IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
COMMERCIAL COURT DIVISION
(MR JUSTICE CRESSWELL)
London, WC2A 2LL
B e f o r e :
(The Rt Honourable Sir Anthony Clarke)
LORD JUSTICE RIX
LORD JUSTICE RICHARDS
|(1) CONSOLIDATED CONTRACTORS GROUP SAL (HOLDING COMPANY)|
|(2) CONSOLIDATED CONTRACTORS INTERNATIONAL COMPANY SAL|
|(3) CONSOLIDATED CONTRACTORS (OIL and GAS) COMPANY SAL|
|(4)SAID TAWFIC KHOURY||Defendants/Appellants|
Smith Bernal Wordwave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
MR CHRISTOPHER CARR QC and MR S SALZEDO (instructed by Messrs Simmons & Simmons) appeared on behalf of the Respondent
Crown Copyright ©
SIR ANTHONY CLARKE MR:
"I state that the High Court of England and Wales has power under the Civil Jurisdiction and Judgments Act 1982 to hear this claim and that no proceedings are pending between the parties in Scotland, Northern Ireland or another Convention territory of any contracting state as defined by section 1(3) of the Act."
The endorsement does not state the ground upon which the claimant asserts that the court has jurisdiction in the case of each of the defendants. However, it conforms with CPR 6.2(1) and the Practice Direction 6BPD.2.
1. Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of the member State.
1. Persons domiciled in a Member State may be sued in the courts of another Member State only by virtue of the rules set out in Sections 2 to 7 of this Chapter.
A person domiciled in a Member State may, in another Member State, be sued:
1. (a) in matters relating to a contract, in the courts for the place of performance of the obligation in question;
(b) for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be:
- in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered,
- in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided,
(c) if subparagraph (b) does not apply then subparagraph (a) applies;
A person domiciled in a Member State may also be sued:
1. where he is one of a number of defendants, in the court for the place where any one of them is domiciled provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings;
2. as a third party in an action on a warranty or guarantee or in any other third party proceedings, in the seised of the original proceedings, unless these were instituted solely with the object of removing him from the jurisdiction of the court which would be competent in his case;
3. on a counter-claim arising from the same contract or facts on which the original claim was based, in the court in which the original claim is pending;
4. in matters relating to a contract, if the action may be combined with an action against the same defendant in matters relating to rights in rem in immovable property, in the court of the Member State in which the property is situated.
1. Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings.
2. Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and it law permits the consolidation thereof.
3. For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."
"CONSOLIDATED CONTRACTORS INTERNATIONAL (UK) LTD
A member of Consolidated Contractors Group of companies
Silver City House, 62 Brompton Road, London, SW3, 1BW
Telephone:071 225 1424
Fax 4471 589 3167
TO: MR MUNIB MASRI
FROM MR SAID KHOURY
DATE: 6 NOVEMBER 1992
This is to define the principles of participation of Munib Masri (MASRI) in CCC's interest in the Masila Block in Yemen.
Basic principle is for Masri to receive 10% of CCC's 10% interest or a 1% overall interest in the Block of Masri subject to the following conditions, payments and adjustments:
1. Masri is to pay 10% of Masila Block Development costs which are paid by CCC.
2. Masri is to pay 10% of Masila operating costs assessed to CCC.
3. Masri to pay 10% of CCC's internal costs for Management and administration of Masila Block Exploration and Development.
4. Masri shall pay 10% of CCC's share of Bonus and Training payments required under the Production Sharing Agreement (PSA) under the PSA.
In consideration for the payments and participation of Masri as described above, Masri shall be entitled to the following when and if received by CCC. (Based on actual net receipts by CCC, i.e. after payment of marketing and other costs).
A. 10% of CCC's share of Contractor oil entitlements under the PSA.
B. 10% of Development Cost Recovery received by CCC.
For purpose of this agreement, the following priority shall be assigned to funds available for cost recovery:-
1. operating Expenses.
2. Exploration Expenses.
3. Development Expenses."
The expression "CCC" is not defined.
"A person domiciled in a Member State may also be sued:
1. where he is one of a number of defendants, in the court for the place where any one of them is domiciled provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."
"A person domiciled in a Member State my also be sued:
1. where he is one of a number of defendants in the court for the place where any one of them is domiciled..."
It can thus be seen that the proviso in Article 6.1 of the Regulation quoted above was not contained in the Brussels Convention. Articles 6.2, 6.3 and 6.4 are in the same form in the Brussels Convention and in the Regulation.
"The prevention of the irreconcilability of decisions is the ratio legis both of Article 6(1) and of the third paragraph of Article 22. In those circumstances I cannot see any good reason for not transposing the 'purpose-related' criterion of the latter provision to cases where there are several claims."
"8. The principle laid down in the Convention is that jurisdiction is vested in the courts of the State of the defendant's domicile and that the jurisdiction provided for in Article 6(1) is an exception to that principle. It follows that an exception of that kind must be treated in such a manner that there is no possibility of the very existence of that principle being called in question.
9. That possibility might arise if a plaintiff were at liberty to make a claim against a number of defendants with the sole object of ousting the jurisdiction of the courts of the State where one of the defendants is domiciled. As is stated in the report prepared by the committee of experts which drafted the Convention (Official Journal C 59, 5.3.1979, p.1), such a possibility must be excluded. For that purpose, there must be a connection between the claims made against each of the defendants.
10. In order to ensure, as far as possible, the equality and uniformity of the rights and obligations under the Convention of the Contracting States and of the persons concerned, the nature of that connection must be determined independently.
11. In that regard, it must be noted that the abovementioned report prepared by the committee of experts referred expressly, in its explanation of Article 6(1), to the concern to avoid the risk in the Contracting States of judgments which are incompatible with each other. Furthermore, account was taken of that preoccupation in the Convention itself, Article 22 of which governs cases of related actions brought before courts in different Contracting States.
12. The rule laid down in Article 6(1) therefore applies where the actions brought against the various defendants are related when the proceedings are instituted, that is to say where it is expedient to hear and determine them together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings. It is for the national court to verify in each individual case whether that condition is satisfied.
13. It must therefore be stated in reply to the first question that for Article 6(1) of the Convention to apply there must exist between various actions brought by the same plaintiff against different defendants a connection of such a kind that it is expedient to determine those actions together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings."
This conclusion seems to me to be consistent with that of this court in Gascoine v Pyrah  1 L Pr 82, which was also a decision under Article 6.1 of the Brussels Convention and which expressly followed Kalfelis v Schröder.
"12. In addition to the defendant's domicile, there should be alternative grounds of jurisdiction based on a close link between the court and the action or in order to facilitate the sound administration of justice.
15. In the interests of the harmonious administration of justice it is necessary to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in two Member States. There must be a clear and effective mechanism resolving cases of lis pendens and related actions and for obviating problems flowing from national differences as to the determination of the time when a case is regarded as pending. For the purposes of this Regulation that time should be defined autonomously".
"the rule laid down in Article 6.1 therefore applies where the actions brought against the various defendants are related when the proceedings are instituted, that is to where it is expedient to hear and determine them together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings."
Since the European court was not specifically deciding the point now in issue, the highest that the respondent's case can be put by reference to the passage underlined (or to the use of the words "various actions" in the court's answer to the first question posed) is that the passage underlined is consistent with the respondent's case. For my part, I would go further than that.
"The second major aim of the Convention is the achievement of predicability and certainty at all stages for all concerned, viz at the time of the conclusion of the transaction, when the dispute has arisen and when it has to be ruled on."
It was partly for that reason that the House of Lords decided in that case that the question of domicile should be determined as at the time the relevant proceedings were issued.
"The Court has thus held that the principle of legal certainty requires, in particular, that the jurisdictional rules which derogate from the general rule laid down in Article 2 of the Brussels Convention should be interpreted in such a way as to enable a normally well-informed defendant reasonably to foresee before which courts, other than those of the State in which he is domiciled, he may be sued (GIE Group Concord and Others, paragraph 24, and Besix, paragraph 26)."
We were referred to paragraph 2 in Besix which is in identical terms to paragraph 40 in Owusu.
(Appeals dismissed; Appellants to pay Respondent's costs, such costs to be the subject of detailed assessment and to be paid within 28 days of assessment).