Jump to Content Jump to Main Navigation
Civil Jurisdiction and Judgments in Europe - The Brussels I Regulation, the Lugano Convention, and the Hague Choice of Court Convention by Hartley, Trevor C (20th July 2017)

Part II Jurisdiction, 7 Jurisdiction: General Principles

From: Civil Jurisdiction and Judgments in Europe: The Brussels I Regulation, the Lugano Convention, and the Hague Choice of Court Convention

Trevor C Hartley

Subject(s):
Exclusive forum clauses — Jurisdiction under the Brussels-Lugano Regime — Law of the country of domicile

(p. 83) Jurisdiction:

General Principles

7.01  This chapter deals with the general aspects of jurisdiction. The discussion will be focused on Brussels and Lugano, since Hague is concerned only with one special kind of jurisdiction.

(p. 84) The Theory of Jurisdiction

7.02  Jurisdiction is a concept with many meanings.1 We are concerned with jurisdiction to adjudicate (judicial jurisdiction), which is the power to subject persons or things to legal proceedings. It arises in various contexts, but we are concerned solely with the international (and inter-territorial)2 context. It is usually divided into two categories: jurisdiction in personam (personal jurisdiction) and jurisdiction in rem. The former is jurisdiction to make a binding order against a specified person; the latter is jurisdiction to make an order which, though potentially binding against the whole world, applies only to a particular thing. At this point, we will confine ourselves to jurisdiction in personam.

7.03  The general idea is that a State has no right to require a defendant to submit to adjudication by its courts unless there is some reasonable ground for doing so. There are a number of possible grounds, the most important being either the consent of the defendant or some significant connection between the court and either the defendant or the claim.3

Consent Jurisdiction

7.04  If the defendant consented to the court’s jurisdiction—for example, by agreeing to a choice-of-court clause or by defending the case on the merits without challenging the court’s jurisdiction—it is reasonable to consider that the court has a right to hear the case.

‘Home-Court’ Jurisdiction

7.05  The second basis of jurisdiction is that there is a link between the defendant and the territory of the forum. The justification for this is that it is fair for the defendant to be sued before his home court. For this reason, we will call it home-court jurisdiction. Although the concept is almost universally recognized, there is considerable difference of opinion as to what constitutes a defendant’s home court: nationality, residence, domicile, and even mere presence (coupled with the service of a claim form) are all adopted in one legal system or another. The last is the traditional common-law principle, though it has been subject to heavy criticism, and is outlawed under Brussels 2012 in the EU context.

(p. 85) Claim-Based Jurisdiction

7.06  The third basis for jurisdiction is that there is a link between the facts on which the claim is based and the territory of the forum. The assumption is that if the facts have a sufficiently close connection with the territory of the forum, it is reasonable for the court to hear the case. This principle is accepted in England, the Commonwealth, and the European Union, though not in the United States.4 Claim-based jurisdiction is the main basis for service of the claim form outside England and Wales under the CPR;5 it is also the main basis for jurisdiction under Article 7 of Brussels 2012.

Derived Jurisdiction

7.07  What Continental authors sometimes call derived jurisdiction (compétence dérivée) is a further category. Under this principle, a court may have jurisdiction over a claim if it is closely related to another claim over which it has jurisdiction on some other basis. This is the principle which underlies the ‘necessary or proper party rule’ in English law.6 The justification for this basis of jurisdiction is that it is desirable that closely related proceedings—for example, actions against joint tortfeasors—should be heard together. However, it means that a party may be forced to defend a case in a country with which he has absolutely no connection. For example, if three Englishmen jointly commit a tort in England, and one of them subsequently becomes domiciled in Spain, all three could be sued there, even if the claimant is also English.7 In the United States, this ground of jurisdiction would be unconstitutional: there, minimum contacts must exist separately with regard to each defendant.8

(p. 86) Ancillary Jurisdiction

7.08  Ancillary orders are in a special position. A court with personal jurisdiction in a case usually has personal jurisdiction to grant any ancillary order appropriate in the circumstances. This is true under both English and EU law.9 This may be called ancillary jurisdiction. The justification for this is that the court will not be able to exercise fully its primary jurisdiction if it cannot make ancillary orders. Nevertheless, this principle is not absolute. It must be balanced against other principles—for example, ancillary orders should not normally be granted if they interfere with the jurisdiction of other courts or require a person to do something in a foreign country which is illegal under the law of that country.

Conclusion

7.09  These are not the only principles on which jurisdiction in personam might be founded; however, they provide a starting point for discussion and analysis.

Exclusive and Non-Exclusive Jurisdiction

7.10  We now consider a distinction of a different kind, a distinction concerned not with the grounds on which jurisdiction is based but with its consequences. This is the distinction between exclusive and non-exclusive jurisdiction. If one court (or the courts of one State) have exclusive jurisdiction that necessarily means that no other court (or the courts of no other State) have jurisdiction. Consequently, a determination that the courts of one State have exclusive jurisdiction also determines that the courts of other States do not have it. This is an important consequence.

7.11  There are, however, two levels of exclusivity under Brussels and Lugano. The higher level is exclusive jurisdiction under Brussels 2012, Article 24.10 This concerns matters like jurisdiction to determine the existence or extent of rights in rem in immovable property. Here exclusive jurisdiction is given to the courts of the Member State in which the property is situated.

7.12  Jurisdiction under these provisions cannot be waived by the parties; so if proceedings are brought in another court, the failure of the defendant to challenge the court’s jurisdiction does not confer jurisdiction on it. Brussels 2012, Article 2611 confers jurisdiction on a court before which a defendant (p. 87) enters an appearance without contesting jurisdiction. However, it does not apply where another court has exclusive jurisdiction by virtue of Article 24. In such a situation, the court before which the claim is brought must declare of its own motion that it has no jurisdiction.12 Moreover, if the court wrongly takes jurisdiction and grants a judgment, the courts of the State with exclusive jurisdiction, and all other courts, are not permitted to recognize the judgment.13

7.13  An exclusive choice-of-court agreement can also confer exclusive jurisdiction on the designated court. However, this is a lower level of exclusivity since it can be waived by the parties. If proceedings are brought in another court and the defendant does not contest the court’s jurisdiction, that court will have jurisdiction under Brussels 2012, Article 26 (Lugano 2007, Article 24).14 The court is not required to declare of its own motion that it has no jurisdiction.15

7.14  Even if the defendant does contest the jurisdiction of the court by invoking the choice-of-court agreement but the court nevertheless hears the case, its judgment cannot be refused recognition and enforcement in other Member States (or Lugano States) on the ground that it was contrary to an exclusive choice-of-court agreement.

7.15  The reason for the difference is that, in the former case, exclusive jurisdiction is for the benefit of the Member State concerned; in the latter case, it is for the benefit of the parties (or one of them). Under Brussels (and Lugano), the interests of Member States (States Parties) are more important than those of private parties.

Basic Structure of Brussels and Lugano

The Domicile of the Defendant

7.16  Brussels 2012 and Lugano are based, first and foremost, on the principle of home-court jurisdiction. The link for establishing this is domicile. Thus, in Brussels 2012, the first sentence of Recital 15 states:

The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile.

7.17  Brussels 2012, Article 4(1) provides:16

(p. 88)

Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.

7.18  This is the basic rule. Jurisdiction on this ground is sometimes called general jurisdiction because it applies irrespective of the nature of the claim. Other grounds of jurisdiction (sometimes said to confer ‘special jurisdiction’) are regarded as exceptions: they should not be interpreted more broadly than is required to fulfil their purpose.17

7.19  Since the basic rule is that the defendant may be sued in the courts of his domicile, this form of jurisdiction is always available unless there is a specific reason why it should not be. This is stated in Brussels 2012, Recital 15, which continues:

Jurisdiction should always be available on this ground [domicile of the defendant] save in a few well-defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor.

7.20  The exception relating to the ‘subject-matter of the dispute’ refers to exclusive jurisdiction under Brussels 2012, Article 24 (discussed above).18 The exception relating to the ‘autonomy of the parties’ concerns exclusive choice-of-court agreements.

Alternative Grounds of Jurisdiction

7.21  The additional grounds of jurisdiction are forms of claim-based jurisdiction, derived jurisdiction or consent jurisdiction. Brussels 2012, Recital 16 states:

In addition to the defendant’s domicile, there should be alternative grounds of jurisdiction based on a close connection between the court and the action or in order to facilitate the sound administration of justice. The existence of a close connection should ensure legal certainty and avoid the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen.19

7.22  These alternative grounds of jurisdiction are set out in Sections 2 to 7 of Chapter II of Brussels 2012 (Articles 7–26).20 Section 2, entitled ‘Special jurisdiction’, is the most important. The other Sections are:

  • •  Section 3 (insurance);

  • •  Section 4 (consumer contracts);

  • •  Section 5 (individual contracts of employment);

  • (p. 89) •  Section 6 (exclusive jurisdiction); and

  • •  Section 7 (prorogation of jurisdiction: choice-of-court agreements and jurisdiction based on entry of appearance without contesting jurisdiction).

7.23  The reason special treatment is given to the matters covered by Sections 3–5 is that these provisions are based on the policy of protecting economically weak parties (both claimants and defendants). Sections 6 and 7 concern the matters discussed previously.21

Special Jurisdiction

7.24  Section 2 contains three Articles. The first, Article 7, is mainly concerned with claim-based jurisdiction—for example, claims based on contract or tort. Article 8 is mainly based on derived jurisdiction—for example, third-party claims; and Article 9 concerns the special case of maritime-law proceedings for the limitation of liability resulting from the use or operation of a ship.

Protection of the Defendant

7.25  Protecting the defendant against unfair jurisdiction is an important objective of Brussels 2012 and Lugano. However, as discussed in Chapter 1, this extends only to defendants domiciled in the European Union or in the Lugano area. Article 5(1) of Brussels 2012 provides:

Persons domiciled in a Member State may be sued in the courts of another Member State only by virtue of the rules set out in Sections 2 to 7 of this Chapter.

7.26  This ensures that EU-domiciled defendants are protected: if they are not sued in the courts of their domicile, they must be sued on one of the additional grounds laid down in the Regulation.22 They are not subject to jurisdictional grounds derived from Member-State law.

Non-EU Defendants

7.27  Defendants not domiciled in the European Union (or the Lugano area) are largely—though not entirely—outside the scope of Brussels and Lugano. This is made clear by Brussels 2012, Article 6(1), which provides:

If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall, subject to Article 18(1), Article 21(2) and Articles 24 and 25, be determined by the law of that Member State.

(p. 90) 7.28  The exceptions to this rule are contained in Article 18(1) (proceedings brought by consumers), Article 21(2) (proceedings against employers), Article 24 (exclusive jurisdiction), and Article 25 (choice-of-court agreements).23 These exceptions are not for the benefit of the defendant but for that of the other party or to uphold Member-State interests.

The Double Standard

7.29  It will be seen from the above that the European Union applies a double standard: defendants from inside the European Union get a higher level of protection than those from outside. This may be contrasted with the position in the United States, where the constitutional limitations on jurisdiction apply equally to defendants from within the United States and to those from outside it.24 Thus a defendant resident and domiciled in England being sued in New Jersey gets the same level of protection under the US Constitution (the minimum contacts doctrine) as a defendant from another US state.25

7.30  Another feature of the EU system (which will be discussed in detail in due course) is that when a court of a Member State gives judgment on a matter within the scope of the Regulation, that judgment must be recognized and enforced in other Member States without any jurisdictional test: recognition cannot be refused because the court of origin took jurisdiction on grounds regarded as exorbitant by the Member State in which recognition is sought.26 This rule is applied, not only to judgments against defendants domiciled in other Member States, but also to judgments against defendants not domiciled in a Member State.27 In the former case, it is justified by the rule that jurisdiction may be taken only on the grounds set out in the Regulation. However, this justification does not apply to judgments against defendants not domiciled in a Member State. Thus, for example, if a Japanese-domiciled defendant is sued in France and the French courts take jurisdiction on the basis of the claimant’s French nationality, English courts are not allowed to refuse recognition and enforcement on the ground that the court of origin took jurisdiction on an unacceptable ground.

7.31  When these provisions were first adopted in the Brussels Convention, third countries protested. As a result, a small concession was made.28 This (p. 91) was originally contained in Article 59 of the Brussels Convention. It permitted a Contracting State (for example, the United Kingdom) to conclude a convention with a non-contracting State (for example, Canada), under which it (the United Kingdom) would undertake not to recognize judgments from other Contracting States against persons domiciled or habitually resident in the non-contracting State (Canada) if the jurisdiction of the court of origin could have been based only on one of the especially exorbitant grounds set out in the second paragraph of Article 3 of the Convention.

7.32  This provision has been retained under Brussels 2012, where it is now found in Article 72. However, it covers such agreements only if they were concluded before Brussels 2000 entered into force. In other words, past agreements are respected, but no future agreements are allowed. As far as is known, the only two agreements still in existence were both concluded by the United Kingdom, one with Canada and one with Australia. This means that if a French national brings proceedings in France against a person domiciled or habitually resident in Canada, and the French court takes jurisdiction under Article 14 of the French Civil Code (the provision granting jurisdiction on the ground of the claimant’s nationality), courts in the United Kingdom will not be required to recognize the judgment.

The Pivotal Role of Domicile

7.33  It will be seen from what has been said that domicile plays a pivotal role in the system of the Regulation. A court required to decide whether it has jurisdiction should first consider where the defendant is domiciled. If he is domiciled in the territory of the forum, the court will have jurisdiction, unless the case comes within one of the narrow range of exceptions set out in the Regulation.29 It does not matter that he may also be domiciled in another Member State.30 As long as he is domiciled in the territory of the forum, the court has jurisdiction.

7.34  If he is not domiciled in the territory of the forum, the court should consider whether he is domiciled in another Member State. Again it does not matter whether he is domiciled in more than one other Member State. If he is domiciled in another Member State, the court can take jurisdiction (p. 92) only on the grounds set out in Sections 2–7 of Chapter II of Brussels 2012 or of Lugano 2007.31

7.35  If he is not domiciled in any Member State, the court will apply its own national rules of jurisdiction, subject to the small number of exceptions set out in the Regulation.32

The Determination of Domicile under Brussels and Lugano

7.36  The rules regarding domicile are similar under Brussels 2012 and Lugano 2007. For this reason, they will be considered together. The position under Hague is different. It uses the concept of residence, though this concept does not play the same pivotal role as domicile plays in Brussels and Lugano. It will be considered below.

7.37  Brussels 2012 and Lugano 2007 contain special rules for the determination of domicile. These are set out in Brussels 2012, Articles 62 and 63, and Lugano 2007, Articles 59 and 60. They give separate treatment to natural persons (human beings), legal persons (companies, etc.), and trusts. The first two will now be discussed; trusts will be considered in Chapter 8.33 For ease of exposition, reference will be made solely to ‘Member States’, but this should be read as including Lugano States.

Natural Persons

7.38  The rule for natural persons is set out in Brussels 2012, Article 62,34,35 which provides:

  1. 1.  In order to determine whether a party is domiciled in the Member State whose courts are seised of a matter, the court shall apply its internal law.

  2. 2.  If a party is not domiciled in the Member State whose courts are seised of the matter, then, in order to determine whether the party is domiciled in another Member State, the court shall apply the law of that Member State.

(p. 93) 7.39  This means that if an English court is seised of a case, it applies UK36 law in order to decide whether the defendant is domiciled in the United Kingdom. If he is, it need not consider the law of any other Member State.37 As was said above, it is irrelevant that he may also be domiciled in another Member State.

7.40  If the defendant is not domiciled in the United Kingdom, the English court must next consider whether he is domiciled in another Member State. To do this, it must apply the law of the State in which it is claimed that he might be domiciled. If he is domiciled in at least one other Member State, the English courts can take jurisdiction only under the rules set out in the Regulation.

7.41  If he is not domiciled in any Member State, the English court can apply the English rules of jurisdiction, subject to the exceptions already mentioned. It is not necessary, as far as the Regulation is concerned, to decide in which non-EU or non-Lugano State he may be domiciled.

7.42  The reason this rather complex system was chosen was to protect defendants domiciled in a Member State from the exercise of exorbitant jurisdiction in another Member State. It was thought wrong that a person domiciled in a Member State according to the law of that Member State should be deprived of protection in another Member State just because he was not domiciled in the first Member State under the law of the second Member State.

7.43  In most cases, it will be fairly obvious whether a defendant is domiciled in a given State. In cases of doubt, however, the English court will have to hear evidence on the law of domicile of the State in question.

7.44  Under this system, it is possible for a defendant to be domiciled in more than one State. For example, he may be domiciled in France under the French rules of domicile and in Italy under the Italian rules. It is also possible that he may be domiciled in no State—for example, if he is domiciled in Italy under the French rules of domicile and in France under the Italian rules. As was said above, the system established by the Regulation takes this into account.

Legal Persons

7.45  For companies and other legal persons38 (or associations of natural or legal persons),39 Brussels 2012 and Lugano 2007 adopt a different approach: the (p. 94) instrument itself (Regulation or Convention) lays down uniform rules of domicile. The relevant provisions are paragraphs 1 and 2 of Article 63 of Brussels 2012 and paragraphs 1 and 2 of Article 59 of Lugano 2007. Article 63 of Brussels 201240 provides:

  1. 1.  For the purposes of this Regulation, a company or other legal person or association of natural or legal persons is domiciled at the place where it has its:

    1. (a)  statutory seat;

    2. (b)  central administration; or

    3. (c)  principal place of business.41

  2. 2.  For the purposes of Ireland, Cyprus and the United Kingdom, ‘statutory seat’ means the registered office or, where there is no such office anywhere, the place of incorporation or, where there is no such place anywhere, the place under the law of which the formation took place.

7.46  This provision was not found in the Brussels Convention. Instead, it was provided in Brussels Convention, Article 53, that the seat of a company or other legal person or association of natural or legal persons would be treated as its domicile. Article 53 then stated that, in order to determine that seat, the court should apply its own rules of private international law. In other words, there was no uniform rule, just a reference to the lex fori (law of the country in which proceedings are brought).

7.47  This approach was not adopted in Brussels 2000, which (with one small exception)42 contains provisions identical to those in Brussels 2012. The new provision was regarded as a step forward, since there are obvious advantages in having a uniform rule.

7.48  Since the new provision was drafted at a time when the United Kingdom and Ireland were established Member States, it had to be drafted so as to reconcile the concepts of the common law with those of the civil law. In order to understand it, therefore, something must be said about these concepts.

7.49  Although domicile has a long history when applied to natural persons, its application to legal persons involves an element of artificiality. In the common law, the domicile of a corporation is the country under the law of (p. 95) which it was incorporated. The law of this country is the legal system that gives birth to it and endows it with legal personality. For certain purposes, however, the principal place of business and the place of its central management are also important. The latter is the administrative centre of the corporation, the place where the most important decisions are taken. The principal place of business is the centre of its economic activities. Though normally in the same place, these two could be different. For example, a mining company with its headquarters in London (central administration) might carry on its mining activity in Namibia (principal place of business).

7.50  Although some civil-law systems also look to the law of the place of incorporation as the personal law of the company,43 the dominant view favours the law of the ‘corporate seat’ (siège social). In these latter States, the place of the corporate seat is regarded as the domicile of the corporation. However, there are two views as to how the corporate seat should be determined. According to the first view, one looks to the legal document under which the corporation was constituted (the statut of the corporation). This will state where the corporate seat is. The corporate seat thus determined is called the siège statutaire.

7.51  The siège statutaire may not, however, be the actual corporate headquarters. The second view is that one should look to the place where the company in fact has its central administration, sometimes called the siège réel. This corresponds to the common-law concept of the place of central administration.

7.52  To cover all points of view, it was thus necessary to have three connecting factors to determine the domicile of a legal person. Thus, even where there is a uniform code of domicile, it is still possible for a legal person to be domiciled in more than one country—for example, where a company is incorporated in Panama or Liechtenstein but has its central administration in England or Germany.

7.53  To cover one strand of thinking in the civil law, it was necessary to include the siège statutaire, which is translated into English as ‘statutory seat’. However, this term does not refer to the corporation’s seat as laid down by some statute (legislation)44 but as laid down by the statut, the document containing the constitution of the companyfor example, the articles of association.

7.54  In order to give effect to common-law thinking, it is provided in paragraph 2 that, ‘for the purposes of’45 the three common-law Member States, (p. 96) statutory seat means registered office. In the foreign-language versions of Article 63(2)—for example, the French—the phrase registered office is not translated, thus indicating that registered office means registered office as understood by the law of Ireland, Cyprus or the United Kingdom, as the case may be.

7.55  Article 68(2) further provides that if there is no registered office anywhere, the statutory seat is, in the three common-law countries, the place of incorporation. Again, this must mean the place of incorporation as determined by the law of Ireland, Cyprus, or the United Kingdom.46

7.56  Article 63(2) finally provides that if there is no place of incorporation anywhere, the ‘statutory seat’ means the place under the law of which the formation47 took place. Again, this must mean ‘formation’ as determined by the law of the common-law country in question.

7.57  The result is that if a company is incorporated in one of the three common-law countries and has its registered office there, it will be domiciled in that country under Brussels 2012, Article 63(1)(a), read with Article 63(2). The same will be true if it was incorporated in one of the three common-law countries but has no registered office in that country or in any other country. An unincorporated association formed in one of the three countries will have its ‘statutory seat’ in the country under the law of which it was formed. It will therefore be domiciled in that country.48

7.58  Finally, it should be noted that the above rules do not apply for the purpose of exclusive jurisdiction over companies or other legal persons or associations of natural or legal persons under Brussels 2012, Article 24(2).49 Here the old rule still stands: the court applies its own rules of private international law.50

The Concept of Residence under Hague

7.59  The Hague Convention does not use domicile as a connecting factor. Instead, it uses residence—a somewhat controversial choice made after quite lengthy discussion. In so far as it applies to natural persons, residence is not defined. This was a deliberate choice. However, Article 4(2) contains a definition of residence with regard to legal persons, which is (p. 97) similar to the definition of domicile in Brussels and Lugano. Hague, Article 4(2), reads as follows:

  1. 2.  For the purposes of this Convention, an entity or person other than a natural person shall be considered to be resident in the State –

    1. (a)  where it has its statutory seat;

    2. (b)  under whose law it was incorporated or formed;

    3. (c)  where it has its central administration; or

    4. (d)  where it has its principal place of business.

It will be seen that this is functionally identical to the definition of domicile in Brussels 2012, if one keeps in mind that, under Article 65(2) of the Regulation, the registered office is treated as being equivalent to the seat as far as common-law countries are concerned. Although concepts in Hague do not necessarily have the same meaning as equivalent concepts in Brussels 2012, it is likely that (in the absence of some special reason to the contrary) the CJEU will interpret it in the same way.

The Determination of Domicile under UK Law

7.60  Since Brussels 2012 and Lugano 2007 refer to national law in certain cases, we will now consider the determination of domicile under UK law.51

7.61  When the United Kingdom first became a Party to the Brussels Convention, it was decided that the common-law concept of domicile was unsuitable for use in that context; so it was decided to create a new, statutory concept. It is this concept that will now be considered.

Domicile of Natural Persons (Individuals)

7.62  The domicile of natural persons (individuals) in the United Kingdom or in a particular part of, or place in, the United Kingdom is determined, for the purposes of Brussels 2012, by the Civil Jurisdiction and Judgments Order 2001, SI 2001 No. 3929 (as amended). Schedule I, paragraph 9, subparagraphs 2–6,52 read as follows:

  1. (2)  An individual is domiciled in the United Kingdom if and only if—

    1. (a)  he is resident in the United Kingdom; and

    2. (b)  the nature and circumstances of his residence indicate that he has a substantial connection with the United Kingdom.

  2. (p. 98) (3)  Subject to sub-paragraph (5), an individual is domiciled in a particular part of the United Kingdom if and only if—

    1. (a)  he is resident in that part; and

    2. (b)  the nature and circumstances of his residence indicate that he has a substantial connection with that part.

  3. (4)  An individual is domiciled in a particular place in the United Kingdom if and only if he—

    1. (a)  is domiciled in the part of the United Kingdom in which that place is situated; and

    2. (b)  is resident in that place.

  4. (5)  An individual who is domiciled in the United Kingdom but in whose case the requirements of sub-paragraph (3)(b) are not satisfied in relation to any particular part of the United Kingdom shall be treated as domiciled in the part of the United Kingdom in which he is resident.

  5. (6)  In the case of an individual who—

    1. (a)  is resident in the United Kingdom, or in a particular part of the United Kingdom; and

    2. (b)  has been so resident for the last three months or more,

the requirements of subparagraph (2)(b) or, as the case may be, subparagraph (3)(b) shall be presumed to be fulfilled unless the contrary is proved.

7.63  The first point to note about these provisions is that they operate on three levels. The top level is the United Kingdom; the second level is a part of the United Kingdom; and the third level is a place in the United Kingdom. As regards the second level, the United Kingdom consists of three parts (countries): England and Wales (one unit for this purpose), Northern Ireland, and Scotland. There are separate rules to determine domicile at each level.

7.64  The second point is that the provisions constitute a complete code: there is no room for the rules of domicile under the common law. The distinction between domicile of origin, domicile of choice, and domicile of dependency does not exist in this context: the rules are the same for everybody.

7.65  The basic principle may be encapsulated in the phrase residence plus. To establish domicile in the United Kingdom, it must be shown that the person concerned is resident in the United Kingdom and that he has a ‘substantial connection’ with the United Kingdom.53 Consequently, the ‘plus’ element at this level is a substantial connection.

(p. 99) 7.66  At the second level (a part of the United Kingdom), the ‘plus’ element is the same—except that if he is domiciled in the United Kingdom as a whole but does not have a substantial connection with any part of it, he will be treated as domiciled in the part of the United Kingdom in which he is resident.

7.67  At the third level (a particular place), the ‘plus’ element disappears altogether: the person concerned will be domiciled in the place in which he is resident, provided he is domiciled in the part of the United Kingdom in which that place is situated.

7.68  Subparagraph 6 lays down an important presumption with regard to the requirement of a substantial connection. It provides that if the person concerned is resident in the United Kingdom as a whole or (as the case may be) in a given part of it and has been resident there for at least three months, he is presumed to have a substantial connection with the United Kingdom or (as the case may be) with the part in question unless the contrary is proved.

7.69  It will be seen from what has been said that these provisions are an attempt to provide a simple, flexible set of rules that enable the domicile of a natural person to change much more easily than the rigid rules of the common-law concept of domicile.

Domicile of Legal Persons for the Purpose of Exclusive Jurisdiction

7.70  As was said above, the domicile of legal persons (companies and other legal persons or associations of natural or legal persons) is determined directly by Brussels 2012 and Lugano 2007; however, there is an exception: for the purpose of exclusive jurisdiction, it is determined by the lex fori. So UK law has a set of rules to determine the domicile of legal persons for this purpose. For Brussels 2012, these are contained in the Civil Jurisdiction and Judgments Order 2001, SI 2001 No. 3929, paragraph 10, subparagraphs 2–6.54 They provide as follows:

  1. (2)  A company, legal person or association has its seat in the United Kingdom if and only if—

    1. (a)  it was incorporated or formed under the law of a part of the United Kingdom; or

    2. (b)  its central management and control is exercised in the United Kingdom.

  2. (3)  Subject to sub-paragraph (4), a company, legal person or association has its seat in a Regulation State other than the United Kingdom if and only if—(p. 100)

    1. (a)  it was incorporated or formed under the law of that state; or

    2. (b)  its central management and control is exercised in that state.

  3. (4)  A company, legal person or association shall not be regarded as having its seat in a Regulation State other than the United Kingdom if—

    1. (a)  it has its seat in the United Kingdom by virtue of sub-paragraph (2)(a); or

    2. (b)  it is shown that the courts of that other state would not regard it for the purposes of Article 24(2) as having its seat there.

7.71  It will be seen from this that the rules applied by the United Kingdom are biased in favour of finding domicile in the United Kingdom and against finding it in another Member State. Although the rules in subparagraph 3 appear to mirror those in subparagraph 2, two important qualifications are laid down by subparagraph 4: the first is that a legal person will not be regarded as domiciled (having its seat) in another Member State if it was incorporated or formed under the law of a part of the United Kingdom (even if its central management and control is exercised in the other Member State); the second is that it will not be regarded as domiciled in another Member State if the courts of that Member State would not regard it as domiciled there. This reference to foreign law does not, however, apply in reverse: a legal person will not be regarded as domiciled in another Member State just because the courts of that Member State would regard it as domiciled there.

7.72  It follows from this that if a company is incorporated in England, it will be regarded by English courts as domiciled only in England, even if it has its central management and control in another Member State. If it is incorporated in another Member State but has its central management and control in England, it will be regarded by English courts as domiciled in both countries, unless the courts of the other Member State would not regard it as domiciled in that State, in which case it will be regarded by English courts as domiciled only in England.

7.73  If other Member States were to adopt rules with a similar bias towards domicile in their territories, there would be many instances in which a company was held to be domiciled in England under the English rules and domiciled in another Member State under the rules of that State. Both would then claim exclusive jurisdiction.55

Nationality

7.74  As was said previously, the criterion adopted by the instruments for determining the ‘home’ of a party is domicile, not nationality. So Brussels 2012, (p. 101) Article 4(2),56 provides that persons who are not nationals of the Member State in which they are domiciled will be governed by the rules of jurisdiction applicable to nationals of that State. This is intended to eliminate any jurisdictional effects that nationality may have in some Member States.

7.75  In addition, Brussels 2012, Article 6(2), provides that, as against a defendant not domiciled in any Member State, a claimant domiciled in a Member State may, whatever his nationality, avail himself of the rules of jurisdiction in force in that Member State in the same way as a national of that Member State. This applies in particular to the rules of especially exorbitant jurisdiction referred to in Brussels 2012, Article 76(1)(a).

7.76  This seems to be aimed at the rule of jurisdiction contained in Article 14 of the French Civil Code, which grants jurisdiction to the French courts on the basis of the French nationality of the claimant.57 The effect of Brussels 2012, Article 6(2), is to extend this exorbitant ground of jurisdiction to all claimants domiciled in France irrespective of their nationality. However, it applies only against defendants not domiciled in any Member State (or, under Lugano 2007, any Lugano State).

7.77  It seems that the rules laid down in Articles 4(2) and 6(2) of Brussels 2012 (and the equivalent provisions in Lugano 2007) apply irrespective of whether or not the person concerned is a national of another EU (or Lugano) State. Thus a Japanese citizen domiciled in France is entitled to invoke Article 14 of the French Civil Code in the same way as a German citizen.58

The Claimant

7.78  In general, the domicile and nationality of a claimant are irrelevant: a claimant domiciled anywhere in the world and having the nationality of any State in the world may bring proceedings under Brussels 2012 or Lugano 2007 in the same way as anyone else.59 There are, however, a small number of exceptions. One has just been mentioned: a claimant who is not domiciled in France and is not a French citizen cannot invoke Article 14 of the French Civil Code. Other exceptions relate to insurance60 and consumer61 contracts.

(p. 102) Declarations of Non-Liability (Negative Declarations)

7.79  In proceedings for a declaration of non-liability, the natural defendant is the claimant and the natural claimant becomes the defendant. What effect does this have on jurisdiction? In Folien Fischer v. Ritrama,62 the CJEU held that the rules of special jurisdiction—the case concerned jurisdiction in tort under what is now Brussels 2012, Article 7(2)—also apply to actions for a declaration of non-liability. Article 7(2) gives jurisdiction to the place where the harmful event occurs, and there is no reason why this should not apply where the person who caused the alleged harm brings proceedings for a declaration that he is not liable.

7.80  This does not, however, mean that a party claiming a declaration of non-liability can always bring proceedings in the same court as that in which a positive claim against him could be brought. Thus if a person domiciled in England is alleged to have committed a tort in a third country against a person domiciled in Spain, the Spaniard could bring a positive claim in tort against the Englishman in England under Brussels 2012, Article 4(1) (jurisdiction based on the domicile of the defendant). However, if the Englishman wanted to sue the Spaniard for a declaration of non-liability, he could not sue in England under Article 4(1). He would now be the claimant and the Spaniard would be the defendant; so he would have to go to Spain.

7.81  The same applies with regard to the special jurisdictional rules contained in Brussels 2012, Articles 10–23.63 These provisions have the objective of protecting the weaker party and are consciously biased in his favour: they give him a wider range of jurisdictional possibilities than the other party.64 If the other party brings proceedings for a declaration of non-liability, he will not necessarily be able to bring them in the same court as the weaker party could if he were bringing a positive claim.65

The Courts ‘For a Place’ and the Courts ‘of a Member State’

7.82  Some provisions of Brussels 2012 give jurisdiction to the courts ‘of a Member State’. Article 4(1) is an example: it gives jurisdiction to the courts of the Member State in which the defendant is domiciled.66 Other (p. 103) provisions give jurisdiction to the courts ‘for’ a particular place—for example, Brussels 2012, Article 7(2), which concerns tort, gives jurisdiction to the courts ‘for the place where the harmful event occurred or may occur’.67

7.83  The significance of this is that, in most Continental countries, there are separate courts of general jurisdiction for different cities or areas. As a result, two kinds of jurisdiction must be considered in these countries. The first is international jurisdiction, which is concerned with whether the courts of the State in question have jurisdiction. The second is internal jurisdiction, which arises only if the courts of the State in question have international jurisdiction. This is the question, which court within that State has jurisdiction? In the case of the Netherlands, for example, is it the Amsterdam District Court or the Rotterdam District Court? This difference does not normally concern England, where there is one High Court for the whole country, but it is important in many other countries.

7.84  Where Brussels 2012 gives jurisdiction to the courts of a Member State, this merely decides the question of international jurisdiction. Once it is decided, for example, that the courts of the Netherlands have jurisdiction, Dutch law will then decide which court in the Netherlands will have internal jurisdiction. Where, on the other hand, Brussels 2012 gives jurisdiction to the courts for a particular place, this decides both international and internal jurisdiction. If the ‘harmful event’ takes place in Rotterdam, for example, Brussels 2012, Article 7(2), will decide that the Rotterdam District Court has internal jurisdiction.

Conclusions

7.85  It will be seen from what has been said that Brussels 2012 and Lugano 2007 are highly structured instruments. They have been carefully designed to provide a system of jurisdiction which enables the European Union to function almost as if it were a single juridical unit. Though it has its flaws, it nevertheless constitutes a remarkable intellectual achievement.(p. 104)

Footnotes:

1  For an analysis, see US Restatement of the Law Third: The Foreign Relations Law of the United States (The American Law Institute Publishers, St. Paul, MN, USA, 1986), § 401.

2  By ‘inter-territorial’ is meant jurisdiction in the context of relations between different territories (countries, provinces, etc.) in the same State—for example, between England and Wales (on the one hand) and Scotland (on the other hand).

3  See the analysis by Sharpe JA in the Canadian case of Muscutt v. Courcelles, (2002) 213 DLR (4th) 577; (2002) 60 OR (3d) 20 (Ont. CA), at paragraphs 19 et seq., where a slightly different terminology is used.

4  Under the ‘minimum contacts’ test, first enunciated by the US Supreme Court in International Shoe Co. v. State of Washington, 326 US 310; 66 S Ct 154; 90 L Ed. 2d 95 (1945), it is an infringement of the US Constitution for a state or federal court to take jurisdiction unless certain minimum contacts exist between the defendant and the territory of the forum. It is not sufficient if the facts on which the claim is based arose in that state: the defendant must have done some voluntary act that was in some way aimed at that state. For the distinction between the US approach and the Commonwealth approach, see Sharpe JA in Muscutt v. Courcelles, (above) at paragraphs 54 et seq. For an example of the US approach, see World-Wide Volkswagen Corporation v. Woodson, 444 US 286; 62 L Ed. 2d 490; 100 S Ct 559 (1980), in which the US Supreme Court held that the courts of a state cannot take jurisdiction in a personal-injury product-liability tort claim just because the accident which caused the injury took place in that state. Compare the position under Article 7(3) of the Brussels 2012, as interpreted by the CJEU in Bier v. Mines de Potasse, Case C-21/76, ECLI:EU:C:1976:166, [1976] ECR 1735. On the other hand, the US Supreme Court accepts that if the claim arises out of the defendant’s activities in the state of the forum, jurisdiction may be founded on a lower level of contacts than would apply where this is not the case: Helicopteros Nacionales de Colombia v. Hall, 466 US 408; 104 S Ct 1868; 80 L Ed 2d 404 (US Supreme Court, 1984); Daimler v. Bauman, 134 S Ct 746; 187 L Ed 2d 624; (US Supreme Court, 2014).

5  CPR 6.36 and Practice Direction 6 B, paragraph 3.1.

6  See Practice Direction 6 B, paragraph 3.1(3).

7  Article 8(1) of Brussels 2012. It should be remembered that forum non conveniens does not apply under EU law.

8  See, for example, Helicopteros Nacionales de Colombia v. Hall, 466 US 408; 104 S Ct 1868; 80 L Ed 2d 404 (US Supreme Court, 1984), where the fact that two defendants were domiciled in the state of the forum (Texas) had no effect on jurisdiction over the third defendant, Helicopteros Nacionales de Colombia, a company domiciled in Colombia.

9  For EU law, see Van Uden v. Deco-Line, Case C-391/95, ECLI:EU:C:1998:543, [1998] ECR I-7091, at paragraph 19 of the judgment.

10  Lugano 2007, Article 22.

11  Lugano 2007, Article 24.

12  Brussels 2012, Article 27 (Lugano 2007, Article 25).

13  Brussels 2012, Article 45(1)(e)(ii); Lugano 2007, Article 35(1).

14  Taser International, Case C-175/15, ECLI:EU:C:2016:176 (paragraphs 19–25); Gasser v. MISAT, Case C-116/02, ECLI:EU:C:2003:657, [2003] ECR I-14693, at paragraph 49 of the judgment (Full Court). This is further borne out by the fact that Brussels 2012, Article 31(2), which is intended to give protection to the jurisdiction of the designated court, is nevertheless subject to Article 26.

15  Brussels 2012, Article 27, and Lugano 2007, Article 25, do not apply where the other court has exclusive jurisdiction by virtue of a choice-of-court agreement.

16  The equivalent provision in Lugano 2007 is Article 2(1).

17  See, for example, Marinari v. Lloyd’s Bank, Case C-364/93, ECLI:EU:C:1995:289, [1995] ECR I-2719 (at paragraph 13 of the judgment).

18  See paras 7.10 et seq.

19  The Recital continues with a reference to ‘disputes concerning non-contractual obligations arising out of violations of privacy and rights relating to personality, including defamation’—in other words, claims for violation of privacy or defamation.

20  The equivalent provisions in Lugano are Articles 5–24 (also in Sections 2 to 7 of Chapter II).

21  See paras 7.10–7.15.

22  For Lugano-domiciled defendants, identical protection is granted by Lugano 2007, Article 3(1).

23  The analogous provision in Lugano 2007 is Article 4(1). Under this, the exceptions are more limited: they relate only to exclusive jurisdiction (Lugano 2007, Article 22) and choice-of-court agreements (Lugano 2007, Article 23).

24  For a small exception, see Rule 4(k)(2) of the Federal Rules of Civil Procedure, explained in United States v. Swiss American Bank, 191 F 3d 30 (1st Cir. 1999).

25  See, for example, McIntyre Machinery v. Nicastro, 564 US – (2011); 131 S Ct 2780 (2011) (US Supreme Court).

26  There are a small number of exceptions: see Brussels 2012, Article 45(1)(e).

27  Brussels 2012, Recital 27.

28  For the background, see Droz (Georges A. L.), Compétence judiciaire et effets des jugements dans le Marché Commun (Dalloz, Paris, 1972), at pp. 429–48; Nadelmann, (1967) 67 Columbia Law Review 995; (1967/8) 5 Common Market Law Review 409; (1969) 82 Harvard Law Review 1282. See also Hartley (T. C.), Civil Jurisdiction and Judgments (Sweet & Maxwell, London, 1984), p. 8, n. 9.

29  See paras 7.19–7.20, above.

30  As we shall see below, it is possible for a person to be domiciled in more than one Member State for the purposes of the Regulation.

31  See paras 7.22–7.26, above.

32  See paras 7.27–7.28, above.

33  See paras 8.163–8.164.

34  For the problems that arise when the domicile of a party is unknown, see Hypoteční banka v. Lindner, Case C-327/10, ECLI:EU:C:2011:745, [2011] ECR I-11543; G v. Cornelius de Visser, Case C-292/10, ECLI:EU:C:2012:142.

35  The equivalent provision in Lugano 2007 is Article 59, which is identical except that Member State is replaced by State bound by this Convention or, where the meaning is obvious, by State.

36  It must be remembered that the Member State is the United Kingdom, not England.

37  As a matter of UK law, the court will still have to decide whether he is domiciled in England or in another part of the United Kingdom. This is discussed below.

38  The phrase company or other legal person appears to refer to an entity with legal personality, other than a natural person.

39  The phrase association of natural or legal persons appears to refer to entities without legal personality which are composed of natural or legal persons (unincorporated associations). According to the Schlosser Report, p. 120, paragraph 162, the phrase company or other legal person or association of natural or legal persons as it appeared in Article 16(2) of the Brussels Convention (equivalent to Article 24(3) of Brussels 2012 (exclusive jurisdiction) covered partnerships. If this is correct, and it would seem that it is, the same should apply to the phrase as it appears in Article 63(1) of Brussels 2012 and Article 59(1) of Lugano 2007.

40  The equivalent provisions of Lugano are substantially identical, except that there is no reference to Cyprus in the second paragraph.

41  In the French text of Brussels 2012, Article 63(1)(c), this appears as ‘principal établissement’.

42  The exception is that there is no reference to Cyprus in the second paragraph.

43  For example, Japan and the Netherlands.

44  The French for statute is loi.

45  In the French text, ‘for the purposes of Ireland, Cyprus and the United Kingdom’ is ‘pour l’Irlande, Chypre et le Royaume-Uni’. This cannot mean ‘when the case is being heard by a court in Ireland, Cyprus, or the United Kingdom.’ It must mean ‘in order to decide whether a company is domiciled in Ireland, Cyprus, or the United Kingdom.’

46  In the French text, the English phrase place of incorporation is used, though this time it is followed by a French translation: le place of incorporation (le lieu d’acquisition de la personnalité morale).

47  The French text says la formation (la constitution).

48  Though it will be subject to the jurisdiction of the courts of that country, the question whether it can be sued in its own name will depend on the lex fori.

49  The equivalent provision under Lugano 2007 is Article 22(2).

50  It is not known why this is.

51  See generally Briggs, Civil Jurisdiction, pp. 197 et seq.

52  For the purposes of Lugano 2007, provisions identical in substance are laid down by the Civil Jurisdiction and Judgments Act 1982, Section 41A, subsections 2–6 (as added by the Civil Jurisdiction and Judgments Regulations 2009, No. 3131, regulation 18(2)).

53  For case law on what constitutes a substantial connection, see Bank of Dubai v. Fouad Haji Abbas [1977] ILPr. 391; Petrotrade Inc. v. Smith [1998] 2 All ER 346; High Tech International v. Deripaska, [2006] EWHC 3276 (Comm); Cherney v. Deripaska [2007] EWHC 965 (Comm) [2007] 2 All ER (Comm) 785; Ministry of Defence and Support of the Armed Forces of Iran v. FAZ Aviation Ltd [2007] EWHC 1042 (Comm); OJSC Oil Co. Yugraneft v. Abramovich [2008] EWHC 2613 (Comm).

54  For the purposes of Lugano 2007, provisions identical in substance are laid down by the Civil Jurisdiction and Judgments Act 1982, Section 43A, subsections 2–4 (as added by the Civil Jurisdiction and Judgments Regulations 2009, No. 3131, Regulation 20(2)).

55  If the courts of two Member States both claim exclusive jurisdiction, the case will be heard by the court seised first and the other court must decline jurisdiction: Brussels 2012, Article 31(1); Lugano 2007, Article 29.

56  The equivalent provision in Lugano 2007 is Article 2(2).

57  In its terms, Article 14 applies only to contractual obligations, but the French courts have applied it much more widely than this.

58  Gaudemet-Tallon, paragraphs 83 and 95.

59  Group Josi, Case C-412/98, ECLI:EU:C:2000:399, [2000] ECR I-5925 (paragraphs 33–61 of the judgment).

60  Brussels 2012, Article 11(1)(b); Lugano 2007, Article 9(1)(b).

61  Brussels 2012, Article 18(1); Lugano 2007, Article 16(1).

62  Case C-133/11, ECLI:EU:C:2012:664.

63  Lugano 2007, Articles 8–21.

64  See para. 1.44, above.

65  See Folien Fischer v. Ritrama, (above) at paragraph 46 of the judgment.

66  The equivalent provision in Lugano 2007, Article 2(1), gives jurisdiction to the courts of the State bound by the Convention in which the defendant is domiciled.

67  The equivalent provision in Lugano 2007 is Article 5(3).