knowledge 17 June 2021 |

High Court Decision Illustrates the Potential Complexities of EU Cross-Border Litigation

In Crotty v SAS AB,¹ the plaintiff slipped on ice when disembarking a flight in Sweden. Relying on the Montreal Convention, she correctly brought proceedings against the Swedish airline in Ireland. The airline accepted the jurisdiction of the Irish courts to hear the claim against it.

However, the plaintiff also joined the relevant Swedish airport authority to the proceedings. The airport authority took a different view and applied to strike out the proceedings against it arguing that it had not been properly served and that the Irish courts did not have jurisdiction to determine the claim.

It pointed out that the Montreal Convention did not apply to the proceedings against it as it was not an airline. Instead, Article 4 of the Brussels Recast Regulation applied. This default rule of jurisdiction provides that persons domiciled in a Member State should, whatever their nationality, be sued in the courts of that Member State. On this basis, the airport authority argued that proceedings against it should have been brought in Sweden.

Special rules of jurisdiction

For her part, the plaintiff argued that she was entitled to rely on the special rules of jurisdiction contained in Article 7 and Article 8 of the Brussels Recast Regulation to oust the default rule.

Under Article 7, a person domiciled in a Member State may be sued in another Member State:

• in matters relating to a contract, in the courts for the place of performance of the obligation in question (Article 7(1));

• in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur (Article 7(2)).

Under Article 8, a person domiciled in a Member State may also be sued:

• where there are multiple defendants, in the courts where any of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments from separate proceedings (Article 8(1));

• as a third party…in the court seised of the original proceedings…(Article 8(2)).

However, the plaintiff had not cited Article 8 on the endorsements as to jurisdiction on her summons and also sought leave to amend the summons in this regard.

Decision of the court

Butler J struck out the proceedings against the airport authority. She said that, as a company domiciled in Sweden, it had an expectation under Article 4 of the Brussels Recast Regulation that any proceedings against it would be brought in Sweden. The onus was on the plaintiff to establish that the special rules of jurisdiction applied to oust this default rule. She noted that these special rules were derogations from the default rule and so should be interpreted restrictively.

Looking at Article 7(1), she doubted whether there was a contractual relationship between the plaintiff and the airport authority but even if there was, the place of performance of the relevant obligations under any such contract was in Sweden.

In respect of the tort element of the claim, Butler J said that “the place where the harmful event occurred” was Sweden. She rejected an argument that although the accident occurred in Sweden, the plaintiff’s on-going injury after she returned to Ireland pointed to a continuing tort giving her an entitlement to sue in this jurisdiction.

Turning to the Article 8(1) argument, Butler J pointed out that neither defendant was domiciled in Ireland. This meant the plaintiff could not rely on that provision notwithstanding its general objective of avoiding irreconcilable judgments which could arise if the plaintiff had to bring separate proceedings against the airport authority in Sweden. Butler J said that this general objective was not an absolute requirement. In fact, Article 30 of the Recast Regulation expressly envisaged that related actions could be pending before the courts of different Member States. In such a case, Article 30 allowed a court to stay its proceedings or decline jurisdiction in favour of a court first seised but there was no mandatory requirement to do so.

Finally, Butler J looked at the application of Article 8(2). The plaintiff sought to rely on this provision as retrospectively giving the Irish court jurisdiction on the basis that the airline had served a notice of indemnity and contribution on the airport authority.

Butler J said that Article 8(2) gave a defendant in existing proceedings the right to have connected third party proceedings determined by the courts which had jurisdiction over the original proceedings. This was in ease of a defendant, which generally would have little or no say over the jurisdiction in which it was sued and enabled it to have all issues in connected proceedings resolved before the courts of a single jurisdiction.

However, it did not permit a plaintiff to sue a defendant, over whom the Irish courts had no jurisdiction, in the hope or expectation that a co-defendant, properly before the Irish courts, would bring third party proceedings thereby legitimising the presence of the defendant who was not otherwise properly sued in Ireland.

Butler J said that the court needed to have jurisdiction in respect of a claim at the time proceedings were brought which was not the case here in respect of the proceedings against the airport authority. The potential for such jurisdiction was not sufficient to actually give the Irish court jurisdiction as it was inherently uncertain. Also, the plaintiff could not argue that its “original proceedings” and the third party proceedings were one and the same so as to allow her to rely on Article 8(2).

Butler J also pointed out that the existing endorsements on the summons purporting to show the Irish court’s jurisdiction to hear the claim, had also formed the basis on which the plaintiff had been permitted to serve the proceedings on the airport authority in Sweden without leave of the court. This meant that there were now fundamental difficulties with that service. Butler J declined to permit a retrospective amendment to the endorsements on the summons so as to show a basis for jurisdiction which did not exist at the time the summons was served.

Finally, Butler J considered the status of the notice of indemnity and contribution served by the airline on the airport authority. She said that a defendant claiming an indemnity or contribution against another defendant could, without leave of the court, issue and serve such a notice on that defendant. However, it was a precondition of valid service that the party served was already a party to the proceedings. Here the airport authority was never properly before the Irish courts at the suit of the plaintiff and was not properly a party to the proceedings when the airline served the notice of indemnity and contribution on it.

In those circumstances, leave of the court had been necessary to issue and serve a third party notice and so the notice of indemnity and contribution was also defective though it still remained open to the airline to apply again to bring the airport authority properly before the Irish courts.

Comment

Although the Brussels regime has greatly simplified many issues around jurisdiction in the context of EU cross-border litigation, this case clearly illustrates the complexities that can and do arise.  The Irish courts have traditionally been hesitant² to allow the joinder of a foreign defendant as a necessary party to Irish proceedings validly commenced against an Irish defendant where the proceedings could have been commenced against both in the foreign party’s domicile and proceedings could not be brought in Ireland against the foreign defendant alone, because the events complained of did not occur in Ireland.  This hesitancy is aimed at avoiding forum shopping through aggressive use of the joinder rules. However, arguments around Article 8 of the Brussels Recast Regulation will often involve delicately balancing questions around the entitlement or expectation of a defendant that it will be sued in its home court with questions around avoiding risk of conflicting judgments and efficient disposal of claims.