Moving in the right direction

On 10 January 2015, the new Judgments Regulation 1215/2012 entered into force, replacing regulation 44/2001 for any proceedings instituted after that date. The changes are incremental rather than revolutionary, but practitioners will need to keep them in mind.

Partial relaxation

The biggest change for practical purposes consists of a partial relaxation of the European Court of Justice’s (CJEU) approach to concurrent proceedings. The basic rule that where proceedings are brought in two member states the court first seised has priority remains (article 29). But there are some important new rules.

First, under the previous regulation, the rule of priority applied even if the first proceedings had been brought in breach of an exclusive jurisdiction agreement. In such cases, the CJEU maintained that the second court must wait until the first court examined its jurisdiction and, if the first court decided – even wrongly – that there was no exclusive jurisdiction agreement, the case would proceed there.

This is now turned on its head. Under article 31, if there is an exclusive jurisdiction agreement, it is the court so designated (even if it is not first seised) that takes initial control over the case, and other courts must wait for the designated court to examine its jurisdiction.

The drafting of these provisions is not perfect. They give rise to a chicken-and-egg problem.

On their face, they apply only if there is an agreement which is effective for the purposes of the regulation to confer exclusive jurisdiction. But that may be in dispute.

The intent of the provisions, however, must be that in cases where there is at least prima facie to such an agreement it is the designated court that should decide the issue.

It is certainly now clear that if, for instance, an English court considers that there is an exclusive jurisdiction agreement in favour of England, then it can and must proceed with the case, even if the first proceedings were brought somewhere else. This is good news for commercial certainty.

Second, there is a (partial) reinstitution of forum non conveniens, where concurrent proceedings are brought in a member state and a third country. As between member states, forum non conveniens remains irrelevant: priority is decided by a combination of the provisions for exclusive jurisdiction (if they apply) or, in cases of concurrent jurisdiction, by the chronological sequence in which proceedings were brought.

But, under the previous regulation, the CJEU held that if a member state had jurisdiction under the regulation, it was not entitled to decline jurisdiction in favour of a third country, even if the third country was manifestly the more sensible jurisdiction for the claim, and even if proceedings began there first.

Enforceable judgment

This position is now somewhat modified by articles 33 and 34. In many, though not all, cases where a member state has jurisdiction over a matter, and proceedings were already pending in a third country in relation to the same or a related cause of action when the case began, the member state may stay its proceedings in favour of the third country. There are limits. The provisions only apply if the member state is second seised, and they only apply if the courts of the member state are satisfied that a stay is ‘necessary for the proper administration of justice’and that the third country can be expected to produce an enforceable judgment.

In effect, third countries are treated somewhat less favourably than member states. As between member states, first seisin is decisive. As between a member state and a third country, it is decisive if the member state is the court first seised, but if the third country’s courts were first seised then the member state has a power, but not an obligation, to stay if a stay seems ‘necessary’ for the ‘proper administration of justice’.

Although this does not produce the full effects of traditional forum non conveniens law in England (which did not depend on whether the English proceedings were started second), it does go a long way towards redressing the unfortunate rigidity of the previous regime.

There is much more that might be said about the new regulation. But these points are sufficient to show that real efforts have been made to address difficulties arising under the old regime. SJ

Paul Stanley QC is a barrister practising from Essex Court Chambers