Curtis & Anor v Lockheed Martin UK Holdings Ltd

A case-management stay pending related foreign proceedings requires very strong reasons. The defendant must show that the benefits of a stay clearly outweigh the claimant’s disadvantage, or that the resulting prejudice is no more than the interests of justice justify.

A risk of inconsistent decisions may constitute a strong reason, but its weight depends on whether the stay will actually remove or merely reduce that risk. The court must balance that risk against prejudice caused by delay, including delay in resolving the claimant’s substantive claim. A difficulty resulting from a party’s own choice to adopt inconsistent positions carries little weight.

The claimants sought payment of the final tranche of the price for shares sold to the defendant. The defendant alleged breaches of warranties concerning disclosure of contracts and potential litigation relating to the PUBCYS project.

Related proceedings were pending in Turin against Stasys, the acquired company, concerning alleged breaches of the same agreements. The defendant applied for a stay of the material-contracts issues, arguing that the Turin proceedings might avoid inconsistent findings and reduce injustice. The central issue was whether the risk and possible influence of the Turin proceedings justified delaying part of the London action.

1. The defendant’s application for a stay was refused. The principles governing a case-management stay were derived from Reichold v Goldman Sachs [1999] 2 Lloyd’s Rep. 567. A stay of properly commenced English proceedings pending litigation between different parties in another jurisdiction requires very strong reasons, and the benefits must clearly outweigh the claimant’s disadvantage.
2. The risk of inconsistent decisions was a potentially very strong reason. However, the proposed stay would last only until the Turin proceedings ended. The claimants would not be bound by the Turin judgment, which would create no estoppel and would not prevent them from seeking inconsistent findings in London. The stay would therefore reduce, but not eliminate, the risk.
3. The Turin judgment might influence the London proceedings. The English court might follow an Italian court’s statement of Italian law, and factual evidence from Turin might be admissible. Those possibilities did not remove the continuing risk of inconsistent decisions.
4. The defendant’s argument that it and Stasys would be forced to adopt contrary positions was given little weight. Stasys had already taken its position in Turin before the defendant chose its contrary position in London. The resulting difficulty was substantially created by the defendant’s own choice.
5. A stay could delay determination of the claim for two or three years, while the London trial could proceed promptly on other issues. Interest would not necessarily compensate the claimants for the lost opportunity to invest the withheld money. The remaining prejudice from delay was therefore significant.
6. Balancing the factors, the scales were evenly balanced. The benefits of a stay did not clearly outweigh the disadvantage to the claimants, and the delay would cause more prejudice than the interests of justice justified. The application was refused.

Not stated in the judgment.