Carl-Zeiss-Stiftung v Rayner & Keeler Ltd and Others (Original Appeal) and Rayner & Keeler Ltd and Others v Courts and Others (Cross Appeal)

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Reid,Lord Hodson,Lord Guest,Lord Upjohn,Lord Wilberforce
Judgment Date18 May 1966
Judgment citation (vLex)[1966] UKHL J0518-1

[1966] UKHL J0518-1

House of Lords

Lord Reid

Lord Hodson

Lord Guest

Lord Upjohn

Lord Wilberforce

Carl-Zeiss-Stiftung
and
Rayner & Keeler Limited and Others
(Original Appeal)
Rayner & Keeler Limited and Others
and
Courts and Others
(Cross Appeal)

Upon Report from the Appellate Committee, to whom was referred the Cause Carl-Zeiss-Stiftung against Rayner & Keeler Limited and others (Original Appeal) and Rayner & Keeler Limited and others against Courts and others (Cross Appeal), that the Committee had heard Counsel, as well on Wednesday the 1st, Thursday the 2d, Monday the 6th, Tuesday the 7th, Wednesday he 8th, Thursday the 9th, Monday the 13th, Tuesday the 14th, Wednesday the 15th and Thursday the 16th, days of December last, as on Monday the 24th, Tuesday the 25th, Wednesday the 26th, Thursday the 27th and Monday the 31st, days of January last, as also on Tuesday the 1st, Wednesday the 2d, Thursday the 3d, Monday the 7th, Tuesday the 8th, Wednesday the 9th, Thursday the 10th, Monday the 14th, Tuesday the 15th and Wednesday the 16th, days of February last, upon the Petition and Appeal of Carl-Zeiss-Stiftung, of Carl Zeiss Platz 1, Jena, Eastern Germany, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 17th of December 1964, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, and that the Petitioners might have the relief prayed for in the Appeal, or such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Petition and Cross Appeal of Rayner & Keeler Limited, whose Registered Office is at 32 Maddox Street, London, W.l, Degenhardt & Co. Limited, whose Registered Office is at 100 New Bond Street, London, W.l, and Carl Zeiss Stiftung of, and who carry on business at, Heidenheim/Brenz in the Federal Republic of Germany, praying, That the matter of the Order set forth in the Schedule thereto, namely, the said Order of Her Majesty's Court of Appeal of the 17th of December 1964, so far as therein stated to be appealed against, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order, so far as aforesaid, might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of Rayner & Keeler Limited, Degenhardt & Co. Limited and Carl Zeiss Stiftung, lodged in the said Original Appeal; and also upon the Case of Louis Courts. Philip Max Skelsey, Martin Roy Kagan, Montague Cohen, David Michael Blackburn and William Holmes, lodged in answer to the said Cross Appeal; and due consideration had this day of what was offered in these Appeals:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled. That the said Order of Her Majesty's Court of Appeal, of the 17th day of December 1964, complained of in the said Original Appeal, be, and the same is hereby, Reversed, and that the Judgment of the Honourable Mr. Justice Cross, of the 6th day of March 1964. thereby in part Discharged, be, and the same is hereby, Restored:

And it is further Ordered, That the Respondents do pay to the Appellants the Costs incurred by them in respect of the said Original Appeal to this House, such Costs to include the attendance of three Counsel on behalf of the Appellants and Plaintiffs in this House, the amount of such Costs to be certified by the Clerk of the Parliaments:

And it is further Ordered, That the Respondents do pay to the Appellants the Costs incurred by them in the Court of Appeal, such Costs to include the attendance of three Counsel on behalf of the Appellants and Plaintiffs in that Court:

And it is further Ordered, That the said Petition and Cross Appeal be, and the same is hereby. Dismissed this House as unnecessary: And it is further Ordered, That the Appellants in the Cross Appeal do pay to the Respondents in the Cross Appeal the Costs incurred by them in respect of the said Cross Appeal to this House, the amount of such Costs to be certified by the Clerk of the Parliaments:

And it is also further Ordered, That the said Original Appeal be, and the same is hereby, Remitted back to the Chancery Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.

Lord Reid

My Lords,

1

In this action the Appellants are seeking an injunction against the Respondents to restrain them from selling optical instruments under the name Carl Zeiss and for other relief. The present appeal arises out of a summons taken out by the Respondents on 7th February 1956 for an Order for a stay of proceedings and dismissal of the action on the ground that it was commenced and is being maintained without the Plaintiffs' authority. At various dates thereafter lengthy affidavits were filed and after long cross examination Cross J. on 6th March 1964 refused to stay the proceedings, having decided against the Respondents on the three grounds then put forward by them. The Respondents appealed and, having received new advice, put forward a new and quite different ground based on the non-recognition by Her Majesty's Government of the German Democratic Republic. The Court of Appeal on 17th December 1964 allowed the Respondents' appeal on this new ground and so found it unnecessary to reach any decision on the grounds maintained before Cross J.

2

I think that it will be convenient first to deal with the new point raised for the first time in the Court of Appeal and then to deal separately with the other grounds. The issues raised are complex and difficult and your Lordships are confronted with some 1,500 pages of affidavits, cross examination and documents. I shall therefore try to restrict my narrative to those matters which are directly relevant to the issues to be decided.

3

It is necessary to have the Appellants' history in mind. About 1846 Carl Zeiss founded an optical business in Jena. He later assumed as a partner Ernst Abbe of Jena University. Then they and Otto Schott founded a glass works. By 1891 Abbe was the owner of the whole (subject to Schott's interest) and he decided to set up a Stiftung or charitable foundation to own and carry on the two businesses under the name of the Carl Zeiss Stiftung. The main objects were to promote "precise technical industry"(which may not be an adequate translation) and to benefit the employees and the working population of Jena.

4

The constitution of the Stiftung was elaborately set out. First there was to be a Special Board for the administration of its estate and the supreme direction of its affairs and the rights and duties of the Special Board were to pertain to "that Department of the State Service of the Grand Duchy of Saxe-Weimar under which the affairs of the University of Jena are for the time being placed". Then "for directing the industrial operations of the Stiftung" there were to be "Boards of Management of the various establishments of the Stiftung for the time being" and a permanent official, the Deputy (Stiftungs Kommissar) was to be appointed to represent the Special Board on the Boards of Management and finally Article 113 provided:

"Should, in consequence of political changes in the State, the provision according to 5 of this Statute with reference to the representation of the Stiftung become untenable, this representation including the appointment of the Deputy of the Stiftung within the meaning of 5 and the statutory administration of the Carl-Zeiss-Stiftung shall be made over to that department of State, which with regard to the university of Jena occupies the place of the State Department of the Grand Duchy of Saxe-Weimar acting as Special Board, provided that its seat is in Thüringia, otherwise to the highest administrative authorities in Thüringia."

5

In 1918 under the Weimar Republic the Grand Duchy was abolished and a new State of Thüringia was set up: thereupon the Minister of Education of that State became the Special Board. Then after 1935 under the National Socialist régime his place was taken by a Reichs-Stathalter. And when Thüringia was occupied by American forces in 1945 a new provincial government of Thüringia was set up by them and its Ministry of Education became the Special Board. On 1st July 1945 by agreement between the allied powers Thüringia came under Russian occupation and the present controversy turns on what happened thereafter.

6

We do not have precise evidence about this but it is said that in 1949 the U.S.S.R. set up the German Democratic Republic to govern that part of Germany then occupied by Russia, and purported to make it an independent state. And it is further said that thereafter the German Democratic Republic purported to act as an independent state in legislating for and administering the Russian zone of Germany. That there is a body calling itself the German Democratic Republic and that it does operate in that zone is I think common knowledge. I do not think that common knowledge goes farther than that, but for the purposes of this appeal I am prepared to assume that the U.S.S.R. did purport to confer independence on the Democratic Republic and that that body does purport to act as if it were an independent state.

7

Shortly stated, the Respondents' case is that we are bound to have regard to the basis on which the Democratic Republic purports to act, and that, as Her Majesty's Government has never granted recognition de jure or de facto to that Republic or its government, we must refuse to recognise as effective all legislation emanating from it, and all acts done under such legislation. For reasons which I shall give later I do not think that that is right but first I...

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    ...court must be the same as that arising in the English proceedings: see, in particular Carl Zeiss Stiftung v Rayner C Keeler Ltd (No 2) [1967] 1 AC 853 ("the Carl Zeiss" case), The Sennar (No 2) [1985] 1 WLR 490" [Clarke LJ @ para 50 of the And later, at paragraph 54: "Th......
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    ...legal principles.[2] With reference to the leading House of Lords decisions in Carl Zeiss Stiftung v. Rayner & Keeler Ltd (No. 2) [1967] 1 AC 853 and The Sennar (No. 2) [1985] 1 WLR 490, the judge held that it would be “absurd” for an English court to give a determination by a foreign c......
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