A critical assessment of the impact that the Brussels I recast may have on the use of forum non conveniens and anti-suit injunction in Europe

“The controversy as to the appropriate way to deal with international parallel proceedings is not, however, simply a matter of different perspective across the Common Law/Civil Law divide as to the appropriate response.”¹ Professor McLachlan rightly highlights the sensitiveness on the way to deal with parallel litigations at the international level. Parallel proceedings, such as forum shopping malus, manipulation or fraud of law can be harmful for the sound administration of justice. The complexity of that phenomenon lies in the fact a Manichean approach may be inefficient. A combined approach of existing legal systems may be the key.

Forum non conveniens is defined as: “the doctrine that an appropriate forum – even though competent under the law – may divest itself of jurisdiction if, for the convenience of the litigants and the witnesses, it appears that the action should proceed in another forum in which the action might also have been properly brought in the first place.”² An injunction is: “a court order commanding or preventing an action.”³ The doctrines of forum non conveniens and anti-suit injunction provide for flexibility for the courts allowed to use them. Indeed, judges could use “these two weapons”⁴ to prevent proceedings done in bad faith or even to ensure that justice for parties is best administered. It is noteworthy to be aware that these doctrines are applied in Common Law and are not recognized in Civil Law systems. At first sight, these doctrines seem to reveal a dichotomy with the European rules of jurisdiction governed by Regulation 44/2001, commonly named Brussels I regulation. Effectively, this set of rules is predominantly composed of civilian rules which infers an exclusion of the doctrines. Nonetheless, the recent adoption of the recast on December 6^th, 2012 may express an income of flexibility amongst the rigid civilian rules. Nevertheless, changes are of minor importance and their efficiency to answer the issues of bad faith of parties and of better administration of justice especially when third states are involved needs to be assessed. Therefore, What is the impact of the Brussels 1 recast on the use of forum non conveniens and anti-suit injunction in Europe? To what extent the recast does not contain efficient answers to prevent parallel litigation?

Such questions firstly require the analysis of the use of anti-suit injunction in Europe (I) and subsequently the vain attempt to institute flexibility in the European regime through the lis pendens rules in lieu of forum non conveniens (II).

I- Anti-suit injunction in Europe

The use of these two doctrines can give rise to conflicts when attempts are made to use them within the European framework which is highly influenced by civil laws. Although some changes can be noticed with the adoption of the recast, the situation concerning anti-suit injunction remains the same (A) but an emphasis on the choice-of-courts agreements may the solution used by the European Union to compensate this absence (B).

A – Anti-suit injunction in Europe: status quo?

Prior to the adoption of the recast, the European Court of Justice made clear that the doctrine of anti-suit injunction shall not form part of the European regime of jurisdiction. Indeed, the court unequivocally stated that an injunction targeted to the party and not to the court interferes with the jurisdiction of a foreign court and is contrary to the Brussels’s regime. ⁵ Thus, its use is prohibited. The court emphasized on the importance of the principles of mutual trust between the legal systems of others member states and the need of legal certainty by a strict application of the uniform rules of jurisdiction. Therefore, even if one party acts mala fide, a court will be: “forbidden to defend the integrity of its own proceedings.”⁶

The changes brought by the recast reinstitute the tricky question to know whether or not anti-suit injunction can be used in the European regime. At first sight, recital 12 of the preamble may have contained a beginning of answer.

The preamble states that courts of member states cannot be prevented from considering the validity of the clause of arbitration, referring the parties to arbitration or staying or dismissing the proceedings.⁷ Therefore, if a party decides to contest the validity of the clause of arbitration, the court will not have to stay the proceedings, it may do it but at its own discretion. The beneficial effect is the abolishment of the so-called “torpedo-actions” since the tactical advantage that could be obtained by delaying the proceedings due to the stay of the proceedings can no longer be obtained. Moreover, the fourth paragraph of recital 12 states that ancillary proceedings in connection with the arbitral process do not form part of the scope of the regulation. As a consequence, it may be a field in which anti-suit injunction are allowed.

However, these preliminary remarks which call for a deeper analysis of the recital evidence that the situation is not likely to change.

Firstly, although this recital tends to accept some situations connected with arbitral proceedings, the result is vague because article 1 expressly provides that arbitration is excluded from the scope of the regulation.⁸ The absence of clear legal grounds gives rise to uncertainty. In addition, the fact these provisions are contained in the preamble increases the uncertainty. Indeed, although the preamble is of salient importance for the interpretation of articles, it does not represent a legal basis in itself.

Secondly, this recital lacks of practical efficiency because it does not solve the issue of parallel proceedings. Admittedly, the torpedo-actions is no longer possible to affect the length of the procedures. However, courts still cannot grant injunctions to prevent parties from manipulating the law or that concurrent proceedings happen. The inherent risk is that the judgments rendered by courts conflict with the awards of the arbitral tribunals. Furthermore, relying on the paragraph stating that the New York Convention⁹ shall take precedence over this regulation concerning the recognition and enforcement of awards would severely undermine the strength of the regulation.

Thirdly, the European Court of Justice stated that there is a principle of continuity between the Brussels Convention of 1968 and the Regulation of 2001.¹⁰ Therefore, although the recast did not enter into force yet, it is very likely that the next interpretation of the Court will continue to prohibit the use of anti-suit injunction in Europe.

B – Emphasis on choice-of-court agreement: an efficient alternative to compensate the absence of anti-suit injunction?

Concerned of promoting legal certainty and of having a consistent application of the European rules of jurisdiction, the European Court of Justice affirmed, in the Gasser GmbH case¹¹, that the rule according to which any other court than the court first seised shall stay its proceedings until the jurisdiction of the court first seised is established, take precedence over the choice of court agreement. The justification for this decision is the risk of disputes that may arise concerning the existence of these clauses because of the strictness of the conditions to have a real clause.¹² Therefore, the strict application of the rule of lis pendens prevails over party autonomy.

The recast of Brussels I Regulation contains changes regarding the strength to grant to choice of courts agreements. Indeed, when read in conjunction article 31 paragraph 2, paragraph 22 of the recital provides that if the court first seised is not the one designated by the parties, that court shall stay the proceedings until the one chosen by the parties declares it has no jurisdiction.

Giving full effect to the choice of the parties may be an alternative option to compensate the absence of anti-suit injunction. Effectively, if the choice of the parties is respected, parties may be less likely to start parallel proceedings to have their clause enforced. This emphasis enables the choices of the parties not to be offended.

Nevertheless, the preventive effects that this emphasis might have on the parallel proceedings cannot be evaluated. Indeed, it may reduce this outcome but satisfactory effects cannot be foreseen. These clauses cannot prevent a party from starting concurrent proceedings as an injunction does. In addition, this provision does not prevent the appearance of disputes concerning the validity of the agreement since it is an issue governed by national law. Consequently, the control of the validity of such clauses will not be uniform. This lack of harmony will weaken the legal certainty of the rules contained in the Regulation: a clause may be considered valid in one member state and not in another one. Inconsistencies in the applications of these rules can also stem from a non-uniform application. Therefore, this alternative does conveys more fairness because it respects the choices of the parties but it does not provide a satisfactory answer concerning the issue of manipulation of the law by the parties.

As a conclusion, not only the use of anti-suit injunction is excluded from the scope of the Regulation but also the alternative suggested may be of little efficiency. The justifications used by the Court are controversial and were not really convincing.¹³ Furthermore, the recast does contain some changes but they have not been enough developed to enable a genuine improvement.

II-The vain attempt of the European Union to bring flexibility and discretion in the Brussels regime through the lis pendens rules

The doctrine of forum non conveniens enables a court, when asked by the defendant, to decline jurisdiction in favour of another more suited and willing court. This mechanism is mostly used in common law countries highlights the flexibility of the justice in these countries. The Brussels regime has the specific mechanisms of lis pendens and related actions rules which gives courts some discretion but were traditionally restricted to member states courts. The recast extended the scope of these rules (A) but the issue is to determine to what extent is it a premise of flexibility in the Brussels regime (B).

A – A European model of alternative to the use of forum non conveniens?

The jurisdiction regime of the Brussels I regulation is based on the domicile of the defendant. This system also named as actor sequitur forum rei provides that the forum of the defendant will be the one chosen. This principle is laid down in article 2 of the Regulation. The European Court of Justice stated that this article “is mandatory in nature.”¹⁴ The rigidity claimed by the court aims at ensuring legal certainty and predictability for the parties. However, the situation is different when the defendant is domiciled in a third state. Indeed, the access to justice to a member state court will depend on the rules of states. Thus, the courts could use their national legislations in such cases and could then, if their legislations allow it, decline jurisdiction in favour of another court. However, the adverse effect with this situation is that the uniform application of the European rules of jurisdiction is likely to be weakened because less applied. Consequently, a solution to compensate that issue is the extension of the application of rules to third states.

The recast of Brussels I contains such normative extension. Indeed, article 25 concerning the prorogation of jurisdiction has been extended because it no longer requires parties to be domiciled in member states to be applicable; it can be applicable regardless of the domicile of the parties. The same change is to be noticed in article 18 related to jurisdiction over consumer contracts.

These extensions are not favourable to the use of the forum non conveniens. Indeed, the rationale for extending the scope of the European rules of jurisdiction is to broaden the situations that will fall within its scope. It then ensures legal certainty but the corollary effect of this extension is the reduction of the scope of the national rules. Therefore, considering that the use of forum non conveniens is not allowed in Europe and that it can only be used when national legislations apply, its use is likely to decrease significantly.

Moreover, the efficiency of such approach is arguable. Indeed, in the event where two courts have jurisdiction, the focal point remains the principle of the court first seised which can lead to litigation race. For such case, the Brussels I Regulation does contain a mechanism granting flexibility to the courts: lis pendens. However, it differs from forum non conveniens since the competent court is identified on a temporal basis without considering the substantive end of justice for the parties.¹⁵

B – A premise of flexibility?

The Owusu case¹⁶ is controversial because the court made clear that the use of forum non conveniens in Europe is prohibited and it significantly favoured the member states when involved in a dispute with a third states party. Indeed, the court affirmed that the domicile of the defendant constitutes a mandatory jurisdictional rule for the courts of member states even if it is not the most appropriate one. In other words, a member state court cannot decline jurisdiction in favour of a non-member states court even if the latter is more appropriate to settle the case. Therefore, the regulation does not only apply to intra-European member states case: the scope of the regulation is partially extended.

Articles 33 and 34 of the recast enable courts of member states to stay the proceedings in the event a court of third states is already seised of the same cause of action and between the same parties.¹⁷ However, these provisions call for several remarks.

Firstly, the regulation maintains the principle of the first court seised: for these provisions to be applied, the court of a third states has to be seised before the member state court. Consequently, the strength of these articles is diminished because these articles will only apply to certain situations. In addition, a race litigation can arise: parties may start proceedings the earliest possible to insure their preferred court will have jurisdiction. Furthermore, these articles do not provide a clear answer as for the discretion of member state courts when first seised: are they allowed to decline jurisdiction in favour of a third state court if it is designated by a choice of court agreement?

Secondly, the word “may” indicates that the stay of the proceedings is a discretionary power. The courts are not bound. The consequence is a non-uniform application of these articles within the European Union. A lack of uniformity will affect the legal certainty and predictability.

Thirdly, a court may accept to stay the proceedings if three conditions are met: the non-European Union court is first seised, the prospective judgment is capable of recognition and enforcement in the concerned state and the stay is necessary for the sound administration of justice. The condition regarding recognition is controversial. Indeed, article 45 states that the recognition of a judgment could be refused if the recognition is contrary to the public policy of the concerned state. Public policy is defined on a national basis and aims at protecting the national interests of states. Furthermore, the absence of uniform European approach gives rise to uncertainty and possible inconsistencies as for the content of this concept. The intervention of the European Court of Justice¹⁸ to explain how and when to use the public policy exception concerning the recognition of foreign judgments is of little help since this concept remain national-based.

As a conclusion, the Brussels I Regulation recast contains the flexible mechanism of lis pendens. However, the attempts to balance the situation with third state may not be as efficient as expected because of the strict conditions.

To conclude, as abovementioned, the recast of Brussels I Regulation maintains the status quo concerning the use of anti-suit injunction. The two alternatives suggested in the recast, namely an emphasis on the choice of court agreement and an extension of the European rules are unlikely to be an efficient answer to the issues of parallel proceedings. Moreover, the strictness of the conditions for the lis pendens rule weakens the beneficial effects that the recast conveyed. Therefore, the pusillanimous changes of the recast of Brussels I regulation on the use of forum non conveniens and anti-suit injunction are not sufficiently strong enough to provide an answer to the issues parallel proceedings. Professor Briggs well summarized the income of the recast by stating that: “Member State court would have what looks awfully like a forum non conveniens discretion.”¹⁹

Maxime Discours

BIBLIOGRAPHY

A. Primary sources.

1.1 Legislation.

• Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968.

• Convention on the Recognition and Enforcement of Foreign Arbitral Awards, United Nations, 1958.

• Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

• Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast).

1.2 Case law.

• Case C-185-07, Allianz SpA, formerly Riunione Adriatica di Sicurta SpA and Generali Assicurazioni Generali SpA v. West Tankers Inc, [2009].

• Case C-281-02, Andrew Owusu v. N.B. Jackson, trading as “Villa Holidays Bal-Inn Villas”, Mammee Bay Resorts Ltd, Mammee Bay Club Ltd, The Enchanted Garden Resorts & Spa Ltd, Consulting Services Ltd, Town & Country Resorts Ltd, [2005].

• Airbus Industrie GIE v. Patel, [1999] 1 AC 119.

• Case C-7/98, Dieter Krombach v. André Bamberski, [2000].

• Case C-116-02, Erich Gasser GmbH v. MISAT Srl, [2003].

• Case C-533/07, Falco Privatstiftung, Thomas Rabitsch v. Gisela Willer-Lindhorst, [2007].

• Ferrexpo AG v. Gilson Investments Ltd, [2012], EWHC 721.

• The Atlantic Star v. Bona Spes, [1974] AC 436.

• Case C-159/02, Turner v. Grovit, [2004].

B. Secondary sources.

1.1 Articles.

• A. Briggs, Anti-suit injunction and Utopian ideals, Law Quaterly Review, 2004.

• T. Kruger, Anti-suit injunction in the European judicial space: Turner v. Grovit, the current developments: Private International law – II, International and Comparative Law Quaterly, 2004.

• Gilllies, Lorna, Creation of subsidiary jurisdiction rules in the recast of Brussels I, 8 Journal of Private International Law, 2012.

• E. Crawford, J. Carruthers, Ferrexpo AG v. Gilson Investment Ltd and ors: a flexible interpretation of the reflexive doctrine, Edinburgh Law Review, 2013.

• Fentiman, ‘National Law and the European Jurisdiction Regime’, in Nuyts & Watté, International Civil Litigation in Europe and Relations with Third States, Bruylant, Brussels 2005.

• J. M. Carruthers, The Brussels I Regulation recast, Scots Law Times, 2011.

• A. Briggs, The Brussels I review proposal uncovered, Lloyd’s Maritime and Commercial Law Quarterly, 2012, book reviews.

• C. M. Mariottini, The proposed recast of the Brussels I Regulation and forum non conveniens in the European Union judicial area, Rivista di Diritto Internazionale Privato e Processuale, 2012.

• A. E. Ippolito, M. A. Nissen, West Tankers revisited: has the new Brussels I Regulation brought anti-suit injunctions back into the procedural armoury?, Arbitration 2013.

1.2 Books.

• Black’s Law Dictionary, 8th ed.

• Fawcett & Carruthers, Cheshire, North and Fawcett’s Private International Law, OUP, Oxford 14^th ed. 2008.

• Hartley, International Commercial Litigation, CUP 2009.

• Nuyts & Watté, International Civil Litigation in Europe and Relations with Third States, Bruylant, Brussels 2005.

• Campbell McLachlan, Lis Pendens in International Litigation, Recueil des Cours, 2008.

• Arthur Taylor Von Mehren, Theory and practice of adjudicatory authority in private international law: a comparative study of the doctrine, policies and practices of common-and civil-law systems, General Course on Private International Law, Recueil des Cours.