Gibraltar Residential Properties Ltd v Gibralcon 2004 SA

Ordinary contractual disputes remain civil and commercial matters for the purposes of the Jurisdiction and Judgments Regulation 44/2001, even where one party is subject to insolvency proceedings in another Member State. The insolvency exception does not apply merely because a claim seeks a stay of enforcement or could be resolved within insolvency proceedings. An exclusive jurisdiction clause therefore remains effective unless the proceedings themselves are insolvency or analogous proceedings. The Insolvency Regulation 1346/2000 governs insolvency proceedings, applicable law and their effects, not jurisdiction over separate contractual disputes. The English court may determine the parties’ rights and make declarations, but payment and enforcement must be dealt with through the foreign insolvency proceedings.

Gibraltar Residential Properties Limited brought two contractual claims against Gibralcon 2004 SA arising from a substantial construction project. The contract applied Gibraltar law and conferred exclusive jurisdiction on the courts of England and Wales. Gibralcon had become subject to insolvency proceedings in Spain before either claim began and applied for declarations that the English court lacked jurisdiction.

The claims concerned repayment, adjudication decisions, set-off, termination, extensions of time, damages and the valuation and completion of the works. The central issue was whether the claims fell within the insolvency exception to the Jurisdiction and Judgments Regulation 44/2001, or were governed by the Insolvency Regulation 1346/2000 and Spanish insolvency law.

1. The applications were dismissed. The court had jurisdiction to hear and determine both contractual actions.
2. The claims were civil and commercial matters. They were not proceedings relating to the winding-up of an insolvent company or analogous proceedings under article 1(2)(b) of the Jurisdiction and Judgments Regulation 44/2001. The fact that Gibralcon was insolvent, or that GRPL sought a stay of enforcement of adjudicators’ decisions, did not alter the nature of the disputes.
3. The parties’ exclusive jurisdiction clause engaged article 23. The English courts therefore had exclusive jurisdiction unless a specified exception applied.
4. The Insolvency Regulation 1346/2000 and the Jurisdiction and Judgments Regulation 44/2001 were mutually exclusive codes for jurisdiction. The former was confined to insolvency and analogous proceedings; the latter governed other civil and commercial proceedings. Article 4 of the Insolvency Regulation concerned applicable law and the effects of insolvency, not jurisdiction over separate contractual claims. Article 3 concerned jurisdiction to open insolvency proceedings.
5. Article 11 of the Spanish Insolvency Act confined the international jurisdiction of the Spanish insolvency court to actions founded on insolvency legislation and immediately related to the insolvency proceedings. Jurisdiction over claims between the Spanish debtor and a party domiciled in another Member State was governed by the Jurisdiction and Judgments Regulation 44/2001. In any event, European law prevailed over inconsistent national law.
6. The English court would determine the parties’ contractual rights and any net balance, but would not order payment or enforcement in a manner prejudicing the Spanish insolvency. Any debt due to GRPL would be proved in Spain, and any sum due to Gibralcon would be paid to, or protected for, the Spanish administrators.

First-instance decision. The judgment records no prior appellate decision.