Whether English proceedings should be stayed in favour of a non-EU country
The ECJ decision in Owusu v Jackson  provided that, where a defendant is sued in the Member State where he is domiciled, the court of that Member State cannot stay its proceedings in favour of a non-Member State court on the ground that it would be more appropriate for the non-Member State court to hear the case. The issue in this case was whether a stay could be granted on other grounds though. That is an issue which the English courts have considered in earlier cases.
Here, the UK domiciled trust company wanted to stay the proceedings brought against it here on two grounds:
- The parties were bound by an exclusive jurisdiction clause in favour of the courts of Western Australia. Applying prior caselaw, Proudman J held that Owusu did not prevent the English court from staying its proceedings on this ground. Article 23 of Regulation 44/2001 provides that where one of the parties is domiciled in a Member State and the parties agree that a Member State’s courts shall have jurisdiction, then that agreement will be upheld. The judge noted that Article 23 is a mandatory exception to the rule that a defendant should be sued in the Member State where he is domiciled and held that the same principle should be applied “reflexively” where the exclusive jurisdiction clause is in favour of a non-EU court.
- There were related proceedings already ongoing in Australia and those proceedings were so closely connected to the proceedings here that there was a risk of irreconcilable judgments. There is conflicting prior caselaw on this argument but Proudman J concluded that it is possible to stay the English proceedings on this basis. However, she chose to base her decision to stay the English proceedings on the exclusive jurisdiction clause point instead.
COMMENT: As has been previously reported, under the recast Regulation 1215/2012, English courts now have a discretion to stay their proceedings in favour of a non- EU court if the non-EU court was first seised (and the proceedings are related). The new Regulation did not apply here, though, as the English proceedings were commenced before 10 January 2015. However, it should be noted that the new Regulation does not deal with the issue of whether the English court could grant a stay based on an exclusive jurisdiction clause in favour of a non-EU country, and so the support for a stay in such circumstances from the court in this case goes some way to help to clarify the position in England (although the Court of Appeal has yet to rule on this issue and it might be argued that, since the new Regulation is silent on this point, the legislators did not intend that a stay would be permissible in these circumstances).