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Analysis of Jurisdictional Regime under Brussels I and Recast Regulation

Mansi Ahuja


Introduction Brussels I Regulation is the Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters(known as Brussels Regulation or Regulation) and is substantially based on the previous convention namely Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters which was signed on 27 September 1968. The Brussels Regulation, in contrary to the Convention, is obligatory for all EU members and does not have to be ratified. Disputes between individuals from various Member States of the European Union are governed by the Brussels Regulation. The concerns relating to the interpretation of provisions of the Brussels Regulation are within the scope of the European Court of Justice's (ECJ) jurisdiction. The modifications to Brussels I Regulation, which entered into effect in January 2015, were approved by European Economic and Monetary Affairs Council in December 2012. The principal changes to the Regulation were intended a) to contour the process of implementation of judgments across Member States and to reduce judgment creditors' time and expense; b) reinforce the option of court agreements by putting an end to torpedo stratagem for trans-border lawsuits; c) expand the jurisdiction rules of the Brussels Regulation to claimants who are not domiciled in European Union in some cases; and d) safeguard arbitration clauses from malicious litigation.


Jurisdictional Regime under Brussels I Regulation and Recast Regulation The Brussels I Regulation includes a scheme of jurisdiction: guidelines that are used by the courts of the Member States of the European Union to decide that whether there exists jurisdiction in cases with linkages to multiple countries which are member of European Union. As per the fundamental premise, the court has jurisdiction in the Member State of the party being prosecuted, although there are other basis which can be varying in substance and reach and also categorized as exclusivity and specificity in a descending order. With regard to the rules of jurisdiction, the primal Brussels Regulation of 2001 is much homogenous to the Lugano Convention (1) that appertains if the dispute relates to multiple signatories to the Brussels Convention and includes the same clauses with identical numbers. When the modified form of the Brussels Regulation came into effect as in 2015, numbering and some significant issues varied. (2) The framework of the Recast Regulation resembles the old Brussel I Regulation. Saving the case falls under one of the exceptions in the Regulation, an individual domiciled in an EU Member State must still be sued in that State. Such exceptions remain essentially the same (3), for example, in tort claims, the courts of the place where the adverse incident happened, and in case of multiple defendants, the court of the place where any of the claimant is domiciled.

Extension of Brussels Regulation’s jurisdictional rules to Non EU defendants via Recast Regulation

For claimants domiciled outside the EU, the Brussels Regulation does not actually apply. In such cases, the courts of the EU Member States preferably apply their own rules to figure out if they are qualified. The revised Brussels Regulation would expand and secure non EU jurisdictional arrangements with a view to accessing and ensuring justice for claimants in ensuing situations: a) A customer from a non-member state of EU can either bring action or lawsuit before the courts of non-member state of EU or before the courts at the place where either trader is domiciled or has place of establishment.

b) Claim can be brought in against a person who is not domiciled in EU, in the state where he has his place of establishment; c) In case parties have decided that exclusive jurisdiction of any Member States’ court would extend to any of the disputes then the condition is that no party to the dispute should be domiciled in the European Union. Jurisdictional Provisions for choice of court in relation to Anchor Defendants or Co- defendants: Art. 8 of Recast Regulation (Art. 6 of Brussels Regulation) As an exception to the conventional rule stated under Article 2 of the Brussels I Regulation, Articles 5 to 7 of 2001 Regulation (Articles 7 to 9 of the Recast Regulation 2012) constitute 'a supplement' to the traditional jurisdictional law. These provisions grant the complainant an alternative opportunity to bring action against the claimant in EU member state apart from the state of his domicile. The presence of a proximate linking aspect between the conflict and the court having jurisdiction for taking up the dispute, is the reason for expansion of the conventional jurisdiction rule and, concurrently a substantial prerequisite for it. (4) Art 6 of the Brussels Regulation (Art 8 of Recast Regulation) provides a legal ground for claimants in multi-party lawsuits or in cases involving combined claims to proceed against defendants in the EU member state apart from those of their domicile, such as where the primal claim is outstanding in the matter of counter-claim or in case of multiple defendants having their claims closely related, in any Member State. (5) The rationale that exist in its wake is to prevent the passing down of inconsistent decisions in contracting States. (6)

“Article 6 of the Brussels I Regulation states: A person domiciled in a Contracting State may also be sued: 1) where he is one of a number of defendants, in the courts for the place where any one of them is domiciled;

2) as a third party in an action on a warranty or guarantee or in any other third party proceedings, in the court seised of the original proceedings, unless these were instituted solely with the object of removing him from the jurisdiction of the court which would be competent in his case; 3) on a counterclaim arising from the same contract or facts on which the original claim was based, in the court in which the original claim is pending.” “Article 8 of the REGULATION (EU) No 1215/2012 (Recast Regulation) states that A person domiciled in a Member State may also be sued: 1) where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided 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; 2) as a third party in an action on a warranty or guarantee or in any other third- party proceedings, in the court seised of the original proceedings, unless these were instituted solely with the object of removing him from the jurisdiction of the court which would be competent in his case; 3) on a counter-claim arising from the same contractor facts on which the original claim was based, in the court in which the original claim is pending; 4) in matters relating to a contract, if the action may be combined with an action against the same defendant in matters relating to rights in rem in immovable property, in the court of the Member State in which the property is situated.” Choice of Court under Brussels Regulation — Case Laws In Watson v First Choice Holidays& Flights Ltd and ApartaHotels (7) , two young English tourists Mr Barnshaw and Mr Watson got injured during a series of events at a holiday resort in Spain resulting in litigation; Mr Barnshaw sued the hotel operator in Spain and Mr Watson instituted the case against the tour operator First Choice Holidays& Flights Ltd and the Spanish company Aparta Hotels Caledonia as an additional defendant in England. The Spanish hotel company resisted the proceedings on the ground that it is running its business in Spain so should not be sued in England. Watson justified the institution of proceedings against Aparta in accordance with Art 6(1) of the 2001 Regulation. The learned judge, placing the reliance on the Reunion Europeenne case (8) decided the case against Mr Watson. The general rule regarding jurisdiction is stated under Article 2 of the Brussels Convention which says defendants domiciled in European Union Contracting State will be proceeded against in courts of that contracting state. But Article 5 and 6 work as exception to the general principle and being headed under Special Jurisdiction provide for different place of suing and thus be interpreted strictly. In this case Article 6(1) and (2) are of immediate relevance as it says that person domiciled in European Union contracting State can also be sued in the courts of the place where any of the claimants among them is domiciled. Reliance was also placed upon Kalfelis case (9) in which it was held that in order to apply Art 6(1) of the Brussels Convention, there should be connection of some kind between the lawsuits brought by same complainant against different claimants in order to avoid risk of irreconcilable judgments from separate proceedings. These exceptional rules of the Regulations enables the tour operator to be sued in England and in turn the tour operator can seek indemnity from hotel operator under the Convention. It was held that when there were multiple linked cases, the parties could not be shielded from the risk of facing different repercussions from various courts and these cases therefore were referred to European Court of Justice for the decision. Subsequently, the territorial regime under the Convention was discussed in the Owusu case but this case left a lot many unanswered questions with respect to scope of the Regulation.

Owusu v Jackson and the Doctrine of Forum Non Conveniens It was the case of Owusu v Jackson (10) which limited the application of doctrine of forum non conveniens. The doctrine of forum non conveniens which was propounded in Spiliada Maritime case (11) is an extension of common law, which enables a court to deny its jurisdiction if it is of the opinion that it is more appropriate for a court of another country to bring an action to trial. It is evident from the Owusu’s decision that even a very limited relation with the jurisdiction of Member State will be appropriate to determine jurisdiction based on the domicile of the defendant. (12) Mr. Owusu, the plaintiff and an Englishman domiciled in United Kingdom, sustained severe injury while swimming at a private beach in Jamaica, when he hit his head while in the pool on a submerged sandbank. For violation of an implied term between Owusu and tour operator that the beach where the accident took place will be fairly secure enough and void from secret hazards, Mr Owusu brought action against Mr Jackson, first defendant in the English courts as he had let that villa to Owusu where accident took place and also sued other Jamaican companies who had licensed the use of the beach, for their failure to warn the tourists of the hidden hazards. ECJ dismissed the claim pleaded by the defendants and the Government of UK that the conventional domicile rules under Art 2 (13) of the Regulation were not applicable because the complainant and one of the defendants domiciled in the United Kingdom and the other defendants domiciled in non-Contracting State. ECJ therefore ruled that Art 2 of the Regulation cannot be subjected to the condition that there must exist legal relation which involves numerous EU contracting States, even though the presence of an international aspect was required for the Convention to be relevant at all. In the case of Munib Masri v Consolidated Contractors International Co (14) the applicant sought to execute a judgment debt against a foreign resident(Lebanese) companies in England and to investigate or examine the director who resided abroad for this reason. The defendant said that the laws provided no such authority, and the authority was beyond the authority of the rule-maker. In the light of foregoing proceedings which were going on in Greece, the defendant companies applied for stay orders from the court here in order to refuse jurisdiction under Art 27 or 28 of the Brussels I Regulation. The court held that for the purposes of Art 27 of the Regulation, the prosecutions in English court and court in Greece did not require the same cause of action, as the rule of law relied on in the two proceedings was significantly different. However, they can be said to be related proceedings that gave rise to a possibility of irreconcilable judgments in line with Article 28 and the correct way out was to stay the action in English court. Overlap between two proceedings contributed to significant risk of irreconcilable or contradictory decisions. Thus there exists a presumption with respect to stay or dismiss the other action. The decline of jurisdiction under Article 28(2) was not sufficient since the merger of the action of conspiracy with the proceedings in Greece was not a fair way out. Therefore, appropriate solution was to stay the English action under Art 28(1) of the Regulation thus preventing those two English and Greek proceedings to continue in conjunction. Now what will be the fate of the action in which there are multiple defendants and are domiciled at different places and the action comprising different legal bases? Such dilemma was resolved in the case Freeport plc v Olle Arnoldsson (15) where an agreement concluded between Mr Arnoldsson and Director of English company Freeport plc that Mr Arnoldsson will receive success fee when factory shop at Kungsbacka (Sweden) open and this shop was to be owned by Swedish company Freeport AB (subsidiary of Freeport Plc). Arnoldsson asked for the fee but Freeport AB refused stating that it neither was party to the agreement nor it existed when the agreement was concluded. Arnoldsson sued both the companies before Swedish District court for payment of success fee along with interest and formed Article 6(1) of Brussels I Convention as basis of his action. Freeport plc pleaded that this legal action consisted of two different legal bases; action against Freeport plc was based on contract whereas action against Freeport AB was based on tort, thus Article 6 of the Regulation is inapplicable as the two legal bases are not connected. ECJ rejected the plea of Freeport and overruling the Réunion Européenne judgment which was being treated as authority till now. (16) It now held that even though claims against defendants constituted different legal bases still Art 6(1) of Brussels Regulation can be invoked, that is, special jurisdiction provisions of the Regulation can be made applicable.

Latest Development In the recent case of 2020, namely Senior Taxi Aereo v Agusta Westland (17), the High Court offered some guidance on the rules under the Recast Brussels Regulation (1215/2012), applicable to defendants domiciled in states that are parties to the EU. Following the ruling,

the court has jurisdiction under Art 8(1) of the Recast Regulation to hear a lawsuit against a non-UK defendant subject to the claim against UK-domiciled anchor defendant will be sustainable.

Although on United Kingdom exiting European Union, Recast Brussels Regulation shall cease to be applicable, the Senior Taxi test will inevitably remain in place where jurisdiction is claimed over EU domiciled co-defendants. The United Kingdom plans to capitulate to the Lugano Convention (18), which includes a clause similar to Article 8(1) of the Brussels Recast Regulation and is likely to be interpreted in accordance with the Brussels EU Recast Regulation.


Conclusion


The Brussels I Regulation (Recast)incorporated major changes to the jurisdictional framework with European Union. In specific, it gave preference to the court designated under an exclusive jurisdiction provisions of the Regulation, enabling that court to continue its proceedings even though the claim was first brought before another court in the EU. However, there are also grey areas and inadequate elements in the Recast Brussels Regulation, particularly with regard to the right of EU courts to ensure compliance to jurisdictional agreements in favor of non-EU courts. All in all, it is reasonable to welcome the recast Regulation, but its implementation will not always be pretty seamless.


References


1. 2007 Lugano Convention, SR 0.275.12.

2. A Briggs, The Conflict of Laws (3rd edn, OUP2008).

3. GV Calster, European Private Law (HART Publishing 2013) p 51.

4. C-386/05 Color Drack GmbH v Lexx International Vertriebs GmbH [2007] ECR I-3699.

5. Article 6(1), 6(3) of the Regulation 44/2001.

6. C-59/27 ‘Report on the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters signed at Brussels (Jenard Report )’ (1979) OJ < http://aei.pitt.edu/1465/1/commercial_report_jenard_C59_79.pdf> accessed on 12 January 2022.

7. Watson v First Choice Holidays & Flights Ltd [2001] WL 606479.

8. Case C-51/97 Réunion Européenne SA v Spliethoff's Bevrachtingskantoor BV and the Master of the Vessel Alblasgracht [1998] ECR I-6511.

9. Case 189/87 Kalfelis v Bankhaus Schröder, Münchmeyer Hengst & Co [1988] ECR 5565.

10. Case C-281/02 Owusu v Jackson(t/a Villa Holidays Bal Inn Villas) [2005] Q.B. 801; [2005]1 Lloyd's Rep. 452.

11. Spiliada Maritime Corp v Cansulex [1987] AC 460.

12. In Owusu, the ECJ remarked that "It is common ground that no exception on the basis of the forum non conveniens doctrine was provided for by the EC Convention on Jurisdiction and the Enforcement of Judgments 1968”[2005] ECR. I-1383; [2005]1 Lloyd's Rep 452.

13. Art2 provides: “Subject to the provisions of this Convention, persons domiciled in a Contracting State shall, whatever their nationality, be sued in the courts of that State… ”

14. Masri v Consolidated Contractors International Company SAL & Anor [2008] EWCA Civ 303.

15. C-98/06 Freeport plc v Olle Arnoldsson [2007] ECR I-08319.

16. It was then held that if the claims against defendants had different legal bases then application of Art 6(1) of Regulation shall be precluded.

17. Senior Taxi Aereo Executivo LTDA & Ors v Agusta Westland S.p.A & Ors [2020] EWHC 1348.

18. The Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters(LuganoConvention2007;SR0.275.12)


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