Tavoulareas v Tsavliris
| Jurisdiction | England & Wales |
| Judge | Tomlinson J,Thorpe,Mance L JJ,Evans-Lombe J. |
| Judgment Date | 05 February 2004 |
| Court | Court of Appeal (Civil Division) |
| Date | 05 February 2004 |
[2003] EWHC 550 (Comm);
Court of Appeal (Civil Division).
Tomlinson J; Thorpe and Mance L JJ and Evans-Lombe J.
Philip Shepherd QC (instructed by Howe and Keates) for the claimant/appellant.
Peter Irvin (instructed by Constant and Constant) for the defendants/respondents.
The following cases were referred to in the judgments:
Dresser UK Ltd v Falcongate Freight Management LtdELR [1992] QB 502.
Erich Gasser GmbH v MISATECAS (C-116/02) (9 December 2003, ECJ).
Grupo Torras SA v Al-SabahUNK [1995] 1 Ll Rep 374; [1995] CLC 1025 (CA).
Gubisch Maschinenfabrik KG v PalumboECAS (Case 144/86) [1987] ECR 4861.
Molins plc v GD SpA [2000] CLC 1027; [2000] 1 WLR 1741.
Phillips v Symes [2001] CLC 1673; [2002] 1 WLR 853.
Tatry v Maciej RatajECAS (Case 406/92) [1995] CLC 275.
Zelger v SalinitriECAS (Case 129/83) [1984] ECR 2397.
Conflict of laws — Brussels Convention — Related actions — Whether Greek court first seised -When Greek court definitively seised -Transmission of judicial documents from one member state to another — Application of Council Regulation on service to litispendency — Council Regulation 1348/2000 —Civil Jurisdiction and Judgments Act 1982, Sch. 1 (Brussels Convention), art. 21.
This was an appeal against the order of Tomlinson J staying the claimant's action against the first and second defendants, on the ground that the Greek courts were first “definitively seised” of proceedings for negative declaratory relief brought by the defendants against the claimant in the First Instance Court of Piraeus, for the purposes of art. 21 of the Brussels Convention.
The claim related to amounts allegedly due (primarily if not exclusively advances) made under agreements made in 1991. The English proceedings were issued in November 2001 and immediate steps were taken to serve both defendants at their English addresses. It was accepted that they were properly served on, respectively, 24 December and 23 November 2001. However, on 8 November 2001, the defendants retaliated by issuing an action before the piraeus court. The Piraeus proceedings asserted duress and sought a declaration that the defendants had no further liability to the claimant. The claimant resided at all material times in Florida. The document lodged with the Piraeus court on 8 November 2001 to initiate the Greek Proceedings alleged that the claimant was resident in London, giving an address where he ceased to reside in 1992. He had lived in the USA since (at least) 1995. The claimant's case was that the defendants knew that he lived in the USA. The Piraeus proceedings were served on the Greek Public Prosecutor under art. 134(1) of the Greek code of civil procedure on 19 November 2001, and as a result of that subsequently sent to or attempted to be served at the London address, unsurprisingly without success. The claimant in fact received notice of the Greek proceedings by a different route at the end of December 2001. No attempt was ever made to serve the claimant in person or in the USA, where he resided. The claimant argued that the English proceedings had priority under art. 21 of the Brussels Convention. The judge held that the Greek court was seised of the proceedings as at 19 November 2001 by virtue of the service on the Public Prosecutor so that the Greek proceedings had priority and the claimant's action had to be stayed. The judge held that Council Regulation 1348/2000 on transmission of judicial documents had no application to litispendency under art. 21 of the Brussels Convention. The claimant appealed.
Held, allowing the appeal:
1. Looking at the evidence and materials relating to Greek procedural law, it was clear that, for Greek domestic purposes, some form of service was as a general rule required for proceedings to become pending and that, where use was made of art. 134, such service was treated as occurring on the receipt of documents by the Public Prosecutor. The issue was how far the same position applied for the purposes of art. 21 of the Brussels Convention.
2. As a matter of Greek domestic law proceedings could be considered retrospectively pending from the date of filing of the writ once service had been effected but art. 21 of the convention required a simple chronological approach which was inconsistent with retrospectivity.
3. The mere existence of proceedings was clearly insufficient to mean that they were definitively pending for the purposes of art. 21.
4. The present case was of a nature falling within Regulation 1348/2000, i.e. was a civil matter “where a judicial…document has to be transmitted from one member state to another for service there”. The Regulation was drafted with the Brussels Convention in mind (cf recital 12), and so as, in particular, to prevail over the Protocol to that Convention, art. IV of which contained provisions relating to the manner, though not the date, of service. Therefore where service was required of any nature covered by the Regulation, both the question whether the method of service was valid and any question as to whether and when service took place should be answered by reference to the convention. The structure of the Greek procedural rules made service a pre-condition to litispendency, even under purely domestic law, while the Regulation was intended to introduce uniform procedures and principles regarding service at an international level. There was no difficulty about reading litispendency under the Greek code of civil procedure as requiring service in accordance with and in the sense of the Regulation before Greek proceedings could be said to be definitively pending for the purposes of art. 21.
5. On that basis, since there had never been any service of the Greek proceedings in accordance with the Regulation, the English defendants’ only hope of establishing that the Greek courts were definitively seised prior to the English courts would have been to show that the claimant had notice of the Greek proceedings and an opportunity to defend them prior to service on the defendants of the English proceedings. That was not however the case, since the claimant did not know of the Greek proceedings until 31 December 2001, well after service on the defendants of the English proceedings. The claimant's appeal should be allowed and the English proceedings restored accordingly.
6. In any event because the Greek proceedings served on the Greek Public Prosecutor gave an incorrect address for service in England on the defendant, there could be no certainty, as a matter of Greek law, that any step taken in the Greek proceedings thereafter would remain valid, or that the proceedings would be able to continue to any sort of conclusion. Therefore, on any proper approach to the concept of definitive seizure for the purposes of art. 21 of the Brussels Convention, the Greek court could not be regarded as being definitively seised at any time before either the Greek proceedings were properly served or the defendant had had notice of them and an opportunity to defend.
(21 March 2003)
Tomlinson J:
1. There are before the court two applications both of which turn on Article 21 of the Brussels Convention.
2. In the action the claimant sues to recover, principally from the first and/or the second defendant the balance outstanding under a loan agreement allegedly made in London in or about September 1991 pursuant to which the claimant allegedly agreed to lend money to the defendants. The first and second defendants are brothers.
3. It would appear that the claimant had an interest in the company owning the vessel “Atlas Pride”. In August 1991 that vessel was in difficulties. A Lloyd's Open Form Salvage Agreement was agreed under which a Tsavliris company was the contractor. According to the claimant the Tsavliris interests requested financial assistance to enable them to carry out the salvage operation. According to the claimant an agreement was made pursuant to which the claimant advanced funds for that purpose against an undertaking that repayments would be made out of any salvage award made in favour of the Tsavliris interests. In addition to a provision for interest it was also agreed, according to the claimant, that there would be paid to him or to his nominee 38% of the amount of any such award after deduction of various costs and expenses.
4. Pursuant to these agreements, it is said, the claimant advanced to the defendants initially US$748,000 and later a further US$2,216,000.
5. According to the particulars of claim a salvage award in the sum of US$7,253,262 was in July 1993 made in favour of the Tsavliris interests.
6. It is said that there remains due and owing to the claimant US$48,000 in respect of the first advance and US$746,232.24 in respect of the later advances. It is not clear to me whether any amount is claimed in respect of the award sharing agreement.
7. It would seem that the claimant first launched proceedings in this jurisdiction to recover this debt in February 1998. This action was not served on the defendants although they were notified of its existence and of its nature. For whatever reason the claimant did not proceed with that action.
8. This action was issued on 7 November 2001 and immediate steps were taken to serve the first and second defendants at their English addresses. It is now accepted that they were properly served on 24 December 2001 and 23 November 2001 respectively. However on 8 November 2001 the Tsavliris interests retaliated by issuing an action before the Large (or Multi-Member) First Instance Court of Piraeus. In that action it is alleged that a Tavoulareas company “forced” the Tsavliris interests to agree to payment of 38% of the salvage award, less certain costs and expenses, under threat of revocation of the Lloyd's Form Salvage Agreement. It is alleged that pursuant to certain loan agreements made to finance the costs of the salvage operation the...
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