Lotus Cars Ltd v Marcassus Sport SARL

Under EU Regulation No 1215/2012, lis pendens is assessed by reference to the claims as brought. A possible future defence, set-off or counterclaim cannot ordinarily create the same cause of action for Article 29 purposes.

Actions are related under Article 30 only where they are so closely connected that joint determination is expedient to avoid irreconcilable judgments. An effective contractual no-set-off clause may remove that connection by ensuring that cross-claims will not be litigated in the payment proceedings. Where a stay remains discretionary, the court should consider the contractual jurisdiction clause, the governing law, the stage and likely speed of the proceedings, and the purpose of the parties’ bargain.

Lotus Cars Ltd supplied vehicles and parts to Marcassus Sport SARL under English-law contracts containing a non-exclusive English jurisdiction clause and payment terms requiring payment in full without deduction, withholding or qualification.

After the contractual relationship ended, Marcassus began proceedings in Toulouse seeking damages and contractual penalties. Lotus subsequently issued English proceedings for unpaid invoices. Marcassus applied for a stay under Articles 29 and 30 of EU Regulation No 1215/2012, arguing that the French proceedings involved the same cause of action or related actions.

The court assumed, without deciding, that the Toulouse court was first seised. The central questions were whether the proceedings were lis pendens or related, and, if related, whether a stay should be granted.

1. Article 29. The court proceeded on the assumption that the Toulouse court was first seised, but rejected the lis pendens argument. The claims as presently constituted concerned different causes of action. Following Gantner Electronics GmbH v Basch Exploitatie Maatschappij BV, the court could not take account of a possible future set-off or counterclaim. The objective and automatic nature of Article 29 required comparison of the claims at the outset of the proceedings.
2. Article 30. The related-actions test required a broad common-sense assessment at the time of the stay application, directed to the risk of irreconcilable judgments. The only suggested present overlap was immaterial. The contractual payment provisions were an effective no-set-off clause. The words requiring payment in full without deduction, withholding or qualification were sufficiently clear, even though the word set-off was not used. The separate treatment of taxes, duties and levies reinforced that construction. The court applied the reasoning in Marubeni Corp v Sea Container Ltd, FG Wilson (Engineering) Ltd v John Holt & Company (Liverpool) Ltd and BOC Group plc v Centeon LLC. The present wording materially differed from that in BOC.
3. Because the clause prevented Marcassus from ventilating its cross-claim by way of set-off in the English proceedings, the actions were not sufficiently connected to be related under Article 30.
4. Alternatively, a stay would have been refused in the exercise of discretion. The English court was the appropriate forum to determine the interpretation of an English-law contract, potentially speedily on summary judgment. The parties had also agreed to English jurisdiction. Giving effect to the no-set-off clause was a compelling consideration, since a stay would undermine the contractual bargain. The principles summarised in The Alexandros T and applied in Nomura plc v Banca Monte Dei Paschi SpA supported that conclusion.
5. Marcassus’ application was dismissed under both Articles 29 and 30. Lotus undertook not to claim the invoice sums in the Toulouse proceedings while the English proceedings remained ongoing and unstayed.