Home Information Cases Mahme Trust v Lloyds TSB Bank PLC (2004)

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Mahme Trust v Lloyds TSB Bank PLC (2004)

Summary

The Lugano Convention 1988 Art.5 provided that the choice of forum to be exercised by a claimant was to be unfettered by court order.

Facts

The defendant bank (L) applied to stay all further proceedings on the ground that Switzerland was a more appropriate forum and it was not unjust for the claimants to bring proceedings there. The first claimant trust (M), formerly the Shaka trust, had been established in 1986 in Liechtenstein by the deceased for the benefit of his wife (X), the fourth claimant, and their son (Y), the fifth claimant. A bank account in M's name was held in Geneva. X instructed L to establish a further trust, which trust passed a resolution enabling the Geneva branch of L to charge an administration fee. X was unhappy about the fee and in 1999 issued proceedings in Switzerland against the bank, which were settled on 22 June 2000. The Geneva bank account was closed in June 2000. Y and M commenced proceedings in England seeking the recovery of sums paid to a trustee of another trust from the assets of M, which proceedings were concluded by judgment, Mahme Trust Reg & Ors v Tayeb & Ors (2002) EWHC 1543 (Ch). W then issued these proceedings seeking a full account of all L's dealings with the deceased and his assets. L argued that its Geneva branch should be regarded as a separate entity from the bank in England and should be treated as domiciled in Switzerland, and that as the action concerned the production of documents in an overseas branch, English proceedings should be stayed as a Swiss court was manifestly more appropriate.

Held

Both Switzerland and the United Kingdom were party to the Lugano Convention 1988. The caselaw demonstrated as a general proposition that a stay of proceedings brought in England on grounds of forum non conveniens was inconsistent with the Convention. Art.2 of the Convention set out the general rule that the choice of jurisdiction was a matter for the claimant. The authorities cited by L, (AR v Grossman (1981) 73 CAR 302, McKinnon v Donaldson (1986) Ch 482, and Societe Erum Shipping Co Ltd v Compagnie Internationale (2004) 1 AC 260) were distinguishable as they were not concerned with the Lugano or Brussels Conventions. Other authorities were unqualified in stipulating that Art.5 of the 1988 Convention provided that the choice of forum to be exercised by a claimant was to be unfettered by court order unless there were special provisions, which did not exist in the instant case. There was no doubt that this court was first seised of the causes of action on which M sued. If the same proceedings followed in Switzerland, the Swiss court, as second seised, would be bound by Art.21 to stay the Swiss proceedings. M was entitled under Art.2 to sue L in England and it was inconsistent with Art.5 to stay the English proceedings on grounds of forum non conveniens and to sue L in Switzerland. The court did not have jurisdiction to grant the stay sought by L.

Application refused.

Chancery Division
Sir Andrew Morritt VC
Judgment date
29 July 2004
References