BAT Caribbean S.A. & Ors v PHP Tobacco Carib SARL & Ors

For an exclusive jurisdiction agreement under Article 25 of Regulation (EU) No 1215/2012, the parties’ consensus must be clearly and precisely demonstrated. Correspondence agreeing to accept service for a joinder application or interlocutory hearing does not confer substantive or exclusive jurisdiction where it preserves the proposed parties’ right to contest jurisdiction. Acceptance of service may simply avoid the cost and delay of service out of the jurisdiction. It does not waive arguments that proceedings should be stayed under Article 29. Without a valid exclusive jurisdiction agreement, the ordinary first-seised rule applies.

BAT Caribbean SA appealed against an order of Andrew Baker J concerning its proposed Part 20 claims against PHP Trading SA and SODIPAM SARL. The claims arose from an alleged VAT agreement connected with a tobacco distribution arrangement. Proceedings involving the same claims had been commenced in Martinique, which was the court first seised.

The parties’ solicitors had agreed that service of the joinder application and, conditionally, the substantive claim could be accepted within the jurisdiction. The correspondence expressly preserved PHP Trading and SODIPAM’s ability to contest the English court’s jurisdiction. The judge held that the correspondence was not an exclusive jurisdiction agreement under Article 25 of Regulation (EU) No 1215/2012 and stayed the claims. The central issue on appeal was whether that conclusion was wrong.

Disposition

1. The appeal was dismissed. The arrangements made in August 2016 did not constitute an exclusive jurisdiction agreement in favour of the English courts.
2. Article 25 of Regulation (EU) No 1215/2012 requires the parties’ consensus as to jurisdiction to be clearly and precisely demonstrated. The court adopted the principles reflected in Salotti v RÜ WA Polstereimaschienen [1976] ECR 1831, Trasporti Castelletti v Hugo Trumpy SpA [1999] ECR I-1597, Antonio Gramsci Shipping Corp. v Recoletos Ltd. [2013] EWCA Civ 730 and Aeroflot v Berezovsky [2013] EWCA Civ 784. Article 25 requires consensus in fact, although a legally binding contract is not necessary.
3. The formal writing requirement does not require a formal written contract or a single document. That requirement could be satisfied by correspondence, consistently with 7E v Vertex [2007] EWCA Civ 140. The decisive question was whether the correspondence showed a clear and precise agreement conferring jurisdiction.
4. It did not. The correspondence focused on joinder, service and the conduct of the case management hearing. It contained no clear intention by PHP Trading or SODIPAM to confer substantive jurisdiction on the English court. Their express reservation that they could contest jurisdiction in precisely the same way as if service had occurred abroad contradicted the alleged exclusive jurisdiction agreement.
5. Acceptance of service was intended to avoid the delay and cost of service out of the jurisdiction. It did not abandon jurisdictional objections or arguments concerning a stay. The reservation was not to be given a narrow meaning.
6. Because there was no Article 25 exclusive jurisdiction agreement, the exception in Article 31(2) was unavailable. The ordinary rule in Article 29 applied: the English court, being other than the court first seised, was entitled and required to stay the Additional Claim. If the French court declined jurisdiction, BAT Caribbean could apply for the stay to be lifted, without needing service out of the jurisdiction.

1. Court of Appeal (Civil Division): dismissed the appeal and upheld the stay of the Additional Claim. [2017] EWCA Civ 1131.
2. High Court of Justice, Queen’s Bench Division, Commercial Court: held that the August 2016 correspondence was not an exclusive jurisdiction agreement under Article 25 and stayed the Additional Claim because the Martinique proceedings were first seised. [2016] EWHC 3377 (Comm).