THE COMBAR LECTURE 2015

THE HIDDEN DEPTHS

OF THE LAW OF JURISDICTION

Adrian Briggs

Blackstone Chambers

Professor of Private International Law, Oxford University

Thursday, October 22, 2015

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THE HIDDEN DEPTHS OF THE LAW OF JURISDICTION

It is well known that the definitional terms used in the Brussels I Regulation (and

elsewhere in European legislation on private international law) have autonomous

meanings. Less well understood, perhaps, is the degree to which the two

jurisdictional regimes which operate in the English courts have autonomous

functions which follow from their distinct conceptions of how jurisdiction is

defined. The lecture seeks to draw out the significance of some of these, the better

to explain the significance of the hidden differences in the laws of common law

and European jurisdiction.

It is always unsettling to deliver a lecture to an audience which includes those

who were present at some of the events which I only read or heard about from a

safe distance. It is also unnerving to discover that this lecture is sometimes framed

and delivered in a rather grand, panoramic, way, by grand, panoramic lecturers.

But 2015 is a year of austerity and more modest ambition. The general point

which I shall endeavour to make, and make good, is one about the structures of

the systems (deliberately plural) of civil jurisdiction operated in the English

courts, and the purpose of their jurisdictional rules. So let us begin.

The proposition that the definitional terms of the Brussels I Regulation have

autonomous meanings, independent of national law is well understood, and this is

true not only in the law of jurisdiction, but also in the Regulations now

increasingly providing our rules for identifying the applicable law. However, the

autonomy is not confined to the meaning of terms, but it extends to autonomous

operation and application: it is the entire system, rather than the individual terms

used within it, which should be understood to be autonomous and independent of

the rules of national law which formerly applied in the territory which is now

under new management.

And if one thinks about it for a moment, what is true for European-made law,

when it operates in an English court, is equally true of the common law – used in

this context as convenient shorthand for common law plus Parliamentary

legislation – when it applies in an English court, which it still does, if in an

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increasingly residuary way: it is, when you think about it, just as autonomous and

independent of the rules of European law as European law is of it: not just in the

meaning of terms, but in operation and application: indeed, as the courts deal

more and more with European law, it is the autonomy of the common law which

needs to be observed and protected, and not the other way round. But it is this

separateness, of each system from the other, which needs to be taken to heart. It is

not that the two systems (common law, European) of private international law

(jurisdiction, judgments and applicable law) were designed to be separate; rather,

they were designed to be self-contained, and separateness is the necessary result:

one courtroom, two systems, as one might say.1 In terms of jurisdiction, with

which we are mostly concerned this afternoon, each scheme determines for itself

whether a court has or does not have judicial power to adjudicate, or to decline to

adjudicate, a matter brought before it; and it is because the two systems are

designed to work so differently that alarm bells ring when reasoning derived from

the one system pops up in the other. For although terms of art, and legal concepts,

may appear to be strikingly similar, the similarities are in fact only mirages, and

those who are seduced by a mirage seldom come to a good end.

This, however, causes particular problems when rules of procedural law, which

are not themselves rules of private international law, but which supplement and

serve the rules of private international law, have to answer questions. The extent

to which these rules of procedural law are coloured and shaped by the context in

which they are required to apply has not been appreciated or observed as clearly

as it should have been; and this also is something to be mentioned this afternoon.

Though time will limit us to only to a few points taken from the many available, it

will be possible to illustrate the argument by reference to some recent judgments,

most concerned with disputes as to jurisdiction, about which something may need

to be said. The message will be that the rules governing jurisdiction which now

apply in an English court, and the rules of civil procedure which supplement

them, are complex but do not form an amalgam or hybrid.2 A judge is required to

1 Or write: see Briggs, Private International Law in English Courts (OUP, 2014). 2 My colleague, Professor Andrew Burrows QC, recently described something of similar kind,

namely the effect (as he saw it) of a principle of European law upon the domestic laws of

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apply common law rules of private international law, and the procedural rules

which support them, in accordance with the distinctive rules and principles of the

common law; and to apply European rules of private international law, and the

procedural rules which support them, in accordance with the distinctive rules and

principles of European law, and to keep the two well apart. Whether you prefer

the analogy of chalk and cheese, or oil and water, or none at all, the two systems,

and the rules which make them up, co-exist but do not mix. The two systems are

separate, and the task is to observe and understand their separateness, not to seek

some form of merger or alignment.

1 Jurisdiction and service

Common law: If service is made, there is jurisdiction

Regulation: If there is jurisdiction, service may be made

The fundamental assumption of the common law is that jurisdiction results from

service, or exists when service has been effected. There may be exceptions for the

rare case in which the parties should be treated as though service had been made,3

but the general principle holds. This is why the court may have jurisdiction over

any defendant, or in proceedings which may be brought in rem, over any thing,

present within the jurisdiction, but will only have jurisdiction over a person out of

the jurisdiction if the claimant is first given permission to serve him out of the

jurisdiction. And this is why, when in Abela v Baadarani,4 Lord Sumption

advised us to abandon what he called ‘muscular presumptions’ against service out

of the jurisdiction, some writers5 saw in this too casual a widening the effective

jurisdiction of an English court. Lord Sumption’s apparent suggestion, that service

was in substance only a notification of the institution of proceedings coupled with

an invitation to come to court and defend them, could appear to treat the

jurisdiction-creating nature of service rather lightly. I should say that I think the

compensation and restitution law, as creating a ‘hybrid monster’: Test Claimants in the FII Group

Litigation v HMRC [2014] EWHC 4302 (Ch), [262]. I am not sure that I would necessarily

characterise the approach against which I caution as ‘monstrous’, but that may merely reflect

greater mildness of temperament. 3 CPR r 6.15; Abela v Baadarani [2013] UKSC 44, [2013] 1 WLR 2403. 4 [2013] UKSC 44, [2013] 1 WLR 2403. 5 Dickinson (2014) 130 LQR 197; cf Collins (2014) 130 LQR 555.

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criticism was misconceived, but the criticism does focus our attention on the truth

that, under the common law, it is service creates jurisdiction.

The fundamental assumption of the scheme of jurisdiction put in place in England

by the Regulation is that jurisdiction is defined exhaustively by the statute, and

that where there is jurisdiction, service may be made.6 In this case service does

indeed do no more than notify the defendant of the institution of proceedings.7 In

such a case, one could more easily understand why rules on service might be

relaxed, for in this case service does not carry the weight, or have the significance,

that it does when it forms part of the common law of jurisdiction.

There are, therefore, two kinds of service: service which creates and establishes

jurisdiction, and service which notifies the pre-existence of jurisdiction. Though

each serves an important function, each operates within the confines of a coherent,

self-contained, system, and takes its colour from its surroundings. And although

this is reflected, to a degree, in the separateness of CPR rr 6.33 and 6.36, it is

certainly arguable that the differences run more deeply than that.

As a matter of common law, the decision to effect service is that of the claimant

alone. Although he will generally need permission if he wishes to serve outside

the territorial jurisdiction of the court, the decision to issue process and to serve it

is his alone, with the jurisdiction of the court being the consequence. This leads

easily enough to the conclusion that in cases where there is an objection to the

institution of proceedings in the English court – because, for example, the

claimant had committed and bound himself by contract not to do it – the English

court is able to focus on the propriety or impropriety, as against the other party, of

the claimant’s act of service, and may deprive it of effect8 if it shown to have been

wrongful. For example, a claimant who issued and served process in respect of

claim which he had promised not to bring in England may find that he is deprived

6 Given effect in English law by CPR r 6.33 and Form N510. 7 It is however true that the Regulation also uses service as part of its mechanism for limiting the

risk of parallel proceedings, and that service (or, more accurately, issue: Article 32) has the effect

of marking the date of seisin and of ensuring that proceedings elsewhere will be a court second

seised. 8 By stay (but rarely by setting aside), if made within the jurisdiction as of right; by revocation of

permission and consequent setting aside of service if made out of the jurisdiction with permission.

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of the benefit of the service, and the jurisdiction created thereby, though this is not

generally done, at least where the common law is the only relevant law, on the

basis that the court had no jurisdiction over the claim at all. There are marginal

exceptions, of course, such as where the validity of foreign patents, or title to

foreign land, are involved, as well as cases of state and diplomatic immunity, but

by and large the court is able to control access to its jurisdiction by asking itself

whether the claimant should or should not have exercised his legal freedom to

serve, or should or should not have obtained permission to serve. It makes it easy

to explain why at common law the regulation of the jurisdiction of the court may

appear to operate as a matter of private law, and not to be fought out on the plane

of public law. Of course, it has also allowed the English courts to rationalise the

anti-suit injunction as a measure which also only regulates the personal

relationship between the litigants, and we all know what happened to that when

the European Court came to deal with it.

The nature of European jurisdiction is statutory, in the sense that it lays down a

number of rules which tell a judge whether he or she has judicial jurisdiction.

These rules are neither formulated as including a discretion, nor defined by

reference to service of process, which here really is reduced to a matter of pure

procedural law only. That makes jurisdiction taken according to the Regulation

very different from jurisdiction taken according to the common law rules; and it

makes the regulation of its jurisdiction by the court much less easy. In principle,

the claimant either satisfies the Regulation rules of jurisdiction or he doesn’t, but

if he does, service is little more than an administrative notification, and it is not

wrong for the court to see it in those terms and treat it accordingly.

And this means that if the court has jurisdiction according to the rules of the

Regulation, leaving aside those cases which fall within Article 6 of Regulation

1215/2012, service really is, as Lord Sumption said it was in Abela v Baadarani,

little more than the notification of the institution of a claim. And if that is all

service really is, the need to insist on strict compliance with its rules is far from

obvious. By contrast, if the act of service is itself the very creation of jurisdiction,

one sees more clearly the reason why we should be cautious about making any

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suggestion, or taking any step, which appears to make service easier to effect, and

– to that extent – jurisdiction broader than it would otherwise have been.

2 Resolving disputes as to jurisdiction

Common law: Good arguable case

Regulation: (Much) the better of the argument

When a claimant has invoked the jurisdiction of a court, or has taken the first step

towards doing the same, the defendant may deny that he is liable to be proceeded

against in England. When he does so, it is almost inevitable that the factual basis

on which the claim to jurisdiction rests will be contestable, and the question is

then how a court should proceed, being properly respectful of the rights and

legitimate expectations of claimant and defendant.

The common law knew the right answer, and applied it calmly enough, most of

the time.9 Where a statutory rule defined the power to serve, most commonly in

the case in which service out the jurisdiction was dependent on the permission of

the court, it required the claimant, if pushed, to show a good arguable case that he

could tick the box or boxes which stated the conditions on which permission to

serve depended. As to the ground or gateway he needed to show, for example, a

good arguable case that there was a contract, a good arguable case that it was

made within the jurisdiction, and so forth. Imprecise though this expression was,

it was pretty clear what it did not mean: it did not require the claimant to make a

better showing than the defendant on the jurisdictional point or points relied on.

Among the many reasons for this, one now stands out: permission cannot properly

be given unless England is shown, clearly and distinctly, to be the natural forum,

or the proper place to bring the claim. In Seaconsar,10 Lord Goff made this point

about the practical and indirect significance of the requirement that England be

the natural forum when explaining that the strength of the merits of the claim set

9 As recently as 2000, the 13th edition of Dicey & Morris, The Conflict of Laws, was able to say

(para 11-127) that ‘The standard to be applied in considering whether the jurisdiction of the court

had been sufficiently established under one or more of the heads of Order 11, r 1(1) was that of the

good arguable case, ie a strong case for argument.’. 10 Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438.

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out in the writ did not need to rise above that of being enough to fend off a strike-

out application; and in Abela v Baadarani, the Supreme Court agreed with Lord

Sumption that the need to show England as the proper place to bring the claim

was reason to reduce the emphasis placed on the other obstacles or preconditions

to service. For if England is the proper place to bring the claim, additional

presumptions against jurisdiction seem rather uncalled-for.

All of this makes sense. Judicial jurisdiction, in the common law sense, has three

interconnected parts: the statutory or traditional rule, the plausibility of the claim,

and the appropriateness of the English forum, and these are held in dynamic

equilibrium. A tick must be placed alongside each requirement, but court may

adjust the weight which each component is to bear; and in the end the system

works as an integrated whole.

Judicial jurisdiction which is conferred or imposed on courts by European

legislation is a very different thing. It gives the judge no real discretion, and is not

moderated by the principle of forum conveniens. Where Regulation jurisdiction is

in issue, the usual context is that the defendant claims to have a statutory

immunity from the jurisdiction of the English court, or a jurisdictional privilege of

defending himself in a court in another Member State. In those circumstances, the

English court is being asked to decide for itself, but because its judgment on the

matter must in principle be recognised11 also on behalf of a court in another

Member State, which Member State court has jurisdiction. It does not just take its

own jurisdictional decision. It follows, inevitably, that the English court must

come to the conclusion, on whatever evidence is before it, that the claimant has

the better of the jurisdictional argument.

There are therefore two kinds of jurisdiction, and two versions of the procedural

rules which apply to them. It really is that simple, but every now and then the line

is blurred. We can take two points which illustrate, to my mind, the manner in

which the law on the institution of proceedings and assessment of jurisdiction has

sometimes lost its way.

11 In effect, this follows from C-456/11 Gothaer Allgemeine Versicherung AG v Samskip GmbH

EU:C:2012:719, [2013] QB 548.

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The first was the decision by the Court of Appeal in Canada Trust Co v

Stolzenberg12 that a claimant, seeking to take advantage of a jurisdictional rule in

the Brussels or Lugano Convention, had to have ‘a much better argument on the

material available’, or a ‘much better argument than the defendants on the

material available’,13 on the jurisdictional point. In the context of the Regulation,

there is certainly some virtue in this formulation which has come to be referred to

as ‘the Canada Trust gloss’. The virtue is this that a ‘better of the argument’ test

is appropriate to the question posed by the Regulation scheme, whereas a ‘good

arguable case’ test, unmoderated by the common law companion rule about the

natural forum, would have been inappropriate in the Regulation context, for at

least two reasons. A ‘good arguable case (only)’ test would have distorted the

European jurisdictional scheme by allowing an English court to take jurisdiction

when its better guess was that, so far as it could tell, it did not have jurisdiction;

and it would not in any event have reflected or applied the common law test,

because there would be no forum conveniens element associated with it.

So far, so goodish. However, a further requirement of having ‘much’ the better of

the argument, even in the context of the Regulation, is simply bad. One only has

to ask ‘how much better is much better?’ to see the point. It surely cannot be right

that a judge can be expected to say that although the claimant appears to have the

better of the argument on jurisdiction, because he does not have ‘much the better

of the argument’ the English court will not exercise jurisdiction in a case in

which, as far as the judge can presently see, the English court does have

jurisdiction and the courts of another Member State do not.

Despite what may appear to be little more than a statement of the obvious, there

has been re-re-reiteration of this maladroit guidance. Only very occasionally has a

court faced up to the problem created by this element of the Canada Trust gloss.14

12 [1998] 1 WLR 547. The House of Lords was abrupt in its refusal to countenance any

questioning of this aspect of the decision. 13 Bols Distilleries BV v Superior Yacht Services Ltd [2006] UKPC 45, [2007] 1 WLR 12, [28]. 14 A very honourable mention must be made for JSC Aeroflot-Russian Airlines v Berezovsky

[2013] EWCA Civ 784, [2013] 2 Lloyd’s Rep 242.

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To say, as some courts have, that the test is a flexible one15 does not help one tiny

bit: how flexible is flexible ? Indeed, if there really were a rule of English

procedural law – which the court may in principle apply, as the European Court

reconfirmed most recently in Kolassa16 – to the effect that a claimant who does

have the better of the argument on jurisdiction may not seise the court because his

jurisdictional argument is better but not much better than that of the defendant, it

would jeopardise the practical effect of the Regulation, contradict the principle of

the effectiveness of European law, impair the principle of legal certainty, and so

on. It was a false step, and it is time to admit the error and put our procedural law,

so far as concerns the Regulation, back on track.

Canada Trust, whatever its merits, was a case actually concerned with jurisdiction

according to the Brussels or Lugano scheme. But the idea that its definition of the

standard to be applied should seep into the common law framework of jurisdiction

and undermine the traditional ‘good arguable case’ standard, as used in Vitkovice

Horni a Hutni Tezirstvo v Korner,17 is simply wrong, for the two kinds of

jurisdiction are entirely different. It was not helpful that the Court of Appeal in

Canada Trust did not properly observe the importance of this demarcation line but

after Vitkovice, and all the more after Spiliada18 and Seaconsar,19 there was no

rational basis for the contention that the common law required a claimant to have

the better of the argument on the head of jurisdiction or gateway issue. A ‘good

arguable case’ did not mean ‘the better of the argument’ on that issue; still less did

it mean ‘much the better of the argument’ on it: it did not mean it then, and it does

not mean it today, and it should not mean it tomorrow. It indicated enough of a

showing so that, when considered alongside the major issue of forum conveniens

and the minor issue of the apparent merits of the claim, the case appeared to be a

proper one for service out. Just that, and no more.

But the line has not been held. The infiltration of Canada Trust into common law

jurisdiction has happened, and unless someone calls foul, it will keep on

15 On which, see also Kolden Holdings Ltd v Rodette Commerce Ltd [2008] EWCA Civ 10, [2008]

Bus LR 1051. 16 C-375/13 Kolassa v Barclays Bank plc EU:C:2015:37. 17 [1951] AC 869. 18 Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460. 19 Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438.

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happening. It certainly does not help – and I say this with more trepidation than

you can possibly imagine – that Dicey20 seems to see no objection in treating

Canada Trust as a statement of the proper approach to common law jurisdiction.

It does not help, either, that the Canada Trust gloss (which is bad enough), in its

‘much the better of’ form (which is worse), was held by the Privy Council in AK

Investment21 to be part of the version of common law jurisdiction which applies in

the Isle of Man and so, in effect, the law in England.

But none of that makes it desirable, and none of that makes it right. Take a breach

of contract case as an example. It would mean, or perhaps it does mean, that if

England is shown, clearly and distinctly, to be the proper place to bring a claim

alleging breach of contract, and if it is not disputed that there was a contract and a

breach but there is dispute as to where the contract was made or the breach was

committed, service out will not be permitted unless the claimant has much the

better of the argument that the breach took place in England, or much the better of

the argument that the contract was made in England, and so on. What possible

reason could there be for there to be (as Lord Sumption may say) so muscular a

presumption against service out in a case in which England is shown to be the

proper place to bring a well-founded claim ? If this is the law, it shouldn’t be: it is

irrational and it is wrong. It may be that Abela v Baadarani has provided the tool

with which to put matters right, but the first and immediate task is to accept that

something has gone wrong with the law. Only then will it be possible to think

clearly.

Among the most recent examples, which illustrates the point with perfect clarity,

is Brownlie v Four Seasons Holdings Inc.22 On the question whether a Canadian

corporation should be summoned to court by means of process served on it out of

the jurisdiction with permission of the court, the Court of Appeal explained that

the claimant had to have ‘much the better of the argument’ that her claim against

the defendant was, for example, founded on a contract made within the

jurisdiction, or that her claim against it in tort was one in which damage was

20 Dicey, Morris & Collins, The Conflict of Laws (15th edn, 2012), para 11-147. 21 AK Investment CJSC v Kyrgyz Mobil Tel [2011] UKPC 7, [2012] 1 WLR 1804, [71]. 22 [2015] EWCA Civ 665.

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sustained within the jurisdiction, (as well as her needing to show that England was

the proper place to bring her claim). In the language of the principal judgment in

Brownlie:

‘At this point, I need to explain what is required to show a ‘good arguable

case’. To establish whether a good arguable case has been made out that

the claim falls within one or more of the jurisdictional gateways, the court

has to apply what has become known as the ‘Canada Trust gloss’.’

With all respect to the court, and while acknowledging the common law chains of

stare decisis hang heavily round some necks while others are unconstrained, no.

The courts of England, Canada and Egypt do not derive their jurisdictions from a

common instrument, equally applicable in each state, such that a jurisdictional

decision by the English court would dispose of the jurisdictional arguments which

might otherwise have been put to the other courts. The jurisdiction of the English

court depended on its being shown that England was the proper place to bring the

claim, with the result that any gateway question should also have been approached

in that light, according to the traditional common law principle of a good arguable

case, and very definitely not under the Canada Trust one.

As I suggested before, it doesn’t really get one anywhere to say that the ‘good

arguable case’ test is a flexible one, for the question is what the test requires of the

claimant in the particular context in which it arises for application. It gets one a

little further, but not far enough, to suggest that the good arguable case test of the

ground or gateway relied on at common law is one which varies according to

whether the disputed factor will be (that there was a contract, for example) or will

not be (that it was made within the jurisdiction) revisited at trial, but even that

seems to be based on sentiment rather than reason.

If therefore one asks what the ‘Canada Trust gloss’ would do or is doing to the

law of jurisdiction as applied in English courts, the answer comes in two parts.

First, it makes the assertion of jurisdiction at common law significantly more

difficult in cases in which England is shown to be the proper place to bring the

claim. This would make no rational sense at all. Secondly, in looking back to the

Regulation, if it is applied in its ‘much’ form, it makes it prevents a claimant who

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appears to be just ahead – but still ahead – on jurisdiction from proceeding in the

English courts, rather than in the courts of another Member State, from suing in

England. The principle of effectiveness should outlaw such an application of

English procedural law23 if indeed that really were English law. In the meantime,

authority is piling up which, one day, is going to have to be shovelled up and

taken away. It all appears to proceed from an assumption that the rules of

jurisdiction which have effect in an English court, and the procedure for dealing

with disputes as to the jurisdiction of an English court, are all alike. They aren’t.

As a footnote to this point, one may also reflect on the significance of procedural

timing. The English approach to all questions of jurisdiction is that they are

determined, once and for all, before the defendant is required to take, or actually

takes, a step towards defending the case on its merits. As to that, the thinking is

that if a defendant takes such a step, this shows an acceptance of the jurisdiction

of the court which is a clear and unambiguous and irreversible waiver of any

objection which might otherwise have been, or have been being, taken.24 In the

cases in which the conduct of the defendant is ambiguous or open to several

interpretations, the proper course is to give the defendant the benefit of the doubt,

requiring the act said to show a waiver of objection to jurisdiction to be examined

in its context, and to be clear and unambiguous when seen in that light.25 But

within the context of the Regulation, in the case of prorogation of jurisdiction by

agreement, the jurisprudence of the European Court requires that prorogation to

23 For a striking example of what the principle of effectiveness can do to national procedural law,

see C-166/73 Rheinmühlen-Düsseldorf v Einfuhr- und Vorratstelle für Getreide und Futtermittel

[1974] ECR 33; C-396/09 Interedil srl v Fallimento Interedil srl [2011] ECR I-9915, from which

it follows that the procedural rule of judicial precedent cannot require a judge at first instance to

follow a decision of the Court of Appeal which would otherwise bind him but which, in his or her

opinion might result in a mis-application of European law. For the proposition that national

procedural law as to res judicata must not impair (and on the facts, did impair) the European

principle of effectiveness, see C-32/12 Duarte Herros v Autociba SA EU:C:2013:637, [2014] 1 All

ER (Comm) 267; for a ruling that a rule of national procedural law restricting rights of appeal on a

question of jurisdiction must not impair (but on the facts, did not impair) the principle of

effectiveness in EU law, see Case C-413/12 Asociación de Consumadores Independientes de

Castilla y León v Anuntis Segundamano España SL EU:C:2013:800. The position in relation to the

European Convention on Human Rights, on which see Kay v Lambeth LBC [2006] UKHL 10,

[2006] 2 AC 465, [40]–[45], is of course different. 24 Though see, for a slight contrast, Deutsche Bank AG London Branch v Petromena ASA [2015]

EWCA Civ 226, [2015] 2 Lloyd’s Rep 15. 25 Sage v Double A Hydraulics Ltd [1992] Times LR 165; cf Deutsche Bank AG London Branch v

Petromena ASA [2015] EWCA Civ 226, [2015] 2 Lloyd’s Rep 15.

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be demonstrated clearly and precisely.26 The logic and organisation of the

Regulation requires that same standard to be applied when it is alleged that there

was prorogation by appearance before the court of a Member State: consent to the

jurisdiction of the court should be required to be shown clearly and precisely. It

does not seem correct that a technical foot fault will give the game away.

It is because the English court makes a final determination of common law

jurisdiction before it has ascertained the true state of the facts which bear on that

jurisdiction that it is necessary to set the standard which needs to be met at a

suitable level: the law cannot allow an unwilling defendant to be exposed to the

expense of a London trial on the bare say-so of the claimant. But as the court is

aware that it cannot at this stage know the true state of the facts, it asks, as Lord

Goff showed us, a question which does not depend on knowing the facts, and uses

that to do what it is now often referred to the ‘heavy lifting’. England has to be

shown, clearly and distinctly, to be the proper place to bring the claim. The beauty

of this formulation is that the court is not called upon to determine, or to pretend

to determine, fact which are in dispute and which cannot yet be established. The

common law now sets its face in a different direction, and asks a question which

seems both rational and, in most cases, fairly answerable. The more recent

approach of Lord Sumption in Abela v Baadarani to the rest of the common law

on jurisdiction, and which draws certain conclusions from this, seems to me, with

respect, to be spot on, and to be far preferable to any requirement that the claimant

have the better of the argument on the gateway point.

By contrast, where the jurisdictional rule relied on by the claimant – or the

competing jurisdictional rule pointed to by the defendant – is one of those in the

Brussels I Regulation or Lugano Convention, and as there is no possibility for the

court to ask itself whether it is the proper place for the trial of the action, and as it

must take its decision now, once, and for all time, a ‘better of the jurisdictional

argument’ approach is plainly the right one for the European context. Of course, it

might be different if the English court had, as some foreign courts have, power to

postpone the decision on jurisdiction until it has heard the evidence and argument

26 For example, C-387/98 Coreck Maritime GmbH v Handelsveem BV [2000] ECR I-9337, [13].

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on the substance of the case. In that procedural context the appropriate

jurisdictional rule might well be a different one. Against that background, one

may suggest that the decision to allow the matter to proceed to hearing would

depend on there being a good arguable case, in the traditional sense, but the actual

decision on jurisdiction, taken at the end of the hearing, would be based on an

ordinary civil balance or probability. Whatever the answer, though, the

jurisdictional rule by which the court determines its jurisdiction should take its

colour from the procedure by and in which the jurisdictional decision is taken.

As the law currently stands, the only exceptional case is the one in which the

parties agree, at the stage of jurisdictional challenge, that the court should resolve

a question – say whether there was a contract between the parties, or what its

governing law is – as though it were trying a preliminary issue. If the parties are

content to proceed in this way, the court will apply the ordinary civil standard, as

with any other preliminary issue; but if there is no such agreement, the claimant

cannot be required to go beyond the traditional standard of showing a ‘good

arguable case’, or having the better of the argument on the material available, as

the case may be. The court cannot, or cannot properly, insist on proceeding as

though making a final determination at the jurisdictional stage, no matter how

managerially efficient it might appear to be. But I cannot see the basis on which

the parties could agree to proceed on the basis that jurisdiction not be ruled upon

until the conclusion of the hearing of the merits of the claim. Perhaps it should

have it, but I do not see that it currently has it.

However, the general point is that the proper formulation of a jurisdictional

question, and of the test used to determine whether jurisdiction is available to the

claimant depends on (i) the inherent nature of the jurisdictional rule which the

court is called upon to apply, and (ii) the point in the proceedings at which the

court is to be asked to decide apply it. The specific point is that the proposition

that ‘Canada Trust’ gloss has any part to play in common law jurisdiction is and

always was founded on a conceptual mistake.

3 Interpreting individual rules of jurisdiction

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Common law: (Some) damage sustained in the jurisdiction

Regulation: Damage occurred within the jurisdiction of the court

In a case governed by the common law rules which is to be commenced by

service out with permission, in which a claim is made in tort, the court has

authority to grant permission if damage was sustained within the jurisdiction. For

those who prefer the imagery of the gateway, if a claim is made in tort the

jurisdictional gate is opened if damage was sustained within the jurisdiction, but if

the claimant, passing through the gate, is to be granted the permission he applies

for, he must show that England is the proper place to bring the claim. Turning

now to the Regulation, in a case governed by the provisions of the Regulation,

which is to be commenced by service where the court is said to have special

jurisdiction under Article 7 over a defendant domiciled in another Member State,

the court has special jurisdiction in a matter relating to tort or delict if the place

where the damage occurred is within the jurisdiction of the court.27 It may be a

fair question to ask whether ‘damage’ means the same thing in each context, but

the clear answer is that there is no reason why it should, and good reason why it

should not.

In the broad context of the Regulation, the particular function of the special

jurisdictional rules in Article 728 is to provide, by way of exception to a general

rule of domiciliary jurisdiction, a basis for adjudication which will, in general,

mean that there is a link of proximity to the facts and matters on which the claim

is founded. So what does ‘the place where the damage occurred’ mean ? To meet

the aims of the principle of proximity, and to reflect the fact that special

jurisdiction is an exception to the general jurisdictional rule, the damage, on the

occurrence of which the matter turns, must be immediate rather than

consequential, direct rather than indirect, primary rather than secondary. Special

jurisdiction may be founded where that damage actually manifests itself: C-

27 This being part of the interpretation of the jurisdictional rule on which 21/76 Bier BV v Mines de

Potasse d’Alsace SA [1976] ECR 1735 forms the point of departure. 28 The rationale for special jurisdiction under Article 8 is a different one, based more on the

coordination of judicial proceedings.

- 17 -

352/13 CDC Hydrogen Peroxide SA,29 but not where the claimant feels the

adverse consequences of damage which has occurred elsewhere.30 Article 7(2) is

plainly not satisfied when a person, injured corpore corpori in another Member

State, comes to England and suffers or pays for the consequences of that injury

here. No doubt the point is easier to see when physical injury is followed by

distinct financial costs than it is when the original loss is financial or otherwise

intangible, such as reputational: in such cases loss occurs, but not always in so

clearly a geographical sense, which can make the test a little harder to apply.

Special jurisdiction is an exceptional jurisdiction, and the nature of its application

as an exceptional rule, by means of Article 7(2), is to be deduced from the scheme

and purpose of the Regulation as a whole, and not from the particular

jurisdictional rule as a matter of linguistic interpretation.31 The Regulation as a

whole is designed to ensure that jurisdiction is clear and certain and that

exceptions to the domiciliary rule are restricted in nature and scope, as befits their

derogatory nature.

Where by contrast the English court is dealing with the common law rule of

jurisdiction created by paragraph 3.1(9) of the Practice Direction, and is asking

whether damage was sustained within the jurisdiction, it is really only asking this

question to open the gate to the real question, which is whether England is the

proper place to bring the claim. What, if anything, does that tell us about the

nature or meaning of ‘damage sustained within the jurisdiction’ ? To my mind it

seems to suggest something undemanding. In Metall & Rohstoff AG v Donaldson

Lufkin & Jenrette Inc32 the Court of Appeal read it to mean that some damage, but

not all of it, had to be sustained within the jurisdiction. According to a line of

High Court authority, starting with Booth v Phillips,33 this gateway was opened by

showing financial consequential loss, or a resultant loss of expected income,

within the jurisdiction. And after all if, as Lord Sumption observed (though the

point had not been judicially made at the time), the most important question was

29 C-352/13 Cartel Damage Claims (CDC) Hydrogen Peroxide SA v Akso Nobel NV

EU:C:2015:335. 30 C-47/14 Holterman Ferho Exploitatie BV v Spies von Büllesheim EU:C:2015:574. 31 See C-45/13 Kainz v Pantherwerke AG EU:C:2014:7, [2015] QB 34, [18]-[19], though any

number of judgments make the same point. 32 [1990] 1 QB 391. 33 [2004] EWHC 1437 (Admlty), [2004] 1 WLR 3292.

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whether England was the proper place to bring the claim, there is no need to strain

one’s muscles over the issue of damage and where it was sustained. Of course, if

the sustaining of some consequential damage were to form the only link to

England, it would not be surprising if England were not the proper place to bring

the claim, but this would just be an observation, not the application of a rule.

Though some of us may originally have been surprised by this interpretation of

sub-paragraph (9)(a), we can now more clearly see that it was entirely sensible,

and concede that the judicial instinct had been right all along. It therefore came as

a surprise, then, when the Court of Appeal34 all but overruled those cases and held

instead that ‘damage’ in sub-paragraph 9(a) meant the same as ‘damage for the

purpose of special jurisdiction’ as derived from the jurisprudence on Article 7(2)

of the Brussels I Regulation. Its decision to do so was regrettable.

The court may have considered that the term ‘damage’ performed a similar

function in the two jurisdictional systems, and that as a result, it should mean the

same thing in each context, but this would not be convincing. It is true that service

out is35 an exorbitant jurisdiction, and Article 7 is an exceptional jurisdiction, but

that does not carry the argument. The jurisdictional rules made by the organs of

the European Union owe nothing to, and take nothing from, the English common

law. Nor should they, for if it were necessary to interpret every jurisdictional term

in the Regulation in the light of the English common law, this would be equally

true of the light cast by the other 27 national laws, and we would all be driven

insane. And it would make even less sense to interpret the common law rules of

jurisdiction, overlaid as they are with a forum conveniens rule, in the light of a

European jurisdictional rule which operates in an entirely different manner. It is,

of course, true that there are precedents for this fallacy of distorting the common

law by using the Regulation to read it wrong. The Indian Grace (No 2)36 is a very

well known example of this flawed methodology, and Mr Teare QC’s exposure of

its inadequacy37 has never been answered, because it is unanswerable. But if this,

34 In Brownlie: [2015] EWCA Civ 665, [80], [91], endorsing the criticism expressed by the court

in Erste Group Bank AG (London) v JSC VMZ Red October [2015] EWCA Civ 279, at [104]-

[105], which had left the first instance decisions severely wounded but not formally overruled. 35 Or is said by some to be, and by others (on which, see Abela v Baadarani [2013] UKSC 44,

[2013] 1 WLR 2403) not to be. 36 [1998] AC 878. 37 [1998] LMCLQ 33.

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or something like it, were the justification for the approach taken by the Court in

Brownlie’s case, it is, with great respect, wholly misconceived. The answer which

the court should have reached on the interpretation of sub-paragraph (9)(a) would

have paid no attention to the case-law on the Brussels I Regulation. It would have

asked what ‘damage sustained’ should be taken to mean when it is used to unlock

the gate to the real common law enquiry, which is about the natural forum or

proper place for resolution of the dispute. The court should have understood and

applied the common law rules for what they are; it should not have been seduced

by the idea that ‘damage’ has one meaning, and one meaning only, when it used

as part of the laws on the jurisdiction of courts. It should have accepted that the

first instance cases to which I alluded were not so wrong after all.

It follows, of course, that the courts cannot properly use the jurisprudence of the

European Court on what is now Article 24(1) of Regulation 1215/2012 to

elucidate the Moçambique38 rule, or the cases on joinder of claims against

multiple defendants, some of whom are domiciled in other Member States, to

which Article 8(1) applies, to assess whether a proposed defendant out of the

jurisdiction is a necessary or proper party to a claim made against another

defendant. Likewise, of course, a national court cannot properly use the

jurisprudence of the European Court on the definition of ‘individual contract of

employment’, or ‘worker’, to illuminate national law: this seems necessarily to

follow from C-47/14 Holterman.39 For if a term of the Regulation is defined and

elaborated deliberately independently of national law, the answer given cannot be

of any relevance, still less authority, on the interpretation of national law.

In C-45/13 Kainz,40 the European Court pointed out that the true construction of

the rule of special jurisdictional for matters relating to a tort, now in Article 7(2),

was not coloured or affected by the Rome II Regulation on the law applicable to

non-contractual obligations. This is because each Regulation has its own

purposes, and each provision of a Regulation has to be interpreted according to

38 British South Africa Co v Companhia de Moçambique [1893] AC 602; cf Lucasfilm Ltd v

Ainsworth [2011] UKSC 39, [2012] 1 AC 208; Hamed v Stevens [2013] EWCA Civ 911, [2013]

ILPr 623. 39 C-47/14 Holterman Ferho Exploitatie BV v Spies von Büllesheim EU:C:2015:574. 40 C-45/13 Kainz v Pantherwerke AG EU:C:2014:7. This calls into question the methodology of

the Court of Appeal in Brownlie’s case at [83]-[84].

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the scheme and purposes of that Regulation, rather than by reference to something

else. If that is so for the non-relationship between two Regulations, it must be all

the more true for the non-relationship between European jurisdiction law and

national jurisdiction law. So although the common law rules may have a scope

which is now rather diminished, they still apply, where they apply, according to

their own scheme and purpose, which takes nothing from and gives nothing to the

Regulation. It is with that thought in mind that we can turn to agreements on

jurisdiction.

4 The nature of ‘agreements’ as to the jurisdiction of courts

Common law: Agreement as to jurisdiction

Regulation: Prorogation of jurisdiction by agreement

The Brussels I Regulation contains rules of direct jurisdiction, which is to say, a

list of circumstances in which the courts of a Member State have jurisdiction over

a defendant in relation to a claim and which they may be called upon by a

claimant to exercise. The simple task for the judge, if called upon to discharge it,

is to see whether the matter before him satisfies one of the available rules which

give his or her court jurisdiction, and proceed or not proceed accordingly.

One of these rules gives the court jurisdiction when the parties have agreed, in a

particular form, that the courts of a Member State are to have jurisdiction. There

may be a question as to the meaning of agreement, but once it is answered, then if

there is such an agreement the court will have jurisdiction which it must exercise,

when called upon to do so, unless that conclusion is overridden by an instruction

given by some other provision of the Regulation. The Regulation conceptualises

this as ‘prorogation’ of jurisdiction, and treats it, in Section 7 of Chapter II, as

being akin to submission by appearance.

The common law is otherwise. Jurisdiction follows or results from service, which

depends on presence or on persuading the court to permit service to be made out

of the jurisdiction. The function of an agreement as to jurisdiction under the

common law system is either to provide the basis for an argument that the court

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should not now exercise the jurisdiction which has already been established by

service made within the jurisdiction, because the parties agreed between

themselves not to have recourse to it, or to provide data for gateway and proper

place rules which define jurisdiction by service out with permission. English law,

and perhaps English lawyers, find it easy to understand what is going on in

contractual terms, and assess the validity and scope of the parties’ alleged

agreement in contractual terms, because a contractual analysis provides the most

useful data to guide the court in the exercise of its discretion. Questions of the

content, scope and validity of such agreements are questions of contractual

validity and construction, whose answer often begins with the identification of the

law which governs the contract of which the jurisdiction provision is a term. It can

get very complex.

But the Brussels I Regulation does not look on the issue of jurisdiction by

agreement as an inherently contractual matter; and it follows that there is no

reason to burden the question whether Article 25 of the Regulation gives

jurisdiction to the courts of a Member State with the theory and complexity of the

common law jurisprudence. Article 25 of the recast Regulation, as I read it,

simply asks whether a defendant whom it is proposed to sue outside the courts of

his domicile agreed (with the claimant or with others who include the claimant)

that he could be or should be sued in that court. In Hohfeldian terms, this appears

to mean that what we have to ask is whether the defendant relinquished his

jurisdictional privilege of being sued where he had a domicile, the correlative of

which would be that the claimant had no right to sue him anywhere else, and

assumed a jurisdictional liability to be sued, in relation to which the claimant

acquired a correlative power to sue him, in the named or prorogated court. All that

is needed is the waiver of privilege and the assumption of liability,41 which is, in

essence, a unilateral act done for the benefit of another party or parties, in the

form in which the Regulation provides for it to be done. None of that requires a

41 Alex Layton QC asked, very fairly and helpfully, how this could be said to be the explanation

for cases, falling under Article 25, in which no party has a domicile in a Member State: Article 25

applies, but no party has a jurisdictional privilege to give up. It is a fair point, but the answer

would have to be that the assumption of a (clear and unquestionable) liability to be sued in the

court named arises and binds a party who was not otherwise liable to be sued there, and the

general point therefore holds.

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contract to bring it about, though if the parties wish to formalise the waiver within

a contract, there is nothing to stop them.

It is instructive that French writers, starting with Droz,42 have always described

the process or prorogation for which Article 25 now provides as an élection de

for, using language which corresponds to the élection de domicile: essentially an

act of the party whose jurisdictional position is declared by him and put on record.

The only real difference seems to be that where the élection de for is concerned,

the other party, who will now have to sue in the designated court rather than in the

domiciliary court, has to concur, and that agreement may be consecrated in the

form of a clause attributive de jurisdiction. But it is pretty clear that élection de

for is separate and distinct from the clause attributive de jurisdiction in which that

élection may be stated, and that each is separate from the substantive contract, not

just in their effect, but also in terms of their conceptual foundation.

The European Court certainly behaves as though it does not see what is now

Article 25 as asking questions which are answered by using techniques taken from

the private law of contract; it has never said anything to the contrary. First, in

deciding whether Article 25 confers jurisdiction on the courts of a Member State,

the validity of the alleged agreement is not dependent on the validity of, or (it

seems) referred to the law which governs, the contract in which the relevant

provision may have been housed: several cases, including Benincasa43 have made

this clear.44 The national court must satisfy itself that consensus as to jurisdiction

can be clearly and precisely demonstrated, in terms of the formal requirements set

out in Article 25(1), as one would expect where it is argued that an important

domiciliary privilege has been foregone, but nothing more than that is needed.

Second, if it is sought to claim the privilege of relying on Article 25 against

someone other than the person who first assumed such jurisdictional liability and

gave the claimant that power, it must be shown that this other person has, clearly

and precisely, given his own consent to the nominated jurisdiction, so waiving a

42 Droz, Compétence judiciaire et effets des jugements dans le Marché Commun (1972). 43 C-269/95 Benincasa v Dentalkit srl [1997] ECR I-3767. 44 The innovation in Article 25, by which an agreement will not be effective if it is null and void

under the law of the Member State whose court has been identified, may be seen as further

confirmation that the issue is not contractual coupled with acceptance of a fait accompli: if the

designated court refuses to accept its designation, it would be daft to ignore it.

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privilege and creating a correlative liability of his own, except in the case in

which he has in law succeeded to or been substituted45 for the party who

originally assumed the jurisdictional liability so that they are, in effect, treated as

one and the same person. This seems to show that the ‘contract’ solution is no

more than an exception to the basic rule, which is that a person who is said to

have given up a privilege must have done it himself: the point is made explicit in

the Hydrogen Peroxide judgment.46 Third, in order to avoid the risk of a person

being taken by surprise by an agreement as to jurisdiction of which he may have

been less than completely aware, which would call into question the very idea that

he had given up a jurisdictional privilege, the requirements of Article 25 are

interpreted strictly (most recently in El Majdoub47), no matter what the law

governing the substantive contract might have said if it had spoken for itself.

And fourth, it now appears that the question of construction, which will determine

the material scope of this jurisdictional acceptance and waiver, are to be answered

without reference or recourse to the rules of a proper or governing law. Another of

the questions in Hydrogen Peroxide concerned the application of a jurisdiction

agreement to claims resulting from cartel activity. The Court gave no support to

the view that it was for the referring court to look to national law to interpret the

content and material scope of the agreement on jurisdiction as though it were a

contract. At [69]-[70], it said that:

‘the referring court must, in particular, regard a clause which abstractly

refers to all disputes arising from contractual relationships as not

extending to a dispute relating to the tortious liability that one party

allegedly incurred as a result of the other’s participation in an unlawful

cartel. Given that the undertaking which suffered the loss could not

reasonably foresee such litigation at the time that it agreed to the

jurisdiction clause and that that undertaking had no knowledge of the

unlawful cartel at that time, such litigation cannot be regarded as

stemming from a contractual relationship. Such a clause would not

therefore have validly derogated from the referring court’s jurisdiction.’

45 C-543/10 Refcomp SpA v AXA Corporate Solutions Assurance SA EU:C:2013:62, [2013] 1

Lloyd’s Rep 449. 46 C-352/13 CDC Hydrogen Peroxide, EU:C:2015:335, (supra, n 29) at [64], [65]. 47 C-332/14 El Majdoub v CarsOnTheWeb.Deutschland GmbH EU:C:2015:334.

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It seems that the referring court was told how the agreement was to be interpreted,

and choice of law did not come into it at all. One may fairly question whether

confirmation and general acceptance of this development would make the law

simpler (I rather fear it will not, if we are to develop a jurisprudence of what

claimants could not reasonably have foreseen). But it reflects a development,

foreshadowed in relation to special jurisdiction under Article 7(1),48 which would

see the Regulation as a full, perfect and sufficient answer to any jurisdictional

question falling within its scope. I have to say it: that does have some attraction.

To make the point again: the jurisdiction of an English court, where derived from

the common law principle that service creates jurisdiction, comes with an inherent

discretion which is in principle liable to exercised or not in the light of a

contractual agreement, which may itself be examined with the forensic care

generally applicable to contested contracts. And despite the fresh start which

Fiona Trust49 demanded, it is perfectly clear that complicated questions of

construction can still arise and make real demands on the court.50 In cases

excluded from the material scope of the Regulation, as well as those within its

scope but where jurisdiction is based on Article 6 and there is no material

connection with the courts of any other Member State, the court may proceed as

though the Regulation had never been made.

But where by contrast the jurisdiction of the English court is created and imposed

by the Regulation, and if the basis for that jurisdiction is said to be Article 25, the

court is called upon to ask the questions, and answer only the questions, which

Article 25 poses: in relation to this claim or matter, did the defendant consent,

clearly and precisely and in relation to the other party and in respect of this matter,

to the jurisdiction of the English court, thereby waiving the privilege of defending

the claim brought by that party in the courts of its domicile ? Where the

jurisdiction of the English court is or would be created and imposed by the

48 C-381/08 Car Trim GmbH v KeySafety Systems Srl [2010] ECR I-1255; C-47/14 Holterman

Ferho Exploitatie BV v Spies von Büllesheim EU:C:2015:574. 49 Fiona Trust & Holding Corp v Privalov [2007] UKHL 40, [2007] Bus LR 1719. 50 For a recent example, Trust Risk Group SpA v Amtrust Europe Ltd [2015] EWCA Civ 437.

Note, perhaps, that this was a case concerned with a jurisdiction agreement for the courts of a

Member State, but that the question whether the English court had jurisdiction (and the Italian

one did not) was addressed and answered without any explicit reference to the Regulation at all.

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Regulation otherwise than by Article 25, but it is contended that Article 25 gives

jurisdiction to the courts of another Member State, as a result of which the English

court may51 be deprived of jurisdiction, the material question is whether Article

25 gives exclusive jurisdiction to the courts of that other Member State, and it is

to be answered only by reference to the wording used in Article 25.

A little diversion, now. There is much more difficulty when the jurisdiction of the

English court is imposed by and taken on the basis of a provision in Chapter II of

the Regulation, other than Article 6, and there is a jurisdiction agreement for the

courts of a non-Member State. When that happens, we still do not really know

what the European lawmakers intend us to do. The idea that an English court has

an inherent discretion to set aside judicial jurisdiction imposed by European

statute is not intuitive, but the idea that a court can do nothing when it is satisfied

that the proceedings before it are brought in breach of contract is perhaps even

less intuitive. For some time it appeared arguable that a solution might be found in

a principle of reflexive effect, which is to say, by applying what is now Article 25

by analogy, but this suggestion, which found some support in French doctrinal

writing and at first instance,52 was treated very warily by appellate courts. It may

now have been holed below the waterline by the judgment of Lord Collins in the

Privy Council appeal in Singularis v PwC,53 where he took grave and persuasive

exception to the idea that a statute could be read and applied ‘as if’ it said

something which it didn’t say. It is not clear whether the objection made by Lord

Collins was confined to cases in which the statute was a Parliamentary one (in that

case, the Companies Act of Bermuda) or was a legal principle of more general

application. But Article 25 deals with cases in which there is a jurisdiction

agreement for a Member State court; and Articles 33 and 34 give explicit, though

limited, effect to agreements for the courts of non-Member States in situations of

lis pendens. Although none of these legislative rules directly excludes the

possibility of other effect being given to such agreements, they offer no

encouragement, either. It will not strike everyone as proper for the statute to have

51 ‘May’, because if proceedings are brought in another court, and the defendant enters an

appearance in that court, otherwise than to contest its jurisdiction, the jurisdiction of the court

prorogated by agreement will have been overridden as a result of prorogation by appearance. 52 A good example of this was in Ferrexpo AG v Gilson Investments Ltd [2012] EWHC 721

(Comm). 53 [2014] UKPC 36, [2015] 2 WLR 971; Briggs [2015] LMCLQ 179.

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any kind of effect - whatever the technical mechanism for its working may be - in

a case to which its wording might well have reached but plainly does not reach.54

So, what is to be done ? Assuming that something is to be done – while accepting

that not everyone agrees about that – the least provocative, but perhaps the only

remaining, solution may be to develop the idea that it is an abuse of the process of

the courts of a Member State to invoke a statutory jurisdiction which one has

contractually undertaken not to invoke. Why should that not simply be seen as an

abuse of the jurisdictional openness of the Regulation ? In the heady days between

the two wars when the Court of Appeal knew no fear, it would simply have called

such behaviour a fraud: see Ellerman Lines Ltd v Read,55 so finding in it the basis

for an argument about abuse of process is neither novel nor challenging. And it

would offer a solution which does not appear suggest that English courts are

granting themselves a common law licence to override a European statute. A

solution fashioned along these lines should survive scrutiny designed to ensure

that the principle of effectiveness of European law is not placed in jeopardy, even

in the light of the new Articles 33 and 34.56 It could not be stretched so far as to

provide the basis for an anti-suit injunction, of course, the grant of which is

precluded for other reasons, but a court still has power to prevent its process being

invoked in a way which is an abuse, and this may be what we should now do

when Regulation jurisdiction, available so far as the text of the Regulation is itself

concerned, is invoked in breach of a contractual promise not to do it.

And the European Court may, just possibly, be opening its door to admit an

autonomous principle of abuse to limit access to jurisdictional rules which are, if

read literally, available to the claimant. In Hydrogen Peroxide, it accepted that

Article 8(1) of the Regulation might be unavailable if the claimant and an anchor

54 The European Parliament (Resolution of 7 September 2010, point 16) advocated the giving of

reflexive effect to jurisdiction agreements for non-Member States; but when it came to legislation,

this was done only in very limited form by Articles 33 and 34, within the sole context of lis alibi

pendens. The 2005 Hague Convention, in force since 1 October 2015, currently only applies in

relation to Mexico, so that yields little of useful value. 55 [1928] 2 KB 144, 151 (Scrutton LJ). 56 Some commentators reject the contention, ultimately based on the expressio unius principle, that

the adoption of Articles 33 and 34 rule out the possibility of giving affect to a jurisdiction

agreement for a non-Member State in cases falling outside those articles: see Garcimartín in

Dickinson & Lein (eds), The Brussels I Regulation Recast (OUP 2015), para 9.14. If this view

prevails, there would be no need to rest the effect of such agreements on a principle of abuse.

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defendant had ‘colluded to artificially fulfil, or prolong the fulfilment of, that

provision’s applicability’. There are just some cases, and Hydrogen Peroxide may

have been one of them, in which insouciant recourse to an available rule of

jurisdiction is intolerable, but cannot be prevented by any other means. It must

surely be open to a defendant to say that the principle which underpinned the

claim for relief in that case also justifies a court in finding a jurisdiction,

otherwise available, to be unavailable in the event of a patent breach of contract.

We shall have to wait and see, but the shape of an acceptable answer may be

beginning to become clear.

The burden of the argument at this point is that although the common law and the

Regulation have rules of jurisdiction which specify when courts do and do not

have judicial power, and although the common law and the Regulation have rules

which provide for and give some effect to the work product of parties who have

demonstrated some form of consensus which relates to jurisdiction, they

understand jurisdiction and agreement, and draw jurisdictional consequences from

the conclusion that there was an agreement in the terms in which they each

interpret ‘agreement’, which are significantly, fundamentally, and unexpectedly,

different. That being so, the idea that one can allow the principles which apply to

the one to apply to the other is pretty obviously unsound; and where this

separation has not been clearly marked, confusion is likely to result.

5 Arbitration

Common law: Arbitration is agreement to resolve disputes by non-judicial means

Regulation: Arbitration means the operations and acts of arbitral tribunals

And so we come to the most troublesome of all: the meaning of arbitration, which

is to say, the meaning of whatever is the civil or commercial matter excluded by

Article 1(2)(d) from the domain of the Brussels I Regulation. No-one here will

need to be reminded of the grief which resulted from the decision in Allianz,57

(a.k.a. West Tankers) which decided that although an English court had been

57 C-185/07 Allianz SpA v West Tankers Inc [2009] ECR I-663.

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asked to grant an anti-suit injunction to give judicial force to a contractual

agreement to arbitrate and not to litigate, it had no right act where to do so would

interfere with proceedings in a civil or commercial matter before an Italian court.

It felt wrong, because if the entire subject matter of the English proceedings was

the arbitration agreement, as the European Court certainly accepted at para [23] of

its judgment, and if arbitration is excluded in its entirety from the scope of the

Brussels I Regulation, as it is, orders made in such a matter should be

unconstrained by the Regulation. Why, and not only as a matter of logic, were the

English proceedings, and the order sought in them, constrained by the Brussels I

Regulation ? The better answer may not be quite the one which Allianz gave, for it

is now clearer, that ‘arbitration’ has more meanings than one, and that while they

certainly overlap, the meanings are not congruent.

Even if it involves a little tidying up of earlier judgments, we can now see why the

natural English assumption about the meaning of ‘arbitration’ was wrong. In

Gazprom58 the European Court held that there was nothing in the Brussels

Regulation to prevent an arbitral tribunal in Stockholm requiring – by means of an

award – a party to an arbitration agreement to discontinue legal proceedings

brought by it in a civil or commercial matter before the courts of Lithuania (that

is, before the courts of a foreign country), and there was nothing in the Regulation

to prevent a court in Lithuania giving judicial force locally to the award of the

Stockholm tribunal. The European Court was careful to point out that the

description of the Stockholm tribunal’s award as an ‘anti-suit injunction’ was that

of Lithuanian court; it evidently did not adopt that characterisation as its own. In

the European Court’s apparent analysis, it was not an anti-suit injunction because

it was not a judgment but an award. If a court in a Member State gives judgment

to give or add judicial force to the award, the resulting judicial is not a judgment

within the scope of the Brussels I Regulation, either: a fact which we had known

ever since Professor Schlosser explained it to us.59

The European Court reasoned that as an arbitral tribunal is not a court, it has no

obligation under European law to abide by the principle of mutual respect for the

58 C-536/13 Gazprom OAO EU:C:2015:316, [2015] 1 Lloyd’s Rep 610. 59 [1979] OJ C59/71, [65].

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judicial institutions of the Member States. It is not a judicial institution; its

personnel are not judges; and its outputs are not judgments. The work of tribunals

is conducted in a parallel universe in which the Regulation, for good or ill, does

not apply. The trickier question arises when a court gets involved. However, when

a court exercises its judicial power to give effect to an award, it acts in a role

which is ancillary to, and not separate from, the arbitration and the award, and

which is local in effect. Likewise, it seems, when prior to an award the court acts

to populate or depopulate the tribunal, even by making orders against persons not

domiciled in the United Kingdom, and in this sense extra-territorial,60 or to assist

the work of the tribunal by securing, for example, the availability of evidence for

it, it acts in a manner auxiliary to the arbitration and so acts outside the scope of

the Regulation.

By contrast, when the court takes over the issuing of orders and directions in the

exercise of original judicial power, such as by issuing an injunction against a

person who should not be suing because they agreed to arbitrate, it is not so

obviously supplying support services to, or perfecting the work of, the tribunal: a

point which is all the more obvious if no tribunal has yet been constituted. It is

acting in the exercise of original or inherent judicial power, in a civil or

commercial matter, and is therefore acting within the framework of the

Regulation. To be sure, it may be acting to ensure that a future award is more

effective, but its order neither affects the work of the tribunal as such, nor

originates in an award made by the tribunal; and if this is so, its jurisdiction to act

is defined and limited by the Regulation. This may be thought to find an echo in

the judgment of Lord Mance in the Kamenogorsk61 case. The positive agreement

to arbitrate is one thing, but the negative agreement not to bring proceedings in a

court, even if the other side of the coin, is another. As he said:

An agreement to arbitrate disputes has positive and negative aspects. A

party seeking relief within the scope of the arbitration agreement

undertakes to do so in arbitration in whatever forum is prescribed. The

(often silent) concomitant is that neither party will seek such relief in any

60 C-190/89 Marc Rich & Co AG v Soc Italiana Impianti SpA [1991] ECR I-3855. 61 Ust-Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk Hydropower Plant LLP

[2013] UKSC 35, [2013] 1 WLR 1889.

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other forum…In each case, the negative aspect is as fundamental as the

positive’.

This insight, that there are two agreements in what may appear to be one, is really

rather helpful to the present analysis. When a party applies to court for an anti-suit

injunction, it is not enforcing the positive agreement to arbitrate, but the other,

negative, often silent, obligation not to sue before the courts of another Member

State, and this may very well be what places it outside Article 1(2)(d) and so

inside the material scope of the Regulation.

Now if one understands arbitration as a complex contract concerning the

resolution of disputes, that is to say, as comprehending the making, the

performance, and the enforcement of the positive and negative, express and

implied, obligations of that contract, and defines it accordingly, it is easy enough

to see why court proceedings of the kind in Allianz would appear to have

arbitration – that complex contract – as their subject matter.62 But if instead one

defines arbitration as the procedure conducted before a tribunal which may from

time to time issue awards, one may see why Gazprom was outside the scope, but

Allianz within the scope, of the Regulation. If arbitration is conceived in terms of

arbitrators and their work as such, what happened in Allianz – to use language

encountered in various places in the Regulation – may have related to a future

arbitration, but did not have arbitration, as distinct from the counterpart promise

not to sue in the courts of another country, as its object. It was not therefore within

the scope of Article 1(2)(d).63

That, at least, is how I would read Gazprom and its elucidation of the meaning of

‘arbitration’. No doubt there is another way, which would be to argue that what

was inadmissible in Allianz was the extra-territorial judicial instruction or demand

issued by the English court, and that this extra-territoriality was what made the

English judgment incompatible with the underlying economy of the Regulation.

62 It is certainly true that this view gains support from paras [22] and [23] of the judgment in

Allianz. 63 For an arguably analogous approach to what it now Article 24(5) of the Regulation, see C-

261/90 Reichert v Dresdner Bank AG (II) [1992] ECR I-2149; see also, from a completely

different context, but which may betray a parallel judicial instinct, Mercedes-Benz AG v Leiduck

[1996] AC 284, 299.

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The trouble with the sufficiency of that as a complete explanation is that the order

made in Marc Rich was, in some sense, one with extra-territorial effect: it

involved and upheld a judicial summons to an Italian entity, otherwise immune to

the jurisdiction of the English court, which had failed to appoint an arbitrator and

threatening to take the matter out of its hands. In Gazprom, the issue of extra-

territoriality might have been critical if the Stockholm tribunal were to have

ordered a cessation of legal proceedings, and an application to give effect to its

award had been made in a country other than that in which proceedings were

taking place. But given the ubiquity of the New York Convention, that seems

fairly unrealistic.

Even if we do not yet know everything, we know more than we did. If Article

1(2)(d) excludes what the Regulation defines as arbitration, as distinct from what

English law might regard as arbitration, then one on view, Gazprom means that

the matter before the English court in Allianz was civil or commercial in nature

(which we knew) and not excluded by Article 1(2)(d) from the scope of the

Regulation because it did not involve, or did not have as its object, the work,

proceedings, or acts of the tribunal. Of course, if that is correct, it may be argued

that a decree of specific performance, ordering a party to an arbitration agreement

to cooperate with the work of the tribunal, would be outside the scope of the

Regulation.64 But there is a debate for another day.

6 Conclusion

There is little time for a conclusion, and little point in reiteration: there has been

plenty of that as we have been going along. The general theme is, however, that

the rules of European private international law (and the rules of procedural law

which support them), and the rules of common law private international law (and

the rules of procedural law supporting them), are separate and entirely distinct one

64 There is certainly a connection here to the decision of Flaux J in Starlight Shipping Co v Allianz

Marine & Aviation Versicherungs AG [2014] EWHC 3068 (Comm), [2014] 2 Lloyd’s Rep 579,

though that case was not concerned with arbitration. The fact that the order comes with an implied

threat of penalty may give pause for thought, in the light of paragraph [40] of the judgment in

Gazprom, but it may take a while for all the consequences of Gazprom, in particular, to be fully

teased out.

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from the other, and must be kept that way: autonomous in meaning, and

autonomous in operation.

It may be tempting to hope that the two streams of private international law

should somehow flow together in an English court, or to accept that as rules of

procedure are not harmonised by European legislation, the English rules are

uniform and apply in a uniform way. But the merger or fusion of the two systems

of private international law would be incompatible with the very nature of each of

them; and to treat rules of procedural law as being indifferent to the scheme of

private international law to which they are ancillary would be to make a different

version of the same mistake. Most of the time this separation in thought and

function occurs naturally, effortlessly, and flawlessly; and this daily

demonstration of excellent deserves the warmest of warm applause. When

confusion creeps in, it gives us the duty and the opportunity to think about what

went wrong, and why, and that is not unhelpful. But for all that we only ever learn

from our mistakes, it would still be better if lectures like this, as nerve-jangling to

give as they are, as I fear, bothersome to endure, were not needed.