AMT Futures Ltd v Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbh
| Jurisdiction | England & Wales |
| Judge | Lord Hodge,Lord Neuberger,Lord Mance,Lord Clarke,Lord Sumption |
| Judgment Date | 01 March 2017 |
| Neutral Citation | [2017] UKSC 13 |
| Date | 01 March 2017 |
| Court | Supreme Court |
[2017] UKSC 13
Lord Neuberger, President
Lord Mance
Lord Clarke
Lord Sumption
Lord Hodge
Appellant
Thomas de la Mare QC
Andrew Scott
(Instructed by Farrer and Co LLP)
Respondent
Hugh Mercer QC
Pierre Janusz
(Instructed by Zimmers Solicitors)
Heard on 5 and 6 October 2016
(with whom Lord Neuberger, Lord Mance, Lord Clarke and Lord Sumption agree)
This appeal concerns the interpretation of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("the Judgments Regulation"). The question is whether the English courts have jurisdiction to hear the claim by the appellant ("AMTF") against the respondent ("MMGR") for damages for the tort of inducing breach of contract.
AMTF is incorporated in the United Kingdom and is based in London. It provides services as a non-advisory, "execution only", derivatives broker for clients who wish to trade in derivatives and who are referred to it by introducing brokers. Among AMTF's clients were people who were domiciled in Germany, Austria, Switzerland or Belgium ("the former clients") and who were introduced to AMTF by independent brokers based in Germany ("the introducing brokers"). AMTF charged its clients commission for its service and paid commission to the introducing brokers.
About 70 former clients, who were dissatisfied with the financial results of their transactions, commenced legal proceedings in Germany against both the introducing brokers and AMTF seeking damages under the German law of delict. The claim against the introducing brokers was that they had given bad investment advice or had failed to warn of the risks of the investments. The claim against AMTF was based on a liability which was accessory to that of the brokers: it was alleged that AMTF had encouraged the brokers to behave as they did by paying them commission from the transaction accounts which it operated for its clients and that it owed and had breached a duty in delict (tort) to the clients to prevent any transactions being undertaken contrary to their interests. AMTF challenged the jurisdiction of the German court. But many of the former clients have recovered damages from AMTF by way of settlement. AMTF estimates that by August 2013 it had spent £2,191,881.68 on investigating the German claims, legal costs in Germany and England and settlement costs.
The agreements between AMTF and the former clients varied over time. But each contained clauses which provided (a) that English law would govern the rights and obligations of the contracting parties and the construction of their contract and (b) that the English courts would have exclusive jurisdiction in legal proceedings relating to the contract. AMTF asserts that the former clients have breached their contracts with it by raising legal proceedings against it in Germany and asserting rights under the German law of delict. AMTF has raised legal proceedings against many of the former clients seeking damages for breach of contract in the High Court in London.
MMGR is a company incorporated under the laws of Germany and carries on business as a firm of lawyers in Germany. AMTF alleges that MMGR induced the former clients to issue proceedings against it in Germany and to advance causes of action under German law, in breach of the exclusive jurisdiction and applicable law clauses in their contracts with AMTF. It has commenced proceedings in the High Court in London against MMGR, based on the English law tort of inducing breach of contract, in which it seeks both damages and injunctive relief to restrain MMGR from inducing clients to bring further claims in Germany asserting causes of action under German law. AMTF argues that the English courts have jurisdiction over its claim under article 5.3 of the Judgments Regulation, which gives jurisdiction in tort claims to the courts for the place in which the harmful event occurred or may occur. MMGR challenges the jurisdiction of the English courts to entertain this action. To that end MMGR applied for a declaration that the English courts did not have jurisdiction over it in respect of the subject matter of AMTF's claim.
Popplewell J in a judgment dated 11 April 2014 ( [2014] EWHC 1085 (Comm)); [2015] QB 699 refused MMGR's application and held that the English courts had jurisdiction. He decided that the relevant harm which gives rise to jurisdiction under article 5.3 occurred in England as AMTF had in each case been deprived of the benefit of the exclusive jurisdiction clause, which, he held, created a positive obligation on a former client to bring proceedings in England. The Court of Appeal in a judgment dated 26 February 2015 ( [2015] EWCA Civ 143; [2015] QB 699), in which Christopher Clarke LJ wrote the leading judgment, concluded that the English courts did not have jurisdiction as the relevant harm had occurred in Germany. The Court of Appeal were not enthusiastic about the conclusion which they felt compelled to reach as it meant the ancillary claim in tort against MMGR for inducing the breach of the contracts could not be made in the court which the contract breaker had agreed would have exclusive jurisdiction over the contract. Thus AMTF's claims against its former clients for breach of contract, which could proceed in England under the exclusive jurisdiction clauses of their contracts, would be separated from the ancillary claim against MMGR. AMTF appeals to this court against that judgment. It submits that the English courts have jurisdiction.
In order to address AMTF's challenge it is appropriate, first, to examine the relevant provisions of the Judgments Regulation and the authoritative case law on those provisions and, secondly, to consider how that case law applies to the facts of this case. Both AMTF and MMGR submit that the law is clear and is in their favour. In the event that this court disagrees with its interpretation, each of AMTF and MMGR seeks a reference to the Court of Justice of the European Union ("CJEU"). I therefore, thirdly, address the question whether in the light of developments of its jurisprudence it is necessary to refer a question of interpretation to the CJEU. In discussing the prior case law in this judgment I refer to both that court and its predecessor, the Court of Justice of the European Communities, by the acronym "CJEU".
The basic rule in the Judgments Regulation is that a person may be sued in the member state of his domicile. Article 2 provides:
"1. Subject to this Regulation, persons domiciled in a member state shall, whatever their nationality, be sued in the courts of that member state."
As the opening words of article 2.1 suggest, the basic rule of domicile is not an exclusive ground of jurisdiction. Other articles within the Regulation provide alternative grounds. Thus in article 5 there are rules concerning matters relating to contract and delict among others. Article 5 provides, so far as relevant:
"A person domiciled in a member state may, in another member state, be sued:
1.(a) in matters relating to a contract, in the courts for the place of performance of the obligation in question;
…
3. in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur; …"
Article 6 provides so far as relevant:
"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; …"
In relation to contracts conferring exclusive jurisdiction, article 23 provides:
"If the parties, one or more of whom is domiciled in a member state, have agreed that a court or the courts of a member state are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. …"
The CJEU has provided authoritative rulings on the Judgments Regulation and its predecessor, the Brussels Convention. Rulings on the interpretation of provisions of that Convention remain valid for the equivalent provisions in the Judgments Regulation: Zuid-Chemie BV v Philippo's Mineralenfabriek NV/SA (Case C-189/08) [2010] 2 All ER (Comm) 265, para 18. I discuss the earlier case law as if it addressed the latter provisions.
The Judgments Regulation contains rules of jurisdiction which are designed to promote legal certainty by allowing prospective litigants, whether claimants or defendants, to foresee with sufficient certainty which court will have jurisdiction. The aim of the Judgments Regulation is to prevent parallel proceedings between courts of different member states and thereby avoid or limit irreconcilable judgments and non-recognition of judgments. The compulsory system of jurisdiction which the Judgments Regulation creates is underpinned by the principle of mutual trust between the courts of the member states. For those propositions see, for example, Overseas Union Insurance Ltd v New Hampshire Insurance Co (Case C-351/89) [1992] QB 434, para 17; Erich Gasser GmbH v MISAT Srl (Case C-116/02) [2005] QB 1, paras 41 and 72; and Turner v Grovit (Case C-159/02) [2005] 1 AC 101, paras 24 and 28.
The general principle is that civil actions are to be brought against...
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