Grovit v De Nederlandsche Bank NV & Ors

The expression civil and commercial matters in the Council Regulation (EC) 44/2001 has an autonomous meaning. The court must examine whether a public authority acted in the exercise of public powers, considering the substance and public-law setting of the claim rather than its private-law form. A regulatory act remains outside the Regulation's scope when it contains an incidental defamatory element. The description of proceedings as libel does not, by itself, make them civil and commercial matters.

The claimants brought libel proceedings in England against a Dutch central bank and two senior officers concerning a letter faxed to London. The letter stated an intention to refuse registration of a money transaction office and contained allegations about the claimants' trustworthiness. The defendants claimed immunity under section 14(2) of the State Immunity Act 1978 and common law. The claimants argued that the Council Regulation (EC) 44/2001 applied because the proceedings were civil and commercial matters.

Tugendhat J rejected the arguments, declared that the court had no jurisdiction and ordered the claim to be struck out. Permission to appeal was granted on the state-immunity issue and on whether the proceedings fell within Article 1 of the Regulation. The central issue was whether the allegedly defamatory letter was an act of public authority exercising public powers.

1. Appeal dismissed. The court considered the civil-and-commercial issue first because both permitted grounds would need to succeed to reverse the judgment and this was the convenient course. After deciding that issue, it expressly declined to determine state immunity under section 14(2) of the State Immunity Act 1978 or at common law.
2. Article 1 of the Council Regulation (EC) 44/2001 has an autonomous meaning. The inquiry is not confined to the private-law form of the claim. It requires consideration of whether the relevant public authority acted as such or as a private individual, and whether the defendant's position and obligations arose from public law. The court relied on the public-powers distinction in Sonntag v Waidmann [1993] ECR 1-1963 and Lechouritou v Federal Republic of Germany Case C-292/05.
3. The Bank and its officers were exercising public-law powers. The Bank performed governmental regulatory and supervisory functions delegated by the Dutch Government to protect the integrity of the Netherlands' financial system. The letter refusing registration was sent in performance of those functions. A challenge to its lawfulness under domestic law would have been by judicial review, not a private-law claim.
4. The fact that the letter allegedly contained defamatory material did not deprive it of its essentially public-law character. The proceedings therefore did not fall within the Regulation's civil-and-commercial scope. The High Court's decision was upheld and the appeal was dismissed.

• Court of Appeal (Civil Division) — [2007] EWCA Civ 953: dismissed the appeal and upheld the decision that the proceedings were outside the scope of the Council Regulation (EC) 44/2001.
• High Court of Justice, Queen's Bench Division — Tugendhat J rejected the claimants' arguments, declared that the court had no jurisdiction and ordered the claim to be struck out.