knowledge 28 July 2022 |

English Courts Stay Proceedings to Give Effect to Brexit Transitional Provisions

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.

Jurisdictional arguments

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:

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

Comment

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.