COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISON COMMERCIAL COURT
MR JUSTICE AIKENS
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LAWRENCE COLLINS
LORD JUSTICE RIMER
| KOLDEN HOLDINGS LIMITED
|- and -
|RODETTE COMMERCE LIMITED
TAPLOW VENTURES LIMITED
Sir Sydney Kentridge QC and Mr David Wolfson (instructed by Skadden, Arps, Slate, Meacher & Flom (UK) LLP) for the Respondent
Hearing date : December 11, 2007
Crown Copyright ©
Lord Justice Lawrence Collins:
II The litigation
1 The parties
2 Sale Agreements: March 18, 2004
"Any dispute arising under and in connection with this Agreement which cannot be mutually resolved shall be submitted to the non-exclusive jurisdiction of the Courts of England, or any other Court of competent jurisdiction."
"6.2 The purchaser hereby represents and warrants as of the date of this Agreement and on a continuing basis hereafter that: ..........
(d) the purchaser is acquiring the securities in a private transaction for the purchasers' own account for purposes of further immediate distribution thereof to JSC "Eurocement" only ........"
3 Proceedings in England: July 13, 2006
".....On the true construction of [the SPAs] each of the first and second defendants was obliged immediately, alternatively as soon as reasonably practicable to transfer [the Maltsovsky shares] to [JV]......".
".....in order to carry out the common intention of the parties, so as to incorporate into each [SPA] an obligation on the relevant [purchaser] immediately or alternatively as soon as reasonably practicable, to transfer [Maltsovsky shares] to [JV]".
4 Conspiracy proceedings in Cyprus: August 3, 2006
5 Assignment and Notice of Assignment: November 15 and November 20, 2006
"Assignors hereby unconditionally and absolutely assign to the Assignee any and all of their rights, claims and causes of action, whether vested in them jointly or individually without limitation existing or arising from the acquisition, ownership or alienation of the shares of OAO "Maltsovsky Portlandcement" ("Maltsovsky") and rights arising from any agreement with third parties associated with Maltsovsky ("the Rights"). For the avoidance of doubt the Rights include all rights, claims and causes of action whether arising directly or indirectly from the [four SPAs]."
6 Second and Third Cyprus proceedings: February 5 and February 14, 2007
(a) against Amherst, Hensher, and Conway: a declaration of non-liability under the SPAs, which is the mirror image of that sought by Amherst, Hensher and Conway in the Commercial Court, i.e. the contract cause of action. The appellants claim a declaration that they, as purchasers of the Maltsovsky shares under the four SPAs were not at any time obliged to transfer those shares to JV;
(b) against all four defendants: a declaration that the Assignments are invalid because they were in breach of express or implied terms of the SPAs and/or were champertous and/or contrary to public policy;
(c) against Kolden: a declaration that it has no rights under the Assignments, including the right to sue; and alternatively, if that should be wrong, a declaration of non-liability in the same terms as that sought against Amherst, Hensher, and Conway;
(d) against all four defendants: damages.
7 Kolden substituted as claimant in the English Action: February 20, 2007
III Judgment of Aikens J
1. Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own action stay its proceedings until such time as the jurisdiction of the court first seised is established.
2. 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.
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 its 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."
IV The appeal
1 The critical date
2 Good arguable case
3 The same parties
Case C-405/92 The Tatry  ECR I-5439
"46. The national court's second question is whether a subsequent action has the same cause of action and the same object and is between the same parties as a previous action where the first action, brought by the owner of a ship before a court of a Contracting State, is an action in personam for a declaration that that owner is not liable for alleged damage to cargo transported by his ship, whereas the subsequent action has been brought by the owner of the cargo before a court of another Contracting State by way of an action in rem concerning an arrested ship, and has subsequently continued both in rem and in personam, or solely in personam, according to the distinctions drawn by the national law of that other Contracting State.
47. In Article 21 of the Convention, the terms 'same cause of action' and 'between the same parties' have an independent meaning (see Gubisch Maschinenfabrik K.G. v Palumbo ….) They must therefore be interpreted independently of the specific features of the law in force in each Contracting State. It follows that the distinction drawn by the law of a Contracting State between an action in personam and an action in rem is not material for the interpretation of Article 21.
48. Consequently, the answer to the second question is that a subsequent action does not cease to have the same cause of action and the same object and to be between the same parties as a previous action where the latter, brought by the owner of a ship before a court of a Contracting State, is an action in personam for a declaration that that owner is not liable for alleged damage to cargo transported by his ship, whereas the subsequent action has been brought by the owner of the cargo before a court of another Contracting State by way of an action in rem concerning an arrested ship, and has subsequently continued both in rem and in personam, or solely in personam, according to the distinctions drawn by the national law of that other Contracting State."
Case C-351/96 Drouot Assurances SA v Consolidated Metallurgical Industries  ECR I-3075
"29. My view, therefore, is that the concept of 'same parties' is to be interpreted literally and strictly. The Court has used the word 'identical'. This means that not only just the parties to the two actions be the same in the literal sense of the same natural or legal person, but also that they must appear in the same right. In particular, a person suing in his own right and for his own benefit is obviously not to be equated with the same person suing or being sued in a purely representative capacity, for example, as the legal personal representative of a deceased person or a person under a disability, or in any of the wide range of cases where a person may, in law, be named to represent corporate bodies or their creditors in cases of insolvency.
31. I share the concerns expressed... that a more flexible approach to the application of the condition that the parties must be the same in order for an obligation to decline jurisdiction to arise under Article 21 of the Convention could seriously imperil the right to a fair hearing and, in some cases, even the efficient administration of justice". He concluded, therefore, that the barge owner and the hull insurers, Druout, were not the "same parties" in the French and Dutch proceedings for the purposes of Article 21. Accordingly, there could be no stay of the French proceedings."
"19. It is certainly true that, as regards the subject-matter of the two disputes, there may be such a degree of identity between the interests of an insurer and those of its insured that a judgment given against one of them would have the force of res judicata as against the other. That would be the case, inter alia, where an insurer, by virtue of its right of subrogation, brings or defends an action in the name of its insured without the latter being in a position to influence the proceedings. In such a situation, insurer and insured must be considered to be one and the same party for the purposes of the application of Article 21 of the Convention.
20. On the other hand, Article 21 cannot have the effect of precluding the insurer and its insured, where their interests diverge, from asserting their respective interests before the courts as against the other parties concerned.
21. In the present case, CMI [cargo-owners] and Protea [insurers] made clear at the hearing that, in the Netherlands action, they seek to have Mr Velghe [the owner] declared exclusively liable for the foundering of the Sequana. As the insurer merely of the hull of the vessel, however, Drouot takes the view that it cannot be held liable for the fault of its insured, and thus has no interest in the Netherlands action.
22. It appears, moreover, that in the French action, Drouot has been not acting in its capacity as the representative of its insured, but in its capacity as a direct participant in the refloating of the Sequana.
23. Thus in this case it does not appear that the interests of the insurer of the hull of the vessel can be considered to be identical to and indissociable from those of its insured, the owner and charterer of the vessel. However, it is for the national court to ascertain whether this is in fact the case.
25. The answer to the question raised must be that Article 21 of the Convention is not applicable in the case of two actions for contribution to general average, one brought by the insurer of the hull of a vessel which has foundered against the owner and the insurer of the cargo which the vessel was carrying when it sank, the other brought by the latter two parties against the owner and the charterer of the vessel, unless it is established that, with regard to the subject matter of the two disputes, the interests of the insurer of the hull of the vessel are identical to and indissociable from those if its insured, the owner and the charterer of that vessel".
"... for the purposes of article 21 ... I do not consider that Mr. Supperstone [counsel for Grovit] can be heard to say that there is no identity of parties. Here the argument overlaps for that relating to abuse: the deployment of C.S.A., a Spanish company, as claimant in Madrid is nothing but a device to confer putative jurisdiction on the Spanish court. That is not only in the circumstances of the case abusive upon ordinary principles of our domestic law. In addition, for this court to treat it as reality rather than the sham and pretence which it plainly is, and accordingly to deny what is otherwise the clearly established jurisdiction of the tribunal under article 21, would in my judgment tend to undermine what Lord Goff of Chieveley has called in Airbus Industrie GIE v Patel  1 AC 119, 132B, 'the primary purpose of the Convention [viz.] to ensure that there should be no clash between the jurisdictions of member states of the Community.'
Moreover, there is jurisprudence of the Court of Justice to show that the issue of identity of parties, in the context of article 21, is to be regarded pragmatically, just as is that of identity of cause of action…"
and he went on to quote paragraphs 19 and 20 of Drouot, and to conclude that for the purposes of Article 21 the cause of action, subject matter and parties were the same, and it was therefore beyond argument that the employment tribunal was the court first seised.
"… it seems to me that the substratum of the doctrine is that a man ought not to be allowed to litigate a second time what has already been decided between himself and the other party to the litigation. This is in the interest both of the successful party and of the public. But I cannot see that this provides any basis for a successful defendant to say that the successful defence is a bar to the plaintiff suing some third party, or for that third party to say that the successful defence prevents the plaintiff from suing him, unless there is a sufficient degree of identity between the successful defendant and the third party. I do not say that one must be the alter ego of the other: but it does seem to me that, having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase 'privity of interest . . . .' "
Lord Justice Rimer:
Lord Justice Tuckey: