Munib Masri v Consolidated Contractors International Co SAL & 6 Ors (2011)
Proceedings in England and Greece did not involve the same cause of action for the purposes of Regulation 44/2001 art.27 but they were related proceedings giving rise to a risk of irreconcilable judgments within art.28 and the proper course was to stay the English action.
The applicants applied for orders that the court should decline jurisdiction or stay the proceedings under Regulation 44/2001 art.27 or art.28 in the light of prior proceedings in Greece. The respondent (M) had obtained a judgment against the first and second applicants which were Lebanese companies. The judgment debt of some $75 million had not been paid, notwithstanding worldwide execution proceedings. M alleged that that was because of an anti-enforcement strategy implemented by the companies and their beneficial owners. M therefore brought proceedings against the companies and their holding company, the seventh applicant, and four individuals, the third to sixth applicants, who were beneficially interested in the holding company, alleging an unlawful conspiracy. M had also previously brought proceedings in Greece against the third to seventh applicants, seeking to make them and others liable for the unpaid judgment debt by the application of Greek law on the basis that the first applicant company, although registered in Lebanon, had its seat in Greece so that, according to Greek law, the company should have complied with various registration formalities, and had not, with the result that those who had carried on its business were to be treated as partners or quasi-partners and were responsible for its debts, and in particular for the judgment debt owed to M. The third to seventh applicants had submitted to the jurisdiction of the Greek court, but all the applicants undertook to submit to the jurisdiction of the Greek court, both in respect of the Greek action as presently constituted, and, if the result of the application was that the proceedings were recommenced in Greece by M and consolidated with the Greek action, in respect of such consolidated proceedings.
(1) The English and Greek proceedings did not involve the same cause of action for the purposes of art.27 since the rule of law relied on was materially different in the two actions, Owners of Cargo Lately Laden on Board the Tatry v Owners of the Maciej Rataj (C-406/92) (1999) QB 515 ECJ followed. In the Greek action it was sought to make the third to seventh applicants and others personally liable for the debts of the first applicant, in particular for the judgment debt. In the conspiracy action it was sought to establish that the applicants were parties to a conspiracy whose purpose was to cause loss to M, including taking every possible step to deprive him of the opportunity to recover any part of the judgment debt. Nor did the actions have the same aim or object: the aim of the Greek action, albeit through the route of corporate obligations, was to cause the principals of the company to be personally liable for the company's debts, while the conspiracy action sought the recovery of loss caused by unlawful acts, Sarrio SA v Kuwait Investment Authority (1999) 1 AC 32 HL and Haji-Ioannou v Frangos (1999) 2 All ER (Comm) 865 CA (Civ Div) considered (see paras 27-31 of judgment). (2) In applying art.28 the court had to consider, among other things, the extent of the relatedness and the risk of mutually irreconcilable decisions, the stage reached in each set of proceedings and the proximity of the courts to the subject-matter of the case, Tatry, Sarrio and Owens Bank Ltd v Bracco (C-129/92) (1994) ECR I-117 AGO considered. The overlap between the two sets of proceedings was such as to lead to a material risk of inconsistent or conflicting decisions. There was thus a presumption in favour of staying, pending consolidation or otherwise, or dismissing the second action. The proper law of the alleged conspiracy was not a determinative or even significant factor in the decision-making process. It was not expedient to decline jurisdiction under art.28(2) because consolidation of the conspiracy action with the Greek proceedings was not a sensible course. The proper course was to prevent the two proceedings continuing in tandem, and to stay the English conspiracy action under art.28(1), as a related action in the court second seised (paras 38-43, 49-57).
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