Speed Investments Ltd and another v Formula One Holdings Ltd and Others (No 2)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Carnwath,Lord Justice Neuberger,Sir William Aldous |
| Judgment Date | 12 November 2004 |
| Neutral Citation | [2004] EWCA Civ 1512 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2004/1684 |
| Date | 12 November 2004 |
[2004] EWCA Civ 1512
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
MR JUSTICE LEWISON
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Carnwath
Lord Justice Neuberger and
Sir William Aldous
Case No: A3/2004/1684
Elizabeth Jones QC and Nicholas Harrison (instructed by White and Case) for the Claimants/Respondents
Murray Rosen QC and Nick Parfitt (instructed by Lovells) for the Defendants/Appellants
This is an appeal from an order of Lewison J. The overall dispute concerns the control and future of Formula One racing. The immediate issue is much narrower, involving a dispute as to the validity of appointments of directors to one of the companies. As a preliminary even to that dispute, there is disagreement as to whether the English court has jurisdiction in the matter. This turns on the interpretation of Council Regulation (EC) No 44/2001 (the "Judgments Regulation") ; and the "Lugano Convention" (incorporated into domestic law by Section 3A of the Civil Jurisdiction and Judgments Act 1982).
Background
The following summary is taken from the judgment below, and is sufficient for present purposes.
Formula One motor racing is controlled by a number of companies within the Formula One Group. The principal companies are Formula One Administration Limited and Formula One Management Limited. Another company called Formula One Holdings Limited ("FOH") is the parent or great-grandparent of both.
FOH is in turn owned by SLEC Holdings Limited ("SLEC") . SLEC is owned 75 per cent by Speed Investments Limited ("Speed"), and 25 per cent by Bambino Holdings Limited ("Bambino") . Speed is in turn owned in varying proportions by three banks.
Speed, Bambino, FOH and others are all parties to an agreement called the SLEC Shareholders Agreement, made on 12th May 2000. By Clause 30 of the SLEC agreement, although the governing law is English law, the parties submit to "the exclusive jurisdiction of the courts of Geneva Switzerland". However, it is common ground that this may be displaced, if they apply, by the exclusive jurisdiction provisions of the Judgments Regulation or the Lugano Convention.
Clause 3.2 provided that the maximum number of directors of FOH should be eight and that FOH should permit the holders of a majority in nominal value of the A shares as defined to appoint four persons to be directors of FOH. It further provided that FOH should permit the holders of a majority in nominal value of the B shares to appoint four persons to be directors of FOH.
Clause 3.3 contained covenants by SLEC and FOH to procure:
"(A) The holders of a majority in nominal value of the A shares should be permitted to appoint a director to each of the subsidiaries, the ("A subsidiary directors");
(B) The holders of a majority in nominal value of the B shares should be permitted to appoint two directors of each of the subsidiaries, the ("B subsidiary directors") ; and.
(C) The subsidiary directors are sent at the same time as the other directors of the relevant subsidiary notice of any meeting of the directors of such subsidiary and a copy of all papers sent to such directors."
Clause 3.6 amplified the provisions relating to the appointment of directors in the event that an option was exercised. Clause 5 provided that immediately following the execution of the agreements, the shareholders should procure the passing of resolutions, adopting new articles of association of, among other companies, FOH. Those articles of association were duly adopted.
By clause 4 of the agreement, Bambino covenanted and undertook to Speed that the details set out in parts 1 and 2 of schedule 1 were in all respects true, complete and accurate. The details set out in part 2 of schedule 1 included a list of directors of FOH in which Messrs Bernard Ecclestone and Stephen Mullens were described as B-directors.
The immediate cause of the proceedings was the appointment on 7th October 2002 by Bambino of the third and fourth defendants, the Argands, as directors of FOH. The claimants say that Bambino was not entitled to appoint the Argands, because it had exhausted its rights of appointment; Messrs Ecclestone and Mullens were B-directors of FOH. Bambino and the Argands say that the Argands were validly appointed because Messrs Ecclestone and Mullens were not B-directors; they were appointed as ordinary directors and remained ordinary directors, despite the provisions of the SLEC Shareholders Agreement, which mistakenly described them as B directors.
The present appeal is concerned solely with jurisdiction. The claimants say the dispute as to the validity of the appointments must be determined by the English court. The judge agreed with them. Bambino and the Argands appeal. FOH itself was the first defendant, but it has taken no active part in the proceedings.
Competing jurisdictions
FOH is a company registered in England and Wales. The two claimants, Speed and SLEC are both Jersey companies. Bambino, the second defendant, is another Jersey company. The Argands are individuals domiciled in Switzerland. Jersey is not a part of the United Kingdom, either for the purpose of the Judgments Regulation or for the purposes of the Lugano Convention. Switzerland is not a member state of the European Union, but it is a contracting state for the purposes of the Lugano Convention.
It is common ground that in respect of Bambino, not being domiciled in a member state, the issue turns on Article 22 of the Judgments Regulation (applied by Article 4) . Article 22 comes under Section 6 of the Regulation (headed "Exclusive jurisdiction") . It provides, so far as relevant:
"The following court shall have exclusive jurisdiction regardless of domicile.
"2. In proceedings which have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or of the validity of the decisions of their organs, the courts of the member state in which the company, legal person or association has its seat. In order to determine that seat, the court shall apply its rules of private international law.
"3. In proceedings which have as their object the validity of entries in public registers, the courts of the member state in which the register is kept." (emphasis added)
The position of the Argands, as Swiss citizens, is governed by the Lugano Convention, but Article 16 of the Lugano Convention (which in this case comes under Section 5) is for practical purposes in the same terms as Article 22 of the Judgments Regulation. FOH was incorporated in England, and accordingly has its "seat" in the United Kingdom under s.43 of the Civil Jurisdiction and Judgments Act 1982 (for the purpose of the Lugano Convention) and under the Civil Jurisdiction and Judgments Order 2001 schedule 1 para 10 (for the purpose of the Regulation) .
Thus, the main issue in the case turns on the true interpretation of the italicised words in Article 16.2. (Both sides, as I understood it, treated the issue under Article 16.3 as standing or falling with that under 16.3) . I shall call this the "exclusive jurisdiction" issue.
As a separate point (the "stay" issue), the Argands (but not Bambino) rely on Article 21 of the Lugano Convention. That provides:
"Where proceedings involving the same cause of action and between the same parties are brought in the courts of different contracting states, any court other than the court first seised shall of its own notion stay its proceedings until such time as the jurisdiction of the court first seised is established. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court." (emphasis added)
Also relevant to this issue are Article 23 of the Lugano Convention, which provides:
"Where actions come within the exclusive jurisdiction of several courts, any court other than the court first seised shall decline jurisdiction in favour of that court"
and Article 28, which provides that "a judgment shall not be recognised" if it conflicts with (among others) Section 5 of that Convention (which includes Article 16) .
The Argands submit that the Swiss court was the court "first seised" of the action as against them, and that accordingly there is a mandatory requirement under Article 21 for the English court to stay the proceedings at this stage. This applies, they say, even if it is ultimately determined that the English court has "exclusive jurisdiction" under Article 16. The judge rejected this submission.
As a separate point, the claimants claim that Article 21 has no application in any event, because the Swiss court was not "first seised" in the sense required by the Article (the "first seised" issue) .
Particulars of claim
Since both parties rely on the terms of the pleaded case as supporting their respective contentions, I should set out the material parts.
The relevant allegations begin at paragraph 32, which reads:
"32. On 7th October 2002, Bambino purported to appoint Monsieur Argand and Madame Argand-Rey as B-directors of FOH pursuant to Article 14 (A) of the new FOH articles.
33. Bambino was not entitled to appoint Monsieur Argand and Madame Argand-Rey as B-directors of FOH because Bambino had already exhausted its rights to appoint...
To continue reading
Request your trial
-
Nicole Hassett (a minor suing by her mother and next fried Orla Hassett) v The South Eastern Health Board
...SA v AL SABAH 1996 1 LLOYDS 7 ROSSLER v ROTTWINKEL 1986 QB 33 WEBB v WEBB 1994 ECR 1717 SPEED INVESTMENTS LTD v FORMULA ONE HOLDINGS LTD 2005 1 WLR 1936 PAPANICOLAOU v THIELEN 1998 2 IR 42 SANDERS v RONALD VAN DER PUTTE 1977 ECR 2382 BRUSSELS CONVENTION ART 16.1 PETERS v ZUID NETHERLANDSE ......
-
Choudhury and Others v Bhattar and Others
...from an examination of that case later in this judgment. I should, however, refer to the decision of this Court in Speed Investments Ltd v Formula One Holdings Ltd [2004] EWCA Civ 1512, [2005] 1BCLC 455, on which the judge relied in reaching his conclusion not on this question but on the q......
-
Ferrexpo AG v Gilson Investments Ltd and Ors
...entirely in accord with that of the Court of Appeal. 146 The proper approach is, I think, illustrated by the case of Speed Investments Ltd and anor v Formula Holdings Ltd, [2004] EWCA Civ 1512, which concerned a dispute about whether a director's appointment was permitted by the shareholde......
-
Akçil and Others v Koza Ltd and another
...Ltd v Katz [1991] Ch 226; [1990] 3 WLR 1183; [1991] 2 All ER 151Speed Investments Ltd v Formula One Holdings Ltd (No 2) [2004] EWCA Civ 1512; [2005] 1 WLR 1936, CAZavarco plc, In re [2015] EWHC 1898 (Ch); [2016] Ch 128; [2015] 3 WLR 1479; [2017] 1 BCLC 252APPEAL from the Court of AppealBy a......