departure and the place of arrival, the CJEU held the claimant is allowed to bring the cause of action at either place of departure or arrival: Peter Rehder v. Air Baltic Corporation (2009) 

Special Jurisdiction - Tort

Article 7(2) provides that in matter relating to tort, delict or quasi-delict, the claim shall be brought at the place where the harmful event occurred or may occur.

Where the defendant acts in one place and the claimant is injured in another place, the claimant is entitled to bring an action in both country.

• In Bier v Mines de Potasse d’Alsace (1976), a French mining company discharged harmful chemicals into the Rhine water in France as a result of which a gardener in the Netherlands, who used polluted water from the Rhine, suffered damage to his property. The CJEU ruled that the harmful event occurs either where the damage occurs or at the place of the event give rise to it. 
• In Shevill v Presse Alliance SA (1995), a victim of libel in a newspaper article was held entitled to bring an action for damage against the publisher either where the publisher is established or in each Member State in which the publication is distributed and where the reputation is injured. Whether the event is harmful is to be determined by the substantive law of the national conflict of laws rules of the court seized.
• In Domicrest v Swiss bank Corp (1999), an English claimant sued a Swiss bank for a negligent misstatement made in telephone call between England and Switzerland. The claimant relied on the representation in telephone to release goods in Switzerland and Italy before the payment was done. The bank refused to pay. It was held that the place of the damage was in Switzerland and Italy (place of reliance) rather than England (place of receipt of the misstatement). The simple receipt of the misstatement does not automatically harm the victim or his assets, only the victim’s action in reliance on the misstatement triggers off the consequence.   

Article 7(2) applies to cases of threatened wrongs as well. Thus, an English court would have jurisdiction to grant an injunction to stop jurisdiction of defamatory material by publisher based in Spain.

Article 7(2) does not cover consequential and pure economic loss.

• In Zumez France SA v Hessische Landesbank (1990), a French company suffered loss when its German subsidiaries became insolvent as a result of the negligent advice of a German bank, The French courts did not have jurisdiction under Article 5(3) (now Article 7(2)). Germany was the place where the event giving rises to the damage where the damage occurs, even though it is in France that the claimant suffers injury.
• In Marinari v Lloyds Bank plc (1995), the Italian claimant claimed that the wrongful conduct of employees of Lloyds Bank in Manchester had led to his arrest in England and seizure of promissory notes. It was held that Italian court does not have jurisdiction over the claim for damage to his reputation in Italy. The CJEU held that the place where the damage occurred is where the harmful event directly produced its damaging effects upon the victim. Although the term may cover both the place where the damage occurred and the place of the event giving rise to it, it cannot be constructed so extensively as to encompass any place where the adverse consequences can be felt of an event which has already caused damage actually arising elsewhere.
• In Henderson v Jaouen and another (2002), an English domiciliary man is injured in a road accident in France. The condition was aggravated in England. It was held that the English courts do not have jurisdiction as the deterioration is a consequence of the original harmful event, not a new harmful event.

Special Jurisdiction – Branch, Agency or Other Establishment

Article 7(5) provides that in case involving a dispute arising out of the operations of a branch, agency or other establishment, a claim shall be brought at where the branch, agency or other establishment is situated.

What is a ‘branch, agency or other establishment’?

• Given that different jurisdictions may have different meaning as to what is a ‘branch, agency or other establishment’, it was accepted that the phrase must be interpreted in an autonomous sense: Somafer SA v Saar-Ferngas AG (1978)
• The CJEU in Etablissement Somafer v. Saar-Ferngas AG (1978) requires a ‘branch, agency or other establishment’ to have a place of business which has the ‘appearance of permanency’.
• It had to be subject to the direction and control of the parent body. Hence an independent commercial agent, who merely negotiated business, could arrange his own work and could also represent competitors and whose function was to transmit orders to the parent company was not a branch, agency or other establishment: Blanckaert and Willems PVBA v Luise Trost (1981)
• It does not include distributors or sales agents for goods of foreign companies: De Bloos Sprl v Bouyer SA (1976)

What is a ‘disputes arising out of the operations’?

• In relation to the term ‘disputes arising out of the operations’, the CJEU in Somafer SA v Saar-Ferngas AG (1978) explained that the concept of operations included matters relating to the rights and obligations concerning the actual management of the said ‘branch, agency or other establishment’, as well as to undertakings entered into at the place of business was established and also actions concerning torts arising from the activities in which it had engaged.
• In Lloyd's Register of Shipping v Société Campenon Bernard (1995), the English defendant company contracted with the French claimant company to check the quality of some steels. The contract was concluded in France through the defendant’s French branch, and the service was to be performed by the defendant’s Spanish branch. It was held that the French court has jurisdiction over the claim for damages based on the defendant’s defective performance of the services in Spain. 

Special Jurisdiction – Multiple defendants

Article 8(1) provides that in case involving a number of defendants, a claim can be brought at place where any one of them is domiciled, provided that the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.  Where a dispute involves multiple parties, it is often just and convenient for all the claims to be decided at the same time by the same court.

For this Article to apply, both D1 and D2 must be domiciled in the EU Member States: Réunion européenne SA and Others v Spliethoff's Bevrachtingskantoor BV and the Master of the vessel Alblasgracht V002 (1998)

There is no requirement that the claims against D1 and D2 are being pursed in the same proceedings. The Article 6(1) (now Article 8(1)) is wide enough to encompass defendants and claims in more than one action: Masri v Consolidated Contractors (2011)

Article 6(1) (now Article 8(1)) can be used even where the claims are brought for the sole purpose for ousting the jurisdiction of the courts where D2 is domiciled: Freeport plc. v Olle Arnoldsson (2007)

The facts and law underlying the claims must be the same.

• In Roche Nederland v Primus (2006), the CJEU said that Article 6(1) (Now Article 8(1)) is not available in this case because in order for there to be irreconcilable judgments, “it is not sufficient that there be a divergence in the outcome of the dispute, but that divergence must also arise in the context of the same situation of law and fact”.
• In Réunion européenne SA and Others v Spliethoff's Bevrachtingskantoor BV and the Master of the vessel Alblasgracht V002 (1998), it was held that Article 6(1) cannot be invoked if the claimant sued D1 on contractual liability and D2 on tortious liability. However in Freeport v Arnoldsson, Article 6(1) applies notwithstanding the different legal bases, so long as the facts and law underlying the claims are the same.

Article 8(2) is invoked by D1 to join D2 to proceedings started by the claimant. D1 may wish to do that so that if he was found liable, he can shift liability (wholly or partly) to D2.

• In GIE v Zurich Espana, it was held that Article 6(2) (now Article 8(2)) cannot be used solely with the object of removing D2 from the jurisdiction of the court which would otherwise be competent. It is for the national court to determine whether such an abuse of process has occurred.

Article 8(3) provides that in an event that a counter-claim was served by the original defendant, the court listening to the original claim will have the jurisdiction (but not where the claimant is domiciled). The requirement is that the counterclaim must arise from the same contract or facts as the original claim that is pending.

• A defence to the claim is just an integral part of the original proceedings, not a counter-claim: Danvaern v Otterbeck (1995)

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Exclusive Jurisdiction

Article 24(1) provides that a court of a MS shall have jurisdiction over proceedings that are about right in rem, in which the immovable property or tenancies of immovable property is situated in that particular Member State.

However, if the tenancies of immovable property were only for temporary private use for a maximum period of six consecutive months, the courts of the MS in which the defendant is domiciled shall also have jurisdiction, provided that the tenant is a natural person and that the landlord and tenant are domiciled in the same MS. 

The provision in Article 24 is exclusive and mandatory. If litigation is brought in breach of Article 24, the court must declare of its own motion that it has no jurisdiction under Article 27.

A claim based on a contract for transfer of ownership of land is not within Article 22(1): Schlosser Report

In Webb v Webb (1994), a flat in France had been bought in the son’s name with funds from the father. The father brought proceedings in the English court for a declaration that the son held the flat as a trustee and for an order to perform his trust obligation. The CJEU held that the claimant was not claiming right in rem, but seeking only to assert rights as against the defendant, so that the claim is in personam.

In Jarrett v Barclays Bank plc (1999), the court indicated that a timeshare agreement itself could fall within the Article, but it has been suggested that it should be regarded as a consumer contract within Article 15, not a contract relating to the tenancy of immovable property. (When a person signs a contract to purchase a "timeshare," she is agreeing to pay the owner of the property a sum of money for the exclusive right to use or occupy the property for a specified time during the year)

Jurisdiction Agreement (Prorogation of jurisdiction)

Article 25(1) provides that the regulation shall apply, regardless of the parties’ domicile, if there is an agreement that the courts of a Member State are to have jurisdiction to settle any disputes. The agreement conferring jurisdiction may be either:

• in writing or evidenced in writing; or
• in a form which accords with practices which the parties have established between themselves; or
• in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.

Article 25(2) indicates that any communication by electronic means which provide a durable record of the agreement shall be equivalent to ‘writing’.

In relation to agreement in writing, Partenreederei ms. Tilly Russ and Ernest Russ v NV Haven- & Vervoerbedrijf Nova and NV Goeminne Hout (1984) held that the jurisdiction agreement must be contained in a document signed by both parties.

The problem often arises where a choice of jurisdiction clause in general conditions on the back of a written and signed contract. 

• The CJEU held that the text of the contract must contain an express reference to these general conditions: Colzani v Rüwa (1976) 
• Where there is an oral agreement and a written confirmation is sent, if no objection is raised the agreement will be regarded as ‘evidenced in writing’: Berghofer GmbH v ASA SA (1985)
• However if the jurisdiction clause was not agreed orally but later contains in the written agreement, the jurisdiction clause will have no effect unless it was accepted by both parties: Galeries Segoura SPRL v Société Rahim Bonakdarian (1976)

The courts will have exclusive jurisdiction under Article 24, and a jurisdiction agreement under Article 25 cannot override Article 24.

However a submission to the court of MS under Article 26(1) may overrides a jurisdiction agreement under Article 25(1): Elefanten Schuh GmbH v Pierre Jacqmain (1981)

Submission

Article 26(1) provides that the court of a MS has jurisdiction if the defendant enters an appearance in that court in that court, unless the appearance was entered to contest the court’s jurisdiction.

Article 26(2) provides the court have a duty to inform the rights of the defendants before assuming jurisdiction.

Parallel action

Just because the English court may assume jurisdiction (under BRR or Traditional Rule) does not mean that litigation will definitely take place in England. 

Article 29(1) provides that courts other than the court first seized shall stay the proceeding until the court first seized established their jurisdictional status in regard to in the particular case that is of same cause of action and between the same parties. Article 29(3) provides that If the jurisdiction of the court first seized is established, any others court shall decline jurisdiction in favour of the court first seized.

The phrase ‘same cause of action’ shall be interpreted broadly: Gubisch Maschinenfabrik AG v Palumbo (1987)

A proceeding is parallel only if two proceedings are concerning the same facts/law: Bank of Tokyo-Mitsubishi UFJ Ltd v Baskan Gida Sanayi Ve Pazarlama AS (2009). If C sues D in contract, and D sues C in tort, it is not parallel even the facts are the same.

In The Tatry (1994), one action is brought in personam in one MS and the other is brought in rem in another MS, the CJEU has subsequently continued both in rem and in personam.

In relation to ‘same parties’, Article 29(1) only requires court second seized to decline jurisdiction only to the extent the parties in the court second seized are the same in the court first seized: The Tatry (1994). So if A sues B and C in France, and B sues A and D in England, the English court only need to decline jurisdiction in regard to the proceeding between A and B.

In a situation where there is a jurisdiction agreement are pointing toward the court second seized, the CJEU held that Article 29(1) has precedence over Article 25(1): Erich Gasser GmbH v MISAT Srl (2004) confirming Overseas Union Insurance v New Hampshire Insurance (1991)

Related actions

Article 30(1) provides that any courts other than the court first seized may stay a proceeding concerning a related action.

Article 30(3) explains that actions are deemed as related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.

The court second seized can refuse to stay proceedings by deciding that:

• the risk is very small: The Maciej Rataj (1992)
• the risk is dependent on a range of contingent matters: Centro Internationale Handelsbank AG v Morgan Grenfell Trade Finance Ltd (1997)

In a situation where there is a jurisdiction agreement are pointing toward the court second seized, the court second seized can uphold the jurisdiction agreement and refuse to stay proceedings on Article 30(1): JP Morgan v Primacom (2005)

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