Summary

It would be appropriate to stay a debt claim given that a "related action" within the meaning of Regulation 44/2001 art.28 had previously been commenced by the debtor in France.

Facts

The defendant French company (C) applied for a stay of an action brought by the claimant (L) in the United Kingdom.

L had begun that action in June 2011. It sought the sum of $6 million, being the sum it claimed to be due under a settlement agreement entered into with C. Default notices relating to C's failure to pay instalments under the agreement had been served on C, the last one being dated March 11, 2010. In February 2010, C had begun debt-conciliation proceedings in France. Such proceedings constituted a judicial measure to assist debtors in financial difficulty. If a creditor did not wish to participate (L chose not to), the debtor could request a suspension of his debts. On March 30, 2010, the relevant tribunal ruled that C was entitled to a two-year suspension in respect of its obligations to L, that period being reduced on appeal to one year. C asserted that it had at least three potential defences to the claim that L had brought. The third relied on propositions of French domestic law and English private international law. The proposition of French law was that C had been under no obligation to pay at the time of the relevant default notice, given the French court's suspension of its payment obligations. The proposition of English private international law was that in the instant action the court would give effect to the French law proposition and would have to do so if the French court ruled that it was correct. C stated that proceedings were pending in France in which it had asked the French court to determine that the French law proposition was right. It maintained that, until that court decided the point or said that it would not decide it, the English action should be stayed.

C argued that (1) the English court should stay the action in favour of the French court under Regulation 44/2001 art.27 as the two sets of proceedings involved the same cause of action between the same parties; (2) alternatively, the proceedings were "related actions" within the meaning of art.28.

Held

(1) It was impossible to say that the two sets of proceedings involved the same facts and rules of law. The English action was concerned with the amount of the debt. The relevant rules of law were those concerning contractual agreements. The relevant rules of law in the French proceedings were those concerned with protection for businesses which were in difficulty. The argument based on art.27 therefore failed (see para.68 of judgment). (2) Article 28 was engaged where the two proceedings 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. It was highly relevant that the English action could not be substantively determined in L's favour unless either the French law proposition was wrong or that proposition was right but as a matter of English private international law it did not assist C. In that regard, there was a substantial degree of connection. Pushing on with the English action ran a substantial risk of trespassing on the French proceedings with the consequent danger of irreconcilable judgments. A value judgment had to be made as to the expediency of hearing the two actions together in order to avoid the risk of inconsistent judgments. As to the French law proposition, that aim might be achieved if the French court concluded that it should be decided. Substantive consideration of the English action would be more advantageously dealt with after the French court had determined whether or not it would decide the French law proposition and, if it did, what the answer was and why, Research in Motion UK Ltd v Visto Corp [2008] EWCA Civ 153, [2008] 2 All E.R. (Comm) 560 applied (paras 70, 79-80).

Application granted