Molins Plc v G.D. S.p.A.
| Jurisdiction | England & Wales |
| Judgment Date | 16 March 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0316-9 |
| Docket Number | CHPCF 2000/0107/A3 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 March 2000 |
[2000] EWCA Civ J0316-9
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
(Mr Justice Pumfrey)
Royal Courts of Justice
Strand
London WC2
Lord Justice Nourse
Lord Justice Aldous and
Lord Justice Potter
CHPCF 2000/0107/A3
Mr S Males QC and Mr I Purvis (instructed by Messrs Bristows, London WC2) appeared on behalf of the Appellant Claimant.
Mr M Silverleaf QC and Mr I Karet (instructed by Messrs Linklaters, London EC2) appeared on behalf of the Respondent Defendant.
ALDOUS LJ:
The issue in this appeal is whether the English Court is bound to stay these proceedings because of the application of Article 21 of the Brussels Convention 1968 which was incorporated into English law by the Civil Jurisdiction and Judgments Act 1982.
The Facts
On 18th May 1992 Molins Plc, the appellants, entered into a written agreement with GD SpA, the respondents, which granted to GD an exclusive licence under certain patents and patent applications. The agreement was to be construed and interpreted under English law. Clause 3 set out the royalties that GD had to pay and clause 5 provided for payment of a minimum royalty which would be reduced if GD converted the licence to a non-exclusive licence. The effect of clause 5 was that the minimum royalties due under the agreement after 1994 were of the order of £100,000 to £150,000 per year. GD requested that the 1994 payment should be deferred. This was agreed subject to the payment of an additional £30,000. In 1995, 1996 and 1997 no royalties were paid.
On 14th August 1998, Molins wrote to GD requesting payment of the minimum royalties due under the agreement. After correspondence, GD wrote on 30th March 1999 to Molins alleging that the licence agreement had been entered into by them in reliance on representations which had proved to be false with the result that GD were entitled to rescind the agreement and to repayment of the royalties paid.
On 22nd June 1999 Bristows, the solicitors acting for Molins, wrote a letter before action to Linklaters, the solicitors acting for GD. That letter concluded in this way:
"Our client has instructed us to be prepared to commence proceedings against your client without further notice for the recovery of the monies owed to our client under the Licence Agreement should your client fail to pay those monies to our client within 14 days of the receipt of the faxed copy of this letter by you. Please could you confirm that you are instructed to accept service of said proceedings."
On 30th June 1999 Linklaters replied stating that they would seek instructions and on 6th July 1999 Bristows sent a reminding letter which stated:
"We refer to our letter of 22nd June 1999 in which we requested confirmation that you are instructed to accept service of proceedings on behalf of GD SpA. Please could we have your substantive response to this request."
On 7th July 1999 Linklaters wrote stating that they were still awaiting instructions from GD.
On 13th July 1999, Bristows issued a claim form seeking payment of the outstanding royalties in the sum of £523,600 and interest and on the same day wrote to Linklaters informing them of it. The letter pointed out that the claim form was valid for service outside the jurisdiction. It went on:
"… in order to avoid the unnecessary additional costs that would be associated with service in Italy, we would be grateful if you would let us know whether or not you are instructed to accept service of proceedings on behalf of GD SpA."
On 15th July 1999 Linklaters replied stating that they were still awaiting instructions. On 21st July 1999, Linklaters wrote stating that they were not instructed to accept service. Bristows therefore took steps to serve the claim form on GD in Italy. This was effected on 30th July 1999.
The letters written by Linklaters to Bristows gave no indication of what GD had in mind. On 19th July 1999 GD, without any letter before action or any prior indication of any kind, issued proceedings in the civil court of Bologna against Molins. Those proceedings sought rescission of the licence agreement, a declaration that no royalties need be paid and repayment of £105,000 being the sum paid by GD to Molins under the licence.
By an application dated 19th July 1999 to the presiding judge of the Court of Bologna, GD sought authorization to serve the writ of summons outside Italy by faxing it to Molins' fax number. The translation of the relevant parts of the application is as follows:
" TO THE PRESIDING JUDGE OF THE COURT OF BOLOGNA
Request of authorization to perform a service of process by fax
GD S.p.A (hereinafter, for the sake of brevity, referred to as "GD") with its registered office located in Bologna, via Pomponia n. 10, in the person of its present legal representative Mr Gian Carlo De Martis, acting in his capacity as Managing Director; represented and defended —according to the Power of attorney attached hereto marginally —by the lawyers Gian Paolo Di Santo from the Court of Milan and Pier Antonio Mareschi from the Court of Bologna; electively domiciled at the latter's office located in Bologna, Via D'Azeglio n. 21.
WHEREAS
-aforesaid company intends to start legal proceedings against Molins plc —an English company having its registered office located in Blakelands, Milton Keynes —with the purpose of obtaining the rescission of a licence agreement entered into by the applicant and by Molins on 18th May 1992, which has finally turned out to be inevitably vitiated by a mistake and to be therefore voidable;
-in spite of all the efforts repeatedly made by GD in order to settle the controversy amicably, Molins has recently escaped any contact with the applicant;
-the judicial paper being examined is to be translated into English;
-specially during the holidays it would be extremely easy for Molins to try and prevent the execution of the service of process according to the methods provided for by the international Agreements;
all this stated first
GD represented and defended as referred to herein in the caption
asks
for Your Excellency, the Presiding Judge of this Court, to authorize serving the writ of summons attached hereto in copy, together with the respective sworn translation into the English language to Molins plc, 11 Tanners Drive, Blakelands, Milton Keynes, Buckinghamshire MK145LU, by faxing it to the latter company's fax number: 0044–1908–218499.
Milan-Bologna, on this 19 th day of July 1999
Mr Gian Paolo Di Santo, lawyer
Mr Pier Antonio Mareschi, lawyer"
The application was granted by decree of the Judge dated 20th July 1999 and the fax transmission took place during the afternoon of 20th July 1999.
It is to be noted that the basis for the need for service by fax was two statements of fact. First that in spite of all the efforts reportedly made by GD to settle the controversy amicably, Molins had recently escaped any contact with the applicant, and second that during the holidays it would be extremely easy for Molins to try and prevent the execution of the service of process according to the methods provided for by the international agreements.
Pumfrey J in his judgment pointed out that both statements were obviously untrue and he proceeded on the footing that they were lies which should be condemned. Before us Mr Silverleaf QC, who appeared for GD, did not seek to suggest that the judge was wrong to proceed upon that basis. At no time had Molins escaped contact with the applicant. To the contrary, they were pressing for payment and their solicitors were in constant contact with GD's solicitors. Further, the holidays could have had no effect upon the ability of GD to serve the Italian proceedings upon Molins. Both statements were untrue and known to be untrue and were made for the purpose of deceiving the presiding judge of the Bologna Court.
On 3rd August 1999 Linklaters wrote to Bristows a letter which revealed the strategy of GD and why the false statements had been made to the presiding judge of the Bologna Court. It stated:
"GD has just been served with a claim form. Molins was served with Italian proceedings on 20 July 1999. These Italian proceedings involve the same cause of action as the English proceedings. The Italian courts are "first seised" of this action. Under Article 21 of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 (the "Brussels Convention") the English court must stay the English proceedings. Please confirm by return that you will stay the English proceedings."
On 25th August 1999 Linklaters wrote saying that they were preparing an application to challenge the jurisdiction of the English Courts. The application notice was issued on 2nd September 1999. It sought an order that the English action be stayed or set aside and a declaration that the court had no jurisdiction over GD in the matter. The reason given was that there were proceedings in Italy between the same parties relating to the same cause of action and that the Italian court was the court first seised. It followed that pursuant to Article 21 of the Brussels Convention the English courts should decline jurisdiction.
After evidence had been filed by the parties, the application came before Pumfrey J on 17th December 1999.
The Judgment
Before the judge GD submitted that the transmission by fax of the Italian proceedings constituted good service under Rule 6.2 (1)(e) of the Civil Procedure Rules which was an accepted form of service under Article 15 of the Hague Convention. Alternatively the service by fax was in accordance...
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