Skip to content

When can English court decline jurisdiction conferred under Brussels Regulation?

Related people
Garvey Sarah
Sarah Garvey



View profile →

15 May 2012

The English High Court granted a stay of proceedings against defendant English companies on the basis (i) that they related to the validity of the decisions of a Ukrainian company and (ii) the English proceedings were oppressive because they duplicated ongoing Ukraine proceedings.

This Case of Ferrexpo AG v Gilson Investment Ltd & ors [2012] EWHC 721 (Comm), 3 April 2012 is important because Andrew Smith J held that English proceedings can be stayed on the basis that the case has a special connection with a non EU Member State, or is already the subject of proceedings before the courts of a non EU Member State despite the fact that the English courts have jurisdiction under Article 2 of Council Regulation (EC) No 44/2001 (the Brussels Regulation). Andrew Smith J approved a reflexive approach to Articles 22, 27 and 28 of the Brussels Regulation.


The substance of the dispute concerned the shareholding of a Ukrainian mining company. In 2005 the defendants (G) brought an action in Ukraine challenging the validity of Share Purchase Agreements made in 2002 between G and the claimants (F), the Ukraine High Commercial Court declared these agreements invalid. Subsequently G brought fresh proceedings in Ukraine in 2011 in order to restore their shareholders’ interest in the company to the situation before the 2002 agreements. In these subsequent proceedings, on 23 November 2011, the Ukrainian court ordered that F be joined as a party to the proceedings. However, on 22 November 2011 F had commenced proceedings in England seeking declarations as to the ownership of shares in the mining company.

G, the defendants to the English proceedings, applied for either a declaration that the English court had no jurisdiction to try the claim, or a declaration that the English court should not exercise any jurisdiction that it might have over the defendants in respect of the proceedings and should stay them. Therefore the question for Andrew Smith J, sitting in the Commercial Court, was whether the English courts had jurisdiction over the proceedings, and, if so, whether the courts were able to stay proceedings despite the European Court of Justice (ECJ) ruling in Owusu v Jackson (Case C-281/02) [2005] ECR I-1383.

Brussels Regulation

G (the defendant companies) were incorporated in England and were therefore domiciled in England. This brought the question of whether the English court had jurisdiction within Article 2 of the Brussels Regulation: "Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State." This is the primary rule of the Brussels Regulation jurisdiction regime and the English courts therefore had jurisdiction, save for exceptions provided for within the Brussels Regulation. Examples of these exceptions are found in Article 22 of the Brussels Regulation (special connection between the subject matter of the dispute and another Member State), and the lis pendens (related actions in another Member State) rules in Articles 27 and 28. Ukraine is not a Member State and therefore none of the Brussels Regulation exemptions applied. The key issue was the controversial question of whether the English courts could decline jurisdiction conferred by Article 2 of the Brussels Regulation, in favour of the courts of non EU Member State courts.

Owusu v Jackson

In Owusu v Jackson (Case C-281/02) [2005] ECR I-1383 the ECJ was asked about the application of the English common law doctrine of forum non conveniens in favour of a non-contracting state, where the English courts had jurisdiction under Article 2 of the Brussels Convention.

The ECJ held that the jurisdiction conferred by Article 2 was mandatory in nature and could not be derogated from except by express provision in the Convention, even if the jurisdiction of no other Member State was in issue or if the proceedings had no connecting factors to any other Member State. The Convention provided for no exception on the basis of the English doctrine of forum non conveniens and therefore the English courts could not decline jurisdiction conferred by Article 2 of the Brussels Convention on this basis. The ECJ in Owusu was only asked about declining jurisdiction on the basis of a discretionary power available under national law. Could an English court decline jurisdiction conferred by Article 2 of the Brussels Regulation on grounds other than that of discretionary forum non conveniens considerations?

Reflexive effect arguments

The defendants argued that Articles 22 and 28 of the Brussels Regulation should be applied reflexively and that the English courts could decline jurisdiction on the basis of a reflexive application of these Articles.

Article 22

Andrew Smith J distinguished Article 22 from the forum non conveniens ground for declining jurisdiction (para 140): "The reasons that the ECJ in Owusu decided that a defendant could not challenge the jurisdiction of the court of his domicile in favour of the jurisdiction of a non-contracting state do not, to my mind, apply to a case where the subject matter of the jurisdiction is within article 22. A reasonable well-informed defendant could… reasonably foresee that he might be sued in relation to such matters in the courts of the non-Member state associated with the subject matter of the litigation." He concluded: "I cannot accept that the Brussels Regulation requires the court to assume jurisdiction over litigation when the subject matter is as apt for trial in another jurisdiction as the cases covered by the parts of Article 22 with which I am concerned." The judge held that Article 22 has reflexive application but that there was "no reason of principle or policy that the reflexive application of the article should be adopted slavishly."

Articles 27 and 28

There is conflicting first instance case law on whether the lis pendens provisions can have reflexive effect. Barling J in Catalyst Investment Group Ltd v Lewinsohn [2010] EWHC 1964 (Ch) held that Article 27 could not be applied reflexively; he further held that there was no jurisdiction to stay proceedings in a Member State in favour of prior proceedings in a non Member State. Contrasting this is the decision of Deputy Judge Theis QC in the family law case of JKN v JCN [2010] EWHC 843 (Fam). An opportunity for the ECJ to clarify this issue was lost as an Irish case where this question had been referred to the ECJ settled prior to the reference being heard (Goshawk Dedicated Ltd & ors Life Receivables Ireland Ltd [2009] IESC 7).

Albeit obiter, Andrew Smith J agreed with the reasoning in JKN v JCN and held that Article 28 could have reflexive application. He stated: "I see no difficulty in giving effect to the ECJ’s injunction that because of Article 2 a defendant cannot dispute that his domicile is an appropriate forum (and so not contend that it is forum non conveniens), but be protected from multiplicity of proceedings." On the facts, however, the judge held that Article 27 would have applied rather than Article 28 and therefore the defendants’ submissions on Article 28 could not succeed. The judge also expressed a view that Article 27 should be considered to have reflexive effect.


The decision goes some way to answering some of the many questions left in the wake of the ECJ’s decision in Owusu. However, without appellate court or ECJ endorsement it is possible that subsequent contradictory decisions could be handed down from the High Court, and this case would then simply add to the number of pre-existing contradictory High Court decisions on these key issues. As reported in previous Litigation Reviews, the Brussels Regulation is currently under review. It is hoped that as part of this review process, the Commission grapples with the issue of the reflexive effect of various Brussels Regulation articles.

Further information

This case summary is part of the Allen & Overy Litigation Review, a monthly update on interesting new cases and legislation in commercial dispute resolution. For more information please contact Sarah Garvey, or tel +44 (0)20 3088 3710.