Starlight Shipping Co v Allianz Marine & Aviation Versicherungs AG & Ors

Under Article 27 of the Regulation 44/2001 of the Council of the European Union, a court second seised must stay proceedings involving the same cause of action and parties. The test compares the substance and object of the pleaded claims, including whether they are mirror images; it disregards defences. A prior insurance claim does not make an English court first seised of later, distinct tort claims. Claims seeking indemnity for pursuing those foreign claims are parasitic on the underlying settlement issue. Applications under Articles 27 and 28 are not jurisdiction challenges and remain available after an acknowledgment of service and defence. Permission to appeal keeps proceedings pending for these purposes.

The vessel Alexandros T became a total loss. Its owner and associated parties brought insurance proceedings in England. Those proceedings were settled by agreements providing for payment without interest or costs and were stayed by Tomlin orders.

More than three years later, the owner and others commenced proceedings in Greece alleging insurer misconduct, false evidence, reputational damage and consequential losses. The insurers sought declarations and indemnities in England, relying on the settlement agreements and exclusive jurisdiction clauses. Burton J granted summary judgment and refused stays under Article 28 of the Regulation.

The appeals concerned whether the English proceedings should be stayed under Articles 27 or 28, whether the English or Greek court was first seised, and whether the summary judgments should stand.

1. Article 27 and the disposition. Longmore LJ, with whom Toulson LJ and Rimer LJ agreed, held that the English applications and actions had to be stayed under Article 27. The summary judgments were therefore set aside. The Article 28 issues became academic, and the court expressed no view on the construction of the settlement agreements.

2. An application under Articles 27 or 28 is not a challenge to jurisdiction. It accepts that the court may have jurisdiction but asks it not to exercise that jurisdiction because proceedings are pending elsewhere. The provisions of Civil Procedure Rules CPR 11 concerning jurisdictional challenges did not prevent an application after an acknowledgment of service and defence.

3. The court could entertain the Article 27 point for the first time on appeal. English procedural law gives a discretion to hear a new point where irremediable prejudice is absent. That discretion was exercised because Article 27 makes a stay mandatory and requires the court to act of its own motion. Permission to appeal also meant that the first-instance judgment remained appealable and the proceedings remained pending.

4. For Article 27, the same cause of action depends on the substance and object of the proceedings. The court examines the pleaded complaints and relief, not defences or intended future defences. A claim for a declaration of non-liability may be the mirror image of a claim for damages. Here, the English assertion that the settlement agreements barred the Greek claims corresponded sufficiently to the central Greek assertion of liability. Claims for indemnity, damages and costs were parasitic on that issue.

5. The original English insurance claim did not make England first seised of the later Greek tort or delict claims once contractual claims were abandoned. The rules of seisin were intended to be simple and mechanistic. The abuse-of-process principle in Henderson v Henderson could not alter which court was first seised. The English applications were later than the Greek proceedings, and the Greek court was first seised of the relevant causes of action.

6. The proceedings were, in substance, between the same parties for Article 27. The original English action could not, in any event, have first seised claims belonging to additional Greek claimants who had never been parties to it.

7. Longmore LJ’s alternative Article 28 analysis treated that provision as concerned with related actions rather than individual issues or causes of action. He considered the English and Greek actions related and England first seised. Toulson LJ and Rimer LJ agreed that the actions appeared related but reserved their views on whether the stayed English action remained pending. Article 28 was unnecessary to the result.

8. The appellants recovered the costs of the appeal, jointly and severally against the CMI and LMI insurers, with an interim payment of £300,000. Permission to appeal to the Supreme Court was refused. The English proceedings were stayed until further order.

1. Court of Appeal (Civil Division): Allowed the appeal under Article 27, stayed the English applications and actions, and set aside the summary judgments.
2. High Court of Justice, Queen’s Bench Division, Commercial Court: Burton J granted summary judgment and refused the applications for stays: [2011] EWHC 3381 (Comm).