England and Wales High Court (Patents Court) Decisions

Molins Plc v. G.D S.p.A [2000] EWHC Patents 170 (2nd February, 2000)

HC 1999 No. 03030

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

Mr Justice Pumfrey

BETWEEN

1. I direct that no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.

DATED 2 February 2000

1. On 18th May 1992 Molins plc, who is the claimant in the present proceedings, entered into a licence agreement with G.D S.p.A., an Italian company which is located in Bologna. Under this agreement, Molins granted to G.D and its affiliates, a world wide sole licence under various identified patents and applications for patents to make, have made, use and to sell Rejection Devices fitted to new cigarette packing machinery made by G.D and to retrofit Rejection Devices to other cigarette packing machinery made by G.D The patent is concerned with the rejection of faulty cigarettes during the cigarette packing process. The claims, at least so far as the United Kingdom patent is concerned, are apparatus claims. Clause 5 of the agreement provides for a minimum royalty subject to a right on or before 31st December 1993 to G.D to convert the licence into a non-exclusive licence, in which case the minimum royalty is reduced. By Clause 9.1, the agreement shall be construed and interpreted under English law. By Clause 9.4, notices provided by the agreement shall be deemed effectively given if in writing and sent by registered mail to the party to be notified at that party's last known address and shall be deemed to have been received on the fifth day following the day of mailing. The agreement is signed for and on behalf of Molins and for and on behalf of G.D.
2. The effect of Clause 5 of the agreement is that minimum royalties due under the licence agreement since 1994 have been of the order of £100,000-£150,000, G.D never having given notice to make the licence non-exclusive. In mid-1994, G.D requested that the 1994 royalty payment be deferred, and Molins agreed to this subject to the payment of an additional consideration of £30,000. In 1995, 1996 and 1997 no royalty payments were, it would seem, made by G.D, and a suggestion by Molins that a similar deferment of royalty to that which had taken place in 1994 (for a similar consideration) was not accepted. On 14th August 1998, Molins wrote to G.D formally requesting payment of the minimum royalties due under the agreement. After some correspondence which I have not seen, G.D wrote to Molins on 30th March 1999 in the following terms:-

"Further to our letter dated September 8th 1998 and the letter signed by Mr Chris Horton dated March 30th 1999, we have now been able to take legal advice on your request for payment of outstanding royalties under the above licence.

As mentioned in our previous letters dated September 8th 1998 and June 11th 1997, we entered into the licence in reliance on representations by Molins plc that:

"(a) The patented invention covered by the licence disclosed the Rejection Device which enabled rejection of single cigarettes and so eliminated the need for a group expeller.

(b) By using a device as patented, we would be able to develop a commercially marketable packing machine for which no group expeller would be required.

It is now clear that these representations were untrue.

We understand from our lawyers that in these circumstances G.D S.p.A. is entitled to the rescission of the licence and to the refund of the royalties already paid under the licence".

Without prejudice discussions took place at the offices of the English solicitors instructed by G.D, Linklaters.

3. On 22nd June 1999, Molins' solicitors, Bristows, wrote a letter before action to Linklaters. On 30th June 1999, Linklaters replied to this letter saying that they would seek instructions, and on 6th July 1999 Bristows chased them for a reply. The reply from Linklaters on 7th July was that instructions were still awaited from G.D.
4. On 13th July Bristows issued a claim form seeking payment of £523,600 and interest. The case as set out in the particulars of claim accompanying the claim form is that this sum is the total of the unpaid minimum royalties due and owing to Molins under the provisions of the agreement. On 13th July 1999, Bristows wrote to Linklaters informing them that the claim form had been issued and asking whether Linklaters had instructions to accept service in the United Kingdom, in order to avoid the expense of serving in Italy. The reply to this letter which is dated 15th July 1999 merely says that Linklaters are awaiting instructions, and on 21st July 1999 Linklaters wrote to Bristows saying that they had no instructions to accept service. Two days earlier, on 19th July 1999, G.D had issued proceedings in the civil court of Bologna against Molins seeking to terminate the agreement on the grounds that the agreement was invalid for a mistake under English law, and was entered into pursuant to a misrepresentation made by or on behalf of Molins, the misrepresentation in question being sufficient so it is alleged, to entitle G.D to rescind the agreement.
5. By an application to the President of the Court in Bologna, G.D sought authorisation to serve the proceedings so issued on Molins by fax. The certified translation of this application is as follows:

G.D S.p.A. (hereinafter, for the sake of brevity, referred to as "G.D") with its registered office located in Bologna, via Pomponia n. 10, in the person of its present legal representative, Mr Gian Carlo De Martis, acting in his capacity as Managing Director; represented and defended - according to the power of attorney attached hereto marginally - by the lawyers Gian Paolo di Santo from the Court of Milan and Pier Antonio Mareschi from the Court of Bologna; electively domiciled at the latter's office, located in Bologna, Via D'Azeglio n.21.

WHEREAS

- the aforesaid company intends to start legal proceedings against Molins plc - an English company having its registered office located in Blakelands, Milton Keynes - with the purpose of obtaining the rescission of a licence agreement entered into by the applicant and by Molins on 18th May 1992, which has finally turned out to be inevitably vitiated by a mistake, and to be therefore voidable;

- in spite of all the efforts repeatedly made by G.D in order to settle the controversy amicably, Molins has recently escaped any contact with the applicant;

- the judicial paper being examined is to be translated into English;

- specially during the holidays it would be extremely easy for Molins to try and prevent the execution of the service of process according to the methods provided for by the international Agreements;

All this stated first

G.D, represented and defended as referred to herein in the caption,

Asks

for Your Excellency The Presiding Judge of this Court to authorise serving the writ of summons attached hereto in copy, together with the respective sworn translations into the English language, to Molins plc, 11 Tanners Drive, Blakelands, Milton Keynes, Buckinghamshire MK14 5LU, by faxing it to the latter company's fax number 0044-1908-218499"

The application is dated 19th July 1999 and signed by the two lawyers. The authorisation is endorsed on the application in the following words:

"After having taken note of the above-stated request, the needed authorisation is hereby granted."

The authorisation is dated 20th July 1999 and is signed by the Clerk of the Court and by the President.

6. The fax transmission to Molins of the process thus authorised had, it would seem, been completed by about 4.00pm on 20th July 1999. Molins served the claim form on G.D on 3rd August 1999. The application before me is to stay the English proceedings on the ground that the Italian court is first seised of the dispute.

Article 21 of the Brussels Convention

7. By Article 21 of the Brussels Convention, "when 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 decline jurisdiction in favour of that court. A court which would be required to decline jurisdiction may stay its proceedings if the jurisdiction of the other court is contested." It is accepted on the part of Molins that the two proceedings here involve the same cause of action and the same parties and that, accordingly, the question for me is which court is first seised.
8. Put shortly, the case advanced by Molins is first that there has been no good service under Italian law, and accordingly the Italian court is not seised of the dispute; second, that G.D falsely led Bristows to believe that it was still considering whether to accept service of English proceedings, when in fact it had determined not to do so and was preparing a pre-emptive strike in Italy; and third that the order for service by fax was obtained by making representations to the Italian court which G.D and its lawyers knew to be false. Thus, if I am against Molins and hold that the Italian court is seised of the dispute, I should not accede to G.D's application to stay these these proceedings since to do so would be to give tacit approval to the misrepresentation which was made to the Italian court. On the contrary I should grant an injunction to restrain G.D from proceeding with the action in Bologna, since that action is an abuse of process. G.D contend that whether or not any misrepresentation was made to the President of the Bologna Court the service was good service in any event since the authorisation of the President of the Court was not needed to effectuate service by fax. If that submission is wrong, and authorisation of the President of the Bologna Court was necessary for good service by fax, they submit that the question of any misrepresentations made to him is not one which I can investigate on this application.

Service of the Italian proceedings

9. The first question is the law of service. The starting point is the provisions relating to service to be found in the Brussels/Lugano Convention, in Article IV of the annexed protocol. This article provides as follows:

"Judicial and extrajudicial documents drawn up in one Contracting State which have to be served on persons in another Contracting State shall be transmitted in accordance with the procedures laid down in the conventions and agreements concluded between the Contracting States.

Unless the State in which service is to take place objects by declaration to the Secretary-General of the Council of the European Communities, such documents may also be sent by the appropriate public officers of the State in which the document has been drawn up directly to the appropriate public officers of the State in which the addressee is to be found. In this case of the officer of the State of origin shall send a copy of the document to the officer of the State addressed who is competent to forward it to the addressee. The document shall be forwarded in the manner specified by the law of the State addressed. The forwarding shall be recorded by a certificate sent directly to the officer of the State of origin."

10. I am not concerned with the second paragraph of Article IV. The first paragraph preserves bilateral arrangements for service arrived at between the Contracting States. In the case of the United Kingdom and Italy, these are to be found in the Convention Regarding Legal Proceedings in Civil and Commercial Matters Cmd 4105, dated 17th December 1930 and ratified on 7th June 1932, to which I shall refer hereafter as the 1930 Convention.
11. Alternative provisions are to be found in the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters (to which the United Kingdom and Italy are both signatories). By Article 15 of the Hague Convention service is effective if the document in question was either (a) served by a method prescribed by the internal law of the State addressed for the service of documents in domestic actions upon persons who are within its territory, or (b) the document was actually delivered to the defendant or to his residence by another method provided for by the Hague Convention itself.
12. It is common ground between the parties in the present dispute that the 1930 Convention and the Hague Convention provide two gateways to valid service in the United Kingdom which do not depend for validity upon the authorisation given by the President of the Bologna Court. Only if service is not valid under either of the Conventions do I need to consider the validity of the service under Italian law, as to which there is a dispute between experts.

Service under the Hague Convention

13. It is convenient to deal with the provisions of Article 15 of the Hague Convention first. It will be observed that service is effective under that article if the document in question was served by a method prescribed by the internal law of the State addressed for the service of documents in domestic actions upon persons who are within its territory. The Italian proceedings in this case were served by fax and accordingly it is necessary to consider the provisions of the Civil Procedure Rules relating to service by fax. By Rule 6.2(1)(e) a document may be served by fax or other means of electronic communication in accordance with the relevant practice direction. Paragraph 3.1 of the practice direction supplementing part 6 of the CPR provides as follows:

"Subject to the provisions of paragraph 3.2 below, where a document is to be served by ... fax;

(1) The party who is to be served or his legal representative must previously have indicated in writing to the party serving -

(a) that he is willing to accept service by fax, and

(b) the fax number to which it should be sent,

(2) If the party on whom the document is to be served is acting by a legal representative, the fax must be sent to the legal representative's business address and

(3) A fax number -

(a) provided in writing expressly for the purpose of accepting service where the party to be served is acting in person, or

(b) set out on the writing paper of the legal representative of the party who is to be served ...

shall be taken as sufficient written indication for the purposes of paragraph 3.1(1)."

14. It appears from the correspondence exhibited that Molins plc place a fax number on the letterhead which they use in the ordinary course of business. It should be noted that the requirements of paragraphs 3.1(1), (2), and (3) are cumulative with the consequence that it is a condition of English procedural law that fax service can only be effective if either an express assent to service by fax within paragraph (1) or a deemed acceptance in accordance with paragraph (3) has been given. Undoubtedly, having regard to the provisions of paragraph (3)(b) service by fax on Messrs Bristows would have been good service.
15. However, no such indication as is required by paragraph 3.1(1) of the Practice Direction has been given, and since none of the deeming provisions of paragraph 3.1(3) have any application to the fax number of Molins to which this document was sent, it seems to me that the service was not good service under the CPR. Mr Silverleaf QC, who appeared on behalf of G.D, submitted that the use in the letterhead of a fax number indicated to the recipient a general willingness to accept service at that number. I was attracted by this submission, which seems to me to gain some force from the provisions relating to service by post. Since a company incorporated in England and Wales may be served by post at any place of business of the company within the jurisdiction which has a real connection with the claim, service by post at the address stated on Molins' letterhead, whether or not that was the registered office, would it seems to me have been good service. Mr Silverleaf also pointed to paragraph 3.4 of the practice direction which provides that where a document is served by fax the party serving the document is not required in addition to send a copy by post or by document exchange, but if he does not do so and the document is proved not to have been received then the court may, on any application arising out of that non-receipt, take account of the fact that a hard copy was not sent. So Mr Silverleaf submits that there is no practical objection to permitting service in the manner which took place in this case by fax to the number appearing on the ordinary commercial letterhead of the recipient. While I am attracted by this submission as I have indicated, it seems to me that the rules for service do reflect a real difference in the way that post and fax communications are frequently dealt with in the ordinary course of business. Accordingly, although with some doubt, I reject Mr Silverleaf's submission that the gateway provided the Hague Convention and Part 6 of the Civil Procedure Rules is open to his clients.

Service under the 1930 Convention

16. I turn to the provisions of the 1930 Convention. Part II of this Convention is entitled "Service of Judicial and Extra-judicial Documents". I am concerned with Articles 2, 3 and 4, which provide as follows:

ARTICLE 2

When judicial or extra-judicial documents drawn up in any of the territories (to which this Convention applies) of one of the High Contracting Parties are to be served on persons (including corporations) in any territory (to which this Convention applies) of the other, such documents may, at the option of the party interested, be served on the recipient in any of the ways provided in Articles 3 and 4.

ARTICLE 3

(a.) The request for service shall be transmitted :–

In Italy by a British consular officer to the Procuratore Generale presso la Corte d'Apello of the district in which the document is to be served;

In England by an Italian consular officer to the Senior Master of the Supreme Court of Judicature in England.

(b.) The request, containing the name of the authority from which the document transmitted emanates, the names and descriptions of the parties, the address of the recipient and the nature of the document in question, shall be drawn up in the language of the country in which the documents are to be served. The document to be served shall be drawn up in the language of the country in which it is to be served, or be accompanied by a translation in such language. The said translation shall be certified as correct by a diplomatic or consular agent of the High Contracting Party making the request, or by an official or sworn translator of one or other of the two countries concerned.

(c.) Service shall be effected by the competent authority of the country where it is to be served, who shall serve the document in the manner prescribed by the municipal law of such country for the service of similar documents, or, should a wish to that effect be expressed in the request, in a special form which is not incompatible with such law. If the authority to whom a document has been transmitted is not competent to deal with it, such authority shall of its own motion transmit the document to the competent authority of its own country.

(d.) The execution of the request for service can only be refused if the High Contracting Party in whose territory it is to be effected considers it such as to compromise his sovereignty or safety.

(e.) The authority which receives the request shall send to the consular officer by whom it was transmitted the documents proving the service or explaining the reason which has prevented such service. Proof of service shall be furnished by a certificate from the authority of the country where service has been effected, setting forth the fact, the manner and the date of such service. The document to be served, and the translation, if any, shall be forwarded in duplicate and the certificate shall appear on one of the copies, or be attached to it.

ARTICLE 4.

The document to be served may also be served on the recipient, whatever his nationality, without the intervention of the authorities of the country in which service is to be effected :–

(a.) By a diplomatic or consular officer of the High Contracting Party from whose territory the document emanates; or

(b.) By an agent appointed by the judicial authority of the country from which the document emanates, or by the party on whose application the document was issued. In the case of documents to be served in Italy, such agent shall always be either a Notary Public or an Advocate, who shall employ for the act of service an official competent by Italian law for this purpose.

The document to be served shall be drawn up in the language of the country in which service is to be effected, or shall be accompanied by a translation in such language, unless the recipient is a subject of the High Contracting Party from whose territory the document emanates.

17. It is clear from Article 2 that Articles 3 and 4 provide a series of ways in which service may be effected under the Convention. The principal way of effecting service is provided for in Article 3(a.). This is service between judicial authorities as Article 3(c.) makes clear. Article 4 provides an alternative method of service which is intended to avoid the intervention of the authorities of the country in which service is to be effected. Article 4 first provides for service under paragraph (a.) by diplomatic or consular officer of the contracting party from whose territory the document emanates and this can be disregarded. Paragraph (b.) provides for service by an agent appointed by the judicial authority of the country in which the document emanates or by the party on whose application the document was issued.
18. In the present case, the fax communication was sent by an operator specifically authorised so to do by the act of the President of the Court in Bologna. The words "or by the party on whose application the document was issued" envisage appointment of the agent by the private party. I do not find it easy to give the words any other meaning. It follows that if this is a case under Article 4 at all, it is a case under the first branch of Article 4(b.). Assuming, therefore, that the fax operator in Bologna was "an agent appointed by the judicial authority", the question is how the service is to be effected. Mr Males QC submits that the effect of Article 4 is to provide an alternative person to effect service within the jurisdiction but not an alternative to the manner of service, which is prescribed by Article 3. It follows, he submits, that service must be effected "in a manner prescribed by municipal law of the country for the service of similar documents" as Article 3(c.) requires, and this brings one back to Part 6 of the CPR. I think that this submission is correct. It seems to me to be clear that the 1930 Convention is not in Articles 3 and 4 contemplating any form of service which would not also be good service by the municipal law of the territory in which service is taking place. Otherwise, Article 4 would render the provisions of Article 3 nugatory.
19. In my judgment, both the gateways to service which would be good independently of the authorisation given by the President of the Court in Bologna are closed to the defendants in the present proceedings and I must turn to the question of this authorisation.

Service under Italian domestic law

20. The effect of the authorisation given by the President of the Court in Bologna is a matter of Italian law. In case C-351/89 Overseas Union Insurance Ltd v. New Hampshire Insurance Company [1991] ECR I-3317, the Court of Justice was concerned in a reference from the Court of Appeal with the effect of Article 21 of the Brussels Convention. One of the questions which arose was whether Article 21 of the Convention has to be interpreted as meaning that if the court second seised does not decline jurisdiction it is obliged to stay its proceedings, or whether Article 21 permits or requires it to examine whether the court first seised has jurisdiction and, if so, to what extent. At paragraph 21 of the judgment the Court of Justice said this:

"In the case of a dispute over which it is not claimed that the court second seised has exclusive jurisdiction, the only exception to the obligation imposed by Article 21 of the Convention on that court to decline jurisdiction is where it stays proceedings, an option which it may exercise only if the jurisdiction of the court first seised is contested.

22. It appears from the report of the committee of experts which drafted the Convention (Official Journal 1979 C59 page 1) that the rule was introduced so that the parties would not have to institute new proceedings if, for example, the court first seised of the matter were to decline jurisdiction. However, the objective of the provision, which is to avoid negative conflicts of jurisdiction, may be achieved without the court second seised examining the jurisdiction of another court.

23. Moreover, it should be noted that in no case is the court second seised in a better position than the court first seised to determine whether the latter has jurisdiction. Either the jurisdiction of the court first seised is determined directly by the rules of the Convention, which are common to both courts and may be interpreted and applied with the same authority by each of them, or it is derived, by virtue of Article 4 of the Convention, from the law of the State of the court first seised ,in which case that court is undeniably better placed to rule on the question of its own jurisdiction.

24. Moreover, the cases in which a court in a Contracting State may review the jurisdiction of a court in another Contracting State are set out exhaustively in Article 28 and the second paragraph of Article 34 of the Convention. Those cases are limited to the stage of recognition or enforcement and relate only to certain rules of special or exclusive jurisdiction having a mandatory or public-policy nature. It follows that, apart from those limited exceptions, the Convention does not authorise the jurisdiction of a court to be reviewed by a court in another Contracting State.

25. It therefore appears, both on the wording of Article 21 and from the scheme of the Convention, that the only other possibility available, as an alternative solution, to the court second seised, which should normally decline jurisdiction, is to stay the proceedings if the jurisdiction of the court first seised is contested. However, it cannot itself examine the jurisdiction of the court first seised."

21. I consider that this is perfectly clear. I should not permit any examination of the Italian court's jurisdiction, if I am satisfied that it is seised of the dispute. Mr Males submits that in deciding whether the Italian court is seised, I must nonetheless examine whether the requirements of Italian law for good service are satisfied. Basing himself on the decision of the Court of Justice in Zelger v. Salinitri [1984] ECR 2397 he submitted that the "court first seised" is the court before which the requirements for proceedings to become definitively pending have first been fulfilled. These requirements are to be determined in accordance with the national law of the court concerned. In AGF v. Chiyoda [1992] 1 Ll. Rep 325, Judge Diamond QC considered that it was open to him sitting in the Commercial Court to decide whether as a matter of Italian law the proceedings with which he was concerned had become definitively pending, even though the point was already on foot for decision by the relevant Italian court, which was the court in Milan. Judge Diamond considered that nothing in the Overseas Union Insurance Company case threw any doubt upon the correctness of this investigation.
22. The case upon which Judge Diamond principally relied, case 129/83 Zelger v. Salinitri [1984] ECR 2397 was a case which established the proposition that I have already stated and said in terms that any court considering the question which court is first seised must determine according to the law of the court in question whether proceedings were definitively pending in that court. Paragraphs 14 and 15 of the judgment in that case are as follows.

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 recognise 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 organisation of judicial proceedure 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 or priority in time of several actions brought within the conditions laid down by the Convention.

So, in Grupo Torras v. Al-Sabah [1996] 1 Lloyds Reports 7, the Court of Appeal said this:

"The court first seised is the one before which the requirements for proceedings to become definitively pending are first fulfilled.

It is this test which in our judgment is decisive of the questions which arise in the present case. It is also to be noted that the Zelger judgment expressly recognises that a court considering an Article 21 or 22 question will have not only to consider the pendency of the action before it under its own national law but also the pendency under the national laws of other States of any relevant actions pending before the Court of the other States (par.15). Thus it recognises that the Courts of the one State will have to reach a decision regarding the pendency of an action before the Courts of another State notwithstanding that the question involves the national law of that other State."

23. It seems to me to follow from this case and the passage from Case C351/89 Overseas Union Insurance Ltd v. New Hampshire Insurance Company quoted above that a case may become "definitively pending" even though the question of jurisdiction of the court over the persons or over the subject matter of the proceedings remains to be established. Article 21 assumes that this is the position, since it provides for the case in which the court first seised declines jurisdiction. It follows, I think, that it is sufficient if proceedings in which the question of jurisdiction will be decided are definitively pending in the foreign court for that court to be first seised of the proceedings. Such a case would, of course, be an appropriate one for the court in this country to stay its proceedings to await the decision of the foreign court as to whether it had jurisdiction over the substantive questions in the case.
24. In the present case, the question arises in this way. The service by fax which was authorised by the order of the President of the Court to which I have already referred was authorised under Article 151 of the Italian Civil Procedural Code of which an agreed translation is as follows:

"Form of service ordered by judge. The judge may order either on request or on his own initiative, by way of decree at the foot of the writ of summons that service may be effected in a manner other than that established by law, even by telegram (c. 2706) with a note of receipt by return, when particular circumstances or need for greater speed advise it."

Had this been a domestic Italian case there is no doubt, subject to the defendant's contentions as to the manner in which the President of the Court was misled, that the service authorised by fax would have been authorised in accordance with Italian law. The contention of Molins in the present case is that so far as service outside the Italian jurisdiction is concerned, reliance may not be placed on Article 151 of the Civil Procedural Code. Mr Cuonzo who is a practising lawyer in Italy with eighteen years experience states as his opinion that it is a requirement of the Italian constitution that Italian law shall conform to generally recognised international law. Therefore he says where a provision of an Italian statute conflicts with provisions of international conventions, the latter will prevail over the Italian legislation and the Italian statute will not be applied by the courts in Italy. Among the international obligations binding upon the Italian courts are the provisions of the Hague Convention. These provisions find themselves mirrored in Article 142 of the Italian Civil Code which provides for a particular manner of service in respect of persons non-resident, non-dwelling and non-domiciled in the Italian Republic.

142. Service on persons non-resident, non-dwelling and non-domiciled in the Italian Republic

(i) Save as provided for in paragraph 3, if the addressee is not resident, does not dwell nor is domiciled in Italy and has not elected domicile or granted a power of attorney in accordance with Article 77, the document is served by affixing a copy on the roll of the court office where the proceedings are taking place and by sending a further copy to the addressee by registered post.

(ii) A third copy is delivered to the Public Prosecutor which is responsible for the transfer to the Ministry of Foreign Affairs for delivery to the person to whom it is addressed.

(iii) The above provisions only apply in cases in which it is impossible to carry out the service in one of the ways provided for by the international conventions and by articles 30 and 75 of Law no 200 of 5.1.1967.

This provision is essentially service by registered post accompanied by a further service through diplomatic channels, and by paragraph 142(iii) it is provided that the provisions of Article 142 only apply in cases in which it is impossible to carry out the service in one of the ways provided for by the international conventions. Thus he says, only where the competent authorities of the foreign state refuse to effect service may documents be served by the means described in Article 142. He expresses the view that Article 142 is not subordinate to Article 151 which I have quoted and that, accordingly, as a matter of Italian domestic law it was not open to the judge of the court in Bologna to authorise service by fax.

25. The consequences of this conclusion, if correct, are of some complexity. Mr Cuonzo says that in Italian procedural law there are different classes of invalid acts which he describes as acts which are irregular, acts which are void and acts which are legally non-existent. In the last case, it is not possible to cure the defect retrospectively, but if the act is merely void or irregular retrospective cure is possible. Whatever the correct characterisation of the defect in the present case however, he says that in no circumstances can it be said that the court is definitively seised of the proceedings since in each case a further validating act, which may be a judicial act or an act of the party concerned, is necessary. Accordingly, he says that the English court should not take the view that the Italian court is definitively seised of the proceedings.
26. Professor Luzzatto, who gives evidence on behalf of G.D, expresses the view that Article 151 does indeed apply to service of proceedings abroad, and if that is wrong, any validation of service will have retrospective effect, with the consequence that so far as Italian domestic law is concerned the Italian court will have been definitively seised from the date of service by fax. Furthermore, he says that it is the practice to permit service on persons outside the Italian jurisdiction under Article 151.
27. There is no doubt that the procedural steps which have been taken have resulted in the appointment of a hearing in Bologna. One can say that the lever which puts the mechanism in motion has been pulled. At that hearing, it will be open to Molins to challenge the service upon them of the proceedings, and to challenge the jurisdiction of the court on Brussels Convention grounds. It appears to be common ground between the experts that were Molins to appear in the Bologna court to dispute the validity of service or the jurisdiction of the Bologna court having regard to the Brussels Convention, the service by fax of the proceedings will have achieved its object and would not subsequently be declared void.
28. I consider that proceedings are definitively pending before the Italian court. It seems to me that, where it is open to the English court not to dismiss but merely to stay proceedings to await what must on any reading of the Convention be a substantial challenge to the jurisdiction of the Bologna court which must be decided by that court, it would in general terms be a wrong exercise of the discretion which I have to investigate complicated questions of Italian procedural law which, if I determine them against the plaintiffs in the Italian proceedings, will have to be accompanied by injunctive relief to make that determination effective. So far as the question of the adequacy of service under Italian law is concerned, I think that I must in the present case exercise the discretion which I undoubtedly have under Article 21 to stay the proceedings but not to dismiss them and leave all issues both of service and of jurisdiction to the Italian court in which proceedings in which these questions will be determined are definitively pending.

Abuse of process

29. But the matter does not stop there. Molins, the claimants in the English proceedings, say that the prosecution of the Italian proceedings is effectively an abuse of process since the Italian court has obtained first seisin of the proceedings, if it has obtained first seisin, by means of a trick. It is suggested that the English court has a jurisdiction which survives the effect of the Convention to ensure that parties do not start proceedings in a manner which amounts to an abuse of process. Before turning to the law it is necessary to set out the nature of the abuse of process of which G.D is said to be guilty.
30. First, it is said that G.D falsely led Molins' solicitors, Bristows, to believe that it was still considering whether to accept service of English proceedings, when in fact it had determined not to do so and was preparing a pre-emptive strike in Italy; and second, it is said that G.D made representations to the Italian Court which it knew to be false, or ought to have known were false.
31. It is beyond argument that G.D had decided to make a pre-emptive strike in the Italian court, and was stalling Bristows. However, it left its English solicitors without instructions (it is not suggested that Linklaters knew what was going on, since if they did the only honest answer to Bristows letters would have been that they had instructions not to accept service). Moreover, there is every advantage to G.D in starting proceedings in Bologna, as it appears not to be disputed that the proceedings in Bologna would take from three to five years to reach a decision at first instance. In the Patents Court, I would hope that a realistic figure would be eighteen months or less. It is nonetheless the fact that the whole structure of the Brussels Convention is based on the principle that it is unacceptable for the courts of the various states to embark on an investigation of their relative merits in the resolution of disputes. The Convention requires me to assume that it is neither better, nor worse, to litigate in Bologna rather than London, provided the requirements of the Convention as to jurisdiction are met. The effect of the deception, if deception it was, practised by G.D on Molins must be viewed rather as if the result were that Molins was the defendant in the Queen's Bench Division rather than the claimant in the Chancery Division. Accordingly I do not consider that the fact that G.D stalled Molins while the Italian proceedings were under preparation is relevant.
32. The second question is more serious. The request to the Italian court for an order permitting service by fax recites the following facts:

- in spite of all the efforts repeatedly made by G.D in order to settle the controversy amicably, Molins has recently escaped any contact with the applicant;

...

- specially during the holidays it would be extremely easy for Molins to try and prevent the execution of the service of process according to the methods provided for by the international agreements;

The first fact is obviously untrue. The solicitors were in regular contact, and indeed the correspondence about service was taking place. The second fact is equally untrue: it is not possible for an English company to evade service, which is always possible at its registered office. Mr Silverleaf for G.D could not find any justification for either of these statements, and I proceed on the footing that they are lies, and are to be condemned.

33. Two points arise. G.D obtained accelerated service by fax by telling lies to the Italian court. So, Mr Males submits, I should not exercise any discretion I have to stay the current proceedings in their favour. Alternatively, he submits that the Italian proceedings are an abuse of process, and I should not decline jurisdiction in their favour. For these propositions Mr Males relies on the decision of the Court of Appeal in Turner v Grovit [1999] 3 WLR 794. This was a remarkable case. The facts were complex, but it is authority by which I am bound for the proposition that even in cases which fall within the Convention the court retains a jurisdiction to prevent an abuse of process, and such an abuse of process includes starting foreign proceedings which are either known to be or are obviously baseless with a view to the oppression of the defendant. In this context, "baseless" includes both a lack of basis in fact and a lack of any basis which could give the foreign court jurisdiction. There are a number of points about Turner v Grovit which need to be borne in mind. First, it was a case in which on the facts the English court (the employment tribunal) had exclusive jurisdiction under Article 17. It was not a case of possible concurrent jurisdictions. Second, the employment tribunal was undoubtedly first seised. It has already ruled on its jurisdiction. Notwithstanding these facts, Laws LJ, with whom Stuart-Smith LJ and Jonathan Parker J agreed, said this:

The court's power to protect its own process by the grant of an anti-suit injunction is not in my judgment confined, in the Brussels Convention context, to a case where the English court or tribunal has established jurisdiction under Article 21, or plainly possesses exclusive jurisdiction as for instance under Article 17. If it were so confined, it would not be a general power to prevent abuse of process at all: it would be a restricted power exercisable only to protect or vindicate the Brussels Convention rules as to jurisdiction. But the English court's right and duty to prevent abuse is inherent and at large. It could only be restricted by statute. In my judgment, there is nothing in the Brussels Convention (which, of course, by virtue of the executive provisions of the Act of 1982, as amended, constitutes domestic statute law) which imposes any such restriction.... I would rest my view of the power to prevent abuse by an anti-suit injunction on the inherent jurisdiction of the English court.

If I may respectfully say so, it seems to me to be essential that the court retains a power to prevent abuses of process which would otherwise be facilitated by a narrow reading of the provisions of the Convention. At the same time, it must be recognised that the jurisdiction is directed at preventing abuse of process, not at alleviating inconvenience or assuaging resentment. It is not an abuse of process merely to require a litigant to litigate in a tribunal of a Convention country if that tribunal in fact has jurisdiction under the convention. Nor is it an abuse of process to bring a defendant before a foreign tribunal by a trick when that tribunal has no jurisdiction: it must be assumed that the tribunal will recognise that fact and will deal with the fact that its jurisdiction has been sought to be invoked by a trick in its own way. To find an abuse of process justifying intervention by the English court more is required, and it seems to me that the element of oppression, overpoweringly present in Turner v Grovit, is crucial.

34. I am satisfied that the facts of the present case, as I have set them out above, do not amount to an abuse of process justifying my intervening in the manner contemplated by Turner v Grovit. Unless I were satisfied that I should intervene in that way, I would not be justified in refusing to apply the ordinary rules of Article 21 and stay the proceedings. It is one of the objects of the Convention to prevent concurrent proceedings, and I do not think that to mark my disapproval of G.D's activities by refusing to accede to their application to stay these proceedings would be desirable. Accordingly I do not think that I should refuse this application for a stay on the grounds that the Italian proceedings are an abuse of process.

Conclusions

35. The present action will be stayed to await the decision of the Italian court on its jurisdiction to entertain the action under the Brussels Convention. I shall hear the parties as to the appropriate relief. I do not reach this conclusion with any satisfaction, but it seems to me to be the inevitable consequence of the rules for jurisdiction established by the Convention.