Catalyst Investment Group Ltd v Lewinsohn & Ors

Where jurisdiction is properly founded on Article 2 of Council Regulation (EC) No 44/2001, an EU court cannot stay or decline jurisdiction on forum conveniens grounds merely because parallel proceedings are pending in a non-EU country. Article 27 cannot be applied reflexively to import a discretionary forum conveniens jurisdiction. Its mechanism operates between courts bound by the Regulation and is based on procedural priority, not comparative convenience.

The Regulation does not prevent a stay on distinct grounds, such as giving effect to a valid exclusive jurisdiction agreement or preventing abuse of process. On the facts, Utah was not clearly the more appropriate forum in any event.

Five applications were heard in three related claims. The defendants sought stays under CPR Part 11 in favour of proceedings pending in Utah, relying principally on forum conveniens and lis alibi pendens.

The claims concerned alleged misrepresentations relating to investment in Eneco and alleged breaches of duties owed by Max Lewinsohn as collateral agent for noteholders in relation to worldwide intellectual property rights. The parties accepted that the Regulation applied and that jurisdiction over the relevant defendants was founded on Article 2.

The central questions were whether the court could stay proceedings properly brought under Article 2 because corresponding proceedings were pending in a non-EU country, and, if so, whether Utah was the natural and appropriate forum.

1. Applications dismissed. The court granted the unopposed application to join the noteholders’ assignors as co-claimants.
2. Article 2 of Council Regulation (EC) No 44/2001 is mandatory, subject only to exceptions provided by the Regulation. Following Owusu v Jackson [2005] QB 801, a court cannot decline jurisdiction under Article 2 on ordinary forum non conveniens grounds.
3. The existence of parallel proceedings in a non-EU country does not alter that conclusion. Article 27 establishes a compulsory order of priority between courts of Member States. It does not confer a discretionary power to decide which forum is more convenient or appropriate. Applying it reflexively to proceedings in a non-EU country would undermine predictability and uniformity because the foreign court would determine jurisdiction under its own domestic law.
4. The court accepted that the Regulation does not exclude distinct common-law powers, including a stay to restrain vexatious or oppressive proceedings or an abuse of process. A mere lis alibi pendens would not ordinarily establish abuse. Nor did the reasoning concerning exclusive jurisdiction agreements or the special subject-matter provisions of the Regulation justify extending Article 27 by analogy.
5. Alternatively, applying The Spiliada [1987] AC 460, Utah was not shown to be clearly or distinctly the more appropriate forum. The principal parties and witnesses were connected with England, the relevant representations were made there, English law was likely to apply to the declaratory claims, and the Utah proceedings were not well advanced. Although Utah law was relevant to the noteholder dispute, that issue was narrow and could be addressed by expert evidence in England.