On 19 June 2013, the Court of Appeal handed down judgment in Antonio Gramsci Shipping Corporation v Lembergs [2013] EWCA Civ 730, upholding the judgment of Teare J that the English Court had no jurisdiction over the Defendant.
On behalf of the Defendant, Anthony de Garr Robinson QC and Laurence Emmett of One Essex Court successfully argued that, where a company had entered into a jurisdiction agreement, it was not open to the Court to establish jurisdiction over an individual standing behind the company by “piercing the corporate veil” and treating the individual as if he were a party to the jurisdiction agreement.
The argument by the Claimants was that the jurisprudence of the ECJ (now the CJEU) permitted the Court to treat a company’s consent to jurisdiction as the consent of the person controlling the company for the purposes of Art. 23 of the Judgments Regulation. They contended that the decided cases establish free-standing European principles of “good faith” and “deemed consent” which allowed jurisdiction to be established under Art. 23 where the company has been used as a vehicle of fraud. Beatson LJ (with whom Lloyd and Ryder LJJ agreed) rejected these arguments.
The case makes clear what is meant by “agreement” in the context of Art. 23 of the Judgments Regulation. For this purpose, it emphasises that the essential inquiry in any case is whether the defendant has actually consented to the Court’s jurisdiction. It also reinforces the limits of the English law principle of “piercing the corporate veil”, as laid down by the Supreme Court in VTB Capital plc v Nutritek Ltd [2013] UKSC 5; and Prest v Petrodel Resources Ltd [2013] UKSC 34.
Mr de Garr Robinson QC and Mr Emmett were instructed by Pinsent Masons LLP.
A copy of the approved judgment text is available here