Glencore International AG v Shell International Trading & Shipping Company Ltd [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Rix J. |
| Judgment Date | 26 August 1999 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 26 August 1999 |
Rix J.
Queen's Bench Division (Commercial Court).
Conflict of laws — Stay of proceedings — Whether English proceedings should be stayed in favour of French proceedings because proceedings involved the same cause and object — Civil Jurisdiction and Judgments Act 1982, Sch. 1 (Brussels Convention), art. 21 — Rules of the Supreme Court, O. 17.
This was an application raising the question whether English proceedings should be stayed in favour of French proceedings under art. 21 of the Brussels Convention.
The second defendant, “Metro”, provided storage facilities for oil products in vessels stationed off Fujairah and also acted as an oil trader. In 1998 Metro collapsed. The English court appointed receivers to get in and preserve Metro's property and receivables. The plaintiff, “Glencore”, took proceedings in England against Metro and against “Shell” claiming the proceeds of sale of seven cargoes of oil which Shell bought from Metro before the collapse. Shell asserted no interest in the proceeds of sale and, having placed the proceeds in an escrow account, commenced interpleader proceedings under RSC, O. 17 against the various competing claimants to the proceeds, including a French bank which financed Metro's trade and claimed to be an assignee of the proceeds of sale of two of the relevant cargoes. The bank had taken proceedings against Shell in France and argued that since the French court was seised of those proceedings before Shell issued its interpleader summons the English proceedings against the bank should be stayed under art. 21 of the Brussels Convention on the basis that the French and English proceedings involved the same cause of action.
Held, dismissing the application:
1. The court applying art. 21 had to consider whether the proceedings had the same “cause”, meaning the same facts and rule of law as their basis, and the same “objet”, meaning the same end in view. ( Haji-Ioannou v Frangos [1999] CLC 1075 applied.)
2. A claim for interpleader relief under RSC, O. 17 was an application to be released from proceedings not a claim to any substantive right. If the relevant English proceedings for the purposes of art. 21 were the claim by the bank against Shell generated by Shell's application for interpleader relief then the “cause” of the English and French proceedings would be the same. If the relevant English proceedings were the application for interpleader relief as a whole, the “cause” would not be the same because the claim by the bank against Shell in England was a mere incident of the overall application and that application and the bank's Paris action did not have the same facts and rule of law as their basis, since the interpleader application depended on the existence of other adverse claims and the statutory machinery under RSC, O. 17.
3. In any event it was clear that the proceedings did not have the same “objet” because the essential issue in the bank's claim against Shell in France was whether Shell was liable to the bank for the price of the two cargoes bought from Metro, whereas the essential issue in Shell's application in England was not Shell's liability to the bank but whether the bank's claim was superior to that of other claimants. Accordingly the bank could not rely on art. 21.
The following cases were referred to in the judgment:
Blue Nile Shipping Co Ltd v Iguana Shipping & Finance Inc (“The Happy Fellow”) [1997] CLC 567; [1997] CLC 1391 (CA)
De La Rue v Hernu, Peron & Stockwell LtdELR [1936] 2 KB 164
Gubisch Maschinenfabrik KG v PalumboECAS (Case 144/86) [1987] ECR 4861; [1989] 1 CEC 504
Haji-Ioannou v Frangos [1999] CLC 1075
Sarrio SA v Kuwait Investment Authority [1996] CLC 211
Tatry v Maciej RatajECAS (Case C-406/92) [1995] CLC 275; [1994] ECR I-5439
Nicholas Hamblen QC and Michael Ashcroft (instructed by Clyde & Co) for Glencore.
Duncan Matthews and Julian Kenny (instructed by Holman Fenwick & Willan) for Shell International Trading.
Brian Dye (instructed by Barlow Lyde & Gilbert) for Metro.
Timothy Howe (instructed by Wilde Sapte) for Banque Trad Credit Lyonnais.
Theodore Goddard represented Credit Agricole Indosuez.
John Odgers (instructed by Kennedys) for National Bank of Fujairah.
Charles Priday (instructed by Hill Taylor Dickinson) for Texaco.
Rix J: This is an outing in complex multi-party litigation arising out of the failure of Metro Oil Corporation (“Metro”) which had operated an off-shore oil and oil products storage system out of large tankers stationed off the coast of Fujairah. Many large oil companies deposited their oil with Metro. Large parcels of that oil were refined in Metro's Fujairah refinery. Following Metro's failure, a very large number of conflicting claims have been made, by numerous different parties, to the oil and oil products which remained on the storage vessels or had been sold by Metro to third party buyers before its collapse.
In this action, 1998 Folio No. 336, the plaintiff, Glencore International AG, one of the principal oil claimants, sues Shell International Trading and Shipping Co Ltd (“Shell”), the first defendant, and Metro as second defendant, in respect of the proceeds of sale of seven cargoes of oil which Shell bought from Metro in early 1998. Shell asserts no interest in the proceeds of these sales, which it has deposited in an escrow account to await the outcome of these proceedings. It recognises, in other words, that it is liable to pay the price of these cargoes to someone. Its difficulty, however, is that a number of different claimants have asserted their right to these proceeds. Shell's only concern, therefore, is that it does not pay out to the wrong person and find itself liable to pay more than once. It has accordingly commenced interpleader proceedings in traditional form, claiming no interest in the proceeds save for its costs, affirming that it does not collude with any party, and asking to be absolved from playing any further part in the proceedings.
In relation to five of the seven relevant cargoes and all but one of the competing claimants, Shell's invocation of interpleader relief has presented no problems. Shell's application replicates a number of other similar proceedings, which in one form or another, whether by way of claim for interpleader relief, or by way of third party claim, have been generated by the collapse of Metro and been concentrated in London in connection with the receivership set up here by the Commercial Court.
One of the competing claimants, however, has objected to being involved in the London proceedings, and would prefer to have its claim against Shell disposed of in Paris. This is Banque Trad Credit Lyonnais (France) SA (“Banque Trad”). It claims against Shell on the basis of an alleged assignment to it from Metro of the proceeds of Metro's sale to Shell of the two relevant cargoes. Those are the cargoes of naphtha shipped on the River Spring and the River Dream in January 1998. Banque Trad relies on the fact that it commenced its proceedings against Shell in Paris, before the Tribunal de Commerce, on 6 March 1998 to allege that the Paris court is the first seised for the purposes of art. 21 of the Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters. That convention has been enacted into English law by means of the Civil Jurisdiction and Judgments Act 1982. It is in issue whether the Paris court was seised for the purposes of the Convention until Banque Trad's action was registered on 13 May 1998; but that was in any event before Shell's issue of its interpleader summons pursuant to RSC, O. 17, r. 3 on 7 December 1998, let alone its service on Banque Trad on 23 December 1998.
The question before me is whether, for the purposes of art. 21, Banque Trad's claim against Shell in Paris and Shell's claim for interpleader relief against Banque Trad (and other claimants) in London involve “the same cause of action”.
Article 21 provides as follows:
“Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Contracting States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.”
It will be observed that for art. 21's mandatory stay to operate, three questions must be addressed.
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(1) Do the proceedings involve the same parties?
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(2) Do the proceedings involve the same cause of...
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