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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Osborne
Lord Johnston
Lord Emslie
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[2006] CSIH 30
A1316/03
OPINION OF THE COURT
delivered by LORD OSBORNE
in the
RECLAIMING MOTION
by
JOHN PARKES
Pursuer and Reclaimer;
against
CINTEC INTERNATIONAL LTD
Defenders and Respondents:
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Act: Party (Pursuer and Reclaimer)
Alt: Murphy, Q.C.; Shepherd & Wedderburn (Defenders and
Respondents)
31 May 2006
The background
[1] In this action, the
pursuer and reclaimer seeks a number of remedies. The first conclusion is for interdict of the
defenders and respondents from directly or indirectly carrying on or being
engaged or interested in any business supplying water suppression technology,
derived from the pursuer's intellectual property rights, for reducing the
harmful effects of explosives, explosive munitions and improvised explosive
devices; and for interim interdict. In the
second conclusion, the pursuer seeks interdict of the defenders from directly
or indirectly carrying on or being engaged or interested in any business that
breaches the pursuer's patents, which are specified in the conclusion; and interim interdict. In the third conclusion, the pursuer seeks
production of certain business books and accounts, so that the consequences of
the defenders' alleged breaches of the pursuer's intellectual property rights
may be determined; this conclusion also
contains alternative claims for pecuniary remedies, the details of which are immaterial
for the present purposes. In the fourth conclusion,
the pursuer seeks payment by the defenders of the sum of £10 million Sterling, with
interest from 1 January
2003, in respect of the pursuer's alleged loss occasioned by the
defenders' breach of the pursuer's patents.
The summons contains certain other conclusions, with which we do not
need to be concerned.
[2] The
defenders entered appearance in this action solely to contest
jurisdiction. It is a matter of
agreement that they have a principal place of business at Cintec House, 11 Gold
Tops, Newport in Wales. The defenders aver in Answer 1 that they are
domiciled in Wales; that no grounds conferring jurisdiction upon
the Scottish courts exist; and that no
agreement exists between the parties prorogating the jurisdiction of the
Scottish Courts. Otherwise, the
defenders have denied the pursuer's averments.
They have tabled a single plea-in-law of no jurisdiction.
[3] The
case came before the Lord Ordinary on the Procedure Roll on 7 July 2005, when
argument was heard on the question of jurisdiction. On 9 September 2005, the Lord Ordinary pronounced an
interlocutor in which he sustained the plea-in-law for the defenders and
dismissed the action. It is against that
interlocutor that the pursuer has reclaimed to this court. The Lord Ordinary has set out the reasons for
his decision in his Opinion, dated 9 September 2005.
In summary, his conclusion was that the pursuer had made no averments of
any connection of the defenders with Scotland.
Submissions for the pursuer and reclaimer
[4] The pursuer, appearing
personally, outlined the complicated background to the present litigation. He also drew our attention to extensive
litigation which had taken place in the High Court in London in relation
to associated matters. He attributed
significance to the fact that the present action had been commenced in the
Court of Session before the commencement of an action at the instance of the
defenders against him in the High Court in London. He asserted that the court which was first
seized of an action had jurisdiction. He
went on to commend to us a document appearing first in the folder which he had
produced, which was a note of the arguments which he wished to address to the
court. In particular, he drew our
attention to section 70 of the Patents Act 1977, which provides remedies
for groundless threats of infringement proceedings of a patent. He also referred to the last document, under
the head Tab F, in the same folder, being an extract from World EOD Gazette of June 2002, which, he claimed, showed that
devices for which he held patents had been demonstrated at an exhibition in
2002. This publication circulated in Scotland. He also relied upon the fact that the
defenders advertised products manufactured by them, but for which he held
patents, on the internet, which advertisements had been downloaded by him and
were accessible to persons in Scotland. In this connection he relied upon a decision
by Lord Drummond Young in Bonnier Media
Ltd v Smith 2003 S.C. 36; he argued that the availability of this
material on a website accessible in Scotland
demonstrated that a threatened wrong might be committed in Scotland. The advertising material distributed by the
defenders indicated that they would be prepared to sell offending products in Scotland. These products, the pursuer argued, breached
his patents. In that connection he drew
our attention to a number of documents in Tab A in the folder which he
produced. He went on to refer to certain
discussions which had taken place between himself and the defenders' representatives,
in which he claimed that those representatives had acted in bad faith. Reliance was also placed upon section 60
of the 1977 Act, which defined the concept of infringement of a patent. It was argued that advertising in the manner
undertaken by the defenders was capable of being seen as an infringing act
under that section.
[5] Developing
his submissions further, the pursuer attributed significance to certain
correspondence set forth in condescendence 1, which included a letter
written on the defenders' behalf, dated 25 June 2003, which the pursuer characterised
as a letter of threat. The defenders had
based their litigation in London on alleged
threats made by the pursuer, which had, it appeared, conferred jurisdiction on
the English court. Likewise, the pursuer
relied upon the letter mentioned.
[6] The
pursuer went on to rely upon Loucas
Haji-Ioannou (31 March
1999). It dealt with the
effect of Article 21 of the Convention on Jurisdiction and the Enforcement
of Judgments in Civil and Commercial Matters of 1968, set forth in
Schedule 1 to the Civil Jurisdiction and Judgments Act 1982.
[7] The
pursuer next proceeded to draw attention to what had been done in certain
litigations in America, which
affected him. He claimed that the
present action had been treated as of significance in those proceedings. It would be odd if the present action were,
in those circumstances, to be dismissed.
Finally, the pursuer, recognising that the averments made in the present
action on his behalf were not expressed as clearly as they might have been and
did not focus upon the matters on which he had relied upon as creating
jurisdiction, moved the court that he should be afforded the opportunity to amend
his pleadings. In particular, he would
wish to rely upon a threatened wrong in Scotland in that
connection.
Submissions for the defenders and respondents
[8] Senior counsel submitted
that the reclaiming motion should be refused.
The issue was not whether there might be some possible ground of
jurisdiction upon which the pursuer might found. The issue was whether, at the commencement of
the present action, a ground of jurisdiction against the defenders had existed
and had been averred by the pursuer. The
Lord Ordinary had decided that no such ground of jurisdiction had been averred
and had not erred in any way in so deciding.
[9] There
were certain averments at the end of condescendence 1 which, it might be
thought, represented an attempt by the pursuer to make averments to found
jurisdiction in the Scottish courts.
These averments made a reference to an alleged agreement to be concluded
"under Scots law". It was averred that
there existed a contract, the place of performance of which was in Scotland. Reference was also made to "the balance of
convenience", said to favour the Court of Session. It was the provisions of Schedule 4 to
the 1982 Act that had to be applied in the circumstances of this case, where
the issue was the allocation of jurisdiction within the United
Kingdom.
Paragraph 1 of that Schedule made it clear that, subject to the
other rules in the Schedule, a person domiciled in a part of the United
Kingdom had to be sued in the courts of
that part. The defenders were domiciled in
Wales. A person domiciled in a part of the United
Kingdom might be sued in the courts of
another part only by virtue of Rules 3-13 of the Schedule. The only one of those rules which could
possibly be thought to operate in the circumstances of this case was
Rule 3. It authorised the suing of
a person domiciled in one part of the United
Kingdom in another part where (a) in
matters relating to a contract, they might be sued in the courts for the place
of performance of the obligation in question.
Under paragraph 3(c), a person domiciled in one part of the United
Kingdom might be sued in relation to
matters relating to tort, delict or quasi-delict in the courts for the place
where the harmful event occurred or might occur. No other part of paragraph 3 could possibly
be applicable in the circumstances of this case. Looking at these parts of paragraph 3,
senior counsel submitted that there were no averments of a contract in which
the place of performance was Scotland. Furthermore, there were no averments of any
delict or quasi-delict which had occurred or was threatened in Scotland. The pursuer's misconceived attempts to
demonstrate these grounds of jurisdiction were not the subject of
averment.
[10] An attempt had been made to rely on the provisions of
Article 21 of the Brussels Convention.
However that attempt was misconceived.
That article related to a situation where proceedings involving the same
cause of action and between the same parties had been brought in the courts of
different Contracting States. In that
situation, where the jurisdiction of the court first seized was established, it
provided that any other court than the court first seized should decline
jurisdiction in favour of that court.
Two points could be made regarding that article. In the first place, it had no relevance to
the circumstances here because proceedings had not been brought in the courts
of different Contracting States; they
had been brought in different parts of the United
Kingdom, which was a single Contracting State. Furthermore, the article proceeded on the
basis that the jurisdiction of the court first seized was established. That was what was in issue in this action. In short, Article 21 had no bearing on
the issue of jurisdiction.
[11] The pursuer's reliance on Bonnier
Media Ltd v Smith was
misconceived. In paragraph [17] of
his judgment Lord Drummond Young had considered the effect of publication of
certain matters on the internet. He had
not been prepared to conclude that the mere fact that websites could be
accessed anywhere in the world meant that, for trademark purposes, the law
should regard them as being used everywhere in the world. In any event, there were no averments about
these matters.
[12] In relation to section 60 of the 1977 Act, senior counsel
did not make submissions. He invited the
court to deal with the issue before it as a matter of pleading. Certain points had been made by the pursuer
concerning the position of a Mr James, who, it was alleged, had acted in
bad faith, in connection with patent applications by the defenders. There was nothing to justify such
allegations.
[13] If the pursuer should properly be understood as making a motion
for an adjournment of the reclaiming motion so that amendments might be made to
his pleadings, that motion should be refused as a matter of discretion. The pursuer had had much time in which to
consider the terms of his pleadings and, if so advised, to take steps to seek
leave for amendment following the decision of the Lord Ordinary, dated 9 September 2005.
Decision
[14] In our opinion, the issue
of jurisdiction requires to be determined in the light of the provisions of
Schedule 4 to the 1982 Act. In
terms of paragraph 1 of that Schedule the normal rule is that persons
domiciled in a particular part of the United
Kingdom are to be sued in the courts of
that part, subject to the rules of the Schedule. On that basis, the defenders and reclaimers,
being domiciled in Wales would
require to be sued in the courts of England and Wales. However paragraph 3 of the Schedule provides
certain possible exceptions to that general rule, which were referred to in
argument. That paragraph provides that:
"A person
domiciled in a part of the United
Kingdom may, in another part of the United
Kingdom, be sued -
(a) in matters relating to a contract, in
the courts for the place of performance of the obligation in question;
...
(c) in matters relating to tort, delict or
quasi-delict, in the courts for the place where the harmful event occurred or
may occur; ... ".
Some attempt was made to invoke the
provisions of sub-paragraphs (a) and (c), by the pursuer. We are quite satisfied that there is nothing
in his averments which demonstrates that those sub-paragraphs could be invoked
in the circumstances of this case. In
particular, there are no averments in condescendence 1 which demonstrate
the existence of any contract between the parties. Furthermore, while there was some discussion
of a possible threatened delict in Scotland in the
course of the argument before us, there are no averments relating to those
matters. In particular, the publicity
material in World EOD Gazette of June
2002, is not the subject of any averment.
The defenders' name does not appear in that material. Further, there is nothing other than the
pursuer's assertion to demonstrate that what is shown in that material falls
within the terms of any patent held by him.
Neither has the pursuer made any averments concerning material which may
have appeared on the defenders' website.
In any event, we doubt whether the mere appearance of any advertising
material on a website could, of itself, constitute infringement of any patent
held by the pursuer, having regard to what appears in section 60 of the
1977 Act and to the observations of Lord Drummond Young in paragraph [17]
of his judgment in Bonnier Media Ltd v
Smith.
[15] Much was made by the pursuer of the effect of section 70
of the 1977 Act. That section provides
for the availability of certain remedies for groundless threats of infringement
proceedings. However, it does not deal
with the jurisdiction of any particular court.
Accordingly we are at a loss to understand how it could be of any
assistance to the pursuer.
[16] The doctrine of "first seizure" also figured prominently in the
pursuer's submissions. We consider that
this reliance was misconceived. The
doctrine derives from the provisions of Article 21 of the Brussels
Convention of 1968, which provides:
"Where
proceedings involving the same cause of action and between the same parties are
brought in the courts of different Contacting States, any court other than the
court first seized shall of its own motion stay its proceedings until such time
as the jurisdiction of the court first seized is established.
Where the
jurisdiction of the court first seized is established, any court other than the
court first seized shall decline jurisdiction in favour of that court."
There are two obvious difficulties
concerning the invocation of this article by the pursuer. In the first place, it operates where
proceedings involving the same cause of action and between the same parties are
brought in the courts of different Contacting States. That situation does not exist here, where
proceedings have been brought in the courts of different parts of a single Contracting State, namely
the United Kingdom. In any event, the operation of the article
proceeds upon the basis that the jurisdiction of the court first seized is
established, when certain consequences follow.
That is of course the issue which is in controversy in the present
action. In short, this article cannot
been seen as a basis for a jurisdiction where that jurisdiction does not exist
on recognised grounds.
[17] For all of these reasons, we have not been persuaded that the
decision of the Lord Ordinary is unsound.
We understood the pursuer to move the court, towards the end of his
submissions, to be allowed leave to amend his pleadings. We are not prepared to grant leave to amend
in this action. The present litigation
has been in court since July 2003. It
was obvious from the moment when the defenders lodged defences that the issue
of jurisdiction was to be actively contested.
On 9 September
2005, the Lord Ordinary dismissed the action on the basis of
there being no jurisdiction, but only now does the pursuer seek to endeavour to
remedy that problem. We do not consider
that it is appropriate at this very late stage to entertain any such proposal
for amendment, particularly having regard to the fact that there has been
extensive litigation in England between the parties concerning, among other
things, the issues sought to be litigated in this action. In all these circumstances we shall refuse
the pursuer's motion for leave to amend.
[18] Having reached the foregoing conclusions, we shall refuse the
reclaiming motion.
