Molins Plc v GD SpA
| Jurisdiction | England & Wales |
| Judge | Nourse,Aldous,Potter L JJ |
| Judgment Date | 16 March 2000 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 March 2000 |
Court of Appeal (Civil Division).
Nourse, Aldous and Potter L JJ.
Stephen Males QC and Iain Purvis (instructed by Bristows) for the claimant.
Michael Silverleaf QC and Ian Karet (instructed by Linklaters) for the defendant.
The following cases were referred to in The judgment of Aldous LJ:
Assurances Generales de France IART v Chiyoda Fire & Marine Co (UK) LtdUNK [1992] 1 Ll Rep 325.
Dresser UK Ltd v Falcongate Freight Management LtdELR [1992] QB 502.
Ferrarini SpA v Magnol Shipping Co Inc (“The Sky One”)UNK [1988] 1 Ll Rep 238.
Neste Chemicals SA v DK Line SA (“The Sargasso”) [1994] CLC 358.
Turner v Grovit [1999] CLC 1281; [2000] QB 345.
Zelger v SalinitriECAS (Case 129/83) [1984] ECR 2397.
Stay of proceedings — Related actions — Service by fax — English and Italian proceedings between same parties — Italian proceedings served in England by fax — Whether fax service was good service under English or Italian law or Brussels Convention — Whether Italian court first seised of proceedings — Whether English proceedings to be stayed — Convention Regarding Legal Proceedings in Civil and Commercial Matters 1930, art. 3, 4 — Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters 1970, art. 15 — Civil Jurisdiction and Judgments Act 1982, Sch. 1 (Brussels Convention), art. 21.
This was an appeal by the claimant, “Molins”, from a judgment of Pumfrey J that an Italian court was already seised of the dispute between the parties so that the English court was bound to stay the proceedings under art. 21 of the Brussels Convention.
In 1992 Molins entered into a licence agreement with an Italian company, “GD”, granting GD a licence to use Molins' technology under certain patents. The agreement was governed by English law and required GD to pay minimum annual royalties. GD failed to pay royalties due under the agreement. In 1998 Molins requested payment. GD replied that it had entered into the agreement on the basis of representations which had proved to be false with the result that GD was entitled to rescind the contract. In June 1999 Molins sent a letter before action to the English solicitors acting for GD and in July Molins issued a claim form. The solicitors said that they were not instructed to accept service. Before Molins could serve the claim form in Italy GD applied to the Italian court for permission to serve Italian proceedings seeking rescission of the licence agreement. GD obtained authorisation from the Italian court to serve the proceedings on Molins in England by fax on the basis that Molins was attempting to escape service. GD sought a stay of Molins' English proceedings on the basis that the Italian court was the court first seised under art. 21 of the Brussels Convention. Pumfrey J held that although the permission to effect service by fax had been obtained on a wrong basis, the Italian proceedings were on foot and the service could be retrospectively validated. On that basis the Italian court was the court first seised and the proceedings had to be stayed under art. 21, at least until the Italian court considered its jurisdiction. Molins appealed arguing that the service was not good service under English or Italian law for the purposes of the Brussels Convention and that accordingly the Italian court was not seised of the proceedings. GD submitted that the transmission by fax of the Italian proceedings constituted good service under r. 6.2(1)(e) of the Civil Procedure Rules which was an accepted form of service under art. 15 of the 1970 Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters; alternatively the service by fax was in accordance with art. 4 of the 1930 Convention between the UK and Italy for the regulation of Legal Proceedings in Civil and Commercial Matters.
Held, allowing the appeal and discharging the stay:
1. As the judge held, the fax service on Molins did not comply with Pt. 6 of the CPR. Molins had not indicated in writing that it was willing to accept service by fax and the fax number to be used for the purposes of para. 3.1(1) and 3.1(3)(a) of the Pt. 6 Practice Direction. The inclusion of its fax number on its headed paper did not express a willingness to accept service by fax.
2. Because there was no good service under the CPR there was no good service under art. 4 of the 1930 convention between Italy and the UK or under the provisions of art. 15 of the 1970 Hague Convention. As the judge held, art. 4(b) permitted service by an agent appointed by the Italian court and the fax was sent by such an agent, but art. 4 did not permit a means of service which was not good service in the country in which service was effected. A document served under art. 4 had to be served in accordance with the rules for service in the CPR. Likewise art. 15 of the 1970 Hague Convention permitted service only by a method prescribed by English law.
3. Under Italian law proceedings only became definitively pending on service. Before the Italian court could be seised of the action the proceedings had to be served on Molins in accordance with art. IV of the Protocol to the Brussels Convention. The judge was wrong to decide the case on the basis that irregular service could be retrospectively validated by the Italian court. The determination of which court was seised could not depend on what would happen in the future. Until retrospective validation the Italian proceedings were not definitively pending. It followed that the Italian court was not seised. There was accordingly no ground for a stay. (Assurances Generales de France IART v Chiyoda Fire & Marine Co (UK) LtdUNK[1992] 1 Ll Rep 325applied.)
4. It was not necessary to decide whether GD's conduct in obtaining the permission of the Italian court to effect service by fax on a false basis was an abuse of the process of the English court.
Aldous LJ: 1. The issue in this appeal is whether the English court is bound to stay these proceedings because of the application of art. 21 of the Brussels Convention 1968 which was incorporated into English law by the Civil Jurisdiction and Judgments Act 1982.
2. On 18 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 cl. 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 cl. 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.
3. On 14 August 1998, Molins wrote to GD requesting payment of the minimum royalties due under the agreement. After correspondence, GD wrote on 30 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.
4. On 22 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 30 June 1999 Linklaters replied stating that they would seek instructions and on 6 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.”
5. On 7 July 1999 Linklaters wrote stating that they were still awaiting instructions from GD.
6. On 13 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.”
7. On 15 July 1999 Linklaters replied stating that they were still awaiting instructions. On 21 July 1999, Linklaters wrote stating...
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