Barclays v. ENPAM

In a judgment handed down on 8th December 2016, the Court of Appeal unanimously upheld the judgment of Blair J at first instance dismissing the appellant’s application for a declaration under CPR Part 11 and giving summary judgment for the respondent. The Court of Appeal considered a number of important questions of EU law, including the correct interpretation of Article 27 of the Judgments Regulation (Regulation (EC) No. 44/2001) and the application of the principle of mutual trust in EU law. The Court found in favour of the respondent, Barclays Bank Plc, on all points, and dismissed the appeal.

The appellant, Ente Nazionale di Previdenza ed Assistenza dei Medici e degli Odontoiatri (“ENPAM”), had entered into a number of contracts with Barclays. Two were relevant to the proceedings: the Conditional Asset Exchange Letter (“the Letter Agreement”) and the Professional Client Agreement (“PCA”). The Letter Agreement and the PCA each contained an English jurisdiction clause.

Without any warning, ENPAM commenced proceedings against Barclays in Milan in June 2014. It brought two claims which were, in essence, would have been characterised by English law as claims in tort. Barclays commenced proceedings against ENPAM in the English  Commercial Court in September 2014 and applied for summary judgment, seeking a declaration that the Milan proceedings were a breach of the jurisdiction clauses. ENPAM made a cross-application for a declaration that the court should not exercise its jurisdiction to hear the action and for an order staying the proceedings pursuant to articles 27 or 28 of the Judgments Regulation. Blair J at first instance rejected ENPAM’s application and gave summary judgment in favour of Barclays.

After Blair J’s judgment, ENPAM issued a ‘brief’ in the Milan proceedings. This amounted to an amendment introducing new claims, including one for a declaration that the jurisdiction clauses were null and void. ENPAM appealed Blair J’s decision, and the Court of Appeal had to decide the following issues:

i. The date at which the application of Article 27 of the Judgments Regulation is to be determined and the time when the court in Milan was seised of the new claim for the purposes of that article;

ii. Whether the proceedings in Milan and London involved the same cause of action within the meaning of Article 27;

iii. Whether Blair J had erred in refusing to stay the English proceedings under Article 28; and

iv. Whether giving summary judgment in the case infringed the principle of mutual trust between the courts of Member States.

On the first issue, Moore-Bick LJ, delivering the judgment of the Court, accepted Sonia Tolaney QC’s submissions that the question under Article 27 is to be determined at the date of the commencement of proceedings in the court second seised. In this case, that was on the date proceedings were commenced in England.  The court further found in favour of Barclays that the expression “proceedings involving the same cause of action and between the same parties” in Article 27 is to be read as a whole and that therefore the date on which the Italian court became seised of the new claims was when the brief was filed after Blair J’s judgment, not on the deemed date under Italian procedural law. Thus, the development came too late to affect the issues on appeal.

On the second issue, the Court considered the meaning of the phrase “cause of action” in the context of Article 27. Following the decision in The ‘Alexandros T’ [2013] UKSC 70, [2014] 1 All ER 590, the Court accepted that in order to fall under the same “cause of action” for the purposes of Article 27, the proceedings must have the same cause (legal and factual basis) and the same objet (purpose). In the instant case, the proceedings in Italy and England had both a different cause and objet. They were based on different facts, because the proceedings in Italy concerned the Barclays’ actions in the run up to the signing of the agreements whereas the action in England concerned the commencement of proceedings by ENPAM. They were based on distinct areas of the law, because ENPAM’s claim in Italy was founded in tort whereas Barclays’ claim was founded in contract. Finally, they had a different purpose, because ENPAM sought damages for pre-contractual and extra-contractual liability, whereas Barclays sought damages for breach of the jurisdiction clauses. Whilst the validity of the jurisdiction clauses might arise in both proceedings, that was not sufficient to bring Article 27 into play, and so Blair J was right not to stay the English proceedings under that provision.

On the third issue, the Court upheld the judge’s exercise of his discretion under Article 28 of the Judgments Regulation. Moore-Bick LJ  considered that (a) the existence of the jurisdiction clauses which had been agreed before the dispute arose; (b) the speed at which the English courts could dispose of the issue; and (c) the fact that the proceedings in Milan had been deliberately structured to enable the court there to assume jurisdiction were all proper factors for the judge to have taken into account. Therefore, there was no basis on which to set aside his decision.

On the fourth issue, the Court found that awarding summary judgment in favour of Barclays on the jurisdiction clause issue would not infringe the principle of mutual trust between Member States. The Court considered that the decision in The ‘Alexandros T’ [2014] 2 Lloyd’s Rep 544 had explicitly rejected the comparison between an anti-suit injunction and summary judgment. The court refused to take into account comments made by the Supreme Court in argument on a different appeal and therefore ENPAM had no arguable defence to Barclays’ claim.

ENPAM’s appeal was accordingly dismissed.

Sonia Tolaney QC (leading Adam Sher) appeared as lead counsel for Barclays, the successful Respondent.

The judgment is available here.