Deutsche Bank AG London Branch (Respondent/Claimant) v Petromena ASA (in bankruptcy, represented by the chairman of the board of directors, Enterprise No. 987 727 713)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Floyd,Lord Justice Ryder,Lord Justice Longmore |
| Judgment Date | 18 March 2015 |
| Neutral Citation | [2015] EWCA Civ 226 |
| Docket Number | Case No: A3/2013/3142 |
| Court | Court of Appeal (Civil Division) |
| Date | 18 March 2015 |
[2015] EWCA Civ 226
The Right Honourable Lord Justice Longmore
The Right Honourable Lord Justice Ryder
and
The Right Honourable Lord Justice Floyd
Case No: A3/2013/3142
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
THE HONOURABLE LADY JUSTICE GLOSTER
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Richard Handyside QC and Mr David Murray (instructed by Allen & Overy LLP) for the Respondent/Claimant
Mr Alain Choo-Choy QC and Mr Henry Forbes Smith (instructed by Quinn Emanuel) for the Appellant/Defendant
Hearing dates: 11 th & 12 th February 2015
Introduction
This is an appeal by the first defendant, Petromena ASA ("Petromena") against the order of Gloster LJ (as she now is) refusing a declaration that the English Court has no jurisdiction over the claim. In this action the claimant, Deutsche Bank AG ("DB"), seeks declarations of non-liability in respect of claims which Petromena has brought against DB in Norway. Petromena says the English court has no jurisdiction to entertain DB's claim for a negative declaration.
DB contends by its respondent's notice that, whatever the position in relation to Petromena's grounds of appeal, the court now has jurisdiction as a result of events which occurred subsequent to the hearing before Gloster J. The critical event is that on 30 October 2013 Petromena filed a second acknowledgment of service. DB submits that, under CPR Part 11(8), the filing of this second acknowledgment of service amounts to a submission to the jurisdiction of the English court. It is logical to consider this point first of all, because if DB is right and Petromena has submitted to the jurisdiction, it is common ground that Petromena's grounds of appeal will be moot.
I start by setting out the chronology relevant to this point.
On 10 October 2012 Petromena filed a first acknowledgment of service on form N9, having ticked the box against the words "The Defendant intends to contest jurisdiction". This is one of four options available on the form, the other three allowing the defendant to indicate an intention to admit the claim, to defend all of the claim or to defend part of the claim. None of these were ticked.
On 7 November 2012 Petromena applied to the English court for an order declaring that it did not have jurisdiction. Gloster J (as she then was) heard the application on 4 March 2013. The judge reserved her judgment. On 3 September 2013 Gloster LJ (as she had by then become) circulated a copy of her draft judgment on Petromena's jurisdiction challenge to the parties' representatives, in accordance with the usual practice. The parties filed and exchanged written skeletons as to the appropriate form of order. In its written submissions Petromena asked for permission to appeal. Permission was opposed by DB. DB's draft order included a provision stating that "[Petromena] may file a further acknowledgment of service within 14 days". Petromena's representatives made no comment on this provision.
Judgment was formally handed down on 14 October. There was no formal representation in court at the handing down. Gloster LJ refused permission to appeal, and made an order including the provision permitting (but not requiring) Petromena to file a further acknowledgment of service within 14 days, as permitted by CPR Part 11(7)(b).
On the same day, 14 October 2013, Petromena filed an appeal to the Supreme Court of Norway. The appeal raised two issues: (i) whether the Norwegian (rather than the English) court was the court first seised of the matter and (ii) whether the causes of action in England and Norway were the same or related.
The sealed order disposing of the jurisdiction challenge was received by DB's solicitors on 28 October 2013. On 29 October 2013 DB's solicitors wrote to Petromena's solicitors in the following terms:
"As you will be aware, pursuant to CPR 11(7), the acknowledgment of service previously filed by your client ceased to have effect when the Court declined to make the declaration sought by your client. The Order provided, amongst other things, that your client could file a further acknowledgment of service within 14 days of the date of the Order. We understand from the Court that no such acknowledgment of service has yet been filed. As this 14 day period has now passed please confirm by return whether your client intends to file a further acknowledgment of service.
It appears that Petromena's solicitors had not yet received a copy of the sealed order because, by email on the evening of 29 October, they requested such a copy from DB's solicitors. DB complied with that request within an hour. The following morning, 30 October, Petromena's solicitors emailed that an acknowledgment of service was being filed with the court that morning.
On 30 October Petromena filed its second acknowledgment of service. A copy was provided to DB's solicitors. On the acknowledgment of service form only the box saying that Petrmomena intended to defend the whole of the claim was ticked.
On 31 October 2013 Petromena's solicitors wrote to inform DB of Petromena's intention to apply to this court for permission to appeal the order of Gloster LJ. The letter continued:
"as you will no doubt be aware, Petromena filed an appeal with the Norwegian Supreme Court on 16 October 2013 from the decision of Norwegian Court of Appeal on the issue of whether the Norwegian courts were first seised of this dispute.
Our client seeks Deutsche Bank's consent to a stay of the High Court proceedings pending the outcome of the abovementioned appeals. Given that either of the appeals may determine the issues in England, it is sensible that the underlying proceedings should be adjourned until those appeals are concluded."
DB's response on 1 November 2013, through its solicitors, was that there was no basis for any stay of the English proceedings. As to the English proceedings, in accordance with CPR 11(8) Petromena had submitted to the jurisdiction of the English court when it filed its second acknowledgment two days previously. An appeal would therefore be pointless. They added that they were not clear as to the basis on which the Norwegian appeal provided support for a stay of the English proceedings.
On 4 November 2013 Petromena filed an appellant's notice with this court seeking permission to appeal. By a letter of the same date its solicitors rejected the assertion that, by filing its second acknowledgment of service, Petromena had "somehow submitted to the jurisdiction in England". They expressed the view that the steps taken by Petromena were consistent with its position that the English court has no jurisdiction to hear the dispute.
In due course Petromena obtained permission to appeal to this Court. DB applied to set aside that permission under CPR 52.9 on the grounds that the appeal was moot given Petromena's submission to the jurisdiction. Tomlinson LJ, hearing the application as a single Lord Justice, considered that the point was better considered by the full court hearing the rest of the appeal.
I should first set out the provisions of Article 24 of the Lugano Convention and CPR Part 11.
"Article 24 Implied prorogation of jurisdiction
Apart from jurisdiction derived from other provisions of this Convention, a court of a State bound by this Convention before which a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 22."
CPR Part 11 provides:
"(1) A defendant who wishes to –
(a) dispute the court's jurisdiction to try the claim; or
(b) argue that the court should not exercise its jurisdiction
may apply to the court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have.
(2) A defendant who wishes to make such an application must first file an acknowledgment of service in accordance with Part 10.
(3) A defendant who files an acknowledgment of service does not, by doing so, lose any right that he may have to dispute the court's jurisdiction.
(4) An application under this rule must –
(a) be made within 14 days after filing an acknowledgment of service; and
(b) be supported by evidence.
(5) If the defendant –
(a) files an acknowledgment of service; and
(b) does not make such an application within the period specified in paragraph (4),
he is to be treated as having accepted that the court has jurisdiction to try the claim.
(6) An order containing a declaration that the court has no jurisdiction or will not exercise its jurisdiction may also make further provision including –
(a) setting aside the claim form;
(b) setting aside service of the claim form;
(c) discharging any order made before the claim was commenced or before the claim form was served; and
(d) staying the proceedings.
(7) If on an application under this rule the court does not make a declaration –
(a) the acknowledgment of service shall cease to have effect;
(b) the defendant may file a further acknowledgment of service within 14 days or such other period as the court may direct; and
(c) the court shall give directions as to the filing and service of the defence in a claim under Part 7 or the filing of evidence in a claim under Part 8 in the...
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