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4 Update to Chapter 10: Damages for unlawful litigation

Edited By: Trevor C Hartley

From: Choice-of-court Agreements under the European and International Instruments - Online Update, September 2015: The Revised Brussels I Regulation, the Lugano Convention, and the Hague Convention

Trevor Hartley

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From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 07 June 2023

Choice of court and consumer contracts — Choice of court and employment contracts — Choice of court and insurance — Contractual term — Jurisdictional and choice of court agreements — EU Rules — Injunctions to restrain proceedings in England and Wales — Jurisdiction under the Brussels-Lugano Regime — Admissibility — Parties to litigation — Damages

4.  Update to Chapter 10: Damages for unlawful litigation

Updating paragraphs 10.31–10.42 of Choice-of-court agreements under the European and international instruments.

N-10-1  AMT Futures Ltd v. Marzillier and ors1 involved a novel twist in this form of litigation. The claimant, AMT Futures, was a UK-incorporated company that acted as an execution-only broker for the purchase and sale of derivative instruments. It had a number of clients in Germany. The contracts it concluded with the clients all contained an English choice-of-court clause and an English choice-of-law clause. Some of the clients lost money and they brought proceedings in Germany against AMT Futures. More than seventy cases were brought, and the outcomes differed. In most, AMT Futures settled the claims. Some were pending at the time of the English proceedings. In the four that went to final judgment, two were decided in favour of AMT Futures and two against it. It is not known why the German courts were willing, in some cases, to hear the proceedings despite the English choice-of-court clauses. It is possible that some (or all) of the clients constituted consumers under Brussels 2000 (the relevant instrument), in which case the choice-of-court clauses would have been invalid.

N-10-2  AMT Futures then brought an action in England against the German law firm that had advised the clients. It claimed damages in tort on the ground that the law firm had induced the clients to breach the choice-of-court agreements. The damages sought included claims for (a) moneys paid in settlement; (b) legal costs incurred in Germany and in England; (c) loss of management time; and (d) loss of profit in respect of future contracts. AMT Futures also sought injunctive relief restraining the German law firm from any further inducement.

N-10-3  The law firm contested the jurisdiction of the English courts. At first instance, it was held that the English courts had jurisdiction under the Brussels I Regulation 2000 (Brussels 2000), Article 5(3).2 The law firm appealed to the Court of Appeal on two grounds. The first was that Article 5(3) did not give jurisdiction to the English courts. This was accepted by the Court of Appeal, which allowed the appeal.

N-10-4  The second ground of appeal was one not argued before the trial court. This was that the claim necessarily and unavoidably offended against EU law principles. In so far as an injunction was claimed, it would involve the English court in being asked to grant an order, which amounted to an antisuit injunction. In so far as damages were sought, it involved the English court being asked to determine issues which breached the principle of effective protection of EU-law rights and of sincere co-operation under EU law, and constituted a collateral attack on the assumption of jurisdiction by the German courts, and of judgments or court settlements obtained by investors in Germany, when under the Regulation any such attack was permitted only in the court where the proceedings had been commenced. In view of its ruling on the jurisdictional issue, it was not necessary for the Court of Appeal to reach a decision on these points; however, Christopher Clarke JA (with whom the other judges agreed) expressed the view that this ground of appeal was unfounded.3

N-10-5  The case is now going on appeal to the UK Supreme Court. If the Supreme Court makes a reference to the CJEU, the latter will have an opportunity to decide whether actions for wrongful litigation are compatible with EU law.


1  AMT Futures Ltd v. Marzillier and ors, Judgment of the Court, [2015] EWCA Civ 143; [2015] 3 WLR 282, 11 February 2015

2  Brussels 2000, ibid., Article 5(3)

3  He referred to the decision of the Court of Appeal in Starlight Shipping Co. v. Allianz Marine & Aviation Versicherungs, Judgment of the Court, [2014] EWCA Civ 1010; [2014] 2 Lloyd’s Rep.. 544 and the subsequent decision of Flaux J in the same case, reported in [2014] 2 Lloyd’s Rep. 579