Brian Mcgowan V. Summit At Lloyds
| Jurisdiction | Scotland |
| Judge | Lady Cosgrove,Lord Marnoch,Lord Reed |
| Date | 12 June 2002 |
| Docket Number | X16/02 |
| Court | Court of Session |
| Published date | 12 June 2002 |
| EXTRA DIVISION, INNER HOUSE, COURT OF SESSION | |
| Lord Marnoch Lady Cosgrove Lord Reed
| X16/02 OPINION OF THE COURT delivered by LORD REED in APPEAL From the Sheriffdom of North Strathclyde at Paisley in the cause BRIAN McGOWAN Pursuer and Respondent; against SUMMIT AT LLOYDS Defenders and Appellants: _______ |
Act: Hofford; H.B.M. Sayers
Alt: Love; The Anderson Partnership
12 June 2002
[1]The pursuer is a bus operator. According to his pleadings, a number of his buses were destroyed in a fire in January 2000. He brought the present action in the Sheriff Court at Paisley against the defenders, seeking indemnification for his losses under a policy of insurance. The defenders pleaded in limine that the court had no jurisdiction, on the basis that the policy contained a clause conferring exclusive jurisdiction on the courts of England. That plea was repelled by the sheriff, and the present appeal has been brought against his decision.
[2]The pursuer's case proceeds upon the basis that the Sheriff Court has jurisdiction under article 5 of schedule 4 to the Civil Jurisdiction and Judgments Act 1982. Before considering that provision in particular, however, it may be helpful to place it in the context of the overall purpose and scheme of the 1982 Act.
[3]The 1982 Act radically altered the law of the United Kingdom, and that of Scotland in particular, in relation to the jurisdiction of courts and tribunals and the recognition and enforcement of external judgments. Its primary purpose was to give the force of law within the United Kingdom to the Brussels Convention of 1968 and related instruments. The 1968 Convention in turn had as its primary object to facilitate the reciprocal recognition and enforcement of judgments within the European Community . That objective was to be achieved inter alia by harmonising the rules of jurisdiction within the Community. The 1982 Act however went further than giving effect to the 1968 Convention. In particular, a potential difficulty arose from the fact that the Convention assigned jurisdiction to the courts of Contracting States, one of which was the United Kingdom: the Convention did not (in general) address the issue whether the courts of England and Wales, Scotland or Northern Ireland were to have jurisdiction. To solve this problem, the 1982 Act adopted a modified version of the scheme of jurisdiction set out in the 1968 Convention as the basis of a new set of rules for the allocation of jurisdiction among the courts of the different parts of the United Kingdom, in cases where the courts of the United Kingdom were entitled to assume jurisdiction under the 1968 Convention. Further, in relation to Scotland, the 1982 Act introduced a new set of rules of jurisdiction applicable when the rules of the 1968 Convention, or those of the scheme for the allocation of jurisdiction within the United Kingdom, did not fall to be applied. This new set of rules was itself largely based upon the rules of the 1968 Convention.
[4]At the risk of over-simplification, the scheme of the 1982 Act can be summarised as follows. Part I of the Act gives effect to the 1968 Convention, which is set out in schedule 1. Part II of the Act gives effect to the intra-United Kingdom scheme, the rules of which are set out in schedule 4. Part III of the Act gives effect to the new Scottish rules of jurisdiction, which are set out in schedule 8. It is Part II of the Act, and the scheme contained in schedule 4, which are relevant to the present case. Because these proceedings were begun before 1 March 2002 they are unaffected by the Civil Jurisdiction and Judgments Order 2001, by virtue of the transitional provisions contained in article 6.
[5]Schedule 4 is given effect by section 16 of the Act, which provides inter alia that schedule 4 is to have effect for determining, for each part of the United Kingdom, whether the courts of law of that part, or any particular court of law in that part, have or has jurisdiction in proceedings falling within the scope of the section. The section applies to proceedings where the subject-matter falls within the scope of the 1968 Convention and the defendant or defender is domiciled in the United Kingdom or the proceedings are of a kind mentioned in article 16 of the 1968 Convention. In the present case, the subject-matter falls within the scope of the 1968 Convention and the defender is domiciled in the United Kingdom (in England). Schedule 4 is therefore applicable. It contains a modified version of Title II of the 1968 Convention.
[6]In schedule 4, the general principle laid down by article 2 is that, subject to the provisions of Title II, persons domiciled in a part of the United Kingdom are to be sued in the courts of that part. Subject to the provisions of Title II, the defenders are therefore to be sued in the English courts. Article 3 permits persons domiciled in a part of the United Kingdom to be sued in the courts of another part of the United Kingdom, but only by virtue of the rules set out in sections 2, 4, 5 and 6 of Title II. Section 2 is headed "Special jurisdiction" and contains inter alia Article 5, on which the pursuer relies in the present case. Article 5 begins:
"A person domiciled in a part of the United Kingdom may, in another part of the United Kingdom, be sued:
(1)in matters relating to a contract, in the courts for the place of
performance of the obligation in question...".
(the words printed in heavy type are those resulting from modifications of Title II of the 1968 Convention by way of addition or substitution: section 16(2)(b)).
The pursuer's case that article 5 confers jurisdiction over the present proceedings on the Sheriff Court at Paisley proceeds on the basis that the place of performance of the defenders' obligation to indemnify him is his home address, which is within the Sheriffdom of North Strathclyde.
[7]Schedule 4 also contains provisions concerned with exclusive jurisdiction and with prorogation of jurisdiction. Section 5 is headed "Exclusive jurisdiction", and contains article 16. That article provides that, in certain specified proceedings, particular courts "shall have exclusive jurisdiction, regardless of domicile." An example is proceedings which have as their object the dissolution of a company: the courts of the part of the United Kingdom in which the company has its seat have exclusive jurisdiction. Section 6 is headed "Prorogation of jurisdiction", and contains inter alia article 17. The first paragraph of that article is in the following terms:
"If the parties...have agreed that a court or the courts of a part of the United Kingdom are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, and, apart from this Schedule, the agreement would be effective to confer jurisdiction under the law of that part, that court or those courts shall have...jurisdiction...".
(the dots indicate modifications of Title II of the 1968 Convention by way of omission: section 16(2)(a)).
[8]Article 17 of schedule 4 has been considered on a number of occasions in the Sheriff Court, and conflicting opinions have been expressed as to its effect. One view is that where schedule 4 is applicable, article 17 has the effect that a jurisdiction clause in a contract cannot create an exclusive jurisdiction, even if the clause purports to do so: any jurisdiction referred to in the clause must be concurrent with that of any other court which would have jurisdiction apart from the clause. Before this court, parties were agreed that this approach was mistaken. In view of the divergence of opinions expressed in the reported cases, however, we asked to be addressed on the point, with a view to offering guidance to lower courts. As this issue is logically anterior to the question of interpretation of the particular clause with which the present case is concerned, we shall begin by considering the effect of article 17.
[9]Article 17 of schedule 4 does not expressly stipulate that the jurisdiction to which it refers is necessarily non-exclusive: it merely provides that the court whose jurisdiction has been prorogated "shall have...jurisdiction". The argument that it prevents an exclusive jurisdiction from being created by agreement depends upon a comparison of article 17 of schedule 4 with other provisions. In particular, article 17 of schedule 4 is a modified version of article 17 of the 1968 Convention, which (as we have mentioned) appears in schedule 1 to the Act. In the 1968 Convention, article 17 begins as follows:
"1.If the parties, one or more of whom is domiciled in a Contracting State, have agreed that a court or the courts of a Contracting 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 exclusive jurisdiction."
The modified version of article 17 which appears in schedule 4 omits the word "exclusive".
[10]The effect of the word "exclusive" in article 17 of the 1968 Convention is a less straightforward question than it might seem at first sight. It appears, from a series of decisions of the European Court of Justice, that jurisdiction under article 17 is "exclusive" in the sense that it operates to the exclusion of any jurisdiction which might otherwise arise under articles 2 to 6 of the 1968 Convention (see e.g. Case 24/76, Estasis Salotti v. RUWA [1976] E.C.R. 1831; Case 23/78, Meeth v. Glacetal [1978] E.C.R. 2133). Differing views have been expressed on the effect, under article 17, of a non-exclusive jurisdiction clause, i.e. a clause providing for jurisdiction to be possessed by a particular court in addition to any other jurisdiction which might otherwise exist. One view is that such a clause comes within article 17 and can be given effect in accordance with its terms (see e.g. Kurz v. Stella Musical GmbH [1992] Ch. 196; Dicey...
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