England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
(RIMER J)

		Royal Courts of Justice Strand London WC2 Thursday 22nd March 2001

1. LORD JUSTICE CLARKE: We have decided that the appropriate course is to exercise the case management powers of the court and not at present to determine the issues which have arisen on the appeal. All interested parties have now attended in order to explain their position. Van Lanschot and Barclays are of course parties to the appeal, whereas Trustor and ITCB are not, although both Trustor and ITCB have an interest in how these proceedings and the proceedings in Luxembourg should proceed. It is important to note that all four parties have expressed a willingness to take part in ADR in order to try to resolve the dispute between them. We take the view that that is a most welcome development because if the whole dispute can be resolved by settlement following ADR, a great deal of time and money will be saved.
2. Today Barclays applied for a stay of the English proceedings pending the determination of the actions in Luxembourg other than the contribution proceedings. Mr Smith QC has attended on behalf of Trustor and, although justifiably protesting at the late application and the lack of notice, has been able to make helpful submissions and accepts that this court has jurisdiction to make an order along the lines proposed by Mr Potts QC on behalf of Barclays.
3. Mr Morgan has attended on behalf of ITCB but he has done so expressly without prejudice to ITCB's submission that the English courts have no jurisdiction to determine any claim against it. As we understand it, all parties accept that ITCB has attended only on a without prejudice basis and that it has not submitted to the jurisdiction. Subject to that, Mr Morgan has made helpful submissions as to the best way forward. The order must expressly state that ITCB has attended without prejudice to its case on jurisdiction.
4. There is comparatively little dispute between the parties as to the way forward. All agree that the liability proceedings should go ahead in Luxembourg, if only because of the crucial importance of resolving who is entitled to the sum of 417 m Swedish kroner. Mr Potts submits that the English liability proceedings should be stayed in the meantime, not under Article 22 of the Brussels Convention, but in the exercise of the court's case management powers under CPR 3.1(2)(f) to grant a stay of the whole or part of any proceedings. He also refers to Reichhold Norway ASA v Goldman Sachs [1999] 2 Lloyd's Rep 567. Mr Carr QC accepts on behalf of Van Lanschot that the court has power to grant a stay, but submits that it would be better to require the two liability actions brought by Trustor to proceed at substantially the same time.
5. We see the force of Mr Carr's submissions but on balance we have decided that the better course is to give directions which have the effect that the various Luxembourg proceedings on liability should be determined first and that the English liability proceedings should only take place thereafter if necessary. This may avoid the need for the English proceedings, although all will depend upon what happens in Luxembourg.
6. We therefore propose to order a stay of the English proceedings pending determination of all the liability proceedings in Luxembourg. We naturally hope that they will be resolved as soon as possible, but we do not think that we should impose an artificial limit on the length of the stay.
7. The parties made submissions as to the terms on which an order should be made. Our conclusions are these.

(1) Barclays and Van Lanschot should be bound by the decisions of the Luxembourg and English courts respectively as to the liability of the other to Trustor so that it will not be open to either to contest the decision of the Luxembourg or the English court as to the liability of the other to Trustor, whether as to liability or quantum. We understand that both banks agree to give an undertaking to this effect. It will need careful drafting.

(2) Each party shall agree to take reasonable steps to have the issues determined in Luxembourg with reasonable expedition. We understand that (subject to certain reservations expressed on behalf of ITC) each party is willing to do so, although we recognise that Barclays cannot do so unless it becomes a party to such proceedings.

(3) ADR. The order should include an order along the lines in Arden J's case. This part of the order should state that it is made without prejudice to Mr Carr's reservation that the court has no power to require Van Lanschot to take part in ADR. However the order should state in its preamble that all parties have agreed to take part in ADR in order to try to resolve the whole dispute.

(4) Liberty to Apply. We think that there should be a general liberty to apply to the Chancery Division, in case circumstances should change or there is some other good reason for the court to make some further order.

8. The question remains what order should be made on the appeal. We have reached the conclusion that the appropriate order would be to stand the appeal over with liberty to restore should it be necessary. We naturally hope that it will not be necessary.
9. We considered whether it would be appropriate for us to give judgment on any part of the appeal. Given the sensible approach of the parties which has led to the order outlined above, we do not think that there is any need for the issues on the appeal to be determined now. Indeed, given the amount of common ground, it might be counterproductive.
10. The only possible exception relates to the question whether we should express a view as to where the contribution proceedings between Barclays and Van Lanschot should be heard and determined. Our provisional view on that question is that the judge was correct to hold that the English contribution proceedings were served on Van Lanschot before Van Lanschot's Luxembourg contribution proceedings were served on Barclays, which would make the English court the court first seised of the contribution proceedings and that the proceedings fall within article 21, with the result that the contribution proceedings must be heard and determined in England.
11. However, there are also contribution proceedings between Van Lanschot and ITCB in Luxembourg and we are not sure that all questions of jurisdiction relating to the contribution proceedings have been fully debated. We therefore think that the question where any necessary contribution proceedings should be heard should be left over for decision when (and if) it arises. As we see it, in principle, it will not arise until after the conclusion of at least one (and possibly all) of the liability proceedings.
12. We invite counsel to draw up an appropriate order to reflect the decisions which we have reached.
ORDER: The court exercised its case management powers not to determine the issues which had arisen on appeal; appeal therefore stood over, with liberty to restore to the Chancery Division; English proceedings stayed pending determination of all liability proceedings in Luxembourg; Barclays and Van Lanschot to be bound by decisions of Luxembourg and English courts as to the liability of the other to Trustor, with consequent inability to contest such decisions on quantum and liability (undertakings to follow); each party to take reasonable steps to have issues determined in Luxembourg with reasonable expedition; parties also to endeavour to agree an expeditious timetable for the resolution of the ADR proceedings, and, if they cannot, may make submissions to the court in writing to provide for the period to be incorporated in the order; it is to be noted that ITCB attended without prejudice to its case on jurisdiction; Trustor should have their costs of being brought into this appeal from Barclays; but costs of the other parties reserved; undertaking given by Barclays not to enforce any costs orders below in the meantime; parties to submit an agreed written order covering all matters. (Order not part of approved judgment)