Jurisdiction EU Conflicts

Exclusive Jurisdiction

The Brussels 1 Regulation (Recast) provides for cases where EU member states have exclusive jurisdiction. In these cases, the Regulation applies. regardless of the domicile of the parties.

Where the court of a member state deals with a claim which is principally concerned with a matter over which the courts of another EU state have exclusive jurisdiction,  it shall of its own motion declare that it has no jurisdiction.

The  Court of Justice of the European Union have held that the exceptions should be interpreted no more widely than its objective. The excepted matter concerned must be the principal subject of the proceedings. It must not arise in incidental manner only.

Two EU States have Jurisdiction

In some cases, under the EU rules, two states may have the power or jurisdiction to hear the claim.  For example, a claim based on a contract may be brought where the defendant is domiciled or where the performance is to take place.

The regulation seeks to ensure that different States will not issue conflicting judgments on the same or related matters.  There are rules and provisions designed to reduce this possibility.

There are two possibilities.  The first is where proceedings affecting the same issues have been commenced in two jurisdictions.  In this case the second is where proceedings on related issues are being pursued.  In general terms, the regulations give precedence to the Court where the proceedings have commenced or seised of the proceedings.

Court First Seised

The general principle is that the court first seised of jurisdiction has priority where more than one jurisdiction is available. A court is seised of proceedings when the commencing document is lodged with the court. Where this predates documentation being lodged, a receipt of service causes the court to be seised of the proceedings. Where however the plaintiff does not take the further necessary steps the court is not seized.

However, this will not be the case if proceedings are lodged and  the applicant has  subsequently failed to take the steps he was required to take to have service effected on the respondent or  if the document has to be served before being lodged with the court, at the time when it is received by the authority responsible for service, provided that the applicant has not subsequently failed to take the steps he was required to take to have the document lodged with the court.’

The general principle is that where proceedings regarding the same subject matter are before two courts in EU states, the court that is first seised has priority, and the other court should stay or decline jurisdiction.  If, however, for example, the court whose jurisdiction is first seised is successfully challenged, then the stay may be lifted in the court’s second seised. Generally, the second court must simply decline jurisdiction rather than review the power of the first court.

The subject matters must relate to the same questions and the same matters.  A claim for a civil wrong/tort and a claim for breach of contract would not be the same.  Difficult questions of interpretation may arise as to whether they relate to the same matters.

Duty on Court

The Brussels 1 Regulation (Recast) places a duty of the court to examine its own jurisdiction by itself of its own motion. Where another court has exclusive jurisdiction the court should give effect to it without waiting for the matter to be raised by the parties.

Where no appearance is entered the court is obliged to make a declaration of its own motion that does not have jurisdiction if this is so.

If a court is seised of the matter, it must stay the proceedings unless satisfied the defendant has received the documents in time to allow it to prepare a defence

Stay Exclusive Jurisdiction

Courts are to decline jurisdiction and defer to the court first seized where the claim comes within the exclusive jurisdiction of the courts of more than one member state. The matter must be determined as quickly as possible. Upon request by a court seized of the dispute any other court seized must without delay inform the former court of the date it was seised.

Where the court of a member state EU member state which is the subject of a choice of court agreement is seised,  the court of another state shall stay proceedings until such time as the chosen court declares that it has no jurisdiction under the agreement. Where the designated court has accepted jurisdiction the courts of other EU states are to decline jurisdiction.

Domicile Cases

The following rule applies to jurisdiction based on the domicile of the defendant, where there are  special rules of jurisdiction.

State member states courts must decline jurisdiction and dismiss the proceedings if the proceedings before the court of the third state are concluded which is capable of recognition and enforcement in the home state.

Where related proceedings are pending before a court in a non-EU state, the courts of EU member states may stay the proceedings if it is expedient to hear and determine the related actions together to avoid the risk of irreconcilable judgements resulting from the separate proceedings and it is expected that the court of the third state will give a judgement capable of recognition and enforcement in the member state. If they are concluded and result in a judgement capable of recognition and enforcement the court may dismiss the proceedings.

Stays given above may be lifted if the proceedings in the other state are discontinued or stayed if it appears that the proceedings are unlikely to be concluded within a reasonable time or continuation of proceedings is necessary for the proper administration of justice.

Substance Considered

The does not depend on the form of the proceedings. It does not matter who is  plaintiff or defendant. It may apply where some of the same parties are parties to both proceedings. In this case the second seised court declines jurisdiction to the extent of the parties before it, are also parties to the first action.

The two actions must have the same cause or objective. The objective is the purpose of the proceedings. They need not be formally identical provided that they are identical in substance.

Actions are deemed to be related where they are so closely connected that it is expedient to hearing them together to avoid the risk of irreconcilable judgements resulting from separate proceedings.

Staying Issues

The rules do not apply where the Court second seised has exclusive jurisdiction.  In a commercial case, jurisdiction conferred by agreement will take priority, and the second Court would not have to stay proceedings.

It is a matter for the first Court to rule on the jurisdiction agreement in favour of the second Court.  The first Court should decline jurisdiction, thereby enabling the proceedings in the second Court in whose favour the jurisdiction clause is to proceed.

Apart from where the EU rules say that proceedings must or may be stayed, there is no general discretion to do this.  Unlike the non-EU rules that apply where there is no EU connection, the EU rules may be mandatory in certain cases.  There is no general power for a Court to simply stay proceedings because it is not convenient, as would be the case under the non-EU rules.

Actions are deemed related when they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments from the same proceedings.  In this case, the second Court has the discretion to stay the proceedings. The issue may arise where there is a risk that the Courts may reach contradictory conclusions on the same fact even though not the same dispute.

A broad common-sense view is taken.  Either party may apply to have the Court exercise its discretion to stay the proceedings. The Court may decide not to review where the risk of irreconcilable judgments is small or is dependent on contingent factors.

Where an action is pending before the courts of a non-EU state between the same parties and involving the same cause of action, the courts of the EU state may stay the proceedings if it is expected that the court of the other state will give a judgement capable of recognition and enforcement in that member state and stay proceedings as necessary for the proper administration of justice.

Setting Aside Service

In cases under Brussels 1 Regulation (recast) An application may be made to set aside service ) The party who seeks to commence proceedings in an EU member state other than that of the defendant’s domicile, must show clearly and unequivocally that the case comes within one of the exceptions.

The court considers whether the requirements of the relevant exception have been met. A comprehensive review of the evidence is not required. However the court should examine its jurisdiction in light of the information available.

It would be contrary to the principles of the Regulation, if the standard of application of an arguable case was allowed to displace the general principle that unequivocal proof of an exception is required. The balance of probability standard is the ordinary standard to prove an exception to the ordinary principle of domicile as a basis for jurisdiction.

In the case of a choice of court agreement where there is a dispute about the sufficiency of consent, the matter must be established on the balance of probabilities. Where there are disputes of facts that cannot be resolved, cross examination on the affidavit may be allowed.

Multiple Parties

Where a dispute involves multiple parties, it may be convenient and expedient for one court to hear all disputes where a number of defendants are domiciled in different EU states.      Two joint debtors domiciled in different countries and EU countries may be sued in either.  Jurisdiction can be taken against co-defendants only if the claims are so closely connected that it is expedient to hear and determine together to avoid the risk of inconsistent orders from separate proceedings.

The defendant may wish to join other parties to the proceedings. Third parties may generally be joined if they are in the EU.  The principal exception is where it is shown that the proceedings are deliberately brought in that third county to deny jurisdiction to a court that would otherwise apply.

A person may be sued on a counterclaim by the person he has sued provided the claim arises on the same matter or fact as the original claim.  In contrast, a defence is a natural part of the proceedings and would not need to satisfy jurisdictional requirements.