Insured Financial Structures Ltd v Elektrocieplownia Tychy SA
| Jurisdiction | England & Wales |
| Judge | THE LORD CHIEF JUSTICE,LADY JUSTICE HALE,LORD JUSTICE LATHAM |
| Judgment Date | 28 January 2003 |
| Neutral Citation | [2003] EWCA Civ 110 |
| Date | 28 January 2003 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | A2/2002/1525 |
[2003] EWCA Civ 110
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(SIR OLIVER POPPLEWELL)
Royal Courts of Justice
The Strand
London
The Lord Chief Justice of England and Wales
(The Lord Woolf Of Barnes)
Lady Justice Hale and
Lord Justice Latham
A2/2002/1525
MR GUY PHILIPPS QC (instructed by Messrs Nicholson Graham & Jones London EC4N 6AR) appeared on behalf of THE APPELLANT
MR JOHN HIGHAM QC (instructed by Messrs Stephenson Harwood, London EC4M 8SH) appeared on behalf THE RESPONDENT
Tuesday 28 January 2003
This is a second appeal by the defendant/appellant, Elektrocieplownia Tychy SA, against an order of Sir Oliver Popplewell, sitting as a Deputy Judge of the High Court of Justice of the Queen's Bench Division, of 21 June 2002. The judge allowed the appeal of the claimant/respondent against the order of Master Eyre dated 3 May 2002. The Master had declared that the English courts had no jurisdiction to try the claim which had been brought by the claimants.
On the appeal the sole issue is whether a contract which provides that the parties agree on the non-exclusive jurisdiction of the courts of Poland have thereby, because of the provisions of Article 17.1 of the Lugano Convention on Jurisdiction and Enforcement of Judgment in Civil and Commercial Matters, in fact conferred exclusive jurisdiction on Poland.
The Facts
The respondent company is registered and carries on business in England and Wales. The appellant is a state-owned Polish company. On 23 October 2000, by an agreement in writing between the parties, it was agreed that the respondents were to provide corporate financial advisory services to the appellant in connection with the financing of electricity generating plants in Poland. Clause 11 of the agreement states:
"Each party agrees to the non-exclusive jurisdiction of the courts [of Poland] in connection with any disputes arising out of this agreement."
The appellants failed to meet their obligations to make payments under the agreement. On 20 April 2001, they gave notice of termination.
Article 17.1 of the Lugano Convention on Jurisdiction and the Enforcement of Judgments provides, so far as material, that:
"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….
2. The court or courts of a Contracting State on which a trust instrument has conferred jurisdiction shall have exclusive jurisdiction in any proceedings brought against a settlor, trustee or beneficiary, if relations between these persons or their rights or obligations under the trust are involved.
3. Agreements or provisions of a trust instrument conferring jurisdiction shall have no legal force if they are contrary to the provisions of Article 12 or 15, or if the courts whose jurisdiction they purport to exclude have exclusive jurisdiction by virtue of Article 16.
4. If an agreement conferring jurisdiction was concluded for the benefit of only one of the parties, that party shall retain the right to bring proceedings in any other court which has jurisdiction by virtue of this Convention."
It is common ground that both parties are domiciled in Contracting States and that they have agreed that the court of a Contracting State, namely Poland, is to have jurisdiction to settle any disputes which may arise in connection with the contract between them. It is not common ground, so far as the respondent is concerned, that Poland has exclusive jurisdiction. For reasons which will become apparent hereafter, in indicating what is not common ground I refer only to the respondent.
Given the parties' express agreement that the jurisdiction of the Polish courts should be non-exclusive, Sir Oliver Popplewell came to the conclusion that the jurisdiction of the Polish courts was, as the agreement states, in fact non-exclusive. That is not a surprising conclusion. However, Mr Guy Philipps QC, in his very clear submissions to this court, argues that the proper application of Article 17 of the Lugano Convention requires this court to come to the conclusion that the only courts which have jurisdiction in respect of a claim by the respondent are indeed the Polish courts.
Initially, before I received assistance from Mr Philipps, it occurred to me that the simple explanation for the apparent tension on which Mr Philipps relies is that Article 17.1, when it refers to a "Contracting State", meant a Contracting State and not more than one Contracting State. However, such a view of Article 17.1 was not advocated by Mr Higham QC for the respondent, and Mr Philipps has satisfied me that that is not the proper approach to Article 17.1. Furthermore, if it were the right interpretation, it could lead to undesirable consequences because it would have the effect that the parties could not agree to two states having exclusive jurisdiction. At first sight the expression that a Contracting State has exclusive jurisdiction implies that no other state has jurisdiction. It is therefore necessary to inquire further into the effect of Article 17 of the Convention on the simple facts that have been placed before this court.
The starting point, in my judgment, must be the interpretation of the agreement which was made by the parties. I accept Mr Philipps' contention that the agreement has to be construed against the provisions of the Lugano Convention. However, if the matter is approached as one of English interpretation (which is the appropriate approach to adopt because that is what the contract expressly requires), then it seems to me that the parties undoubtedly intended by the words that they used that Poland was to have jurisdiction, but that that jurisdiction was not to be exclusive. Its effect was to be that Poland was to have jurisdiction in any event, but under the rules governing jurisdiction, where there was no express conferment of jurisdiction, jurisdiction should be applied in accordance with the provisions contained in the Convention which identify the relevant jurisdiction. In other words, the agreement should be regarded as expressly conferring jurisdiction on a number of contracting states, the identity of those contracting states (apart from Poland) being provided by the Lugano Convention itself.
The benefit of the express reference to Poland meant that that country was to have jurisdiction, even if it was not one which would have jurisdiction under the provision of the Lugano Convention in the absence of an express reference to Poland.
In coming to that view, I am helped by the authorities to which we were referred in the course of argument. The general intention of the Convention appears from the decision in A de Bloos, SPRL ( Case 14/76, 6 October 1976), where the European Court said:
"8. As stated in its preamble, the Convention is intended to determine the international jurisdiction of the courts of the contracting States, to facilitate the recognition and to introduce an expeditious procedure for securing the enforcement of judgments.
9. These objectives implied the need to avoid, so far as possible, creating a situation in which a number of courts have jurisdiction in respect of one and the same contract."
That decision of the European Court specifies the general purpose of the Convention, which is commendable.
In Meeth v Glacetal ( Case 23/78, 9 November 1978), the European Court said:
"5. According to the first paragraph of Article 17 'if the parties …. have...
To continue reading
Request your trial
- Thameside Construction Company Ltd v Stevens
-
Squibb Group Ltd v Vertase F.L.I Ltd
... ... the asbestos removal and demolition of existing structures at a site in Leamington Spa. It was a credit sub-contract, ... ...
-
ABB Ltd v Bam Nuttall Ltd
... ... has or has apparently led to a very substantial financial difference in favour of HKM but necessarily against the ... ...
- Aspect Contracts (Asbestos) Ltd v Higgins Construction Plc