FKI Engineering Ltd & Anor v Dewind Holdings Ltd & Anor

For jurisdiction under Article 6(1) of the Judgments Regulation, claims must be assessed objectively as at their institution. The question is whether they are so closely connected that it is expedient to hear them together to avoid a risk of irreconcilable judgments. A broad common-sense approach is required. The risk may arise from conflicting findings of fact or law.

A claim can provide the necessary anchor for jurisdiction if it raises a real issue to be tried. Declaratory claims are not premature merely because related foreign proceedings are pending where the declarations determine issues arising in those proceedings. Article 22(2) applies only where proceedings are principally concerned with the validity of a decision of a company organ, rather than contractual claims.

FKI Engineering Ltd and FKI plc brought claims arising from the sale of a German wind-turbine company to Dewind Holdings Ltd. Dewind GmbH, the German subsidiary, sought a declaration that the English court had no jurisdiction over claims concerning threatened German proceedings and applied to set aside service and dismiss the action.

The claimants relied on Article 6(1) of Council Regulation (EC) 44/2001, using the claims against Dewind Holdings as the anchor claims. Dewind GmbH relied on Article 22(2), contending that the German claims concerned the validity of decisions of company organs. The issues were whether Article 22(2) applied, whether the declaratory claims were premature, and whether the anchor claim satisfied the merits threshold.

1. Application dismissed. The court retained jurisdiction over the claims against Dewind GmbH.
2. Article 22(2) did not confer exclusive German jurisdiction. Applying the substance or principal concern test, the German claims were principally contractual claims under Capital Reserve Agreements. They did not principally concern the validity of a decision of an organ of Dewind GmbH.
3. Article 6(1) required application of the Kalfelis test: whether, at the time proceedings were instituted, the claims were so closely connected that it was expedient to hear and determine them together to avoid irreconcilable judgments. The assessment was objective. A broad common-sense approach was appropriate, without over-sophisticated analysis.
4. The claimants could rely on the contingent claim against Dewind Holdings as the anchor claim. The claim was not premature. The declarations were not dependent on the outcome of the German proceedings, since the relevant issues would be determined in England.
5. The merits threshold was whether the claimants had shown a real issue to be tried. The financial-information claim raised several genuinely triable issues, including the scope of the information obligation, the alleged claim by Dewind GmbH, the treatment of the alleged debt in the completion accounts, causation, and the possible revival of earlier indebtedness.
6. The expert-determination issue was not pursued. The court nevertheless noted that a determination stated to be final and binding could be impeached for fraud, bias or mistake, with mistake meaning departure from the expert’s instructions.
7. Viewed cumulatively, the claims were sufficiently connected, several German issues might require determination in England, and the risk of irreconcilable judgments was manifest.