Commercial Court considers continuing effectiveness of “Italian Torpedo” actions under the Lugano Convention

18 May, 2020

Waksman J recently handed down judgment in Mastermelt Limited v Siegfried Evionnaz SA [2020] EWHC 927 (QB), the first English authority to consider whether the ‘court first seised’ rule under the Lugano Convention is affected by new provisions introduced into the Brussels Recast Regulation where there is an exclusive jurisdiction clause in favour of another court.

The Claimant had issued a pre-emptive claim in England seeking negative declarations as to its liability in respect of services provided to the Defendant (“Siegfried”). Siegfried challenged jurisdiction on the basis of an exclusive jurisdiction clause conferring jurisdiction on the Zürich Commercial Court (“ZCC”). Siegfried subsequently issued proceedings in the ZCC.

Under the Lugano Convention as interpreted prior to Brussels Recast, the ‘court first seised’ rule would require the proceedings in the ZCC to be stayed pending the English Court’s ruling on jurisdiction. However, before Siegfried’s jurisdiction challenge in England was heard, the ZCC refused to stay its own proceedings on the basis that the ‘court first seised’ rule should be disapplied where the court seised second was the subject of an exclusive jurisdiction clause. It did so in reliance on a new provision introduced in Brussels Recast (in article 31(2)), to the effect that the court named in the jurisdiction clause should rule first on its jurisdiction, so as to prevent the so-called “Italian Torpedo”. The ZCC held that this new rule applied by analogy in a Lugano Convention case.

Siegfried relied on the decision of the ZCC before Waksman J, contending that it was entitled to recognition under the Lugano Convention. The judge rejected that contention and disagreed with the ZCC’s conclusion, holding that the ‘court first seised’ rule continued to apply in Lugano Convention cases.

Waksman J went on to consider what amounted to an “agreement in writing or evidenced in writing” for the purposes of article 23 of the Lugano Convention, holding that an agreement “evidenced in writing” was not confined to an oral agreement evidenced in writing, but that, if it was so confined, the “in writing” requirement must be interpreted expansively. He held that the exclusive jurisdiction clause relied on by Siegfried satisfied the requirements of article 23, and accordingly declined jurisdiction.

James Sheehan acted for the Defendant, Siegfried, instructed by Katie Chandler at Taylor Wessing LLP.