Mr Flavio De Carvalho Pinto Viegas and 1, 516 others v Mr José Luis Cutrale
| Jurisdiction | England & Wales |
| Judge | Mr Justice Henshaw |
| Judgment Date | 05 November 2021 |
| Neutral Citation | [2021] EWHC 2956 (Comm) |
| Docket Number | Case No: CL-2019-000603 & CL-2019-000727 |
| Year | 2021 |
| Court | Queen's Bench Division (Commercial Court) |
[2021] EWHC 2956 (Comm)
THE HONOURABLE Mr Justice Henshaw
Case No: CL-2019-000603 & CL-2019-000727
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
James Flynn QC, James Ramsden QC, David Went, Russell Hopkins and Anirudh Mathur (instructed by PGMBM, a trading name of Excello Law Limited) for the Claimants
Brian Kennelly QC, Paul Luckhurst and Gayatri Sarathy (instructed by Linklaters LLP) for the Defendants
Hearing dates: 21–23 June 2021
Draft judgment circulated 19 October 2021
Approved Judgment
| (A) INTRODUCTION | 4 |
| (B) BACKGROUND | 6 |
| (C) SUCOCÍTRICO CUTRALE: DOMICILE | 9 |
| (1) Legal framework | 9 |
| (2) Facts | 19 |
| (a) Constitutional documents | 19 |
| (b) Evidence of the position in practice | 28 |
| (c) Location of Family Board decisions | 43 |
| (3) Discussion | 45 |
| (D) SUCOCÍTRICO CUTRALE: SERVICE | 49 |
| (1) Legal framework | 49 |
| (2) Facts | 55 |
| (3) Discussion | 58 |
| (E) CUTRALE SR: DOMICILE | 60 |
| (1) Legal framework | 60 |
| (2) Facts | 66 |
| (3) Discussion | 69 |
| (F) CUTRALE JR: ARTICLE 6(1) LUGANO CONVENTION | 71 |
| (G) STAY | 74 |
| (1) Cutrale Snr: stay under Article 34 of Brussels Recast | 74 |
| (a) Applicable principles | 74 |
| (b) The proceedings in Brazil | 80 |
| (c) Whether the Brazilian courts were first seised, and pendency of claims | 89 |
| (d) Favero and Costa: ‘related’ and expediency tests | 90 |
| (e) Whether a judgment of the Brazilian courts would be capable of recognition and enforcement by the English courts | 95 |
| (f) Whether a stay is necessary in the interests of justice | 95 |
| (g) Overall conclusion and discretion | 103 |
| (h) Additional claimants in the Viegas claim | 103 |
| (2) Cutrale Jnr: stay under Article 28 of the Lugano Convention | 104 |
| (3) Sucocitrico: stay under Article 33 or 34 Brussels Recast | 105 |
| (4) Sucocítrico Cutrale and Cutrale Snr: forum non conveniens stay | 106 |
| (a) Principles | 106 |
| (b) Application | 109 |
| (H) CONCLUSIONS | 116 |
(A) INTRODUCTION
The Defendants apply, under CPR Part 11, to challenge:
i) the validity of service and jurisdiction in respect of the Third Defendant (“ Sucocítrico Cutrale”); and
ii) jurisdiction in respect of the First Defendant (“ Cutrale Snr”) and the Second Defendant (“ Cutrale Jnr”).
Sucocítrico Cutrale is a Brazilian company. Its principal business is producing orange juice in Brazil for export. Cutrale Snr and Cutrale Jnr are Brazilian citizens. They are shareholders in Sucocítrico Cutrale and sit on its ‘Family Board’, to which I refer in more detail below.
There are two claims before the court. Claim CL-2019-000603 ( the “Viegas claim”), originally issued on 27 September 2019, is pursued on behalf of 1495 individuals, 21 companies, and one foundation. Claim CL-2019-000727 ( the “Sanches claim”), issued on 22 November 2019, is pursued on behalf of 30 individuals and one company.
The claims concern an alleged cartel between several Brazilian companies which produce orange juice, including Sucocítrico Cutrale. The Brazilian Association of Citrus Exporters (ABECITRUS) is also alleged to have been involved. The Claimants are orange farmers who are all domiciled in Brazil. The claim relates to alleged antitrust infringements committed in Brazil and said to have restricted competition in markets in Brazil, causing harm to the Claimants there. There are a number of sets of extant proceedings in Brazil relating to the same alleged cartel. However, the Claimants claim to be entitled to maintain these proceedings in England and Wales on the bases that:
i) although Sucocítrico Cutrale is a Brazilian company, it has its central administration in London and is therefore domiciled in the UK pursuant to Article 63(1)(b) of Regulation 1215/2012 (“ Brussels Recast”);
ii) alternatively, the Claimants were entitled to serve Sucocítrico Cutrale, pursuant to CPR 6.3(c)/6.9(2) at a “place within the jurisdiction where [it] carries on its activities; or any place of business of the company within the jurisdiction”.
iii) Cutrale Snr is domiciled in England; and
iv) Cutrale Jnr is domiciled in Switzerland and the claims against him are so closely connected with the claims against Sucocítrico Cutrale and Cutrale Snr that it is expedient to hear and determine them together so as to avoid the risk of irreconcilable judgments, pursuant to Article 6 of the Lugano Convention.
The Defendants' position is in outline as follows:
Sucocítrico Cutrale
i) Sucocítrico Cutrale has its “central administration” in Brazil and is therefore not domiciled in the UK for the purpose of Article 63(1)(b) of Brussels Recast. There is therefore no right to bring proceedings against the company in England under Article 4(1). The court must apply common law principles to determine jurisdiction (see Article 6(1)).
ii) Alternatively, the claims against Sucocítrico Cutrale should be stayed under Articles 33 and/or 34 of Brussels Recast because of the ongoing proceedings in Brazil concerning the alleged cartel.
iii) The Claimants were not entitled to serve Sucocítrico Cutrale at an address within the jurisdiction, and so the company has not been validly served.
iv) Alternatively, applying common law forum non conveniens principles, Brazil is the proper place for the claims against Sucocítrico Cutrale and the court should not exercise jurisdiction against it. The claims against Sucocítrico Cutrale should be stayed even if (contrary to the Defendants' primary case) Cutrale Snr is domiciled in England. Cutrale Snr has confirmed that he would submit to the jurisdiction of the Brazilian court. The risk of inconsistent judgments in England and Brazil therefore carries little weight because it would be caused by the Claimants' unnecessary pursuit of litigation in England. In such circumstances, the court may stay the claims against the foreign defendant notwithstanding the presence of a UK domiciled anchor defendant ( Vedanta Resources plc v Lungowe [2020] AC 1045 at §§40, 67, 75, 83–85, 87).
Cutrale Snr
v) Cutrale Snr is not domiciled in the UK. There is therefore no right to bring proceedings against him under Article 4(1) of Brussels Recast.
vi) Further or alternatively, the court should stay the claims against Cutrale Snr pursuant to Article 34 of Brussels Recast because of the ongoing proceedings in Brazil.
vii) Although Cutrale Snr was served in the jurisdiction, applying common law forum non conveniens principles Brazil is the proper place for the claim. Accordingly, the court should decline jurisdiction.
Cutrale Jnr
viii) If neither Sucocítrico Cutrale nor Cutrale Snr is English domiciled there is no basis to assume jurisdiction against Cutrale Jnr.
ix) If Cutrale Snr is English domiciled but the claims against Sucocítrico Cutrale are to proceed in Brazil, the criteria under Article 6 of the Lugano Convention are not met because it would be more expedient for the claims against Cutrale Jnr to be heard in Brazil alongside the claims against Sucocítrico Cutrale.
x) Further or alternatively, the court should stay the claims pursuant to a reflexive application of Article 28 of the Lugano Convention because of the ongoing proceedings in Brazil.
For the reasons set out below, I have come to the conclusion that the Defendants' application succeeds in part. The court lacks jurisdiction over Sucocítrico Cutrale. However, the court does have jurisdiction over Cutrale Snr and Cutrale Jnr and there is no proper basis on which to stay the claims against them.
(B) BACKGROUND
The Claimants allege a cartel between several Brazilian orange juice production companies in the period January 1999 to January 2006. They reserve the right to allege infringement of Brazilian competition law in respect of a longer period (Particulars of Claim §45, suggesting in particular that the alleged cartel may have commenced in 1993). The Claimants describe it as having been a long-running, secretive, and hard-core cartel involving powerful and wealthy individuals and companies involved in the international orange juice export market, which had profound consequences for thousands of independent Brazilian orange farmers, including more than 1,500 who are claimants in these proceedings.
The companies alleged to have participated in the cartel are: (1) Sucocítrico Cutrale; (2) Bascitrus Agroindustry S.A.; (3) Cargill Agrícola S.A.; (4) Fischer S.A. Agroindústria (formerly Citrosuco Paulista S.A.); (5) Citrovita Agroindustrial Ltda; and (6) Louis Dreyfus Commodities Agroindustrial Coinbra-Frutesp S.A (draft Particulars of Claim §41). ABECITRUS is also alleged to have been involved (e.g. §§41, 60.1(d)).
The great majority of Sucocítrico Cutrale's Brazilian orange business is for export to international markets, principally in the form of concentrate for orange juice. 98% of all the oranges grown in Brazil are for export.
The pleaded particulars of breach include the following:
i) Agreements to divide orange farmers between the companies in the alleged cartel by purchasing only from allocated farmers...
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