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Bir And Third States Arts.33 34 Notes

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BRUSSELS REGULATION AND
THIRD STATE PROCEEDINGS
The Owusu problem

How do Brussels I Regulation Recast ('BIRR') rules intersect with national jurisdiction rules?
Can an English court with jurisdiction under BIRR stay proceedings in favour of a non-Member-State? If so, in what circumstances?

1. First considered in Owusu v Jackson CJEU: No stay was awarded. But this decision still left some uncertainties for how it would apply in different fact petterns.
a. FACTS: C (British national) sued D for negligence in England under Art.2 BIR (Art.4 BIRR). The
English court had jurisdiction under Art.2 BIR, but D applied for a stay of the proceedings on the ground that Jamaica was the most appropriate forum (i.e. forum non conveniens argument), since e.g. the evidence was located in Jamaica.
b. HELD: MS court could not decline to exercise jurisdiction over Ds domiciled in that MS in favour of a third state. BIRR did not provide for a stay in favour of a third-state, so no stay could be awarded.
One reason given for the decision was that "allowing forum non conveniens in the context of the
Brussels Convention would be likely to affect the uniform application of the rules of jurisdiction contained therein in so far as that doctrine is recognised only in a limited number of contracting states, whereas the objective of the Brussels Convention is precisely to lay down common rules to the exclusion of derogating national rules." Other MSs do not have a doctrine of forum non conveniens.
Criticism: However, just because the BIRR did not provide for a stay did not mean no stay could be awarded. It was simply an ambiguous point. Indeed, perhaps the silence of the BIRR suggests the regime was not meant to deal with stays in favour of third states.
 Another reason given was to protect D. However, it is D that is asking for a stay.
Specific uncertainties that Owusu left open:
 Was the reasoning limited to cases where the English court had taken jurisdiction under the domicile (Art.4 BIRR) ground? What about Art.7(1), (2), (5) and Art.25 grounds?
 Would it make any difference if a stay in favour of a non-MS was sought on different grounds
—in particular:
o exclusive jurisdiction (i.e. Art.24 equivalent)
o a jurisdiction agreement (i.e. Art.25 equivalent)
o lis alibi pendens (i.e. Arts.29 and 30 equivalent)
NB: The CJEU declined to answer a second question posed by the national court raising these uncertainties.

2. The particular BIR ground of jurisdiction relied on:
a. Only Art.4? On one hand, Art.4 domicile ground might be viewed as a special case because it is the default rule: the CJEU referred to this ground as being "mandatory in nature".
b. BUT the better conclusion is that Owusu applies even to other grounds: In the hierarchy of BIR
grounds, it seems that Art.7(1), (2), (5) and Art.25 are more powerful. Ultimately, therefore, if we think the most compelling justification for Owusu is the uniformity justification, then it would apply even if the other special grounds of jurisdiction are relied on. So a stay would be granted even if a different ground of jurisdiction is relied on.
 This was English court's view in Gomez v Gomez-Monche Vives (2008) HC on Art.5(6) (trusts);
and Equitas v Allstate Insurance (2008) HC (cf. Skpe Technologies v Joltid (2009)) on Art.23
(jurisdiction agreements); and UCP v Nectrus (2018) HC on an Art.25-type non-exclusive jurisdiction agreement.
c. (NB Forum non conveniens doctrine should not be completely prohibited by Owusu: Some have suggested that Owusu might prevent the forum non conveniens doctrine from operating even where the court is applying its national rules, since the application of the national rules is only by virtue of Art.6 1 BIRR which provides that the Regulation does not engage. Accordingly, the case is still within the scope of the BIRR, and Owusu would prevent forum non conveniens.
 However, if the court can apply national rules, it should be allowed to apply forum non conveniens:
the court cannot apply some national rules and not all. Perhaps this is just a knee-jerk reaction by civil lawyers against the discretion of common law courts.)

3. What is the basis for the forum non conveniens stay: BIRR specifies circumstances in which it regulates or even requires a court with jurisdiction to decline jurisdiction in favour of another MS. But if the basis for a forum non conveniens stay in favour of a third State is one of the grounds specified in the BIRR (e.g. land or jurisdiction agreement), then can the court with BIRR jurisdiction stay in favour of the non-MS?
a. Exclusive jurisdiction (Art.24): 2 possible arguments to avoid Owusu effect:
i. Subject matter rule: Lucasfilm v Ainsworth (2011) SC:
 FACTS: In an IP dispute concerning the validity of a patent, there is exclusive jurisdiction where the patent is registered, desriving from the Mocambique rule that English court cannot hear cases about foreign land.
 HELD (SC): Declining jurisdiction in this case is not really an application of forum conveniens rule; the Mocambique rule actually goes to the subject matter jurisdiction of the court, because this is a rule that goes to its ability to hear the case—i.e. prevents jurisdiction in the first place. Therefore it does not touch on forum conveniens—i.e. operating on a different level of analysis.
ii. Reflexive effect, i.e. proceedings can be stayed where the BIR would require a stay if the third state were a Member State, reflecting the provisions & objectives of the BIR: Ferrexpo AG v
Gilson Investments (2012) HC:
 FACTS: English court had jurisdiction under BIRR on an ownership dispute concerning a
Ukrainian-domiciled mining company. If Ukraine had been a MS it would have had jurisdiction under Art.24 (then Art.22).
 HELD: Applied principle of reflexive effect, so a stay was awarded.
It is uncertain how far the doctrine of reflexive effect applies.

1. What is the source of the rules for declining jurisdiction in such cases? BIRR cannot apply because the third state is not a Member State. But an illusory, imagined parallel
BIRR provision is being applied.

2. What degree of consistency is required? For example, do the formality requirements stipulated in BIRR for a mandatory stay need to be complied with?
 A 'strict'/'direct' application would apply the words of the BIRR exactly the same way. An 'indirect'/less strict—perhaps purposive—application is to apply the idea or purpose of the BIRR provision, such that in the stipulated cases there is a discretion to stay.
No mutual trust and confidence obligations: A mandatory stay may be fine within the scope of BIRR between Member States, where there is mutual trust & confidence. However, this trust
& confidence does not apply to third states; there is a lack of reciprocity, which is why a discretionary stay is preferable to a mandatory stay.
b. Exclusive jurisdiction agreements (Art.25):
i. Reference to national law is allowed: Konkola Copper Mines v Coromin (2005) HC: Colman J
obiter: If an agreement is for a MS court, then it is covered by the Regulation; but conversely, if the agreement is for a third state (non-MS), then it is not covered, and a reference to national law is allowed.
 FACTS: What law determines the validity of a jurisdiction agreement in favour of a third state?
 HELD: If jurisdiction agreement was invalid, then the court could apply the BIRR.
 Perhaps this is not quite reflexive effect: Instead, if the jurisdiction agreement was valid in favour of the third state, it takes the dispute out of the scope of BIRR.
 Or it could be a flexible/broad application of reflexive effect.
ii. Approved in Winnetka Trading Corp. NB in Masri v Consolidated Contractors (2008) CA,
Collins LJ remarked that it would be odd if the BIRR did not permit a stay in such circumstances.
c. Lis alibi pendens (Arts.29, 30), but in a third state:
i. No stay in Catalyst Investment v Lewinsohn (2009) HC: Held that there is no power to stay in favour of the third state, as discretionary stays are prevented by Owusu.
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