In its recent decision in Cartier parfums-lunettes v Ziegler France SA* the European Court of Justice (ECJ) has provided some helpful clarification on an important aspect of the Brussels Regulation, namely, the correct interpretation of Article 27.
The Brussels Regulation (or, to give it its full name, the “Council Regulation (EC) No44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters”) provides a regime which, (in broad terms), is directed at:
- The unification of the rules of conflict of jurisdiction within the EU, specifically by determining the proper jurisdiction of certain categories of claims where the defendant is domiciled in the EU; and,
- Simplifying the steps which need to be taken in order for a judgment handed down in one EU Member State to be recognised and enforced in another.
The first of these points is in issue in circumstances where proceedings relating to the same dispute are commenced in more than one jurisdiction. Enter Article 27.
Article 27 provides as follows:
- 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 [in other words, the court which first has “possession” of the claim] shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.
- 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.
So, there is a two-stage process. Before the jurisdiction of the first court is first established, the second court must stay the second set of proceedings that have been brought in it and wait until the first court has established jurisdiction. At that point, the second court must decline jurisdiction.
This procedure avoids the risk of neither court accepting jurisdiction, putting the claimant in the action back at square one.
In 2007, the first claimant sent a consignment of cosmetics from France to England, using the Defendants, Ziegler, as carriers. Some of the goods were stolen in transit whilst being driven across the UK.
On 24 September 2008, the Claimants brought an action before the French commercial court against Ziegler and other parties which had been sub-contracted by Ziegler.
Ziegler argued, however (as the Claimants well knew), that having filed a claim form before the English High Court some eight days earlier, they had beaten the Claimants to the punch, and raised a plea of lis pendens (literally, a pending action). Indeed, crucially, the Claimants had appeared before the English High Court to contest the merits of Ziegler’s claim, without challenging the court’s jurisdiction.
The Claimants argued that the English High Court’s jurisdiction has not been “established” within the meaning of Article 27. In order for that to be the case, the English High Court must expressly reject its lack of jurisdiction, failing which it remained open to the Claimants to commence proceedings in another court.
French academic opinion on the proper construction of what it meant for the jurisdiction of the first court to be “established” under Article 27 was divided. This led the French Cour de Cassation to the reference the issue to the ECJ.
The ECJ held that the test proposed by the Claimants’ was not correct.
Jurisdiction of the first court first seised was established when:
- The court had not declined jurisdiction of its own motion; and,
- None of the parties had contested the court’s jurisdiction prior or up to the point when the first defence on the merits of the case was submitted. This point reflects Article 24 of the Brussels Regulation, which provides that where a defendant enters an “appearance” in a court, the jurisdiction of that court could no longer be challenged.
The ECJ’s decision underlined the importance of contesting jurisdiction, should a party choose to do so, right at the outset and before it makes submissions to the court on the merits of the dispute**. There is no doubt in the writer’s view that this interpretation is the correct one. Waiting for the first seised court to expressly rule on its jurisdiction, as suggested by the Claimants, rather takes control of the matter out of the hands of the parties and undermines the importance of being the first party to lodge a claim before its chosen court. In this case, the Defendants would have beaten the Claimants in the “foot race” to lodge their claim but would then be left reliant on the English High Court to make an express ruling on jurisdiction, presumably before the French court did so.
*Cartier parfums-lunettes and Axa Corporate Solutions Assurance v Ziegler France SA, (Judgment of the Court)  EUECJ C-1/13 (27 February 2014).
** This is, of course, in line with the position under section 31 of the Arbitration Act 1996, where a party who wishes to raise an objection as to the substantive jurisdiction of an arbitral tribunal must be made “not later than the time he takes the first step in the proceedings to contest the merits of any matter in relation to which he challenges the tribunal’s jurisdiction”.