Brussels Regulation Article 6(1) and anchor defendants
05 March 2013
In the case of Andris Linuzs & ors v Latmar Holdings Corp  EWCA Civ 4, 17 January 2013, the Court of Appeal found that a default judgment against a sole English-domiciled "anchor" defendant does not remove the English court’s jurisdiction against various co-defendants (domiciled in other Member States) under Article 6(1) of the Brussels Regulation. As with jurisdiction based on domicile under Article 2(1) and consistent with existing case law, the court’s jurisdiction under Article 6(1) is to be determined at the time jurisdiction is invoked (ie at the time of issue of proceedings). In addition, on the facts, there was a good arguable case that the claims were sufficiently closely connected that there was a risk of irreconcilable judgments, even if the anchor defendant was not party to any wider conspiracy.
The Appellants had played a major role in procuring the execution of the agreements by the claimant, but the claimant alleged that they were a sham (as evidenced by the fact that they had been executed after the renegotiation had taken place and after various sums of money had been paid to Arindal and MediaFocus (the agreements had been backdated)). The claimant therefore pleaded deceit and/or fraudulent misrepresentation and/or unlawful means conspiracy, both against the Companies and against the Appellants (among others).
The claimant founded the English court’s jurisdiction against MediaFocus under Article 2(1) of the Brussels Regulation (MediaFocus was incorporated in England and was the only defendant with English domicile). As against the other defendants, the claimant then relied on Article 6(1) of the Brussels Regulation on the basis that one co-defendant was domiciled in England and "…the claims…[were] so closely connected that it… [was] expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings" The burden was on the claimant to demonstrate a "good arguable case" that the English court had jurisdiction, which Eder J held to have been satisfied. (Eder J also found jurisdiction under Article 23, but the point was not dealt with on appeal and so is not considered in this article.)
Issues on appeal
Findings on appeal
Taking the latter point first, Toulson LJ held that, consistent with prior case law, the relevant time for determining jurisdiction under Article 6 was the time at which the jurisdiction was invoked. Toulson LJ also noted in passing that, if this was not the case, it would have had the illogical result of forcing the claimant to withhold from obtaining judgment against MediaFocus solely in order to retain jurisdiction in relation to the Appellants.
Finally, Toulson LJ held that, even on the hypothesis that the claimant had failed to establish a good arguable case that MediaFocus was party to the wider conspiracy, the connecting factors between the activities of the two Companies were nevertheless "…manifest and multiple", such that it was expedient for the claims to be heard together to avoid the risk of irreconcilable judgments.
Whatever the precise legal bases of the claims, it was necessary for the court to examine their essence in the relevant factual context and assess whether their nature and interrelationship were such that, if tried separately, there was such a risk, so as to make it expedient in the interests of justice for them to be heard together.