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
		13 October 2011

Mr Justice Simon:

Introduction

1. On 21 February 2011 the Claimant ('WMS Inc'), a company incorporated in the State of Delaware (USA), began proceedings in the Commercial Court against the Defendant ('B Plus'), a company incorporated in England ('the English Action'). The proceedings sought declarations in relation to two commercial transactions. The first was the termination of a contract in March 2010 ('the Supply Contract Claim'). The second was the ending of negotiations between the parties in March 2010 ('the Negotiation Claim'). In each case WMS Inc sought declarations that it was entitled to act as it did and had no liability to B Plus.
2. The claims arise out of discoveries which WMS Inc contends it made during the course of due diligence enquiries into the business of B Plus. WMS Inc says that these discoveries gave rise to serious concerns about dealing with B Plus. The allegations are contested.
3. The Supply Contract Claim arises out of a contract between WMS Inc (as seller) and B Plus (as buyer) entered into in late November 2009, by which WMS Inc agreed to supply 250 second-hand gaming machines for the payment of US$2m by B Plus ('the Supply Contract'). WMS Inc contends that it contracted on its standard terms which provided for a process of due diligence investigations designed to ensure the suitability of those with whom it contracted. It is WMS Inc's case that it made discoveries about the beneficial ownership of B Plus which justified its termination of the contract under Clause 14 of its standard terms. In its Defence, dated 25 April 2011, B Plus has denied that WMS Inc was entitled to act as it did and has counterclaimed. No figure has yet been pleaded but it is reasonable to assume that the sum claimed will be many millions of Euros.
4. The Negotiation Claim concerns WMS Inc's decision in February/March 2010 to end negotiations ('the European Negotiations') which took place with B Plus in relation to a potential future supply of gaming machines for the Italian market. B Plus has not pleaded to this claim since it is subject to the present jurisdiction challenge.
5. On 1 April 2011 B Plus issued an application in relation to the Negotiation Claim seeking orders from the Court (a) declining jurisdiction under Articles 27.2 or 28.2 of EC Regulation 44/2001 ('the Brussels Regulation'), or alternatively, (b) a stay under Article 28.1. The basis of the application is that at the time the claim was issued B Plus had brought proceedings before the Italian Court in Rome claiming in respect of losses arising out of the breakdown in the negotiations for a contract to supply the Italian Market ('the Italian Proceedings'). It is important to note that B Plus brought a claim not against WMS Inc, but against an affiliated company, WMS Gaming International S.L ('WMS Spain'). B Plus has never brought a claim against WMS Inc before the Italian Courts.
6. Before turning to the Italian Proceedings it is convenient to mention a recent application made by B Plus. This application, dated 16 June 2011, seeks an order from the Court staying the Supply Contract Claim under Article 28.1 of the Brussels Regulation, or in the exercise of the Court's case management powers.

The Italian Proceedings

7. On 21 April 2010 B Plus commenced the Italian Proceedings against WMS Spain in the Rome Court. Initially the claim was for breach of the Supply Contract and for damages under Article 1337 of the Italian Civil Code for WMS Spain's unjustified interruption of the European Negotiations ('the Article 1337 claim'). As will appear later, the first of these claims is no longer pursued, although its status for the purposes of the Brussels Regulation is in issue.
8. WMS Spain's primary defence to the Article 1337 claim was that it was not involved in its own right in the European negotiations, but only on behalf of WMS Inc, which was the appropriate defendant to such a claim.
9. On 16 June B Plus filed a Motion against WMS Spain, requesting attachment of all of its property up to an amount of €141,860,135 (the sum of its then claim for breach of the Supply Contract - €14,503,377, and its claim under Article 1337 - €127,254,758).
10. On 2 December, following a hearing on 14 October, Judge Izzo issued an Order on the motion application. She dismissed the Motion on three bases. First, she found that there was no jurisdiction in respect of B Plus's claim against WMS Spain for breach of the Supply Contract. Secondly she held that there was provisional and conditional jurisdiction in respect of the Article 1337 claim against WMS Spain. Thirdly, and significantly, she found that WMS Spain had no status or standing in respect of such claim because it was not the proper defendant. In short, WMS Spain's defence that it was the wrong party 'must be upheld'.
11. On 20 January 2011, Judge Izzo refused the application of B Plus to join WMS Inc in the Italian proceedings, and ordered that a further hearing was to take place on 27 April to consider issues of evidence and disclosure.
12. On 16 February B Plus lodged its First Additional Brief, in which it waived its claim for breach of the Supply Contract,

... reserving the right to propose again such a claim in the competent jurisdictions vis-a-vis the mother company [WMS Inc] with offices in Illinois (USA).

13. On 7 April B Plus lodged its Third Additional Brief in which it set out the basis of its case that WMS Spain was the correct party to the claim under Article 1337. It also referred to the English proceedings and concluded,

The fact that [WMS Inc] filed a claim to obtain a negative declaration in the UK against B Plus is not relevant for the purposes of these proceedings, with regards to the separation (acknowledged also by counterparty) between the two companies.

14. On 25 May, following a hearing on 27 April, Judge Izzo ordered that the documentation served by the parties was sufficient to come to a conclusion as to the party with whom B Plus was conducting the European Negotiations: it was WMS Inc and not the defendant in the proceedings, WMS Spain. It is unnecessary for the purposes of this judgment to set out the four reasons the Judge gave for reaching this conclusion. However her Order ended,

B Plus's request for witness evidence is therefore held unnecessary.

On these grounds the applications for judicial enquiry are rejected and the hearing for summing up closing arguments is adjourned on 10 July 2013, 9.30 am.

15. In the light of the history of the Italian Proceedings, I have concluded that this Court is entitled to reach the following conclusions. First, as a matter of timing, there will be no decision from the Rome Court until after closing arguments (at the earliest) late 2013. Secondly, the Rome Court now has all the admissible evidence relevant to its determination of the Article 1337 Claim against WMS Spain. Thirdly, there is no immediate prospect of WMS Inc being 'joined' into the Italian Proceedings in the light of the refusal of that application on 20 January 2011. Fourthly, there is no realistic prospect of Judge Izzo coming to a different view in 2013 about the merits of WMS Spain's defence that B Plus has sued the wrong party ('the wrong party defence'). She reviewed all the evidence which was admissible and concluded that she had enough evidence to come to a decision. I note in this context that she refused to admit expert evidence on the quantification of B Plus's damages.
16. I accept Mr Houseman's submission that in this case it is possible to predict the likely outcome of the Italian Proceedings. Even if there were an appeal from her decision, this cannot take place until after July 2013. I also accept his argument that B Plus would not be able to consolidate a claim against WMS Inc in the Italian Proceedings prior to the July 2013 hearing.
17. These matters are relevant to the existence or magnitude of any risk of irreconcilable decisions as between the English Action and the Italian Proceedings.
18. On this basis of the above, I have reached the following factual conclusions. (1) If WMS Inc's claims were to proceed to a trial in the Commercial Court the trial would be likely take place in the Autumn of 2012 (with a realistic time estimate of 2-3 weeks) and with judgment being given in the Autumn. (2) It follows that the issues in the English Action are likely to be determined a year before the first instance decision in the Italian Proceedings. (3) The Rome Court would be bound to take into account such prior judgment, in so far as relevant to the issues it had to determine. (4) As a matter of commonsense, it is to the highest degree unlikely that, if the Negotiation Claim proceeds in England, B Plus would fail to counterclaim for its alleged loss against WMS Inc under Article 1337 and would instead stick obdurately to its position that only WMS Spain was engaged in the negotiations. The allegations which B Plus is likely to make in relation to the Negotiation Claim in the English Action will not require the English Court to make findings to the effect that WMS Spain is or is not liable in respect of such matters. All of this is relevant to the risk of inconsistent outcomes.

The Article 27 Application

19. Articles 27 and 28 come under the heading of section 9 of the Brussels Regulation, 'Lis Pendens – related actions.'
20. Article 27 provides:

1. Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.

2. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court.

21. It is convenient to note two uncontroversial points about the application of Article 27. First, the approach to the question whether the cause of action in proceedings in the two jurisdictions is the same reflects the general underlying policy of avoiding at the outset the possibility of irreconcilable judgments. It is for this reason that Article 27 should be interpreted 'broadly so as to cover, in principle, all situations of lis pendens before the courts' of Member States, see Underwriting Members of Lloyd's Syndicate 980 and others v Sinco SA [2008] EWHC 1842 (Comm), Beatson J at [22], citing Case C-351/89 Overseas Union Insurance Ltd etc v New Hampshire Insurance Co [1991] ECR I-3317, [16]. Secondly, Article 27 also has a secondary aim, namely to minimise the possibility of concurrent proceedings i.e. to discourage a multiplicity of proceedings: Recital (15) of the Brussels Regulation; see also Evialis SA v SIAT and others [2003] EWHC 863 (Comm), Andrew Smith J at [127], citing the dictum of Saville LJ in 'The Happy Fellow' [1998] 1 Lloyd's Rep 13 at 17-18.
22. The parties agreed that six issues arose on this part of the Application. I shall deal with these issues in the order in which the parties presented them, although it will be apparent that some of the issues may not arise in view of the answers on prior issues.

(1) Is the Rome Court still seised of the Supply Contract Claim by B Plus against WMS Spain?

23. Mr Brent (for B Plus) acknowledged that on 16 February 2011 B Plus had taken the decision to waive the Supply Contract Claim in the Italian Proceedings, while reserving its right to advance such claim in the competent jurisdiction against WMS Inc, which the English Action gives B Plus the opportunity to do. However he submits, by reference to the evidence of Avv Riccardo Troiano that, notwithstanding the waiver, by reason of Articles 306 and 308 of the Italian Code of Civil Procedure (ICCP) the Italian Court remains seised of the claim until WMS Spain has accepted the waiver and there has been a formal declaration from the Court. The evidence of Avv Roberta Falciai served on behalf of WMS Inc is to the directly contrary effect. Her evidence is that Articles 306 and 308 only apply to the renunciation of the entire proceedings, and that since B Plus did not discontinue the entire claim those articles were not engaged. All that happened was that B Plus modified its claim.
24. The conflict of evidence raises a common problem in this type of case. The Court is faced with directly conflicting evidence of foreign law given, not by experts owing duties to the Court, but by lawyers articulating views on behalf of their clients.
25. Nevertheless, one matter is clear: when B Plus waived its Supply Contract Claim against WMS Spain it did not purport to renounce or discontinue under Article 306. On this basis it seems to me inherently unlikely that the Supply Contract Claim continued even technically to exist in some form of forensic limbo until formally pronounced on by the Italian Court for the purposes of Article 27. I therefore conclude that the Supply Contract Claim is no longer part of the Italian Proceedings, and the Rome Court is not seised of this claim.

(2) If not, can this Court nevertheless apply Article 27 on a 'claim by claim' basis to the Negotiation Claim?

26. The argument of B Plus is that, although the Supply Contract Claim is not before the Italian Court, the Negotiation Claim is before that Court and therefore the English Court is bound to stay the Negotiation Claim. Mr Brent relied on the decision of the Court of Justice in Case C-406/92 'The Tatry'. In that case the Court considered whether Article 21 of the Brussels Convention (the predecessor to Article 27 of the Brussels Regulation) required a 'complete identity' of parties between the two relevant sets of proceedings before the national court was bound to stay the second set of proceedings. The Court concluded that the requirement of identity meant that the court which was seised second should only decline jurisdiction 'to the extent to which the parties to the proceedings pending before it are also parties to the action previously started before the court of another Contracting State; it does not prevent the proceedings from continuing between the other parties' [33]. Although this resulted in the 'fragmentation of proceedings', this could be mitigated by staying the other proceedings under Article 22 of the Convention (now Article 28 of the Brussels Regulation). The aim of avoiding irreconcilable judgments superseded the aim of avoiding fragmentation of proceedings.
27. Mr Brent relied on 'The Tatry' as an authority by analogy for the proposition that the English Court is obliged to treat claims separately and apply Article 27 to each claim, just as it is obliged to treat the parties separately. He also drew attention to two decisions which he submitted supported this proposition. The first was the decision of Mance J in Toepfer International GmbH v Molino Boschi SRL [1996] 1 Lloyd's Rep 510 at 513 where the Judge adopted a claim by claim analysis when considering Toepfer's claims in the English proceedings for injunctive relief and for a declaration (albeit concluding in both cases that the English proceedings did not involve the same cause of action as the Italian proceedings). In the second decision, Bank of Tokyo-Mitsubishi Ltd v Baskan Gida Sanayi ve Pazarlama [2004] EWHC 945 (Ch) Lawrence Collins J stayed the contractual claims in the English proceedings under Articles 27 and 28, but not the tortious claims: see [243]. Mr Brent also referred to Briggs & Rees, Civil Jurisdiction and Judgments, 5th edition, §2.30.
28. For WMS Inc, Mr Houseman submitted that the starting point was that Article 27 referred to staying 'its proceedings' and not claims. Although 'The Tatry' was analogous, there was no binding authority on the point; and although Lawrence Collins J in the Bank of Tokyo-Mitsubishi case assumed that the Courts could adopt this course, it was not a live issue in that case. Furthermore, there were two other cases Evialis SA v SIAT (above) and Underwriting Members of Lloyd's Syndicate 980 and others v Sinco SA (above) in which Andrew Smith and Beatson JJ concluded that a claim by claim approach was not appropriate.
29. It seems to me that Mr Houseman is right to say that the starting point is that Article 27 refers to 'proceedings' and that the use of such a word does not envisage parts of proceedings being the subject of a stay or an order declining jurisdiction. Although in the 'The Tatry' the ECJ held that proceedings might be stayed against some parties but not others it considered that such fragmentation of proceedings was, even to that extent, a disadvantage. In my judgment this is a rather slight basis for requiring a claim by claim analysis involving further potential fragmentation in every case where there is more than one claim. Whether such an approach is justified is likely to depend on the application of the broader principles of avoiding irreconcilable judgments and minimising the number of legal proceedings. For these reasons, although I am doubtful about approaching the Negotiation Claim on a claim by claim basis, I have not reached a concluded view on this issue.

(3) Depending on the answers to (1) and (2), do the Italian Proceedings and the English Action involve the same cause of action?

30. At this stage of the argument, the Court has to consider whether the Negotiation Claim (in the English Action) and the Article 1337 Claim (in the Italian Proceedings) are or involve the 'same cause of action'. In order for this to be so it is common ground that the two sets of proceedings must involve both (1) the same cause (i.e. they have the same facts and rule of law as their basis); and (2) the same objet (i.e. they have the same view in end). The claims themselves need not be identical and, in making the assessment, the Defences are to be disregarded, see the summary in Underwriting Members of Lloyd's Syndicate 980 and others v Sinco SA (above) [24]. Substantive claims for liability and claims for declarations of non-liability are capable of having the same 'cause' and 'objet', see [25] of the same case.
31. In my judgment neither the 'cause' nor the 'objet' are the same.
32. The cause is not the same because, although the factual basis of the claim is the same, the rule of law is not. If one looks at the claim documents in each set of proceedings, the applicable law of the relevant tort claim is different: B Plus contends in the Italian Proceedings that Italian Law is the applicable law; and in the English Action WMS Inc contends probably that Illinois law, or possibly that English law, is the applicable law. These involve different inquiries in deciding any liability for breaking off pre-contractual negotiations, and it is unlikely that both courts will apply the same substantive law to such allegations.
33. Nor is the objet the same. The respective proceedings have different views in end. The objective of the Italian Proceedings is to fix liability to pay compensation upon WMS Spain and no other party. The objective of the English Action is to establish that WMS Inc has no liability for having ended the European Negotiations. As already noted, both sides have accepted that these are not the same parties.

(4) If so, are the two sets of proceedings between the same parties?

34. The parties are agreed that this is the key issue. Mr Houseman took the initial point that B Plus has in effect accepted that the two sets of proceedings are not between the same parties. In the English Action only WMS Inc is involved, and in the Italian Proceedings only WMS Spain is involved. He relied on the acknowledgement in B Plus's 3rd Additional Brief of 7 April ([13] above) that the two companies were separate. He also drew attention to a passage from the 1st statement of Avv. Dott. Troiano at §24.

If B Plus brought fresh proceedings in the Court of Rome against WMS Inc alone the proceedings would be regarded as related and as falling therefore within Article 274 rather than Article 273. This is because, as I explain further below, the same relief would be sought and the same cause of action would be relied on, but the claim would not be between the same parties.

35. Although Mr Houseman was entitled to advance these points as an advocate's flourish, the issue calls for answers to two specific questions: (a) Is there a privity of interest between WMS Inc and WMS Spain, and (b) are the interests of WMS Inc and WMS Spain indissociable or indivisible?
36. Mr Brent submitted that the term 'party' had an autonomous European meaning. In particular, identity could exist where the parties involved were separate legal entities. It would depend on whether there was 'such a degree of identity between the interests of the entities that a judgment against one of them would have the force of res judicata as against the other', see the summary of principles set out in Kolden Holdings Ltd v Rodette Commerce Ltd and another (above) at [85]. He also argued that it was in principle possible for a parent company and its subsidiary to be regarded as the same party for the purposes of Article 27. In Berkeley Administration Inc v McClelland [1995] I.L.Pr 201 at [13] and [30], Dillon LJ regarded it as 'wholly unreal' for an English parent company and a French subsidiary to be treated as separate parties. Although the French subsidiary (which had commenced the French proceedings) had never been a party to the English proceedings, the English parent company (which was a party to the English proceedings and was subject to an injunction) 'could not conceivably have evaded its obligations' under the injunction 'by bringing in its wholly owned subsidiary ... to do those things in France' which it was prohibited from doing by the English injunction. He submitted that in the present case too, it was 'wholly unreal' for WMS Inc and WMS Spain to be treated as separate parties. The relevant person was an employee of both WMS Inc and WMS Spain.
37. Mr Houseman accepted that the Berkeley Administration case gave some limited support for the proposition that a parent and its subsidiary company could be treated as the same party, but submitted that the case was concerned with a subsidiary which had no independent role or function and was simply used by the parent to carry out its activities abroad. He submitted that WMS Inc and WMS Spain were separate entities incorporated in different jurisdictions, subject to different regimes of corporate governance, and that the evidence showed that they were subject to different management control. The fact that there may have been some overlap in terms of executive personnel did not mean that the interests of the two companies were indissociable or indivisible. There was no identity of interest similar to that sometimes found, for example, in cases of an assignor/assignee or insured/subrogated insurer; and there was no evidence or reason to suppose that WMS Inc was controlling or seeking to benefit from the Italian Proceedings. Those proceedings were brought against WMS Spain and it was that entity which was defending them. In any event, WMS Inc and WMS Spain were running different cases as to the applicable law of any tort claim.
38. I am very doubtful about treating the Berkeley Administration case as establishing any broad principles extending beyond the facts of the case. Any attempt by a parent company to hide behind the identity of a subsidiary in order to avoid its liabilities is likely to be looked at with close attention. In the present case the identity of the negotiating party and whether it was WMS Inc or WMS Spain has always been at the heart of the dispute. B Plus has recognised the distinct identities of WMS Inc and WMS Spain throughout the course of the Italian Proceedings, by (a) suing only WMS Spain, (b) attempting unsuccessfully to join WMS Inc, (c) waiving its contractual claim as against WMS Spain, (d) threatening to sue WMS Inc elsewhere on such claim, and (e) pursuing a positive factual case as against WMS Spain and not WMS Inc on the Article 1337 Claim. The two companies are plainly not indissociable and indivisible; and a judgment against one would not have the force of res judicata against the other. It seems to me that the Court needs to be cautious about treating parent and subsidiary companies as the same parties for the purposes of Article 27, since it would potentially expand the scope of Article 27 (the mandatory rule) at the expense of Article 28 (where a discretion can be exercised in an appropriate case). For these reasons I conclude that it is unrealistic to treat WMS Inc and WMS Spain as the same parties. On 7 April 2011 B Plus acknowledged, and more importantly in its Order of 25 May 2011 the Italian Court proceeded on the basis, that they are not.

(5) Has jurisdiction over the Article 1337 claim been accepted by the Rome Court?

39. This matter can be dealt with shortly as B Plus acknowledged that the Rome Court has not accepted jurisdiction in relation to this claim and therefore the terms of Article 27.2 is not engaged,

(6) In the light of the conclusions (1)-(5) above, must this Court: either (a) stay the English Action, or (b) stay the Negotiation claim pending the outcome of the Italian Proceedings?

40. Again, the question can be answered shortly. In the light of the conclusions that I have already reached, it follows that this Court is not bound to stay the English Action either indefinitely or until the jurisdiction of the Rome Court is 'established.'

The Article 28 Application

41. Article 28 provides:

1. Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings.

2. Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the action in question and the law permits the consolidation thereof.

3. For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.

42. The parties agreed that four further questions arose under Article 28.

(7) Are the English Action and the Italian Proceedings related actions?

43. Mr Brent submitted that the test of 'relatedness' is intended to be a straightforward test, see for example, Lord Saville in Sarrio SA v Kuwait Investment Authority [1999] 1 AC 32, 38H-42F. The underlying purpose of Article 28 is to avoid the risk of irreconcilable judgments; and there should be a 'broad commonsense approach' to the question of whether there are related actions. Article 28 should not be applied mechanically, Research in Motion UK Ltd v Visto Corporation [2008] EWCA Civ 153, [37], what is required is,

... an assessment of the degree of connection, and then a value judgment as to the expediency of hearing the two actions together (assuming they could be so heard) in order to avoid the risk of inconsistent judgments. It does not say that any possibility of inconsistent judgments means that they are inevitably related. It seems to us that the Article leaves it open to the court to acknowledge a connection, or a risk of inconsistent judgments, but to say that the connection is not sufficiently close, or the risk is not sufficiently great, to make the actions related for the purpose of the Article.

44. Mr Brent accepted that there were difficulties with his argument over the Supply Contract Claim against WMS Inc (not least that B Plus had served a Defence to the claim and had issued its application for a stay out of time); but he submitted that the Court should stay the claim, so as to permit B Plus to 'consolidate' this potential claim in the Italian Proceedings. So far as the Negotiation Claim was concerned, he submitted that the Italian and English claims were 'mirror images' of each other, where the grounds relied on for terminating the negotiations were similar, and that it was appropriate to stay the English Action.
45. Mr Houseman drew attention to the terms of Article 28.3 and the importance of the test of expediency, and the principle that claims should be heard and determined together so as to avoid the risk of irreconcilable judgments. He submitted the risk of irreconcilable judgments should be evaluated before the Court considered whether the actions were related for the purposes of the Article; and that if this were done in the present case, it was clear that there was no appreciable risk of irreconcilable judgments. So far as the Supply Contract Claim was concerned, there was no such claim before the Italian Courts. So far as the Negotiation Claim was concerned, there was no appreciable risk of irreconcilable judgments since in the Italian Proceedings the issue would be whether WMS Spain was liable for ending the discussions, whereas in the English proceedings the issue would be whether WMS Inc was responsible for ending discussions.
46. Having considered these arguments and the cases to which I have been referred, I have come to the conclusion that the relevant actions pending in the Courts of England & Wales and Italy are not related actions. The Negotiation Claim in the former and the Article 1337 in the latter are similar: the names of the parties are alike and there is an overlap in the subject matter of the dispute. However, on analysis they are not related in the sense described in Article 28. To adopt the words of the Court of Appeal in Research in Motion UK Ltd v Visto Corporation (above), there is a 'connection,' but there is little risk of inconsistent judgments and such risk is not sufficiently great to make the actions related for the purpose of Article 28. If B Plus were to achieve everything it seeks in the Italian Proceedings against WMS Spain (which at the moment seems highly unlikely, in the light of the presently stated views of Judge Izzo that WMS Spain is the wrong party to be sued in the Article 1337 claim) B Plus would be entitled to a judgment against WMS Spain to the effect that it was responsible for the breakdown in negotiations. It is not obvious how a judgment in this country as to whether WMS Inc was or was not responsible for the breakdown would be inconsistent with such a judgment.
47. I have not overlooked Mr Brent's argument that I should take into account the possibility that his client would be entitled to consolidate its Supply Contract Claim against WMS Inc in the Italian Proceedings. This however is a matter which can be considered at the discretion stage (ie under issue (9))

(8) If not, can this Court nevertheless apply Article 28 on a 'claim by claim' basis so as to consider whether (a) the Negotiation claim and the Article 1337 claim are related actions, and/or (b) the Supply Contract claim and the Article 1337 claims are related actions?

48. I have already dealt with a similar argument under Article 27 (see issue (2) above), and for similar reasons do not decide the point under Article 28. However, in any event and for reasons which have already appeared and which appear below, such an approach would not assist B Plus in the present case.

(9) Was the application to stay the Supply Contract claim made out of time and, if so, should the court grant an extension of time to remedy this?

49. I have already recorded the circumstances in which B Plus applied to stay the Supply Contract Claim. That application was made some 11 weeks after the expiry of the 28 day deadline for making such an application. By that stage B Plus had served a 28-paragraph Defence and Counterclaim to the Supply Contract Claim and a 21-paragraph Request for Further Information (which was answered on 13 June 2011).
50. Before extending time to allow this further stay application to be made, the Court would need to be satisfied that there were good reasons for it being made late. No good reason has been advanced. There has been no factual change of circumstance which might justify the lateness of the application. B Plus had every opportunity to apply for a stay in relation to the Supply Contract Claim. Not only did it fail to do so, its solicitor (Mr Cockshutt) accepted that the English Court had jurisdiction in relation to the Claim.
51. I do not accept the suggestion that there is any conduct by WMS Inc which justified this change of approach by B Plus or entitled it to the relief it now seeks. In any event, the suggestion that the Supply Contract Claim should be stayed, until a possible joinder to the Italian Proceedings (of a claim which B Plus have already specifically abandoned against the only party to the Italian Proceedings) at an uncertain date, is a slight and unsubstantial basis for relief, and provides a further and potent reason for refusing the application.

(10) In the light of the answers to (7)-(9) should the Court exercise its discretion either (a) to decline jurisdiction in respect of the Negotiation Claim, or (b) to stay the Negotiation Claim pending the outcome of the Italian proceedings, or (c) to stay the Supply Contract Claim pending the outcome of the Italian proceedings?

52. I have already answered sub-issue (c) on the basis that it requires an application which I am not prepared to allow. Sub-issues (a) and (b) proceed on the basis of an affirmative answer to issues (7) and/or (8).
53. Both parties referred to and adopted the approach indicated by Advocate General Lenz in Case C-129/92 Owens Bank Ltd v Bracco [1994] QB 509 at [76-79], in which he indicated the importance of three factors: first, the extent of the relatedness and the risk of mutually irreconcilable decisions; secondly, the stage reached in each set of proceedings, and thirdly, the proximity of the courts to the subject matter of the case.
54. In my judgment the application of these (non exclusive factors) militates strongly against allowing the present application.
55. So far as the first factor is concerned, (as already noted) there is no serious or appreciable risk of irreconcilable outcomes. The focus and objectives of the two actions are not the same: the Article 1337 Claim in Italy is concerned with whether WMS Spain is liable for ending the discussions, whilst the Negotiation Claim in London (including the counterclaim which B Plus will be entitled to make against WMS Inc) is concerned with whether WMS Inc is liable for ending such discussions with B Plus. These are different questions. However, even if (which is highly unlikely) both were to be answered affirmatively, this would simply mean that WMS Spain and WMS Inc were jointly and severally liable for the same tort/delict. These would not be irreconcilable outcomes. Further and in any event, the Court has sufficient material from which it can properly conclude that the most probable outcome in the Italian Proceedings is a finding that WMS Spain is not liable. This result has been clearly foreshadowed by Judge Izzo in her 2 December Order and again in her 25 May Order. There is to be no new evidence in those proceedings, so her firm view is unlikely to change. There will be, as Mr Houseman put it, 'a procedural vacuum' in the Italian Proceedings. I take into account the argument of B Plus that it will seek to re-open Judge Izzo's ruling on the evidence and appeal her first instance decision. However that is a matter which impacts on the next factor.
56. So far as the second factor is concerned (the stage at which both actions have reached), the strong likelihood is that the trial here would determine all the relevant issues between the two real parties to the dispute (WMS Inc and B Plus) well before any first instance determination of the Italian Proceedings. The present realistic estimate is for a Commercial Court trial in the autumn of 2012. This will result in findings of fact binding upon B Plus which may (if relevant at all) be accommodated by the Rome Court in its subsequent determination in relation to WMS Spain. Mr Brent submits that this Court should not be critical of the way in which other Member Courts conduct their business. I accept that submission. However two matters of fact stand out starkly. First, as is common ground, the confined issues with which Judge Izzo is concerned will not be determined at first instance until July 2013. Secondly, the admirable concision with which Judge Izzo made her rulings may be compared favourably with the length of the present Judgment. It follows that an English judgment would be available at least a full year before the first instance determination in the Italian Proceedings, and long before any hypothetical future consolidated Italian Proceedings.
57. So far as the third factor is concerned (the proximity of the courts to the subject-matter of the case), Mr Houseman accepted that some, but not all, of the underlying factual circumstances of the Negotiation Claim took place in Italy. However, he submitted that this did not mean that the Italian Court was a more, still less the most, appropriate or expedient forum for determination of the issues at the heart of this case. He relied on the domicile of B Plus, the reliance on events which took place in England in January 2010 and the trial of the Supply Contract claim in the jurisdiction. There are factors which militate each way, but even if the full weight of this factor is weighed in B Plus's favour, I do not regard it as outweighing the other considerations in favour of letting the English Action proceed to trial.
58. I therefore refuse to exercise the Court's discretion either to decline jurisdiction in respect of the Negotiation Claim, or to stay that claim pending the outcome of the Italian Proceedings.

Conclusion

59. For these reasons the applications of B Plus are refused. I will hear the parties on the form of directions which should be made in the light of this judgment. It is to be understood that I intend that the case should proceed to a 2-3 week trial in the Michaelmas term of 2012.
60. In Kolden Holdings (above) at [96] Lawrence Collins LJ expressed the hope that the parties, having spent a large amount of money on what he regarded as a sterile exercise, would now turn their attention to dealing with the substance of their dispute. I repeat the expression of that hope in the present case.