Mazur Media Ltd & Anor v Mazur Media GmbH & Ors

A jurisdiction agreement under article 23(1) of the Council Regulation (EC) No 44/2001 gives the chosen court jurisdiction over contractual claims and appropriate ancillary relief. It does not bring a related conversion claim within article 5(3) where the alleged tort is indistinguishable from the contractual breach.

For article 5(3), the harmful event occurs where the direct damage or the event causing it occurs. Consequential financial loss felt elsewhere is insufficient. A contractual right to possession supports conversion only where it was granted by a person having the possessory title needed to confer that right.

Foreign insolvency proceedings do not engage section 130(2) of the Insolvency Act 1986. Although the court retains an inherent power to stay proceedings, exceptionally strong grounds are required where jurisdiction arises under the Regulation, particularly under an exclusive jurisdiction clause.

Two English companies in administrative receivership claimed rights to master sound-recording tapes held in Germany. One claimant relied on a share sale agreement with the former shareholder of a German company. The other relied on an assignment by that company of worldwide copyright and an alleged implied transfer of ownership of the physical tapes. Both agreements contained exclusive English jurisdiction clauses.

The defendants sought to set aside service on two defendants, to limit the claims against the contracting defendants and to stay the proceedings against the German company because it was in German insolvency proceedings. The central issues were the scope of jurisdiction under articles 5(3) and 23(1) of the Council Regulation (EC) No 44/2001, the claimants’ standing in conversion, and the English court’s power to stay claims affected by foreign insolvency proceedings.

1. The defendants’ applications succeeded in part, but the application to stay the claims within English jurisdiction was refused. The court had jurisdiction over Apex’s contractual claim against Mrs Mazur for damages and delivery up under the share sale agreement. It also had jurisdiction over Mazur Ltd’s contractual claim against Mazur GmbH for title and delivery up under the assignment, subject to later determination of whether the alleged implied term was arguable.

2. Article 23(1) of the Council Regulation (EC) No 44/2001 conferred exclusive jurisdiction over disputes within the contractual jurisdiction clauses. Delivery up could be ordered where ancillary to a contractual claim properly before the court. The share sale agreement neither transferred nor could transfer Mazur GmbH’s ownership of the tapes to Apex. Apex therefore had no basis for a declaration of title.

3. Apex also lacked standing in conversion. A contractual right to immediate possession can support conversion only where the agreement is made by a person whose own possessory title entitles that person to grant the right. Mrs Mazur contracted as shareholder, had no pleaded possession or authority from Mazur GmbH, and could not confer upon Apex the immediate possessory right required for conversion.

4. The court had no jurisdiction over the conversion claims under article 5(3). A claim which was precisely the same as an alleged contractual breach was related to a contract and fell outside the autonomous tort jurisdiction. In any event, the alleged detention and use occurred in Germany. Failure to deliver in England and consequential financial loss suffered there did not make England the place of the harmful event. The claims for declarations and delivery up against the non-contracting defendants also lacked a jurisdictional basis.

5. Section 130(2) of the Insolvency Act 1986 can apply when an English court winds up a foreign company, but it does not apply directly or by analogy to foreign insolvency proceedings. The court nevertheless has an inherent power, reinforced by section 49(3) of the Supreme Court Act 1981, to stay proceedings to prevent injustice.

6. A stay in favour of insolvency proceedings in another Regulation State requires exceptionally strong grounds, especially where the parties selected the English court exclusively. Cost, the limited value of a damages award, the availability of a foreign forum, duplication and the risk of inconsistent decisions were ordinary forum conveniens considerations. They did not justify a stay.

not stated in the judgment.