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

For jurisdiction under article 5(3) of Council Regulation No 44/2001, the court must identify where the event directly produced the initial, jurisdictionally significant harm. Consequential financial effects felt at the claimant’s domicile do not suffice.

Where a defendant allegedly induces proceedings abroad in breach of an exclusive English jurisdiction clause, the relevant harm does not occur in England merely because the claimant loses the contractual benefit of being sued only there. If the failure to commence English proceedings causes no loss, while the foreign proceedings generate costs, settlements and other liabilities, the damage occurs in the foreign state. The Regulation has an autonomous European meaning. Neither the governing law nor a national requirement for completion of the tort determines jurisdiction.

AMT Futures Ltd, an English execution-only derivatives broker, contracted with clients on terms providing for English law and the exclusive jurisdiction of the English courts. About 70 former clients, represented by the German law firm MMGR, brought delictual or quasi-delictual claims against AMTF in Germany.

AMTF sued MMGR in England for inducing breaches of the choice-of-law and jurisdiction clauses. It sought damages for settlements, legal expenses, management time and lost profits, together with injunctive relief. Popplewell J held in [2014] EWHC 1085 (COMM) that the English courts had jurisdiction because AMTF had lost in England the benefit of being sued only there.

MMGR appealed. The central issue was whether England was the place where the harmful event occurred for the purposes of article 5(3) of Council Regulation No 44/2001.

1. The appeal was allowed unanimously. The direct and initial damage occurred in Germany. The English courts therefore lacked jurisdiction under article 5(3) of Council Regulation No 44/2001.

2. Article 5(3) requires the court to identify the place where the event directly produced its harmful effects upon the immediate victim. The inquiry concerns the initial or jurisdictionally significant damage, rather than consequential financial effects or the place where the claimant ultimately bears expenditure. The Regulation has an autonomous European meaning and cannot be construed by reference to the domestic requirements for completion of a particular tort.

3. The failure to commence proceedings in England did not itself cause AMTF any loss. The loss arose because proceedings were commenced in Germany, requiring AMTF to engage German lawyers, incur litigation expenses, enter settlements and make payments there. Describing the damage as the loss of the contractual benefit of being sued only in England did not alter where the harm occurred.

4. Dolphin Maritime & Aviation Services Ltd v Sveriges Angfartygs Assurans Forening [2009] EWHC 716 was distinguishable. There, non-payment in England was itself the sole, direct and immediate cause of the claimant’s non-receipt of money. Here, omission to sue in England caused no loss independently of the German proceedings.

5. The governing law and exclusive English jurisdiction clause could make proceedings in England foreseeable, but neither determined jurisdiction over the ancillary tort claim. The close-connection and sound-administration considerations underlying article 5 do not create a forum conveniens inquiry.

6. It was unnecessary to decide MMGR’s alternative EU-law objections or whether any English recovery would be territorially limited. Christopher Clarke LJ nevertheless considered the additional EU-law ground apparently unfounded. An injunction directed against MMGR’s inducement would not restrain the German claimants themselves, and a damages claim for inducing breach was not necessarily a collateral attack upon German jurisdiction or judgments. Tomlinson and Laws LJJ agreed with the disposition and reasoning.

1. Court of Appeal (Civil Division): By [2015] EWCA Civ 143, unanimously allowed MMGR’s appeal and held that the English courts lacked jurisdiction under article 5(3) of Council Regulation No 44/2001.
2. Queen’s Bench Division: Popplewell J held in [2014] EWHC 1085 (COMM) that the English courts had jurisdiction because the relevant harm was the loss in England of the benefit conferred by the exclusive English jurisdiction clauses.