England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		30th July 2002

Introduction

1. There are before the Court applications by the Defendants in two related actions, to set aside, stay or strike out proceedings in those actions on jurisdictional grounds or, in the case of one of the applications, for alleged abuse of process. I shall describe the applications in more detail below.
2. The actions arise out of industrial action taken by the Finnish Seamen’s Union (“FSU”) and the Auto-Ja Kuljetusalan Tyontekijalitto AKT RY (“AKT” - the Finnish Transport Workers Federation), respectively the Second and Third Defendants in each action, against 4 British-flagged ships in Finnish ports in March 2001. Both of these Unions are domiciled in Finland. The ships in question were the FINNREEL, FINNMASTER, FINNKRAFT and FINNHAWK (together referred to below as “the Vessels”). They were owned by, respectively, the First, Second, Fourth and Fifth Claimants, all of which are companies incorporated in the British Virgin Islands. (The Claimants are the same in each action). The Third Claimant, a company incorporated in England, has a contingent interest in the FINNMASTER, which it is in the process of acquiring under a conditional sale agreement. The Sixth Claimant (“Norbulk”), a company incorporated in Scotland, is the technical, safety and crewing manager of the vessels.
3. The First Defendant, the International Transport Workers’ Federation (“ITF”), is domiciled in England, with offices in London. It is a trade union organisation composed of a federation of trade unions of transport workers around the world. FSU is one of its affiliates. It is the Claimant’s case that the industrial action in Finland was instigated by ITF. This is denied by ITF.
4. The Vessels are roll-on, roll-off vessels, purpose-built for the intended trade from Finland to ports in other European Union countries such as England and Germany, carrying in particular forest products such as paper reels. In March 2001, each was operating under a 5-year time charter which granted the charterers, the Finnlines Group, the option to terminate the charter should an ITF boycott affect the vessel for more than 72 continuous hours. The Vessels are, as I have mentioned, British - flagged ships, whose crews were employed on terms which had been approved by the British Maritime and Coastguard Agency (“ MCA”).
5. On 2^nd March 2001 a Mr Simo Nurmi, who signed himself as “ITF Coordinator Finnish Seamen’s Union”, sent a “Notice to Shipowners” addressed to the Owners of the Vessels and Norbulk as their representative and manager, stating that he had “inspected your flag of convenience vessel...FINNHAWK today at Helsinki” and found that it was not covered by an acceptable collective bargaining agreement, and requiring Norbulk on behalf of Owners to enter into negotiations with FSU for the “ITF Standard Collective Agreement” covering all officers and ratings employed on the Vessels, and to back date wages and benefits due under such an Agreement to the beginning of each crew member’s employment. He advised that if Owners failed to sign such an agreement and pay such wages, the vessels would be “open for any actions deemed necessary without any further notice.”
6. The industrial action began on the 7^th March 2001. The dockers who were then unloading the FINNREEL, at Rauma, ceased work. Similar action was taken against the FINNKRAFT, at Hanko, later that day. On 8^th and 9^th March 2001 respectively, similar action was taken against the FINNMASTER at Hamina, and against the FINNHAWK in Helsinki.
7. Between 9^th and 12^th March 2001, the Claimants sought and obtained interim injunctive relief against ITF, from the Commercial Court in London. It is not necessary to describe the sequence of the various applications made, which eventually resulted in an interim injunction granted by David Steel J on 12^th March 2001, directing ITF not to interfere with the loading or discharge of the Vessels in Finnish ports or otherwise to interfere with the Claimants trading the Vessels into and out of Finland.
8. However this injunction did not have the desired effect. The industrial action continued, and it was apparently made clear that it would continue unless and until two agreements were signed on behalf of Owners. These two agreements were prepared by FSU, and were expressed to be between FSU and Norbulk as Owner/Agent of the Owner of the Vessels. Faxed copies were sent to London by FSU, signed in London by Mr Karlsen, the Managing Director of Norbulk, on 13^th March 2001, and faxed back to FSU in Finland. The agreements were as follows:

(1) A Settlement Agreement, which recorded that the Vessels had been boycotted by FSU, supported by AKT, was expressed to be “full and final and solves all present disputes between all parties involved,” and which provided for the signature by the parties of a Collective Bargaining Agreement covering all the Vessels, in the form attached thereto;

(2) The Collective Bargaining Agreement (“CBA”), which set out the standard terms and conditions on which all seafarers serving on the Vessels were thenceforward to be employed.

9. Following the signature of these two Agreements, the industrial action ceased, and the dockers resumed loading or discharge of the Vessels.
10. The injunction applications were made in what became Claim No. 2001 Folio 290, the first of the two actions with which the present applications are concerned, and to which I shall refer as “the March Action”. This action originally named only ITF as Defendant. On 14^th March 2001 the Claim Form and Particulars of Claim therein were served on ITF. In the Particulars of Claim the Claimants alleged that the industrial action was instigated by ITF, was a breach of the dockers’ contracts with their employers, and constituted unlawful interference with the Claimants’ business and with alleged directly effective rights of the Claimants under Community law to trade their Vessels to Finland. They pleaded that the Settlement Agreement was void or voidable for duress, but made no express reference to the CBA. They sought a permanent injunction in similar terms to those of the interim injunction granted by David Steel J, damages (together with interest), and a declaration that the Settlement Agreement was procured by duress unlawfully, and was void or voidable.
11. On 23^rd March 2001, following the signature of the Settlement Agreement and the CBA and the consequent cessation of the industrial action, the interim injunction was discharged by consent.
12. I should mentioned at this point that on 9^th March 2001, the First and Third to Fifth Claimants (and Nordic Forest Terminals Ab, not a party to the English Actions) applied without notice to the Helsinki District Court for urgent injunctive relief against FSU and AKT. This without notice application was, however, rejected by the District Court, which gave directions for service of the application on FSU and AKT, and for FSU and AKT to deliver their reply by 30^th March 2001. What would thereby have become a with notice application was overtaken by events, including the signature of the two Agreements and the resultant cessation of industrial action. The application was consequently withdrawn on 26^th March 2001, and the matter was accordingly dismissed as recorded in a decision of the District Court dated 4^th April 2001. No substantive proceedings have been commenced by any of the Claimants against FSU or AKT in Finland.
13. ITF served its Defence in the March Action on 10^th May 2001. Among other things it denied that it had instigated or authorised any of the industrial action, which it asserted had been taken by FSU and AKT on their own initiative. Further Information of the Particulars of Claim was requested by ITF, and provided by the Claimants in July 2001. Among other things details were provided of the alleged losses in respect of which the Claimants claimed damages. These included increased crew costs of US$100,000 per month “as a result of the purported Settlement Agreement”. This clearly relates to the increased crewing costs payable as a result of the CBA. A Reply was also served in July 2001.
14. On 15^th November 2001, a Case Management Conference in the March Action took place before Langley J, who gave what I understand to have been agreed directions for a trial, to commence on the first available date after 1^st October 2002. The trial was subsequently fixed to start on 21^st October 2002, with an estimated length of 8 days, and that remains the current position.
15. However, after the directions for trial had been agreed, the Claimants informed Langley J. that they intended to apply for permission to join FSU and AKT as additional defendants to the March Action. They asked that this information be treated as confidential, so that ITF would not be allowed to pass it on to FSU and AKT; but Langley J. refused their request, and hence it was communicated without restriction as to any further dissemination.
16. The Claimants were concerned that on being notified of their application for permission to join them as additional Defendants to the March Action, FSU and AKT would seek to pre-empt such joinder by themselves commencing proceedings in Finland. Accordingly, on 15^th November 2001, the Claimants commenced the second English Action with which the present applications are concerned, Claim No. 2001 Folio 1278, to which I shall refer as ‘the November Action’. The Claim Form was issued, with Particulars of Claim, naming ITF, FSU and ATK as First, Second and Third Defendants respectively. The Particulars of Claim are virtually identical to those in the unamended March Action, save that claims are also advanced against FSU and AKT, as the alleged joint instigators of the Finnish dockers’ action. Langley J was not told at the Case Management Conference of the Claimants’ intention to bring the November Action.
17. On the following day, 16^th November 2001, the Claimants issued their application for permission to join FSU and AKT as additional Defendants to the March Action. This application was accompanied by a draft Claim Form and Particulars of Claim, in virtually identical terms to those of the November Action.
18. It is the Claimants’ case that the English Courts have jurisdiction in respect of their claims against the Finnish Unions in both Actions, by virtue of Article 6.1 of the Brussels Convention, which provides as follows:

“A person domiciled in a Contracting State may also be sued:

1. where he is one of a number of defendants, in the courts for the place where any one of them is domiciled.”

As already mentioned, ITF is domiciled in England.

19. By letter dated 19^th November 2001, ITF, as it was entitled to do, informed FSU of the Claimants’ application for permission to join FSU and AKT as additional defendants, sending FSU a copy of the application notice and the draft amended Particulars of Claim.
20. At 1330 hours Finnish time on 5^th December 2001, the Claim Form in the November Action was served on FSU in Finland.
21. At 1500 hours on the same day, FSU and AKT commenced proceedings in Finland against Norbulk, sued as agent on behalf of Owners. They did so by lodging an application summons, or “plaint”, with the Finnish Labour Court, receipt of which was duly acknowledged by an administrative official of the Labour Court, who stamped the application summons with the seal of the Labour Court. These proceedings, to which I shall refer as “the Finnish Action”, and which I shall describe in more detail below, have not yet been served on any of the Claimants. In Finland, service of proceedings is in the hands of the courts. I have been told that there have been difficulties in serving Norbulk at its registered office in Glasgow, and that service is currently being effected through the Scottish courts, at the request of the Finnish courts.
22. At 1730 hours on 5^th December 2001, the Claim Form in the November Action was served on AKT in Finland.
23. On 7^th December 2001, Cresswell J. heard the Claimants’ application to join FSU and AKT as additional defendants to the March Action. He was told about the commencement of the November Action: Counsel for the Claimants indicated that, if and when jurisdiction was finally established over FSU and AKT in the March Action, the November Action would not be pursued. His Order of 7^th December 2001 dispensed with service of the application on FSU and AKT if and insofar as service was required (see further below); granted the Claimants permission to join FSU and AKT; provided for the service of an amended Claim Form and amended Particulars of Claim in the form of the drafts provided to the court; and gave FSU and AKT liberty to apply to set aside the Order on 7 days’ notice.
24. The amended Claim Form and Particulars of Claim were duly served on FSU and AKT in Finland on 19^th December 2001.
25. On 4^th February 2002, FSU and AKT issued application notices in the March and November Actions. Both applications are made pursuant to CPR Part 11. In each, FSU and AKT seek a declaration that the Court has no jurisdiction to try the claims made against them, and Orders setting aside the Claim Form and service of the proceedings on them, or staying the proceedings. In addition, in the March Action they seek an Order setting aside the Order of Cresswell J granting permission to join them as additional Defendants thereto. Most of the grounds relied on are common to both applications. In both, FSU and AKT contend that the Finnish Labour Court was first seised for the purposes of Article 21 of the Brussels Convention by virtue of the commencement of the Finnish Action on 5^th December 2001; they also invoke Article 22. In both, they contend that the Finnish Courts have exclusive jurisdiction under Article 17 of the Brussels Convention by virtue of the presence of a Finnish jurisdiction clause in the CBA. (In written and oral submissions they also contended that there was an Article 17 jurisdiction clause in the Settlement Agreement). In both, they assert that CPR Rule 6.19 (which permits service of a claim form out of the jurisdiction without the permission of the Court, in the circumstances therein described) did not apply, and that permission for service out should accordingly have been obtained, because at the dates of issue and service of the proceedings against FSU and AKT other proceedings, namely the claims against ITF in the March action, were already pending in the English Courts. (In relation to the March Action, in written and oral submissions they also relied in this connection on the existence at such dates of pending proceedings against them in the November Action). In their application notice in the November Action they further allege that Article 6.1 of the Brussels Convention does not apply because the claim against ITF discloses no genuine issue to be tried, and therefore that there is no basis for the English courts to exercise jurisdiction. I omit reference to certain other grounds which were not pursued.
26. On 8^th February 2002, ITF, on whom the Claim Form in the November Action had not by then been served, served notice on the Claimants pursuant to CPR Rule 7.7 requiring them either to discontinue the action or proceed with service by 22^nd February 2002. The proceedings were duly served on ITF on 22^nd February 2002.
27. On 8th March 2002, as foreshadowed in ITF’s CPR Rule 7.7 notice, ITF issued an application notice for an Order striking out the November Action as against them, under CPR Rule 3.4 and/or the inherent jurisdiction of the Court, on the grounds that it was, by reason of the existence of pending proceedings between the Claimants and ITF in the March Action concerning the same claims, an abuse of the process of the Court.
28. The three applications came on for hearing together on 1^st July 2002. In the event, the hearing occupied three days. At the outset of the hearing, I was invited as a matter of case management to hear ITF’s abuse of process application in the November Action first, as ITF had made no application in the March Action and as it was common ground that if ITF’s application in the November Action succeeded, the claims therein against FSU and AKT would also have to be struck out, because the claim against ITF provided the only basis for Brussels Convention jurisdiction, under Article 6.1, against the Finnish Unions. However as the March Action came first, and as the November Action only assumed real significance if the Finnish Unions’ application in the March Action was successful, I ruled that I should hear the Finnish Unions’ arguments on those applications first. Accordingly I heard first the submissions of Mr Mark Cran QC, who appeared on behalf of FSU and AKT, followed by the submissions of Ms Helen Davies on behalf of ITF, and the submissions of Mr Dominic Kendrick QC on behalf of the Claimants.
29. The Brussels Convention has, with effect from 1^st March 2002, been effectively replaced within all Contracting States except Denmark, by the provisions of Council Regulation (EC) No. 44/2001 of 22^nd December 2001, on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“the Regulation”). Among the changes effected by the Regulation is the introduction of a definition of seisure for the purposes of the provisions relating to lis pendens and related actions, as now set out in Section 9, comprising Articles 27 to 30, of the Regulation. Article 30 provides that for the purposes of Section 9, and subject to certain qualifications, a court shall be deemed to be seised when the document instituting the proceedings is lodged with the court or, if service is necessary before lodgement, at the time when it is received by the authority responsible for service. It remains to be seen what if any problems this new autonomous definition of seizure throws up. It does not shed any light on the issues that I have to decide relating to when if at all the Finnish Labour Court became seised of the Finnish Action (see below), though it will undoubtedly reduce the need for such inquiries in the future.

The issues

30. The application of the Finnish Unions in the March Action raises the following main issues:

(1) Where the English court would have Brussels Convention jurisdiction unless, as alleged by a defendant, (a) a court in another Contracting State was first seised of proceedings involving the same cause of action and between the same parties within the meaning of Article 21, or (b) the disputes the subject of the English proceedings are subject to a foreign jurisdiction clause to which Article 17 applies, upon whom does the burden of proof lie, and what is the applicable standard of proof, that Articles 21 and/or 17 do or do not apply? (Issues (2) – (4) below must be understood in the light of the answers to Issue (1).)

(2) When does a Finnish Court become seised of an action for the purposes of Article 21 of the Brussels Convention?

(3) If the answer to Issue (2) is that a Finnish Court becomes seised of an action for the purposes of Article 21 upon lodgement with the court of the application summons or plaint, with the result that the Finnish Labour Court became seised of the Finnish Action for these purposes on 5^th December 2001 - that is, two weeks before the English Court became seised of the March Action as against FSU and AKT upon service of the amended Claim Form therein on those Defendants - does the Finnish Action involve the same cause of action and is it between the same parties as the March Action within the meaning of Article 21?

(4) Are the disputes between the Claimants and FSU and/or AKT in respect of which the Claimants claim against those Defendants in the March Action, disputes that the parties have agreed that the Finnish Courts (or any particular Finnish Court) are to have jurisdiction to settle within the meaning of Article 17 of the Brussels Convention?

(5) Were the Claimants entitled under CPR Rule 6.19 to serve the amended Claim Form in the March Action on FSU and AKT in Finland without first having obtained the permission of the Court to effect such service out of the jurisdiction, and if not, what should be the consequence of their failure to obtain such permission?

31. If the application of FSU and AKT in the March Action is unsuccessful, with the result that that Action remains alive in relation to all three Defendants, then the Claimants have made clear that they would not wish to pursue the November Action, which, it will be recalled, was only commenced because the Claimants were concerned that FSU and AKT might try to pre-empt their application to join FSU and AKT as additional Defendants to the March Action by bringing proceedings in Finland and invoking Article 21 in respect thereof. In those circumstances, the points raised by the Defendants’ respective applications in relation to the November Action are of academic interest only, save in relation to costs. I was, however, asked to deal with them in any event, and agreed to do so.
32. The first issue raised by the Defendants’ applications in the November Action is whether that Action is an abuse of process, having regard to the fact that (a) it was brought by the Claimants in an attempt to prevent FSU and AKT from obtaining chronological priority by bringing Finnish proceedings against the Claimants before the Claimants could join FSU and AKT as additional Defendants to the March Action and serve the amended Claim Form on them in Finland, (b) ITF was named as a Defendant to provide a jurisdictional peg under Article 6.1 of the Brussels Convention upon which to hang the Claimants’ claims against FSU and AKT, and (c) the allegations and claims therein against ITF duplicate the allegations and claims against ITF in the March Action. This is the subject matter of ITF’s application notice, supported as it was by FSU and AKT, who contended that Article 6.1 did not apply because the claims against ITF in the November Action disclosed no genuine issue to be tried.
33. If the November Action is not an abuse of process, then my decisions on the issues arising on the application of FSU and AKT in the March Action will also be applicable in relation to the identical, or similar, issues that arise on their application in the November Action. However, the facts relevant to the November Action equivalents to March Action Issues (3) and (5) are different. If the Finnish Labour Court became seised of the Finnish Action for Brussels Convention purposes on lodgement with the Court on 5^th December 2001, it was common ground that the English Court was nonetheless first seised of the disputed claims against FSU in the November Action, by virtue of the fact that the Claim Form therein was served on FSU at 1330 hours Finnish time that same day, 1 2 hours before lodgement of the application summons in the Finnish Action. As Counsel observed in the course of argument, 5^th December 2001 is a day for the connoisseur of Article 21. The amended Claim Form in the November Action was not served on AKT until 1730 hours Finnish time that day, 1 2 hours after lodgement of the application summons in the Finnish Action. Thus it was only AKT that was in a position to advance an Article 21 argument in relation to the November Action. And at the time of issue and service of the November Action, the only other pending English proceeding was the March Action as against ITF, because permission had not by then been obtained to join FSU and AKT as Defendants to that Action.
34. I now turn to deal with the issues raised by the application of FSU and AKT in the March Action.

The March Action

Burden and standard of proof

35. As mentioned above, the Claimants have relied on Article 6.1 of the Brussels Convention (set out above) to found jurisdiction over FSU and AKT for the purposes of both the March Action and the November Action. They have done so on the basis that ITF has at all material times been domiciled in England, and that their claims against FSU and AKT are sufficiently connected with their claims against ITF to bring the case within the principle of connectivity laid down by the European Court of Justice in Kalfelis v. Bankhaus Schröder, Münchmeyer, Hengst & Co [1988] ECR 5565, when it answered the second question submitted to it by the Bundesgerichtshof as follows:

“For Article 6(1) of the Convention to apply there must exist between the various actions brought by the same plaintiff against different defendants a connection of such a kind that it is expedient to determine the actions together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings.”

It has not and could not be suggested that the claims are not sufficiently connected to bring the case within this principle. The Claimants’ reliance on Article 6.1 for the purposes of the November Action has been challenged for different reasons, which I shall consider when I deal with the abuse of process arguments.

36. The provisions of the Brussels Convention upon which FSU and AKT principally rely are Articles 17.1 and Article 21. Article 17.1 provides, so far as material, as follows:

“If the parties, one or more of whom is domiciled in a Contracting State, have agreed that a court or the courts of a Contracting State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have exclusive jurisdiction. Such an agreement conferring jurisdiction shall be either:

(a) in writing or evidenced in writing, or

(b) in a form which accords with practices which the parties have established between themselves, or

(c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.

....”

Article 21 provides as follows:

“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 motion 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.”

37. Although there is now House of Lords authority as to the appropriate standard of proof to apply to an issue as to whether a necessary precondition of Convention jurisdiction has been established by the Claimant (Canada Trust Co v Stolzenberg (No. 2) [2002] 1 AC 1, considered in more detail below), the questions of burden and standard of proof applicable where it is the defendant who relies on Article 17 and/or Article 21 as grounds for the English Court to decline jurisdiction, do not appear to have been explicitly addressed in any reported judicial decision. (The question of standard of proof in relation to Article 17 was left open by the Court of Appeal in Knauf UK GmbH v. British Gypsum Ltd. [2002] 1WLR 907, at pages 925-926.)
38. In these circumstances, both sides were keen to assume the burden of proof, because it was common ground that the applicable standard of proof was that of a good arguable case, and that this required less than proof on the balance of probabilities; and it was suggested that in a case where the arguments were evenly balanced, the party with the burden of proof would win. Indeed I was referred to para. 2.208 of Civil Jurisdiction and Judgments, 3^rd edition (2002), by Adrian Briggs and Peter Rees, which postulates a case in which the English court would have jurisdiction under Article 5.1 of the Brussels Convention unless there was a foreign jurisdiction clause to which Article 17 applied, the English court concludes on balance that the foreign jurisdiction clause on which the defendant relies was valid and effective, but thinks that there is a good arguable case that it could be impeached, and the English court decides to retain jurisdiction on the basis that the claimant has established a good arguable case that the English court has special jurisdiction, even though it considers that the German courts probably have exclusive jurisdiction. For reasons which will appear below, I think the problem thus presented is more apparent than real.
39. The Claimants contended that a claimant bore throughout the burden of proving the facts that allowed the Court to assume and, wherever jurisdiction was challenged, retain jurisdiction, and that the applicable standard was that of a good arguable case, which they submitted was a flexible test that required less than proof on the balance of probabilities but a strong enough case to justify retaining the action in England. In practical terms this meant, so they submitted, that they had to demonstrate a good arguable case that the Finnish Labour Court was not first seized of any proceedings involving the same cause of action and between the same parties as their English proceedings against FSU and AKT, and that there was no applicable Finnish jurisdiction clause. In contrast, FSU and AKT submitted that they bore the burden of establishing a good arguable case, either that the Finnish Labour Court was the court first seized of such proceedings, or that the claims against FSU and/or AKT fell within a jurisdiction clause conferring jurisdiction on the courts of Finland, and that if I concluded that the arguments on either of these issues were evenly balanced, it followed that they had a good arguable case which entitled them to succeed on their jurisdictional challenge
40. In Shevill v Press Alliance SA [1995] ECR I-415, the European Court of Justice considered a reference from the House of Lords in a defamation case which had raised the question (amongst others) of what standard of proof a court should require of a plaintiff that the conditions of Article 5.3 of the Brussels Convention were satisfied, in deciding whether it had jurisdiction under that Article. The Court ruled (at page 446) that:

“The criteria for assessing whether the event in question is harmful and the evidence required of the existence and extent of the harm alleged by the victim of the defamation are not governed by the Convention but by the substantive law determined by the national conflict of laws rule of the Court seised, provided that the effectiveness of the Convention is not thereby impaired”.

This ruling has been taken to be of general application, and to permit English courts to set their own criteria for the degree of proof required of matters essential to establishing jurisdiction under the Convention, “provided that the effectiveness of the Convention is not thereby impaired”.

41. In Canada Trust Co v Stolzenberg (No. 2) [1998] 1 WLR 547 (Court of Appeal), [2002] 1 AC 1 (House of Lords), the English courts had to consider, among other questions, the standard of proof required where the issue was whether a defendant was domiciled in the United Kingdom so as to found jurisdiction against other defendants, in respect of connected claims, under Article 6.1. The issue raised for decision was whether the applicable standard was that of “good arguable case”, as the plaintiffs contended, or the ordinary civil standard, of proof on the balance of probabilities, as the defendants submitted. The judge (Rattee J) and all members of the Court of Appeal (Nourse, Pill and Waller LJJ) held that the applicable standard was “good arguable case”, in line with the position under RSC Order 11 (now CPR Rules 6.20 - 21) as authoritatively decided by the House of Lords in Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438. Waller LJ, who delivered the leading judgment, analysed the authorities on both RSC Order 11 and the Brussels Convention, at pages 553-559 of his judgment. The decision of the Court of Appeal on this point (as on other points raised) was upheld, their Lordships not finding it necessary to call upon counsel for the plaintiffs to deal with the issue of standard of proof. Lord Steyn (with whose reasons the other members of their Lordships’ House agreed), having referred to the applicability of the “good arguable case” test in the Order 11 context, said this (at page 13 f-g):

“The question is whether in the context of article 6 the more stringent test of a balance of probabilities should apply. The adoption of such a test would sometimes require the trial of an issue or at least cross-examination of deponents to affidavits. It would involve great expense and delay. While it is true that the jurisdictional issues under the Convention are very important, they ought generally to be decided with due despatch without hearing oral evidence. In my view Waller LJ’s judgment [1998] 1 WLR 502, 553-559 correctly explained on sound principled and pragmatic grounds why the defendants argument is misconceived.”

It can thus be taken that Waller LJ’s reasoning has the endorsement of the House of Lords.

42. It is unnecessary to set out the entirety of the relevant section of Waller LJ’s judgment. It is sufficient to quote a few passages which seem to me to be of particular relevance to the present dispute. These are as follows:

“It is I believe important to recognise, as the language of their Lordships in Korner’s case [1951] AC 869 demonstrated, that what the court is endeavouring to do is to find a concept not capable of very precise definition which reflects that the plaintiff must properly satisfy the court that it is right for the court to take jurisdiction. That may involve in some cases considering matters which go both to jurisdiction and to the very matter to be argued at the trial, e.g. the existence of a contract, but in other cases a matter which goes purely to jurisdiction, e.g. the domicile of a defendant. The concept also reflects that the question before the court is one which should be decided on affidavits from both sides and without full discovery and/or cross-examination, and in relation to which therefore to apply the language of the civil burden of proof applicable to issues after full trial is inapposite. Although there is power under Ord. 12, r.8(5) to order a preliminary issue on jurisdiction, as Staughton LJ pointed out in the Attock Cement Co. case [1989] 1 WLR 1147, 1156d, it is seldom that the power is used because trials on jurisdiction issues are to be strongly discouraged. It is also important to remember that the phrase which reflects the concept “good arguable case” as the other phrases in Korner’s case “a strong argument” and “a case for strong argument” were originally employed in relation to points which related to jurisdiction but which might also be argued about at the trial. The court in such cases must be concerned not even to appear to express some concluded view as to the merits, e.g. as to whether the contract existed or not. It is also right to remember that the “good arguable case” test, although obviously applicable to the ex parte stage, becomes of most significance at the inter partes stage where two arguments are being weighed in the interlocutory context which, as I have stressed, must not become a “trial”. “Good arguable case” reflects in that context that one side has a much better argument on the material available. It is the concept which the phrase reflects on which it is important to concentrate, i.e. of the court being satisfied or as satisfied as it can be having regard to the limitations which an interlocutory process imposes that factors exist which allow the court to take jurisdiction.

The civil standard of proof has itself a flexibility depending on the issue being considered and the concept ‘good arguable case’ has a similar flexibility. It is natural, for example, in a case concerned with a contract where the jurisdiction depends on whether the breach took place within the jurisdiction, but where the issue to be tried will be whether there was a contract at all, not to wish to give even the appearance of pre-trying the central issue, even though the concept of being satisfied must apply both to the existence of the contract and the place of the breach. It is equally natural for the court in the process of being satisfied to scrutinise most jealously that factor which actually provides jurisdiction. It is equally natural that where the foundation of jurisdiction is domicile, i.e. an issue that will not arise at the trial, that particular scrutiny of the material available takes place in the context of the limitations applied to an interlocutory process.” (pages 555c-556b).

“The Seaconsar case demonstrates that what has to be sufficiently shown for the purpose of establishing jurisdiction both in relation to the argument as to whether the contract existed or not (which may arise more fully at the trial) and as to where the breach took place (which will not) has to be shown to the standard of a ‘good arguable case’. As further appears from the Seaconsar case, that is a threshold below ‘proved on a balance of probabilities’, because that is the civil burden after a full trial, but higher than ‘serious question to be tried’, which relates of the plaintiff’s claim relative to the contract. But, as I have sought to stress, ‘good arguable case’ is a concept with some degree of flexibility depending on the issue.” (page 558d-e)

“I ought finally to refer to a decision of my own relied on by Mr Hochhauser, IP Metal Ltd v Ruote OZ SpA [1993] 2 Lloyd’s Rep 60, and to the ruling of the Court of Appeal refusing leave to appeal from that decision, IP Metal Ltd v Ruote OZ SpA (No. 2) [1994] 2 Lloyd’s Rep 560. That case was concerned with article 17 (agreements as to jurisdiction) and as to whether that article, if applicable, in effect overrode articles 21 and 22. I expressed the view that article 17 did override, but that the English court would want to be as clear as possible, and at least form the view that it was highly likely that if the matter were tried out the plaintiff would succeed in his argument on the jurisdiction clause, before concluding that article 17 applied. I was referred to the Tesam [1990] IL Pr 149 and Mölnlycke [1992] 1 WLR 1112 cases and Mr Gaisman for the plaintiffs in that case was seeking to persuade me that a ‘good arguable case’ was the appropriate test. I rejected ‘good arguable case’ as the appropriate test when dealing with article 17, and preferred what I conceived to be a higher test because the question of whether there was a consensus within the terms of that article was likely only to be of relevance when jurisdiction was being decided. In addition, I applied what I conceived to be a higher test, because I was dealing with a situation in which another court was seised and where it was being argued that it was that court which should decide the question of jurisdiction, not the English court. When leave to appeal was refused Saville LJ referred to my formulation ‘highly likely’, but I do not read the judgment as approving or disapproving of the words I used.

I, too, was dealing with the matter without the benefit of Lord Goff’s analysis in the Seaconsar case [1994] 1 AC 438. I think I was probably wrong to reject ‘good arguable case’ as being the appropriate test. I say probably because the court may be in a slightly different position when faced with whether article 17 should apply and override article 21 or 22 than it is when considering whether it has jurisdiction under articles 5 or 6. But I rather suspect that in truth ‘good arguable case’ is the appropriate standard which I should have adopted, and that I failed to appreciate that that language would have enabled me to take the attitude that I did.” (page 559c-g).

43. As Waller LJ’s analysis makes clear, the underlying issue for the court where Convention jurisdiction is in issue is whether it is right for the court to take jurisdiction. The “good arguable case” test is the result of the court’s search for “a concept not capable of very precise definition which reflects that the plaintiff must properly satisfy the court that it is right for the court to take jurisdiction”. At the inter partes stage, where opposing arguments are being weighed in the interlocutory context, Waller LJ interpreted the test as requiring the plaintiff (now claimant) to show that he had “a much better argument on the material available.” But as he pointed out, the concept “good arguable case” is a flexible one, and may require particular scrutiny of certain factors, albeit in the context of the limitations applicable to the interlocutory process.
44. The decision of Moore-Bick J in Glencore International AG v Metro Trading International Inc. [1999] 2 LLR 632 provides an example of the application of these principles in a case where the claimant was seeking to establish jurisdiction under Article 17 of the Brussels Convention. The Judge said this (at page 642):

“It is unnecessary and indeed inappropriate at this stage in the proceedings for the Court to make any definitive ruling on issues which form part of the substantive dispute between the parties. It is sufficient, therefore, for a claimant who seeks to establish jurisdiction under art. 17 of the Convention to satisfy the Court that there is at least a good arguable case that the dispute between the parties is governed by an exclusive jurisdiction clause which satisfies the requirements of that article: see Canada Trust Co v Stolzenberg (No. 2) [1998] 1 WLR 547 per Lord Justice Waller at p.559. In a case such as the present a good arguable case requires less than proof on the balance of probabilities, but must nonetheless be strong enough to justify retaining the action here rather than declining jurisdiction in favour of the Court first seised in accordance with art. 21.”

45. The underlying issue, namely whether it is right for the court to take jurisdiction, remains the same, whether the immediate issue before the court on a challenge to jurisdiction is, have the matters necessary to bring the case within Article 2 or one of the heads of special jurisdiction been established to the requisite degree, or, must the court decline jurisdiction (or stay the proceedings) because of the alleged existence of a foreign jurisdiction clause within Article 17, or because the courts of another Contracting State are allegedly first seised of a dispute involving the same cause of action and between the same parties within the meaning of Article 21. What is more, the Court must be satisfied that it is appropriate to take jurisdiction, whether or not the defendant mounts a challenge to jurisdiction. Thus for example Article 21 requires any court other than the court first seised to stay proceedings of its own motion until the jurisdiction of the court first seised is established.
46. In these circumstances I do not think it can be right that any legal burden of proof, to whatever standard, can lie upon the defendant. I accept the Claimants’ submission that the burden remains throughout with the claimant, to satisfy the court that it is right to take jurisdiction, with the consequence that if any provisions of the Convention are invoked by the defendant as requiring the court to decline jurisdiction or to stay the proceedings before it, the burden lies on the claimant to satisfy the court, to the requisite standard, that those provisions are inapplicable.
47. The requisite standard is that of a good arguable case. I have borne in mind that this is a flexible concept, and one that requires particular scrutiny to be given in the present context to the material relevant to the issues of whether Articles 17 and/or 21 are applicable. I have approached these issues on the basis that, in this context, “good arguable case” requires the Claimants to demonstrate that they have much the better argument on the material available. On that basis, the problem presented by Messrs Briggs and Rees would not in practice arise, because if the court concluded that the defendant had the better of the argument on whether Article 17 was applicable, it would decline jurisdiction. In view of my conclusions, it has not been necessary for me to consider what the position would have been had I concluded that the arguments were evenly balanced.

When does a Finnish Court become seised of an action for the purposes of Article 21?

48. In Zelger v. Salinitri (No 2) [1984] ECR 2397, the European Court, on a reference from the Oberlandesgericht Munich, gave the following guidance on the proper interpretation and application of Article 21(at paras 14-16 of its judgment):

“14. It may properly be inferred from Article 21, read as a whole, that a court’s obligation to decline jurisdiction in favour of another court only comes into existence if it is established that proceedings have been definitively brought before a court in another State involving the same cause of action and between the same parties. Beyond that, Article 21 gives no indication of the nature of the procedural formalities which must be taken into account for the purposes of considering whether or not to recognize the existence of such an effect. In particular, it gives no indication as to the answer to the question whether a lis pendens comes into being upon the receipt by a court of an application or upon service or notification of that application on or to the party concerned.

15. Since the object of the Convention is not to unify those formalities, which are closely linked to the organization of judicial procedure in the various States, the question as to the moment at which the conditions for definitive seisin for the purposes of Article 21 are met must be appraised and resolved, in the case of each court, according to the rules of its own national law. That method allows each court to establish with a sufficient degree of certainty, by reference to its own national law, as regards itself, and by reference to the national law of any other court which has been seised, as regards that court, the order of priority in time of several actions brought within the conditions laid down by the Convention.

16. The answer to the question raised by the Oberlandesgericht München is therefore that Article 21 of the Convention must be interpreted as meaning that the court “first seised” is the one before which the requirements for proceedings to become definitively pending are first fulfilled, such requirements to be determined in accordance with the national law of each of the courts concerned.”

49. This decision established an autonomous, Convention definition of seisin for the purposes of Article 21, namely that of definitive pendency, but left it to the national law of the state concerned to determine when the requirements of definitive pendency are fulfilled. The European Court of Justice did not define what it meant by “definitively pending”, but, as the Court of Appeal has held (see below), it did not use the adverb “definitively” by way of mere rhetoric, and some guidance as to what the European Court of Justice may have had in mind is to be derived from the submissions of the Commission, which used the phrases, “seised definitively” and “definitively instituted”.
50. There is as yet no decision of the Finnish courts as to the stage at which Finnish proceedings become definitively pending for the purposes of Articles 21 and/or 22 of the Conventions.
51. The position with regard to English proceedings has been firmly established as a result of two decisions of the Court of Appeal, in Dresser UK Ltd. v. Falcongate Freight Management Ltd. [1992] QB 502 and Neste Chemicals SA v. DK Line SA (The “Sargasso”) [1994] 2 LLR 6. The rule is that English proceedings become definitively pending for the purposes of Articles 21 and 22 upon service of originating process, and not before. In each of those 2 cases, the originating process in question was a writ, but it was not suggested that the position was any different in relation to a claim form issued in accordance with the Civil Procedure Rules. Although those 2 decisions were directly concerned only with the time at which English court became seised of proceedings for the purposes of Articles 21 and 22, they give authoritative guidance (at least so far as this court is concerned) as to the proper interpretation of Articles 21 and 22 and of the decision in Zelger v. Salinitri.
52. I take first the decision in Dresser, in which the relevant issue was as to the date on which an English court became seised of proceeding for the purposes of Article 22, though it was recognised that the test was the same for the purposes of that Article as it was for the purposes of Article 21. The leading judgment in that case was delivered by Bingham LJ. I set out below certain passages in his judgment which seem to me to be of particular relevance to the present case, with my comments where appropriate. At pages 514h -515a, Bingham LJ said this:

“We must therefore decide when, under English law, the requirements for the present proceedings to become definitively pending were first fulfilled. Since this question never arose, and never could have arisen, before 1987 one could not expect earlier authority to yield a simple, ready-made answer. We must be wary of adopting and applying any rule developed for a different purpose in different circumstances. In determining the effect of national law for purposes of the Convention we must, I think, have regard to the international purpose which the Convention was made to achieve.”

One would expect the courts of another Contracting State to adopt a similar approach when the issue came before them for the first time, and, for example, not to assume that a domestic rule to the effect that proceedings before them became pending at a particular time, necessarily provided the answer to when proceedings became “definitively pending” for the purposes of Article 21; and in determining the effect of national law for the purposes of the Convention, to have regard to the international purposes of the Convention. At page 519f, he stated as follows:

“Even if an action is pending on issue of proceedings, it is necessary to consider if it is “definitively” pending. The European Court did not in my opinion use this adverb, defined by the Oxford English Dictionary to mean “so as to decide or settle the matter; decisively, conclusively, finally, definitely” by way of mere rhetoric.”

That seems to me to be an authoritative recognition of the fact that an action may be pending, but not definitively pending - a point also made by Peter Gibson LJ. in his judgment in The Sargasso (see below). At pages 519g - 520d, Bingham LJ quoted the following from the submissions of the Commission to the European Court of Justice in Zelger v. Salinitri:

‘Since the bringing of an action often extends over a certain period of time (the lodging of the document initiating the proceedings at the registry of the court and the subsequent service thereof on the defendant) the question also arises whether article 21 of the Convention refers to the definitive institution of proceedings or to some earlier stage, for example the time when the document is lodged with the court. . . . It would seem to be justified to displace jurisdiction which exists by virtue of the provisions of the Convention only if proceedings have already been instituted before the court of another contracting state and have resulted in that court’s being seised thereof definitively. As long as that court is not seised definitively it is not clear whether those proceedings will actually taken their course. Thus, for example, in German procedural law an application may simply be withdrawn before service on the defendant without that amounting to a formal discontinuance of the proceedings. Furthermore, it must not be forgotten that the defendant does not, as a general rule, have any knowledge of the fact that proceedings have been instituted against him before the document initiating them is served upon him and that in those circumstances he cannot yet raise the please of lis alibi pendens. For that reason the moment at which the proceedings are definitively instituted must be retained as the deciding factor for the purposes of article 21 of the Convention.’

He commented that it seemed likely that the European Court of Justice had these submissions in mind when it formulated its judgment as it did. I respectfully agree. At page 522g he observed that:

“We are concerned to analyse and apply English procedure, and we will review that of other countries only when an issue under the Convention falls to be decided. We must then accept their interpretation of their procedural law. It may, however, be that in other countries as well as this procedural rules will call for reconsideration in the light of the Convention.”

This is a case where the English court has to review Finnish procedure. There is no decision of the Finnish courts as to what constitutes “definitive pendency” for the purposes of Articles 21 and 22, but if such an issue were to arise, there is no reason to doubt that the Finnish courts would consider their procedural rules, not purely from a domestic standpoint, but also in the light of the international purposes of the Convention.

53. Bingham LJ expressed his conclusions as to when an English court became seised of proceedings for the purposes of Articles 21 and 22 as follows (at page523a-d):

“. . .it is in my judgment artificial, far-fetched and wrong to hold that the English court is seised of proceedings, or that proceedings are decisively, conclusively, finally or definitively pending before it, upon mere issue of proceedings, when at that stage (1) the court’s involvement has been confined to a ministerial act by a relatively junior administrative officer; (2) the plaintiff has an unfettered choice whether to pursue the action and serve the proceedings or not , being in breach of no rule or obligation if he chooses to let the writ expire unserved; (3) the plaintiff’s claim may be framed in terms of the utmost generality; (4) the defendant is usually unaware of the issue of proceedings and, if unaware, is unable to call on the plaintiff to serve the writ or discontinue the action and unable to rely on the commencement of the action as a lis alibi pendens if proceedings are begun elsewhere; (5) the defendant is not obliged to respond to the plaintiff’s claim in any way, and not entitled to do so save by calling on the plaintiff to serve or discontinue; (6) the court cannot exercise any powers which, on appropriate facts, it could not have exercised before issue; (7) the defendant has not become subject to the jurisdiction of the court.”

54. Ralph Gibson LJ delivered a short concurring judgment, and Sir Stephen Brown P also concurred. Having cited the conclusion of the European Court of Justice in Zelger v. Salinitri, Ralph Gibson LJ added (at pages 524 h - 525 b):

“That decision acknowledges that this court has both the right and the obligation to decide the question having regard to the proper construction of the Convention in the light of its purposes in accordance with the proper understanding of our own procedural law.”

There is no reason to doubt that a Finnish court would recognise that it had not only a similar right, but also a similar obligation.

55. In Dressser, Bingham LJ expressed the view that whereas as a general rule, service of proceedings was the time at which as English Court became seised, this was not an invariable rule, and by way of exception, the Court would be seised of proceedings in the event of an actual exercise of jurisdiction before service, as in the case of the granting of a Mareva injunction or the making of an Anton Pillar order.
56. In The Sargasso, however, the Court of Appeal, upholding a decision of Sheen J to the effect that an English Court did not become seised of proceedings upon the grant of leave to issue and serve a concurrent writ out of the jurisdiction under RSC Order 11, dissented from the view that the general rule was subject to exceptions. The leading judgment of Steyn LJ, contains the following passages of relevance to the present case:

“Mr Justice Sheen approached the matter on the basis that the granting of leave to serve out of the jurisdiction is not to be equated with the exceptional cases which Lord Justice Bingham envisaged. He rightly points out that Lord Justice Bingham applied a test of “decisively, conclusively, finally or definitively pending” (page 10).

“The only guidance offered by the European Court of Justice is that in order to be seised proceedings must be “definitively” brought before a Court. Taking account of this general proposition, the question of seisin in this context must be decided in accordance with the national procedural laws of Contracting States. But the European Court of Justice considered that the objective must be a national solution “of a sufficient degree of certainty”. Subject to these general propositions we must turn to English procedural law in order to determine at what point of time an English Court is seised of the proceedings. That is by no means a straightforward task since the word “seised” (the word used in art. 21) and the words “definitively brought before a court” (as “seised” was interpreted Zelger v. Salinitri No. 2) are not terms of art in English law. No English decisions had occasion to address such questions. Only after the accession of the United Kingdom in 1987 to the Brussels Convention did such questions become relevant. It follows that when the matter first came before an English Court it was unconstrained by authority. Instead it was faced with a new problem and a choice of solutions. This does not answer the question before us. But it does underline the importance of competing policy considerations and the need to adopt an interpretation which best matches the context and purpose of this multi-lateral convention” (Pages 9-10).

Peter Gibson LJ said this (at page 12):

“The interpretation put by the European Court of Justice in Zelger v. Salinitri (No. 2).... at p. 2409 on the meaning of “first seised” in art. 21 of the Brussels Convention requires national Courts of Contracting States to answer the following question: in any case where proceedings involving the same cause of action and between the same parties are brought in Courts of different Contracting States, which is the Court before which the requirements, according to the national law of that Court, for the proceedings to become definitively pending have been first fulfilled? That interpretation recognises that proceedings may be pending in a Court without being definitively pending. There are, therefore, some steps which may be taken in proceedings in a Court which are nevertheless insufficient to make the proceedings definitively pending in that Court.”

57. The Claimants’ case was that a Finnish court, faced with the issue as to when Finnish proceedings become definitively pending for the purposes of Article 21 and/or Article 22, would decide that they only become definitively pending when they are served on the defendant - in other words, that there is no material difference for these purposes between the position in Finland and that which obtains in this country. Service of the Finnish Action had not yet been effected at the time of the hearing of the Defendants’ applications, and so on this basis that Action was not yet definitively pending .
58. However, FSU and AKT contended that Finnish proceedings become definitively pending on the date on which a plaintiff’s written application for a summons was lodged with the court, and that a Finnish court would so decide. It will be recalled that the written application (or plaint) in the Finnish Action was lodged with the Labour Court at 1500 hours on 5^th December 2001, 14 days before the amended Claim Form in the March Action was served on FSU and AKT.
59. I have to assess the rival contentions of the parties, and the evidence and other materials on which they rely, in order to decide (in line with my decisions on burden and standard of proof) whether on the materials available the Claimants have a much better argument on this point than FSU and AKT.
60. The evidence included translated extracts from the Finnish Code of Judicial Procedure (“the Finnish Code”), and a translation of the Finnish Act respecting the Labour Court (“the Labour Court Act”) - the application summons in the Finnish Action was addressed to the Labour Court.
61. Chapter 5 of the Finnish Code contains provisions relating to the initiation and preparation of a civil case. Section 1 of chapter 5 provides that:

“(1) A civil case shall be initiated by a written application for a summons, delivered to the registry of a district court.

(2) The case shall become pending and its preparation shall begin upon the arrival of the application to the registry.”

Section 2(1) provides that:

“An application for a summons shall indicate:

1. the specified claim of the plaintiff;

2. the circumstances on which the claim is based, in detail;

3. as far as possible, the evidence that the plaintiff intends to present and what he/she intends to prove with each piece of evidence;

4. the claim for the compensation of legal costs, if the plaintiff deems this necessary; and

5. the basis for the jurisdiction of the court, unless jurisdiction can be inferred from the application for a summons or the documents enclosed to it.”

62. Sections 15 to 18 of the Labour Court Act (as supplemented by section 26) deal with the institution of proceedings before the Finnish Labour Court. Section 15(1) provides that proceedings are to be instituted by presentation of a written application to the Court. This is then reviewed by the Chairman or the Court Clerk (sections 16 and 26(2)), who will instruct the applicant to remedy any defect if the application is found to be defective. If the application is not rectified, it will be dismissed (section 17(1)). If the application is complete or any defect therein is rectified, the Chairman or a Court Officer will then issue a written summons, arrange for it to be communicated to the respondent, and instruct him to present a defence within the specified time limit (section 18).
63. Mr Timo Esko, a partner in the Helsinki Law firm Timo Esko & Sami Uoti Oy, was the Finnish law expert for FSU and AKT. In his First Report, dated 4^th February 2002, he stated that “proceedings in Finland are seized when the Application of Summons is issued/registered at the Court” (citing Chapter 5, Section 1 of the Procedure Code in Support), and expressed the opinion that “This principle is applicable to the deciding of the moment of seizure for a domestic procedural question and also when deciding the issue of ‘first seised’ under Articles 21 and 22 of the Convention.” However, he cited no support for this latter proposition, and did not mention the concept of definitive pendency, by reference to which national procedural rules must be judged for the purposes of Article 21.
64. Mr. Petri Taivalkoski, a partner in the Helsinki law firm Roschier Holmberg, Attorneys Ltd., was the Finnish law expert for the Claimants. In his First Report, dated 28^th May 2002, he agreed with Mr Esko as to the point at which a Finnish Court was seised of proceedings under internal Finnish procedural law. However, he did not agree that this also determined the moment at which the Finnish Court should be deemed to have been seised for the purposes of the Brussels Convention. He exhibited a 1996 article (“the Möller Article”) by Judge Gustaf Möller, a Justice of the Supreme Court of Finland and one of the co-authors of the Jenard-Möller Report on the Lugano Convention. Mr Taivalkovski stated, and I accept, that Judge Möller is considered to be a leading authority in Finland with respect to matters relating to the Brussels and Lugano Conventions. The Möller Article, which I shall consider in more detail below, concludes as follows:

“... it is submitted that Finnish and Swedish Courts for the purposes of the Conventions - despite of the provisions on seisin in the Codes of Judicial Procedure in force in those countries - should be regarded seised when the document initiating the proceedings has been served on the defendant.”

Mr Taivalkoski said that he found the arguments presented in support of this view convincing, and that he thought it likely that the Labour Court would follow Judge Möller’s view.

65. In his Supplemental Expert Report dated 21 June 2002, Mr Esko asserted that the Möller Article amounted to “a dissenting opinion from the mainstream and should be seen as an initiative for change”, and that “it does not represent the present situation nor the prevailing opinion”. Apart from referring to various passages in the Article itself, in particular footnote 27 to the Article, which I set out and comment on below, the only support which Mr Esko gives for these assertions is a translated extract from what he describes as a University text book Lugano-konventionen (1992), by Professor Lermart Palsson, a well-known specialist in conflict of laws and of jurisdictions, in which Professor Palsson points out that, in contrast to the position in most other Contracting States, according to Swedish, Danish and Norwegian procedural law “proceedings are considered to be initiated with the effect of litispendens already when the application for a summons has arrived to the Court”. Neither this extract, nor Mr Esko in his Supplemental Expert Report, specifically address the question of when proceedings become definitively pending in Finland or other Scandinavian jurisdictions.
66. The final contribution to the Expert Evidence was a Supplementary Expert Report of Mr Taivalkoski, dated 27^th June 2002 and put before the Court, in the event without objection from FSU and AKT (who referred me in opening to certain paragraphs therein), in the course the hearing. Mr Taivalkoski disagreed with Mr Esko’s assertion that the Möller Article was a dissenting opinion and an initiative for change. He acknowledged that many authors, including Professor Palsson, had considered that the decisive time for first seizure under the Brussels Convention was, as to Finland and Sweden, the moment when the documents were lodged with the Court. However, he stated that the Möller Article contained the first thorough analysis of the issue, and that he was not aware of any articles or other publications by leading Convention experts in which Judge Möller’s views had been considered and an opposite view still supported.
67. I turn next to consider the Möller Article. It must be rare indeed for an English court having to decide, or form a view on the strength of an argument in relation to, an undecided question of foreign law, to have available an article written by a Judge of the Supreme Court of the foreign state in question on the very question in issue, particularly when that Judge is considered to be a leading authority in that country on the area of law in which the question arises. Judge Möller was a co-author of the Jenard-Möller Report on the Lugano Convention.
68. The Claimants contended that in the light of the Möller Article, they clearly had at least a good arguable case that the view expressed therein, that a Finnish court should be regarded as seised for the purposes of the Convention only when the document initiating the proceedings has been served on the defendant, would be adopted by the Finnish courts, as Mr Taivalkoski thought it would.
69. FSU and AKT for their part contended, however, that the reasoning of Judge Möller was flawed, and that the Finnish courts would, in accordance with the opinion of Mr Esko, and a decision of the Danish Supreme Court to which Judge Möller made reference, decide that the domestic rule in Finland, that a court becomes seised when the application summons is lodged with the Court, would also be adopted for the purposes of the Convention.
70. In the light of the challenge to Judge Möller’s reasoning and the reliance of FSU and AKT on the Danish decision, it is necessary to examine the Möller Article, and that decision, in some detail. The Möller Article was published by Kluwer Law International in 1996 (page references below are to this publication). It is entitled “The date upon which a Finnish and a Swedish Court becomes seised for the purposes of the European Judgment Conventions.” The title itself gives at least partial recognition to a point much relied on by FSU and AKT, namely that the rules regarding the commencement of proceedings and the date upon which a court becomes seised, at least for domestic purposes, are broadly similar in all Scandinavian countries. FSU and AKT contended that the courts of one Scandinavian country are likely to have regard to decisions of the courts of another Scandinavian country in respect (at least) of procedural issues. This was largely undisputed, and I shall assume that it would indeed be the case.
71. Judge Möller clearly had in mind the differences between the domestic rules as to seisure and pendency in the six original Contracting States, where at least as a general rule an action does not become pending before service (which may include deemed service as for example in the Netherlands, where a defendant resident abroad is treated as served when a copy of the proceedings is served on the officier van justitie for the issuing court), and the rule as set out in chapter 5 section 1(2) of the Finnish Code, and the similar rule in the Swedish Code of Judicial Procedure, to the effect that a Court is considered to be seised when the document initiating the proceedings is lodged with the Court (page 221).
72. He refers to and cites from both Dresser and The Sargasso, and the principle established therein that according to English law a court does not for the purposes of Article 21 become seised until service of the originating process (pages 222-224). He then poses the question:

“Would the same also apply as far as Finnish law and Swedish law are concerned or do the above mentioned statutory provisions in Finnish and Swedish law necessarily mean that a court also for the purposes of Article 21 and 22 of the Conventions becomes definitively seised already when the document initiating the proceedings is lodged with the court?” (Page 224).

73. Judge Möller points out that the current Finnish and Swedish procedural rules have (as from 1^st December 1993 in the case of Finland and from 1948 in the case of Sweden) replaced rules under which a court only became seised upon service on the defendant. He explains that the reason for these changes in rules as to time of seizure was that whereas under the former rules, service was a matter for the parties (as for example in England), under the current rules, service became a matter for which the court was responsible, and “it was felt inappropriate, if the observance of limitation periods or the compliance with procedural time limits could depend on delays in service effected by the court itself” (page 224). One of the criticisms made on behalf of FSU and AKT was that Judge Möller had failed to appreciate or deal with the significance of the point that in Finland and Sweden, service was now effected by the Court. To the contrary, he was clearly well aware of the changes in the rules as to service, and the fact that this underlay the change in the domestic rules as to seisure. It is inconceivable that he failed to take this into account in reaching he conclusions that he did.
74. Moreover, it was the Möller Article which provided FSU and AKT with what I regarded as their best point, for it was Judge Möller who pointed out (at page 224) that these Finnish and Swedish provisions

“do not only mean - as the German term ‘Anhangigkeit’ - that time in certain cases ceases to run for the purpose of limitation periods etc., but also that jurisdiction is removed from a domestic court later seised,”

Thus the consequence that flows under the Convention where another Court is first seised within the meaning of Article 21, follows in Finnish and Swedish domestic law when the document initiating the proceedings is lodged with the court. FSU and AKT were entitled to pose the question, ‘why would a Finnish or Swedish Court not attribute the same significance to the lodging of the document for the purposes of Article 21, as they do for domestic purposes?’

75. In the remainder of the Möller Article, Judge Möller does indeed address this question. Immediately after the passage just quoted, he continues:

“One may, however, still ask whether the above mentioned provisions in Finnish and Swedish law regarding the moment at which a court becomes seised also apply for the purposes of Article 21 of the Convention. Even though the rules of procedures of the various Contracting States are not identical as regards determining the moment at which courts become seised, the courts outside Scandinavia do not ordinarily regard themselves as seised of proceedings until (at earliest) the proceedings have been actually served on and thus brought to the attention of the defendant. As Bingham L.J. pointed out in Dresser v. Falcongate we must in determining the effect of national law for the purposes of the Convention “have regard to the international purpose which the Convention was made to achieve” and “be wary of adopting and applying any rule developed for a different purpose in different circumstances”. The reasoning in the above mentioned judgments of the Court of Appeal is relevant also for Finnish and Swedish courts when applying the Lugano Convention” (pages 224-225).

Thus Judge Möller draws attention, as had Bingham LJ, to the international purpose of the Convention, and the fact that domestic rules developed for different purposes in different circumstances will not necessarily provide the answer to a question arising in the context of the Conventions. Not surprisingly, Judge Möller also indicates that Finnish and Swedish Courts would have regard to the reasoning in the Court of Appeal judgments in deciding the issue when they became seised for the purpose of Article 21. (He refers in this connection, at page 225 footnote 15, to the Declaration by the Representatives of The Governments of the States Signatories to the Lugano Convention, OJ 1988 L 319, p 40).

76. Judge Möller then embarks (at pages 225-229) on an analysis of Zelger v Salinitri. He agrees with Bingham LJ. that the Court did not use the adverb “definitively” by way of mere rhetoric, and that it was probable that it had had in mind the submissions of the Commission, from which he then quotes extensively. He interprets these as meaning that the Commission regarded the decisive factor as being “the moment at which the proceedings are definitively instituted so that the claimant cannot any more withdraw his application without any prejudice.” It was submitted on behalf of FSU and AKT that this was a serious misreading of the Commission’s reasoning. I take it to be reference to the example the Commission gave, by reference to German procedural law, of withdrawal before service, not amounting to formal discontinuance. But the crucial issue is not what particular situations the Commission may have had in mind, but what the Court meant by definitive pendency. Judge Möller also expresses the view that the Court had in mind the point made by the Commission that until a court was seised definitively, “it is not clear whether those proceedings will actually take their course.” I see no reason to doubt that this was indeed one of the factors that the Court had in mind when it adopted the test of definitive pendency.
77. Judge Möller was clearly not particularly impressed with the arguments of Advocate - General Mancini in his Opinion to the Court in that case, and in any event, as Judge Möller points out, the Court did not accept the Advocate-General’s recommendation that the moment at which a lis pendens arises for the purposes of Article 21 must not precede service (pages 227-228).
78. In his Conclusions (at pages 230-232), Judge Möller identifies the decisive point in the two Court of Appeal decisions as being the fact that service of proceedings, not issue, ordinarily activates the litigious process and imposes procedural obligations on the parties. He then points out that a similar argument could be advanced to the effect that the lodging of the initiating document with the court does not in Finland or Sweden impose any procedural obligations on the parties. He illustrates this point by reference to the plaintiff’s rights to withdraw before service, and without any risk as to costs or a finding of res judicata. But the point as to activation of the litigious process is a more general one, and is perhaps best reflected in the seventh reason given by Bingham LJ., that until service, “the defendant has not become subject to the jurisdiction of the court”. It was not suggested that the position in this respect was any different in Finland.
79. Judge Möller then offers (at pages 231 - 232) some further reasons in support of his views. The first is that a rule providing for seizure on service could be unfairly exploited and could “give the Finnish and Swedish courts an unfair advantage in any race for jurisdiction in cases where also a court in a State, where courts become seised upon service of the document initiating the proceedings on the defendant, has jurisdiction”. He points out the inevitable delays attendant upon service in one jurisdiction of proceedings instituted in another. It is clear that he had the international context in mind. It would be surprising if such delays, and consequential scope for manipulation and forum shopping, existed in the context of purely domestic proceedings in Finland or Sweden. Judge Möller’s conclusion on the point (at page 231) was that:

“Since the Conventions in the light of the relevant case law do not compel to do so, there seems to be no justifiable ground to let proceedings first brought eg. in Germany or England, which do not become pending definitively until the document initiating the proceedings has been served on the defendant, be overtaken by proceedings commenced later in Finland or Sweden solely because of the fact that a court according to the Codes of Judicial Procedure in force in those countries is considered to be seized when the document is lodged with the court.”

80. Judge Möller then refers to the extensive interpretation given by the European Court of Justice to the concept ‘the same cause of action’ in Article 21, and its recognition that an action for a declaration of non-liability may involve the same cause of action as proceedings claiming damages (see Gubisch Maschinenfabrik v Palumbo [1987] ECR 4816; The Owners of the cargo lately laden on board the ship “Tatry’ v The Owner of the ship ‘Maciej Rataj’ (“the Maciej Rataj”)[1994] ECR 5440.) In these circumstances Judge Möller stresses the desirability that a party should be aware of an action brought against him as soon as the court become seized for the purposes of Article 21. He concludes on this point (at page 106):

“It would thus not be reasonable to consider that the proceedings have become definitely pending before the document initiating the proceedings has been served on him.”

Although the European Court of Justice has declined to impose such an interpretation on Contracting States, Judge Möller clearly sees compelling reasons why the Finnish courts should reach the same conclusion as have the English courts as to when proceedings become definitively pending for the purposes of Articles 21 and 22.

81. Judge Möller expresses his overall conclusion as follows (at pages 232-233):

“With regard to what has been said above, it is submitted that Finnish and Swedish courts for the purposes of the Conventions - despite of the provisions on seisin in the Codes of Judicial Procedure in force in those countries - should be regarded seized when the document initiating the proceedings has been served on the defendant.”.

I should also set out the footnote (27) to this conclusion, which is in the following terms:

“Goransson submits as regards Swedish law that such an understanding would not be in contradiction with the judgment of the European Court in Zelger v. Salinitri but doubts whether such an interpretation would be accepted by the Swedish courts [reference given to a 1991 publication].

According to the Danish law on civil procedure ... Section 348 a court becomes seised when the document initiating the proceedings is lodged with the court. In spite of that Fogh, Ugeskrift for Retsvesen 1989 B p.389 submits that a Danish court is to be considered definitively seized for the purposes of Article 21 of the Brussels Convention when the document initiating the proceedings has been served on the defendant. This opinion has, however, not been accepted by the Danish Supreme Court in a case decided in 1992 ....”

I do not think that Judge Möller’s conclusion is rendered any less persuasive by Mr Goransson’s doubts as to whether a Swedish Court would accept the “service date” solution. I note that Mr Goransson’s text pre-dates the reports of both the Dresser and Sargasso decisions.

82. I was provided with a translation of the 1992 decision of the Danish Supreme Court to which Judge Möller refers. The case is called Polish Shipping Company v. Partrederiet for “Elbe” and “Weser”. It arose out of a collision in Dutch territorial waters between vessels belonging to the claimant and to the defendant. On 25^th June 1990 the claimant began proceedings against the defendant in Denmark. On the same day, the defendant began proceedings against the claimant in the Netherlands. It appears from the report that the Dutch proceedings were served on the day of issue. The defendant in the Danish proceedings applied for those proceedings to be dismissed, relying on Articles 21 and 22 of the Brussels Convention. The Copenhagen Maritime and Commercial Court declined to dismiss the proceedings pursuant to Article 21, because the two sets of proceedings had been instituted on the same day. However, it stayed the proceedings pursuant to Article 22, apparently on forum conveniens grounds. It is only a court other than the court first seised of related actions that can stay its proceedings under Article 22. The Supreme Court upheld the decision of the Copenhagen Court on the grounds given by the latter Court. The report does not address the issue of when proceedings became definitively pending in either jurisdiction. As indicated above, the decision to stay the Danish proceedings pursuant to Article 22 is inconsistent with a conclusion that the Danish courts were the courts first seised. The case affords no, or certainly no reasoned, support for the proposition that a Danish court is seised of proceedings for the purposes of Article 21 upon lodgment of the proceedings with the court.
83. For my part, I find Judge Möller’s reasoning compelling, and the criticisms of it unwarranted. In the light in particular of the Möller Article, I have concluded that on the material available, the Claimants have a much better argument on this issue than FSU and AKT. They accordingly have a good arguable case that as a matter of Finnish law, a Finnish court is seized of an action for the purposes of Article 21 (and Article 22) upon service of proceedings on the defendant, and not before, and that a Finnish court (whether the Finnish Labour Court, or any other Finnish court) would so conclude.
84. It follows that the Claimants have a good arguable case that the English Court was first seized of the March Action against both FSU and AKT, since proceedings in the March Action were served on FSU and AKT on 19^th December 2001, and proceedings in the Finnish Action had not been served when the Defendants’ applications were heard .
85. In the light of this conclusion, the issue as to whether the Finnish Action is between the same parties and involves the same cause(s) of action as the March Action, does not arise for decision. I shall, however, express my conclusions on the point briefly below, mindful of the fact that these may be relevant to the similar issue that arises in relation to the November Action.

Is the Finnish Action between the same parties, and does it involve the same cause of action, as the March Action?

86. The authorities have established the following propositions:

    (1) For the purposes of Article 21, where there are proceedings in different jurisdictions involving two or more claimants, or defendants, it may be necessary to examine the position as between individual pairs of claimant and defendant, and ask which court became first seised of proceedings between that pair of parties. Thus for example if a court only becomes seised for these purposes upon service, where different defendants are served at different times it may be necessary to consider, in respect of each defendant, which court was first seised, and to apply Article 21 accordingly. Whilst this may lead to some fragmentation of proceedings, Article 22 may provide the means to avoid this consequence of the proper application of Article 21. See: the decision of the European Court of Justice in The Maciej Rataj (cited above); Fox v. Taher [1997] I.L.Pr. 441, per Brooke LJ, obiter; Glencore International AG . v. Metro Trading International Inc (also cited above), per Moore-Bick J. at pages 636-637;
    

    (2) Proceedings involve the same cause of action for the purposes of Article 21 if they have the same cause and the same object. They have the same cause if the same facts and the same rule of law form the basis of each set of proceedings. They have the same object if they have the same end in view. They can have the same cause and the same object even if the remedies sought in the different sets of proceedings are different: the classic example is of a claim in one jurisdiction by A against B, for damages for breach of contract, and a claim in the other jurisdiction by B against A, for a declaration of non-liability under the contract or alleged contract. See: the decisions of the European Court of Justice in Gubisch and The Maciej Rataj (both cited above), and the decision of the Court of Appeal in Haji-Ioannou v. Frangos [1999] 2 LLR 337, in particular per Lord Bingham CJ at pages 350-351.

87. I have already summarised the basis and nature of the Claimants’ claims against FSU and AKT in the March Action (the claims against them in the November Action are identical). The application summons in the Finnish Action names both FSU and AKT as Plaintiffs. The only Respondent is Norbulk, but it was accepted on behalf of the Claimants that Norbulk was sued as agent on behalf of Owners, who are for these purposes to be treated as if they were parties to that Action. Two claims are advanced in the Finnish Action. In Claim (1), FSU seeks confirmation that the agreement referred to therein, which I take from the description in annex 1 to be a reference to both the Settlement Agreement and the CBA, is a collective agreement realised through lawful industrial action in Finland, and that Norbulk and Owners are obliged as employers to comply with it. In Claim (2), FSU and AKT seek confirmation that a Finnish court is competent to examine any civil dispute concerning claims for damages and other claims addressed to FSU and AKT arising from the alleged illegality of the industrial action and based on the alleged invalidity of the collective agreement. The brief Grounds relied on in support of both claims refer to the industrial action, the conclusion of the agreement(s) (and the inclusion therein of a Finnish law and jurisdiction clause), the commencement of the March Action against ITF and the allegation therein that the industrial action was unlawful, and the application to join FSU and AKT as additional defendants to the March Action, for hearing on 7^th December 2001.
88. In the course of the hearing it became common ground that, as between the Claimants and FSU, the Finnish Action was, by virtue of Claim (1) therein, to be treated as raising the same cause of action (ie. as having the same cause and the same object) as the March Action as between those parties. The same facts and the same rules of law (whatever they turn out to be) form the basis of both sets of proceedings between these parties, and both sets of proceedings have the same ultimate object, namely the determination of the legality of the industrial action and the grant of appropriate relief consequential on such determination.
89. It is also clear that Claim (2) does not duplicate or mirror any claim in the March Action: it is a claim by both Finnish Unions for a declaration as to the competence of a Finnish court (which I take to be a reference to its jurisdiction) to determine disputes arising out of the industrial action and based on the alleged invalidity of the collective agreement.
90. The principal issue that was argued before me in this connection was whether AKT was to be treated for the purposes of Article 21 as being in effect a party to Claim (1), for if it was not, it could not invoke Article 21, even if FSU could.
91. It was submitted on behalf of the Finnish Unions that AKT was a party to the Finnish Action (as indubitably it was), and, on the basis of Mr Esko’s First Report, that it would therefore be bound by the Finnish Labour Court’s decision on Claim (1), and that it was in the position of an intervener on that claim. Mr Taivalkoski in his Supplemental Report effectively refuted the suggestion that AKT was in the position of an intervener on Claim (1): it could apply to intervene, but had not yet done so. I do not know the reason why only FSU is the claimant on Claim (1): the suggestion that it was because AKT was not a party to the Settlement Agreement or CBA overlooks the fact that AKT was a party to the industrial action, and knew it faced an application that it be made an additional defendant to the March Action. Whatever the reason, the fact remains that no claim is made by AKT in the Finnish Action for a declaration that the industrial action was lawful, or for any other substantive relief arising out of that Action. It seems to me that in the light of the principles summarised above, it must follow that the Finnish Action does not, as between the Claimants or any of them and AKT, involve the same cause of action as the March Action, and that therefore even if I had decided the date of seizure issue in favour of FSU and AKT, that decision would only have availed FSU.

Do the disputes between the Claimants and FSU and/or AKT fall within a jurisdiction clause to which Article 17 of the Brussels Convention applies?

92. In Powell Duffryn v. Petreit [1992] ECR I-1745, the European Court held, among other things, that where an issue arose as to whether proceedings fell within Article 17 of the Brussels Convention,

“....it is for the national court to interpret the clause conferring jurisdiction invoked before it in order to determine which disputes fall within its scope” (para. 37 of the Judgment).

93. The submissions of FSU and AKT on the Article 17 point can be summarised as follows:

(1) The Settlement Agreement and the CBA are both governed by Finnish law;

(2) These 2 Agreements are, as a matter of Finnish Law, to be read together as a single agreement;

(3) Clause 28 of the CBA provides (among other things) that the forum for

“All disputes arising from this agreement”

is to be the District Court of Helsinki or the Finnish Labour Court. Because the Agreements are to be read together, this clause is applicable to disputes arising from the Settlement Agreement, just as it is applicable to disputes arising from the CBA;

(4) The validity of the Settlement Agreement is expressly put in issue by the Claimants. It follows from the above that the dispute as to the validity of the Settlement Agreement falls within the scope of clause 28 of the CBA, as also do the disputed claims arising out of the alleged wrongs constituted by the industrial action, which were settled by the Settlement Agreement;

(5) Although the Claimants have not in terms put in issue the validity of the CBA, they have done so by necessary implication, by challenging the validity of the Settlement Agreement. Thus even if the Settlement Agreement and the CBA do not fall to be read and construed as a single agreement, the disputes to which the Claimants’ claims give rise fall within the scope of clause 28 of the CBA;

(6) Alternatively, clause 3 of the Settlement Agreement, which provides that:

“This agreement is governed by the Finnish Legislation”,

represents an implicit choice of the Finnish Labour Court as the Court to try any disputes arising out of the Settlement Agreement (this is not one of the grounds mentioned in FSU and AKT’s application notices, but it was advanced at the hearing without objection, albeit subject to the gibe that it was an afterthought);

(7) It is not appropriate at this stage for the court to investigate questions of duress, in particular whether the Claimants’ signature of the Settlement Agreement and the CBA was procured by duress. It is sufficient, for present purposes, that the formal requirements of Article 17 were satisfied, as FSU and AKT allege that they were;

(8) In any event, the Claimants have not made out a good arguable case that the industrial action was unlawful as a matter of Finnish law, and therefore that the Agreements were procured by unlawful economic pressure such as to be capable of constituting duress.

Before considering these arguments and the Claimants’ responses thereto, I must refer to the Settlement Agreement and the CBA in a little more detail, and set out the terms of principal relevance.

94. The Settlement Agreement is a single page document, dated Helsinki 13^th March 2001, prepared by FSU in typescript, but amended in manuscript as described below. As already indicated, it is expressed to be:

“Between the . . . FSU and the Norbulk Shipping UK Ltd (Company) who is the Owner/Agent of the Owner of m/v FINNHAWK m/v FINNKRAFT, m/v FINNMASTER and m/v FINNREEL”.

It was signed by Mr Karlsen on behalf of Norbulk, and by Mr Zitting on behalf of FSU. It was accepted by the Claimants that Norbulk entered into the Settlement Agreement as agent for and on behalf of the other Claimants, so that it took effect (subject to their allegation of duress) as a agreement between the FSU and all six Claimants.

95. The Settlement Agreement refers to the inspection of the vessels, the discovery that they “were not covered by acceptable collective bargaining agreements”, and the consequent boycott by the FSU, supported by the AKT. It then continues:

“To settle the dispute the parties now agree as follows:

1. Collective Bargaining Agreement covering all the vessels shall be undersigned between the Company and the FSU.

2. This agreement is full and final and solves all present disputes between all parties involved. No party shall start in Finland or elsewhere any actions, legal or otherwise against other parties. Besides that all parties agree to withdraw all legal or other actions started before the undersigning of this settlement agreement.

3. This agreement is governed by the Finnish legislation.

4. The parties accept this agreement and commit themselves to fulfil all its terms and conditions without any exceptions.”

The last 3 words of clause, as typed, read “the Finnish legislation”: these were deleted, and “English law” substituted in manuscript, by Mr Karlsen, but “English law” was in turn deleted, and the original wording reinstated in manuscript, allegedly when FSU insisted that the terms were non-negotiable. The CBA (with 3 annexes) was, and was stated to be, an attachment to the Settlement Agreement.

96. The CBA, also dated 13^th March 2001 and stated to be effective from that date. As indicated above it too was also expressed to be an agreement between Norbulk, described in clause 1 as “the Owner/Agent of the Owner of the Ships”, and FSU. It was also signed by Mr Karlsen on behalf of Norbulk, and Mr Zitting on behalf of FSU. It sets out standard terms and conditions of employment for seafarers serving on the four vessels, and by clause 1 requires Norbulk to employ the seafarers on these terms and conditions, and to enter into individual contracts of employment incorporating the same. It is not necessary for present purposes to set out any of these terms and conditions, though it should be noted that MCA by letter to Norbulk dated 10^th April 2001 stated that the incorporation of the CBA in the crew agreement was unacceptable for the purposes of section 25 of the Merchant Shipping Act 1995. The Defendants have however pointed out that the Claimants have not in their Particulars of Claim in either action pleaded that the CBA is illegal as a matter of English law. (As already indicated, the CBA is not even mentioned. ITF have taken objection to a Response to a Request for Further Information, served by the Claimants subsequent to the hearing, in which the MCA letter is pleaded, as is the alleged illegality of the CBA as a matter of English law.)
97. Clause 28 of the CBA, which is headed “Breach of Agreement, provides, in full, as follows:

“If the Company breaches the terms of this Agreement the FSU, for itself or acting on behalf of the Seafarers, and/or any Seafarer shall be entitled to take such measures against the Company as may be deemed necessary to obtain redress.

All disputes arising from this agreement or from the individual Employment Contracts shall be governed and construed in accordance with the laws of Finland. The forum for such disputes is the District Court of Helsinki or the Finnish Labour Court”.

As in the case of clause 3 of the Settlement Agreement, this clause was amended in manuscript by Mr Karlsen, by the deletion of the typed reference to the laws of Finland, and the District Court of Helsinki or the Finnish Labour Court, and the substitution of respectively, “England” and “High Court in England”, but allegedly on FSU’s insistence, the original wording was then reinstated, in manuscript.

98. Both Agreements are, as indicated above, expressed to be governed by Finnish law: whatever else it may signify, I take the reference in the Settlement Agreement to “The Finnish legislation” to be a choice of Finnish law as the proper law of that Agreement. Accordingly, both Agreements are to be construed in accordance with Finnish law, and I must have regard to Finnish principles of construction, not only for the purpose of construing the relevant provisions of each Agreement, but also for the purpose of considering whether the two Agreements are to be viewed as one, as FSU and AKT submitted that they should be.
99. The Finnish principles of contractual construction were common ground: Mr Esko stated in his First Report (para 26) that:

“Under Finnish law, in order to construe a contract, it is necessary to establish the intention of the parties based on the wording of the contract and also to take into account what has been said and done during the negotiations and if relevant what has been the previous practice between the parties. If these considerations do not lead to adequate construction, then a broader approach of construction is resorted to and, in accordance with established legal principles, one aims at a “generally acceptable result”,

and Mr Taivalkoski agreed. The main difference between these principles and those applicable under English law is that under Finnish law it is both permissible and necessary to take contractual negotiations into account in determining the intention of the parties. The second sentence of the passage quoted above seems to be a test of last resort, if no adequate construction can be discerned from the wording of the contract, read in the light of any relevant evidence as to negotiations and previous practice. As the Claimants pointed out, FSU and AKT submitted no evidence of any actual negotiations or previous practice which could help their case.

100. Mr Esko went on in his First Report to express his view as to how a Finnish Court would construe these two Agreements, venturing the opinion that under Finnish law it would be considered that the Settlement Agreement and the CBA are one agreement, with the result that the jurisdiction clause in the CBA also covers the Settlement Agreement - although he accepted that there was no Finnish case law on this in the context of Article 17 (para 25). I agree with the Claimants’ submission that this goes beyond the proper function of an expert on foreign law, whose role on issues of contractual construction should be confined to expounding the relevant principles of the foreign law is question, leaving it to the English Court to construe the contract by applying those principles - see Rouyer Guillet v. Jackson Knowland [1949] 1 All ER 244, per Lord Greene MR.
101. The two Agreements are, on the face of it, separate agreements. As the Claimants submitted, if one ignores duress it follows that the parties were the masters of their own contractual fate: the FSU drafted 2 agreements, and the parties signed 2 agreements. Having regard to the relevant principles of Finnish law relating to construction of contracts, as expounded by Mr Esko, I see no reason not to give effect to the parties’ choice of separate agreements. The fact that the Settlement Agreement provides, by clause 1, that the parties shall sign the CBA, that the CBA is attached to the Settlement Agreement, and that the two Agreements were in fact signed simultaneously, do not afford reasons why this choice should be disregarded. On the contrary, the Settlement Agreement was clearly intended, at least by FSU, to draw a line under past events, viz. the industrial action and claims and disputes arising out of it (see clause 2), and to provide for the signature by the parties of a CBA to regulate future relations between them, and between Norbulk/Owners and the seafarers employed by them. If the two Agreements had been intended to be construed as one, there would have been no need to include in the Settlement Agreement a separate choice of law (and, as FSU and AKT contend, jurisdiction) clause, to duplicate that of clause 28 of the CBA. Moreover, if as the Finnish Unions allege clause 3 of the Settlement Agreement represents an implicit choice of the Finnish Labour Court, that is inconsistent with the choice of courts offered by clause 28 of the CBA, and thereby with the submission that both Agreements are to be construed as one. I have therefore concluded that the Claimants have much the better of the argument on the material available, and therefore a good arguable case that the two Agreements are not, as a matter of Finnish law, to be construed as a single agreement. If they are to be construed as separate agreements, it follows that a dispute arising from the Settlement Agreement is not necessarily also a dispute arising from the CBA within the meaning of clause 28 thereof.
102. On the assumption that the two Agreements fall to be construed as separate Agreements, the next issue is as to the proper construction of clause 28 of the CBA, and whether the Claimants have made out a good arguable case that none of their claims fall within the scope thereof. Clause 28 provides for the reference of

“All disputes arising from this agreement or from the individual Employment Contracts”

to (one or other of) the designated Finnish Courts. It was submitted on behalf of FSU and AKT that words such as “all disputes arising from this agreement” are to be construed widely, as have been similar words in arbitration clauses. But the disputes in the present case arise, not from the CBA, but from the industrial action that preceded both Agreements, and the purported settlement of those disputes by the Settlement Agreement, which the Claimants contend is void or voidable for economic duress. It is true that the CBA was entered into pursuant to (and simultaneously with) the Settlement Agreement, and I agree with FSU and AKT that the Claimants’ claims involve an implicit challenge to the validity of the CBA - for if the Settlement Agreement was procured by duress, so also was the CBA, and as already mentioned the Claimants claim damages for the losses consequent on their entry into the CBA. That implicit challenge has been made explicit in the recent Response to ITF’s Request for Further Information, to which objection has been taken. That does not mean that the disputes arise from the CBA within the meaning of clause 28 thereof. They arise from the industrial action, and from the FSU’s demands, that led to the signature of the Settlement Agreement and the CBA.

103. FSU and AKT were unable to cite any case in which wording identical or similar to that of clause 28 has been held to be sufficiently wide to encompass a dispute as to whether a contract containing the arbitration or jurisdiction clause in question was void or voidable for duress. There is little doubt in this case that if, as alleged by the Claimants, the Settlement Agreement and the CBA were procured by duress, that duress affected the choice of law and jurisdiction provisions therein as it did the substantive provisions. It is difficult to see how a jurisdiction (or arbitration) clause could in such circumstances be wide enough to encompass claims challenging the validity of the contract in which it was contained on the grounds of duress: it would probably have to contain express provisions encompassing such claims, and even then, it might be open to the party challenging the validity of the contract to contend that he was not bound by the clause as he did not truly consent to its terms.
104. At all events, the Claimants have in my judgment at least a good arguable case that clause 28 of the CBA does not apply to the claims advanced by them in the March action, on the grounds that such claims do not arise from the CBA: on the material available they have much the better of the argument on this point.
105. As mentioned above, the alternative (albeit belated) submission of FSU and AKT was that clause 3 of the Settlement Agreement constituted an implied choice of the Finnish Labour Court as the court to try all disputes arising out of the Settlement Agreement. The basis for this submission was that the Finnish Labour Court is the court designated by the Labour Court Act as the court to hear and rule on disputes concerning collective bargaining agreements. Mr Esko in his Supplemental Report asserted that the Labour Court practice shows that the Settlement Agreement qualifies as a collective agreement, but provided no support for this assertion.
106. There is of course a clear distinction between a choice of law, and a choice of jurisdiction, though the two may be contained in a single clause, as in clause 28 of the CBA. Clause 3 of the Settlement Agreement constitutes a choice of law, not a choice of jurisdiction. The Settlement Agreement is in any event not a collective bargaining agreement : it is an Agreement which provides for the parties to enter into a (separate) CBA, and is expressed to be full and final settlement of “all present disputes”. It addresses the past, and provides that the future is to be addressed in a separate agreement. Thus I cannot see any sound basis for the contention of FSU and AKT that clause 3 constitutes an implicit agreement for the reference of disputes arising from (or indeed in any way connected with) the Settlement Agreement to the Finnish Labour Court (or Finnish courts generally). But it is sufficient for present purposes that I have concluded that the Claimants on the material available have much the better of the argument on the point, and therefore a good arguable case that the parties have not by the Settlement Agreement agreed, either expressly or impliedly, that the Finnish Labour Court specifically, or Finnish courts generally, are to have jurisdiction to settle disputed claims such as those advanced by the Claimants in the March Action.
107. If the above conclusions are incorrect, and the Settlement Agreement, whether read together with or separately from the CBA, contains a jurisdiction clause which on its true construction applies to the dispute the subject of the Claimants’ claims, interesting questions would arise as to whether a jurisdiction “agreement” procured by duress falls within the scope of Article 17, if not, what system of law governs the issue of whether there has been duress which vitiates the jurisdiction “agreement”, and whether the Claimants have made out a good arguable case (by reference to whatever is the applicable system of law) that their agreement to the jurisdiction clause(s) in question was indeed procured by duress. Although it would in my view be surprising if a jurisdiction clause to which one party’s “agreement” was procured by duress could be said to be the subject of consensus between the parties, as apparently required for the purposes of Article 17 (see para 29 of the judgment of the European Court of Justice in Benincasa v. Dentalkit Srl [1997] ECR I-3767 at page 3798), neither this question, nor the issue (if relevant) as to the applicable system of law, has been dealt with in the authorities. In view of my decision that the Claimants have a good arguable case that there is no applicable jurisdiction clause which on its true construction (in accordance with Finnish law) applies to the disputes the subject of the Claimants’ claims against FSU and AKT, I do not think that it is necessary or appropriate for me to prolong this judgment by an examination of any of these issues.
108. Even if, contrary to the foregoing, I had concluded that the Claimants did not have a good arguable case that there was no applicable Finnish jurisdiction clause in the Settlement Agreement or the CBA, that would not have availed AKT, which was not a party to either Agreement.

CPR Rule 6.19

109. CPR Rule 6.19 sets out the circumstances in which a claim form may be served on a defendant out of the jurisdiction without the permission of the court. Until 1^st March 2002, it provided, so far as material, as follows:

“Service out of the jurisdiction where the permission of the court is not required

(1) A claim form may be served on a defendant out of the jurisdiction where each claim included in the claim form made against the defendant to be served is a claim which the court has power to determine under the 1982 Act and -

(a) no proceedings between the parties concerning the same claim are pending in the courts of any part of the United Kingdom or any other Convention territory; and

(b) (i) the defendant is domiciled in the United Kingdom or in any Convention territory;

. . . . .

(3) Where a claim form is to be served out of the jurisdiction under this rule, it must contain a statement of the grounds on which the claimant is entitled to serve it out of the jurisdiction.”

The reference to the 1982 Act is to the Civil Jurisdiction and Judgments Act 1982, and “Convention territory” means the territory of any Contracting State to which the Brussels or Lugano Conventions apply.

110. FSU and AKT submitted that at the time the amended Claim Form in the March action was served on them in Finland, on 19^th December 2001, other proceedings between the parties concerning the same claim were pending in the courts of a part of the United Kingdom, in that:

(1) proceedings between the Claimants and ITF were pending in the March Action (this was the only CPR Rule 6.19 point taken in their application notice); and/or

(2) proceedings in the November Action had by then been served on both FSU and AKT, and were therefore pending in England.

Accordingly, they submitted that the amended Claim Form in the March action should not have been served on FSU and AKT out of the jurisdiction without the permission of the Court. Permission had not been sought or obtained for service out. It was submitted that this of itself justified setting aside service of the amended Claim Form in the March Action.

111. The first point, relating to the March Action proceedings between the Claimants and ITF, is clearly a bad one. In context, the reference to “parties”in sub-paragraph (1)(a) of the Rule clearly means the claimant(s) and “the defendant to be served” out of the jurisdiction. This is in line with the party-by party approach to service to be adopted for Convention purposes - see eg. the Maciej Rataj (cited above).
112. The second point, relating to the November Action proceedings against FSU and AKT, raises the question of whether Rule 6.19(1)(a) is properly to be construed as if the word “other” appeared between “any” and “part of the United Kingdom”. The Civil Procedure (Amendment No 5) Rule 2001 (S1 4015), which came into force on 1^st March 2002, amended CPR Rule 6.19 (1)(a) by inserting the word “other” in that position. If the Rule had been in that form in December 2001, this second point would not have been open to FSU and AKT, as there were then no proceedings between the Claimants and FSU or AKT pending in the courts of any other part of the United Kingdom or any other Convention territory. However, it was not, and I have to construe CPR Rule 6.19 as it stood in December 2001.
113. Section III of CPR Part 6, which contains the provisions relating to service out of the jurisdiction and which includes CPR Rule 6.19, is supplemented by a Practice Direction, paragraph 1.1 of which is in the same form now as it was in December 2001. This provides as follows:

“The usual form of words of the statement required by Rule 6.19(3) should be:

“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.” (My emphasis)

The amended Claim Form contained a statement in these terms, preceded by statement that:

“The Claimants are entitled to serve this Claim Form out of the jurisdiction on the Second and Third Defendants pursuant to CPR Part 6.19 (1) and Article 6(1) of the Brussels and/or Lugano Convention”.

114. The Notes to CPR Rule 6.19 as it stood prior to the addition of the word “other”, contained the following material commentary on the Rule:

“Rule 6.19(1) states that a claim form may be served out of the jurisdiction on a defendant without the permission of the Court provided that each claim against that defendant is a claim which by virtue of the Civil Jurisdiction and Judgments Act 1982 the Court has power to hear and determine. A claimant may take advantage of this rule and serve the defendant out of the jurisdiction without first obtaining the court’s permission provided the proceedings in which such claim or claims are made satisfy the conditions stated in r.6.19(1). Under the 1982 Act, jurisdiction arising under various Conventions is conferred on the English courts.

The conditions stated in r.6.19(1) are:

(i) no proceedings between the parties concerning the same cause of action are pending in the courts of any other part of the United Kingdom or of any other Convention territory; and

(ii) either the defendant is domiciled in any part of the United Kingdom or in any other Convention territory, or [immaterial words omitted]. . . .

It is important to note that r.6.19(1) cannot be understood on its own. It must be read with the Act and Conventions. . . .”(My emphasis)

Notes with identical content appear in the current (Spring 2002) edition of Civil Procedure.

115. It is clear that the editors of Civil Procedure, and the draftsman of the Practice Direction, interpreted Rule 6.19(1)(a) in its unamended form as containing the requirement that there should be no relevant proceedings pending in the courts of any other part of the United Kingdom or any other Convention territory. The question is, whether they were right to do so.
116. In my judgment, they were. The provisions of Rule 6.19 must be interpreted with reference to their legislative background and purpose. They were clearly designed to give effect to the provisions of the Brussels and Lugano Conventions, and to Schedule 4 of the 1982 Act, which provides for the allocation of civil jurisdiction between the three separate jurisdictions of the United Kingdom. It was no part of the function of Rule 6.19 to prevent multiplicity of proceedings in England.
117. I therefore conclude that both the Note and the Practice Direction accurately reflect the unamended Rule 6.19(1) as it should properly be interpreted, and therefore that permission was not required to serve the amended Claim Form in the March Action on FSU and AKT in Finland. If I am right in this conclusion, it follows that, strictly speaking, the March 2002 Amendment to Rule 6.19(1)(a) was unnecessary - but it would not be the first time that an amendment has been made to a Statutory Instrument for the sake of clarity, rather than to effect a change in the law.
118. The arguments of FSU and AKT based on CPR Rule 6.19 accordingly fail. I should however add, that if, contrary to my decision, permission for service out had been required, it could have been sought when the application was made to Cresswell J. for permission to join FSU and AKT. There is no reason to suppose such permission would not have been granted - Cresswell J. had, after all, been told of the November Action, and so was aware of the existence of concurrent proceedings against FSU and AKT, and the purpose thereof. If permission had been required, service without permission would have been an irregularity, which could be cured by the retrospective grant of permission. Had I concluded that service was irregular, I should have wished to hear argument on whether it would have been appropriate to grant retrospective permission.

Conclusion in relation to March Action

119. It follows from my conclusions as set out above, that the applications of FSU and AKT in respect of the March Action must be dismissed.

The November Action

Is the November Action an abuse of process?

120. The submissions of ITF in support its contention that the November Action was an abuse of process were supported by FSU and AKT. They can be summarised as follows:-

(1) It is prima facie vexatious and therefore abusive to issue two sets of proceedings against the same defendant relating to the same dispute and seeking effectively the same relief;

(2) The Claimants’ obvious and admitted desire to prevent FSU and AKT from bringing proceedings against them in Finland before permission had been obtained for and service had been effected of the amended Claim Form in the March Action, and thereby obtaining chronological priority for such Finnish proceedings for the purposes of Article 21 of the Brussels Convention, provided no good reason for naming ITF as a defendant in the November Action. On the contrary, the European Court of Justice has emphasised that Article 6.1, which provides an exception to the general principle laid down in Article 2 of the Brussels Convention that jurisdiction is vested in the courts of the State of the defendant’s domicile, is not to be used to allow a claim to be made against a number of defendants with the sole object of ousting the jurisdiction of the courts of the State where one of them is domiciled - see Kalfelis v Schroeder [1988] ECR 5565 at para 9, and Canada Trust v. Stolzenberg (No 2) [1998] 1 WLR 547, per Waller LJ at pages 568e, and 558h-559b. That is exactly what the Claimants were seeking to do by means of the November Action;

(3) There is no genuine claim to be made against ITF in the November Action that is not already the subject of the March Action. ITF was included as a Defendant in the November Action solely to provide a jurisdictional peg upon which to hang the claims therein against FSU and AKT, in purported reliance on Article 6.1. Such procedural manipulation subverts the Brussels Convention - see in this connection, Knauf UK GmbH v British Gypsum [2002] 1 WLR 907;

(4) The fact that the Claimants made their intentions clear to Cresswell J. on 7^th December 2001 is no answer to the abuse of process argument;

(5) To allow the Claimants to pursue the November Action against ITF in preference to the March Action, or to consolidate the two sets of proceedings against ITF, and thereby avoid the vice of allowing two separate actions involving the same parties and claims to proceed, would effectively bypass the requirements of CPR Rule 38.7, under which a claimant who discontinues a claim after service of a defence needs the permission of the court to make another claim against the same defendant arising out of the same or substantially the same facts: the Claimants are seeking to achieve the same end, but without obtaining the permission of the court;

(6) The November Action was also an illegitimate attempt to circumvent the requirements of CPR Rules 19.4 and 23.4 to the effect that the permission of the court is required to add a defendant after the claim form has been served, and that notice of an application for such permission must be given to each respondent (this submission was developed by Mr Cran on behalf of FSU and AKT, and adopted by Ms Davies on behalf of ITF).

121. By way of general support for these submissions, the Defendants submitted that a deliberate decision had been taken by the Claimants in March 2001 to sue ITF in England, and FSU and AKT in Finland (a reference to the abortive injunction proceedings in Finland against FSU and AKT, withdrawn on 26^th March 2001); that the Claimants then delayed until 15^th November 2001 before taking any further proceedings against FSU and AKT; and that insofar as the Claimants, having apparently changed their minds and decided to proceed against the Finnish Unions, found themselves in difficulties and faced in November 2001 with the possibility of pre-emptive legal action in Finland by the Finnish Unions, they had brought such difficulties upon themselves.
122. ITF’s application was, as mentioned above, made under CPR Rule 3.4, sub-rule (2)(b) of which gives the court an express power to strike out a statement of case if it is an abuse of the Court’s process, and/or in reliance on the court’s inherent power to prevent abuse of its own process. In paragraph 3.4.3 of the Notes to CPR Rule 3.4, the following is stated:

“It is an abuse to bring vexatious proceedings, ie., two or more sets of proceedings in respect of the same subject matter which amount to harassment of the defendant in order to make him fight the same battle more than once with the attendant multiplication of costs, time and stress” (my emphasis).

123. I was referred to two authorities specifically relating to multiplicity of proceedings and the circumstances in which this might constituted an abuse of process. The first was Australian Commercial Research & Development Ltd v. ANZ McCaughan Merchant Bank Ltd [1989] 3 All ER 65, a decision of Sir Nicholas Browne-Wilkinson V-C. In that case, the plaintiff had issued proceedings in England against the defendant bank, arising out of an agreement with the defendant bank and five brokers for the placement of shares in the plaintiff. The defendant bank had counterclaimed. The plaintiff also issued proceedings in Queensland against the defendant bank and the five brokers. The plaintiff applied for a stay of the counterclaim, and offered to stay the English claim, so as to permit the whole matter to be litigated in Queensland. In the course of his judgment the Vice-Chancellor stated (at page 69h):

“What we have in this case, and so far as I know it has not previously arisen, is a case in which the same party has initiated proceedings in two separate jurisdictions, those proceedings raising either at the present time or inevitably in the future exactly the same issues. The plaintiff, having itself invoked the two jurisdictions, now applies for a stay of the counterclaim (which naturally arises out of the claim) on the terms that it merely stays its own existing action in this country. In my judgment, where a plaintiff seeks to pursue the same defendant in two jurisdictions in relation to the same subject matter, the proceedings verge on the vexatious. I am not suggesting in any sense that the plaintiff in this case was being deliberately vexatious, but the outcome is vexatious.”

He held that the plaintiff was required to elect which set of proceedings it wished to pursue, concluding (at page 70b):

“This is not simply a question of the stay of the action here: the action must be dismissed if [the plaintiff] wishes to pursue the matter in the Australian courts and not here”.

Accordingly, and as the appropriate forum was in Queensland and not in England, he gave the plaintiff leave to discontinue the claim, and stayed the counterclaim.

124. The second case was Merrill Lynch Pierce Fenner & Smith Inc v. Raffa, an unreported decision of His Honour Judge Raymond Jack QC, sitting as a High Court Judge, given on 11^th May 2000. In the English action the claimants sued the defendant for the alleged misappropriation of securities to the value of over US$50 million. The defendant was also the subject of a criminal investigation in Egypt, pursuant to which he was arrested and remanded in custody. The claimants lodged a request with the Egyptian prosecutor for a civil claim against the defendant, the effect of which was that if he was convicted, the criminal court would consider whether it should order him to pay compensation (or remit the issue of compensation to a civil court). The defendant applied for a stay of the English proceedings until all the Egyptian proceedings were terminated, on the grounds (among others) of dual proceedings. The Judge cited a passage from Dicey & Morris on The Conflict of Laws, 13^th Edition, para. 12-031, dealing with the position where a plaintiff sued the same defendant in two different jurisdictions. The learned editors had referred to the decision in the Australian Commercial Research case, and had continued:

“But there may be cases (e.g. where one of the actions is brought to obtain security by way of attachment of assets) where a stay rather than an order for discontinuance of English proceedings, or an injunction requiring foreign proceedings to be discontinued, would be appropriate. By contrast, where it is not open to the claimant to bring the whole of his claim before one court (e.g. where the proceedings may be founded on an attachment of assets in each of two jurisdictions, and both sets of assets are claimed by the claimant, or where the rules on enforcement of judgments mean that in practice two sets of proceedings represent the only way in practice of obtaining relief), it may be regarded as reasonable to bring both sets of proceedings, and the claimant should not be required to elect”.

Having himself quoted the passage from the judgment of the Vice-Chancellor set out above, the Judge continued:

“The reason why two sets of proceedings in respect of the same subject matter will normally be vexatious is that it amounts to a harassment of the defendant to make him fight the same battle twice, with the attendant multiplication of costs, time and stress. But, in my view, it will not be vexatious, nor will an election be called for, where the claimant has a sufficient justification for bringing the two sets of proceedings. The passage in Dicey & Morris provides examples of when that may be so”.

In the event, he concluded that there was nothing vexatious in the claimants continuing with the English proceedings in the case before him.

125. In both these cases the court treated the issue as being whether the existence of two sets of proceedings involving the same subject matter was vexatious. The Note to CPR Rule 3.4 which I have quoted above is in line with this, in that it focuses on whether the multiplicity of proceedings “amount to harassment of the defendant in order to make him fight the same battle more than once.”
126. I was referred by the Claimants to the decision of the House of Lords in Johnson v Gore Wood & Co [2001] 2 WLR 72. One of the issues in that case was whether the plaintiff should be allowed to bring a claim against the defendant firm of solicitors for professional negligence in relation to a particular transaction, in circumstances when the plaintiff’s company, W Ltd., had previously sued the defendants for professional negligence in relation to the same transaction, and that action had been settled. In applying to strike out the plaintiff’s action as an abuse of process, the defendants had invoked the so-called rule in Henderson v. Henderson (1843) 3 Hare 100. The Court of Appeal held that the plaintiff’s action was an abuse of process, but their Lordships unanimously allowed the plaintiff’s appeal on this point. In the course of his leading speech, Lord Bingham said this (at page 90):

“....Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party’s conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interest of justice” (my emphasis).

In allowing the appeal, he concluded that the Court of Appeal had “adopted too mechanical an approach”, and had failed “to weigh the overall balance of justice” (page 93).

127. In the same case Lord Millett observed (at pages 118-119) that:

“In so far as the so-called rule in Henderson v Henderson suggests that there is a presumption against the bringing of successive actions, I consider that it is a distortion of the true position. The burden should always rest upon the defendant to establish that it is oppressive or an abuse of process for him to be subjected to the second action” (my emphasis).

128. The facts of that case were very different from those relating to the November Action, but these passages, and in particular the ones that I have emphasised, provide authoritative guidance as to the approach a court should adopt when faced with a question of whether a second set of proceedings involving the same subject-matter as the first is an abuse of process. They make clear that it would be wrong to proceed on the basis that there is a presumption that the second set of proceedings is vexatious and therefore abusive, which the claimant must rebut in order successfully to resist a strike-out application. On the contrary, the onus lies throughout on the party alleging abuse. The court should ask itself whether in all the circumstances the claimant’s conduct is an abuse, and, as Lord Bingham said, “there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party”.
129. None of the above three cases involved any Brussels Convention issues, but Knauf UK GmbH v British Gypsum Ltd [2002] 1 WLR 907, a decision of the Court of Appeal upon which the Defendants placed considerable reliance, did. In that case, the claimant, a German company, wished to bring proceedings in England against the first defendant, an English company, and the second defendant (“Peters”), another German company, in the case of the latter in reliance on Article 6.1 of the Brussels Convention. The claimant was however concerned that Peters might learn of its intentions before service could be effected in Germany, and begin proceedings against the claimant in Germany which would have chronological priority by virtue of Article 21. In this respect, the case is similar to the present one. In order to pre-empt this possibility, the claimant sought permission under CPR Rule 6.8 to serve the claim form by an alternative method, namely by service on Peters’ London solicitors, who had not been nominated to accept service. The claimant had, for the purposes of Rule 6.8, to show that there was “a good reason to authorise service by a method not permitted by these Rules”. Permission was granted by Aikens J on a without notice application, and service was effected on the London solicitors. As anticipated, Peters then commenced and served proceedings against the claimant in Germany, seeking negative declarations. It then applied to set aside the alternative service in London, and challenged English jurisdiction, on the grounds, among others, that there had been no good reason to authorise alternative service. The application came before David Steel J, who upheld Aikens J’s order, on the grounds (so far as relevant) that it was desirable that all issues raised by the underlying dispute should be decided in one jurisdiction, that the claimant’s English action provided the best prospect of achieving that object, and that the desire to forestall any attempt by Peters to take advantage of the disparity in periods needed to accomplish service and thus introduce the complication of a second (German) forum seised of only part of the dispute, afforded good reason for authorising alternative service.
130. Peters’ appeal against this decision was upheld. It had been common ground between the parties that service by post on Peters in Germany was not an option. The Court of Appeal clearly had doubts as to whether this was correct (see paras. 37, 44 and 46 of the judgment), but proceeded on the agreed basis that service under the Hague Service Convention and the relevant bilateral service Convention would have involved delay. In the judgment of the court, prepared by Rix LJ and handed down by Henry LJ, they held that “to use CPR Rule 6.8 as a means for turning the flank of those Conventions, when it is common ground that they do not permit service by a direct and speedy method such as post, is to subvert the Conventions…” (para 47). That is a point that does not arise in the present case. They then went on to consider whether the Order for alternative service also subverted the principles of the Brussels Convention. Having referred to the European and English jurisprudence on Article 21 they stated (at para 54):

“In these circumstances we do not think that it is open, save perhaps in very special circumstances which we do not presently have in mind, for English law to arrogate to itself a discretionary approach, under the rubric of “good reason”, to advance the normal date at which the English court would be seised for the purpose of articles 21 and 22. Although the principle of date of service would have been nominally preserved through the device of the alternative method of service, it would have been abandoned in essence: and not for the sake of service(as under the old RSC Ord 65, r 4, because normal service had been found impracticable) but for the sake of arriving at a state of being first seised in order to oust the jurisdiction of a competing forum, in other words for the sake of jurisdiction”.

They expressed their overall conclusions on the service point as follows (at paras 58 and 59):

“58. In the light of these considerations we would seek to sum up the issue of whether or not there was good reason in this case under CPR r 6.8 as follows. The application to Aikens J was put specifically on the basis that it was the best, perhaps the only means of bringing all parties into a single forum. An unusual form of service was requested, not for the sake of effecting service (for instance because of some difficulty about that), but for the sake of establishing jurisdiction over a foreign party (Peters) which was prima facie entitled to be sued in the courts of its domicile. The conventions controlling service between the United Kingdom and Germany were therefore being bypassed not in the interest of effecting service by some alternative method where the agreed method was not possible, but for the sake of establishing jurisdiction in England. Although the means used for effecting jurisdiction in England purported to find justification in the Brussels Convention’s rule of strict chronological precedence and in its interest in seeing all related actions tried together, in truth such means subverted the principles of that Convention: for precedence was achieved only by taking an a priori view of where it was convenient for the litigation to be conducted. Moreover that view was taken in the absence of the defendant, who, because it was served before it even had a chance to address the court on the manner of its service, had the question of chronological precedence decided in its absence (otherwise than in the normal way mandated by the service Conventions in force between the states concerned). The court’s rationale for taking such action was a view as to where the litigation could best be canalised; whereas the Convention dictates other rules for deciding such questions. The devices sought were not therefore a means of finding a level playing field, but were designed to subvert the agreed principles by which the United Kingdom and Germany regulated service of process and jurisdiction.

59. In our judgment there cannot be a good reason for ordering service in England by an alternative method on a foreign defendant when such an order subverts, and is designed to subvert, in the absence of any difficulty about effecting service, the principles on which service and jurisdiction are regulated by agreement between the United Kingdom and its Convention partners. This is not a matter of mere discretion, but of principle”.

131. It had been at the forefront of the claimant’s arguments on appeal that its stratagem, designed as it was to ensure that the disputes between all parties could be litigated together in a single forum, was not designed to undermine the policy of the Brussels Convention, but was rather a means of achieving that policy, exemplified by Article 22, of bringing related actions in a single forum (see para 33), but, as appears above, this argument was roundly rejected by the Court of Appeal.
132. The Defendants relied upon what was said in Knauf about subversion of the Brussels Convention, and contended that the Claimants were by the November Action seeking to subvert the rule of strict chronological precedence laid down by Article 21, by attempting through the November Action to forestall any attempt by the Finnish Unions to gain jurisdictional priority for the Finnish Courts in respect of the disputes between them and the Claimants. They submitted that the Claimants’ obvious desire to have their disputes with all three Unions tried in one jurisdiction, England, and to avoid the risk of bifurcation of proceedings and irreconcilable judgments, did not afford good reason for endorsing a step which might have affected chronological precedence under Article 21, and pointed out that it was not appropriate to take any a priori view as to where it was convenient for the litigation to be conducted.
133. I do not see how the issue, in accordance with the CPR, of English proceedings in respect of which the English Court would, subject to Article 21, have Brussels Convention jurisdiction over all defendants sued, and the service of those proceedings through the normal channels, with the object of securing chronological precedence for those proceedings under Article 21, can be said to subvert Article 21 or any other provision of the Brussels Convention, even if those proceedings have been commenced and served because it is feared that the proposed joinder and service of the foreign defendants to existing proceedings against an English defendant may be pre-empted by the foreign defendants bringing proceedings in their own jurisdiction. This is a case in which both the Claimants, and the Finnish Unions, have attempted to obtain priority for their own preferred jurisdiction: as the skeleton argument of FSU and AKT frankly acknowledges (at para 35), “The Finnish Action was intended….to counter the forthcoming application by Owners to join [FSU and AKT] as additional Defendants to the March Action.” In such circumstances, it must be left to the provisions of the Convention to determine which jurisdiction will prevail, in accordance with the rule of strict chronological priority laid down by Article 21. A crucial distinction between the present case and Knauf is that in the present case, the court has not been asked to exercise in favour of the Claimants any discretionary power in respect of the November Action, still less to exercise any such power for purposes collateral to those for which the power was granted, and in respect of which the court has been invited to form a view as to how the disputes between the various parties could best be resolved. I agree that it is not appropriate to approach the issues raised by the Defendants’ applications with any a priori view as to which is the more appropriate jurisdiction. I have not had to do so, and I have not done so. On the contrary, by not intervening in relation to the November Action it seems to me that the court will be allowing the provisions of the Convention to hold sway.
134. I do not understand the statement of the European Court of Justice at para. 9 of its judgment in Kalfelis v Schroeder, to the effect that a plaintiff should not be allowed to invoke Article 6.1 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 them is domiciled, as being directed at a case such as the present one, where there is an obvious and admitted connection between the claims made against each of the Defendants in the November Action. That action is not an abuse of Article 6.1, to which the remarks of the European Court, and also the remarks of Waller LJ in the Canada Trust case at the references given above, were directed. On the contrary, I agree with the submission of the Claimants that they were employing Article 6.1 in accordance with its fundamental rationale, to avoid the risk of irreconcilable judgments.
135. It remains for me to consider the Defendants’ “non-Convention” arguments, ie. those based on the existence of dual proceedings, and their submissions to the effect that to allow the Claimants to pursue the November Action would effectively by-pass the requirements of CPR Rule 38.7 and CPR Rules 19.4 and 23.4.
136. Dealing first with the point on CPR Rule 38.7, if the Claimants had discontinued the March Action against ITF before commencing the November Action, they would have needed the permission of the court to begin the November Action. They chose not to proceed in that way. However I agree with the Defendants that I should have regard, as I do, to the conditions that would have attached to that alternative course of action in considering whether the course adopted was an abuse of process.
137. CPR Rule 19.4(1) provides that, unless the claim form has not been served, the Court’s permission is required to remove, add or substitute a party. Rule 23.4(1) lays down the general rule that a copy of any application notice must be served on each respondent, and for this purpose Rule 23.1 provides that “respondent” means the person against whom the order is sought, and such other person as the court may direct. The Defendants submit that the Claimants effectively by-passed these requirements for notice and permission by commencing a fresh action, the November Action, against all three Defendants - though of course the Claimants applied for permission to join FSU and AKT to the March Action, and served notice of their application on ITF. I think it is clear in this context that “respondent” meant ITF, for it was the only person against whom the order was sought, and that the Rules did not require the Claimants to service notice of their application on FSU and AKT, as those Defendants submitted. However the commencement of the November Action did indeed have the effect of adding additional parties as defendants to proceedings brought by the Claimants, without any permission being sought or without ITF having the opportunity to object. Again it is right that I should bear in mind, as I have done, the requirements for the addition of defendants to existing proceedings in considering whether the different course adopted by the Claimants was an abuse of process.
138. The issue for me was whether, having regard to these provisions of the CPR, to the Brussels Convention, and to all the other circumstances of the case, the Defendants have demonstrated that the course adopted by the Claimants was an abuse of process. In my judgment they have not. There is nothing in the CPR or the Brussels Convention which prevented the Claimants from commencing a second action, against all three Defendants, and serving proceedings therein on FSU and AKT in Finland, without first obtaining the permission of the Court. Article 6.1 permitted joinder of FSU and AKT. The Action was commenced, and the proceedings served, with the legitimate aims of securing chronological priority for the English Courts and (so far as possible) avoiding bifurcation of proceedings between different jurisdictions. The Claimants have never had the intention of prosecuting two entirely separate sets of proceedings against ITF, or of unjustly harassing ITF. The unusual circumstances of this case afford another example of circumstances in which a claimant had sufficient justification for bringing two sets of proceedings. And in the event I do not think that ITF has been harassed, whether unjustly or at all. ITF has not suggested that it has been in any way prejudiced by the course adopted by the Claimants. Had it not decided to apply to strike out the November proceedings, the added impact of it of being a Defendant in two actions, rather than one, is likely to have been minimal. It would be the other Defendants, and not ITF, that would benefit from ITF’s strike-out application succeeding.
139. It is no answer for ITF to say that, if the commencement of the November Action was legitimate, then claimants could always evade the procedural requirements for joinder of an additional party and/or commencement of an action after discontinuance by simply starting a new action against the additional party and the original defendant. There are always likely to be adverse cost consequences for a claimant taking that course, and in certain circumstances it may indeed be an abuse of process to do so. But in the circumstances of this case, I have concluded that it was not.
140. It follows that ITF’s application must be dismissed, and that FSU and AKT’s challenge to the November Action based on the alleged inapplicability or misuse of Article 6.1 of the Brussels Convention must fail.

Other issues arising on the application of FSU and AKT in the November Action

141. As mentioned above, my decisions on the issues arising on the application of FSU and AKT in the March Action are also applicable in relation to the November Action. The consequence of this is that their application in the November Action also fails and must be dismissed.
142. Furthermore:

(1) Even if I am wrong as to date of seisure of a Finnish court for the purposes of article 21, the application of FSU and AKT on the basis of that Article still fails, because:

(a) FSU was served with proceedings in the November Action 1 2 hours before lodgment with the Finnish Labour Court of the application summons in the Finnish Action;

(b) Although AKT was served with proceedings in the November Action 1 2 hours after lodgment of the Finnish application summons, as between the Claimants and AKT, the Finnish Action does not involve the same cause of action as the November Action - see my decision on the identical point in relation to the March Action;

(2) Even if I am wrong as to whether the word “other” should in effect be read into CPR Rule 6.19(1)(a), the application of FSU and AKT on the basis of that Rule still fails, because when the November Action was served on FSU and AKT on 5^th December 2001, there were no other pending proceedings between them and the Claimants, whether in England or elsewhere - permission to add them as defendants to the March Action was not granted until 7^th December 2001.

Article 22

143. For completeness I should add that in their application notices in both Actions, and in their skeleton argument, FSU and AKT also invoked Article 22 of the Brussels Convention, which provides as follows:

“Where related actions are brought in the courts of different Contracting States, any court other than the court first seised may, while the actions are pending at first instance, stay its proceedings.

A court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the law of that court permits the consolidation of related actions and the court first seised has jurisdiction over both actions.

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.”

144. In their skeleton argument, FSU and AKT submitted that if, contrary to their primary contention, the entirety of the Finnish Action was not replicated as to parties or causes of action by the March Action, the Finnish Action was nonetheless a related action in respect of which the Finnish Courts were first seised for the purposes of Article 22, and that the English Court therefore had a discretion to decline jurisdiction, which it should exercise because of the practical convenience of litigating all claims in Finland alone. This argument fails on the facts, not only because, as I have found, the Claimants have a good arguable case that Finnish Courts are not seised of an action for the purposes of Article 21 until service, but also because, as the Claimants pointed out, of all the extant proceedings it is on any view the English Court which was first seised of a related action, namely the March Action as against ITF. Accordingly the English Court has no discretion to exercise under Article 22. Whether the Finnish Labour Court has a discretion under Article 22, and if so, how that discretion should be exercised, may be matters that that Court will be invited to consider hereafter, but they are not matters on which it would be appropriate for me to make any further comment.

Consequential Orders

145. I shall hear argument on the consequences that should follow from the dismissal of the Defendants’ applications, in relation to directions for trial and the impact, if any, of my decisions on the date (21^st October 2002) presently fixed for the trial of the March Action as between the Claimants and ITF, and in relation to what should become of the November Action.