Kuwait Oil Tanker Company SAK and another v Qabazard
| Jurisdiction | England & Wales |
| Judge | LORD HOBHOUSE OF WOODBOROUGH,LORD BINGHAM OF CORNHILL,LORD HOFFMANN,LORD NICHOLLS OF BIRKENHEAD,LORD MILLETT |
| Judgment Date | 12 June 2003 |
| Neutral Citation | [2003] UKHL 31 |
| Date | 12 June 2003 |
| Court | House of Lords |
[2003] UKHL 31
HOUSE OF LORDS
The Appellate Committee comprised:
Lord Bingham of Cornhill
Lord Nicholls of Birkenhead
Lord Hoffmann
Lord Hobhouse of Woodborough
Lord Millett
and others
My Lords,
I gratefully adopt and need not repeat the account given by my noble and learned friend Lord Hoffmann of the facts, history and issues in this appeal.
For reasons given by the House in the Société Eram case [2003] UKHL 30 I think it clear that the English court had no jurisdiction to make a garnishee order absolute in this case. Had the matter been one of discretion there were strong reasons for not making such an order, and Langley J was right to decline to do so.
This case, however, differs from Société Eram in one significant respect: that the United Kingdom is a party to the Lugano Convention, incorporated into English law by section 3A of the Civil Jurisdiction and Judgments Act 1982 as amended, and Switzerland (where the chose in action which the judgment creditors seek to attach is situated) is also a party. Thus the question of jurisdiction to make the order sought must be considered not simply as one of English law or private international law as applied in England and Wales but as one governed, or potentially governed, by obligations binding on the United Kingdom by virtue of international convention.
Two provisions of the Lugano Convention are relevant. First, article 16(5) confers "exclusive jurisdiction, regardless of domicile, … in proceedings concerned with the enforcement of judgments" on "the courts of the Contracting State in which the judgment has been or is to be enforced." Secondly, article 19 provides:
"Where a court of a Contracting State is seised of a claim which is principally concerned with a matter over which the courts of another Contracting State have exclusive jurisdiction by virtue of Article 16, it shall declare of its own motion that it has no jurisdiction."
Thus if the order which the judge was asked to make in this case involved the enforcement of a judgment he had no choice but to accept jurisdiction if the United Kingdom was the contracting state in which the judgment was to be enforced or renounce jurisdiction in favour of Switzerland if it was not.
The opinions of the House in Société Eram [2003] UKHL 30 indicate that Switzerland is the state in which enforcement will take place because it is there that the debt is situated upon which it is sought to execute. English authority points towards that conclusion: see, for example, Babanaft International Co SA v Bassatne [1990] Ch 13 at 35, 46. While the House was referred to no foreign authority which could be said to show international endorsement of that approach, such material as there is appears to support it rather than otherwise.
In his authoritative report on the Brussels Convention (Official Journal of the European Communities, No C59/1, 5 March 1979), Mr Jenard commented on article 16(5) of that convention (which is in the same terms in the Lugano Convention) in these terms:
"Enforcement of judgments
Article 16(5) provides that the courts of the State in which a judgment has been or is to be enforced have exclusive jurisdiction in proceedings concerned with the enforcement of that judgment.
What meaning is to be given to the expression 'proceedings concerned with the enforcement of judgments'?
It means those proceedings which can arise from 'recourse to force, constraint or distraint on movable or immovable property in order to ensure the effective implementation of judgments and authentic instruments'.
Problems arising out of such proceedings come within the exclusive jurisdiction of the courts for the place of enforcement.
Provisions of this kind appear in the internal law of many Member States."
The recourse to which the author refers would, on facts such as those here, take place in Switzerland. The judgment of the European Court of Justice in Denilauler v Snc Couchet Frères ( Case 125/79) [1980] ECR 1553 was not directed to the interpretation of article 16(5), but the observations in paragraph 16 of the judgment would apply with added force to execution:
"The courts of the place or, in any event, of the Contracting State, where the assets subject to the measures sought are located, are those best able to assess the circumstances which may lead to the grant or refusal of the measures sought or to the laying down of procedures and conditions which the plaintiff must observe in order to guarantee the provisional and protective character of the measures ordered."
The opinion of the Advocate General (Herr Lenz) in AS-Autoteile Service GmbH v Pierre Malhé( Case 220/84) [1985] ECR 2267 was to similar effect (page 2271):
"Furthermore, the particular areas which fall under Article 16, certain disputes regarding tenancies, companies, registers, industrial property and the enforcement of judgments, are matters which, because of their particular difficulty or complexity, require that the court having jurisdiction should be particularly familiar with the relevant national law."
Reichert and Others v Dresdner Bank AG ( Case C-261/90) [1992] ECR 1-2149 was a case concerned with article 16(5) of the Brussels Convention, among other articles. In the course of its judgment the European Court of Justice said (in paragraph 26):
"From that point of view it is necessary to take account of the fact that the essential purpose of the exclusive jurisdiction of the courts of the place in which the judgment has been or is to be enforced is that it is only for the courts of the Member State on whose territory enforcement is sought to apply the rules concerning the action on that territory of the authorities responsible for enforcement."
It would appear that very much the same...
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