knowledge | 28 July 2022 |
English Courts Stay Proceedings to Give Effect to Brexit Transitional Provisions
The English courts have held that the “lis pendens” provisions of Brussels I Recast apply to proceedings commenced in that jurisdiction after the expiry of the Brexit transition period where relevant proceeding were already commenced in an EU Member State before that expiry date.
In this case,1 a contractual dispute arose between the plaintiff, a French national said to be resident in England and certain Belgian defendants. The defendants also made counter allegations of harassment and defamation against the plaintiff.
The defendants commenced proceedings in Belgium in respect of those allegations before the expiry of the Brexit transition period (“Belgian proceedings”). In response, the plaintiff denied the jurisdiction of the Belgian courts to hear the matter and said that she would rely on the contractual relationship to commence proceedings in England.
Shortly thereafter and after the expiry of the Brexit transition period, the English courts granted the plaintiff leave under the under the common law regime to commence those proceedings (“English proceedings”). The proceedings were actually commenced some weeks later with the issue of a claim form.
However, in the intervening period the defendants had amended their claim in the Belgian proceedings and said that they now sought a negative declaration in those proceedings in respect of the claims made in the English proceedings. They denied the jurisdiction of the English court to hear the English proceedings.
In challenging the jurisdiction of the English court, the defendants relied on the continuing application of Article 29 or alternatively Article 30 of Brussels I Recast2 set out in Article 67(1) of the Withdrawal Agreement.3 Article 67(1) provides that:
“In the United Kingdom, as well as in the Member States in situations involving the United Kingdom, in respect of legal proceedings instituted before the end of the transition period and in respect of proceedings or actions that are related to such legal proceedings pursuant to Articles 29, 30 and 31 of [Brussels I Recast] … the following acts or provisions shall apply…the provisions regarding jurisdiction of [Brussels I Recast]…”
Under Article 29 of Brussels I Recast, where two sets of proceedings commenced in different EU courts are identical, the court second seised must stay its proceedings until the court first seised determines whether or not it has jurisdiction. Where the jurisdiction of the court first seised is established, the second court must decline jurisdiction in favour of the court first seised. Under Article 30 where the proceedings are related, the court second seised has a discretion whether to stay its proceedings.
Decision of the court
The English court agreed that by virtue of Article 67(1) of the Withdrawal Agreement, the relevant provisions of Brussels I Recast applied as the Belgian proceedings were commenced before the expiration of the transition period. It was not necessary for the English proceedings to have been commenced before this expiry date.
The court was also satisfied that the proceedings came within Article 29 of Brussels I Recast from the time of the relevant amendment in Belgium. As this was prior to the issue of the claim form in England, the Belgian courts had been first seised of the dispute. On that basis, the English proceedings should be stayed until the jurisdiction of the Belgian court was established, and if it was established, then the English court should decline jurisdiction.
The court said that if it was wrong in relation to Article 29 then it would still have granted a stay pursuant to Article 30 for various reasons such as the governing law of the contract was likely to be Belgian law and there was a possibility of consolidating the proceedings in Belgium which would avoid the risk of inconsistent decisions.
It also went on to say that leave to commence proceedings under the common law regime should not have been granted as England was not the appropriate forum for the dispute.4
This is an interesting decision and is consistent with the approach taken in other English decisions albeit on the basis of an agreed position as to the law.5 It demonstrates the type of complex procedural issues that parties to cross-border litigation in Europe should prepare for in a post-Brexit world.
How can we help?
The Disputes Group at McCann FitzGerald can assist clients in addressing all of the regulatory and/or litigation issues business may face in response to Brexit. Alternatively, your usual contact in McCann FitzGerald will be pleased to provide further information.
- Simon v Tache  EWHC 1674 (Comm).
- 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 OJ L 351, 20.12.2012.
- Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community OJ L 29, 31/01/2020, p. 7.
- There is some dispute between the parties as to whether the court has stayed its proceedings pending a decision in Belgium or whether it has declined jurisdiction on foot of the common law regime. This is to be revisited at a later date.
- Benkel v East-West German Real Estate Holding  EWHC 188 (Ch), On the Beach Ltd v Ryanair UK Ltd  EWHC 861 (Ch).
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.