AMT Futures Ltd v Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbH

Article 5(3) of the Judgments Regulation is a derogation from the defendant’s domicile rule and must be interpreted restrictively. In economic-loss cases, jurisdiction generally lies where the harmful event directly produced its effects on the immediate victim and where the original damage was manifested, rather than where consequential financial loss is felt.

However, where a claimant is deprived of a contractual benefit, the damage may occur where that benefit ought to have been enjoyed. This includes the loss of protection provided by an exclusive jurisdiction clause. The place of funding litigation expenses or the claimant’s domicile will ordinarily be insufficient.

AMT, an English financial-services company, sued MMGR, a German law firm, alleging that MMGR induced former clients to breach exclusive English jurisdiction and governing-law clauses by bringing tort claims against AMT in Germany.

MMGR challenged jurisdiction under Article 5(3) of the Judgments Regulation. AMT relied principally on the alleged loss in England of the contractual benefit of being sued there, and alternatively on payments made from England to fund settlements and litigation expenses.

MMGR also argued that the jurisdiction clauses were unenforceable because the former clients were consumers. The issues were whether England was a place where the damage occurred and whether AMT had a sufficiently arguable case that the clauses were valid and enforceable.

1. Application dismissed. AMT established a good arguable case that the German proceedings breached the former clients’ exclusive English jurisdiction and governing-law clauses.
2. Article 5(3) is a special jurisdiction derogating from the general rule in Article 2 and must be interpreted restrictively. It requires a particularly close connection between the dispute and the proposed forum, consistent with certainty and the sound administration of justice.
3. In economic-loss cases, the relevant damage is the original, direct and immediate damage suffered by the direct victim. Consequential financial loss felt at the claimant’s domicile, or in the place from which expenditure is funded, is ordinarily insufficient.
4. The distinction between loss of money or goods and non-receipt of money or goods is material. Where a claimant is deprived of a contractual benefit, the damage is likely to occur where the benefit should have been received. That principle applies to the benefit of an exclusive jurisdiction clause.
5. The clause gave AMT a positive right to have disputes brought in England, together with the protection and enforcement of its substantive English-law rights by the English courts. The induced breach deprived AMT of that protection in England. England was therefore the place where the damage occurred for Article 5(3) purposes.
6. The alternative losses did not assist AMT. Litigation activity, settlement liabilities, court fees and German legal expenses arose and were incurred in Germany. Funding those expenses from England was only a consequential financial effect. Wasted management time and lost future business were likewise remote consequences.
7. The consumer argument could not defeat jurisdiction at the merits threshold. Whether each former client was a consumer was fact-sensitive, and MMGR had not shown that all 70 clients satisfied the definition. Even if they were consumers, the effect of the Unfair Terms in Consumer Contracts Regulations 1999 and Articles 15 to 23 of the Judgments Regulation raised serious issues to be tried rather than demonstrating that AMT’s claim was fanciful.