Jurisdiction EU Issues

In the case of a dispute arising out of the operation of a branch, agency or establishment the person may be sued in the EU state where it is situated. Operations may cover contractual and non-contractual matters obligations arising from its activities. This allows injured parties to take legal action against a branch or agency in the place where it is established, if he has dealt with that branch or agency.

Where dispute involves multiple parties, it may be convenient and expedient that the one court hears all disputes, where a number of defendants are domiciled in different EU states.      Two joint debtors domiciled in different countries 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 toa 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.

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

The key question is which Court is first seised of the dispute.  The regulations provide generally a Court is seised when the proceedings are lodged with the Court.  However, this will not be the case if proceedings are lodged, and service effected.  Uniform EU rules applied to the time of service.

The general principle is that where proceedings regarding the same subject matter are before two Courts in EU States, the Court which is first seised has priority and the other court should stay or decline jurisdiction.  If however for example the Court which is first seised its jurisdiction is successfully challenged then the stay may be lifted in the court 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.

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.

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 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.

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.

In cases internal to the United Kingdom Scottish, Northern Ireland or English Courts had discretion to stay proceedings in favour of the other part.

Cases involving land or immovable property are not subject to the EU rules.  They are within the exclusive jurisdiction of the Court where the land or property is situated.  This rule applies to both non-EU and traditional rules.  It follows from the principle that immovable property is under the control of the Courts of the jurisdiction concerned, that any order would be possibly ineffective and also that the local Courts are the best place to resolve the technical and complex issues that may arise about title to land.

However, the rule does not apply to all matters connected with property.  A Court is obliged to enforce obligations in a contract or trust even if this means ordering a party to transfer a right in foreign lands.  In this case the Court is not adjudicating on the title or ownership of land but is making a personal order against the person concerned to take the requisite steps in the jurisdiction where the land is situate.  The Court would not order the person to do something in relation to the land which a foreign country would not itself be entitled to do.

A Court may order specific performance in relation to a foreign land sale and may order the execution of a mortgage.  It may order the transfer of lands arising from fraud, fiduciary relationship or trust.  The orders do not affect the foreign land.  They are enforceable only personally against the defendants. These cases fall outside regarding title or possession of foreign buildings or lands.

In the context of pending litigation, it is generally possible to obtain certain pre-trial orders.  These include orders freezing the position pending determination of the outcome of the case, orders for discovery of documents and inspection, orders not to move assets from the jurisdiction and orders to enter and search property.

The EU rules provide that an application may be made in one state for protective measures that may be available under the law of that state even if another EU state has jurisdiction in relation to the matter itself.  The legislation applies provided the rights are civil or commercial.

It applies to orders that are designed to preserve a position in one state so as to safeguard rights that are the subject of litigation in another state.  It does not apply to orders seeking interim payment or examining witnesses to determine the merits of a dispute.  It does apply to freezing injunctions.