The London Steam-Ship Owners' Mutual Insurance v The Kingdom of Spain

For the purposes of Article 267 TEU, a national court may refer an EU-law question where deciding that question is necessary to give judgment. A ruling from the CJEU need not itself be necessary. The question need only be a necessary step in deciding an issue which is critical to the judgment.

Where a non-final national court is considering a reference, it should ordinarily refer a question which is critical to its decision unless it can resolve the issue with complete confidence. Real doubt as to the likely interpretation by the CJEU supports a reference. The court may refuse a proposed question which is primarily fact-sensitive and unlikely to yield useful EU-law guidance.

The Club appealed against an ex parte registration order concerning enforcement in England of a Spanish judgment arising from the loss of the Prestige. The Spanish judgment imposed liability on The Club, whereas an earlier English order enforced an arbitration award under which The Club was not liable to Spain.

The dispute raised issues under Articles 34(1) and 34(3) of Regulation (EC) 44/2001, including irreconcilability with the English arbitration-related order, res judicata and public policy. Spain applied for a preliminary reference under Article 267 TEU. The central issue was whether the questions were necessary and suitable for reference, and whether the court could resolve them with complete confidence.

1. Reference jurisdiction. The court had an ordinary right of appeal and was not a court against whose decision there was no judicial remedy. The mandatory final-court limb of Article 267 TEU therefore did not apply. The reference fell within the discretionary preceding paragraph.
2. Jurisdictional threshold. A reference was permissible where the question concerned interpretation of the Treaties or an EU institutional act and was necessary for the national court to give judgment. The question need not be one for which a CJEU ruling was itself necessary. The questions were sufficiently material because they were in issue, had been argued and would have to be decided in a properly reasoned judgment.
3. Criticality. The relevant test was whether the question was critical to the decision, or a necessary step towards it. The earlier formulation that the point had to be substantially conclusive had been modified or explained by later authority. The Article 34(3) questions and the res judicata issue under Article 34(1) met that test, even though the human-rights aspect of Article 34(1) might independently determine the appeal.
4. Degree of doubt. A non-final national court should ordinarily refer an EU-law issue critical to its decision unless it can resolve it with complete confidence. That required complete confidence as to how the CJEU would decide the issue. The court lacked that confidence concerning whether a judgment under section 66 of the Arbitration Act 1996 was a relevant home judgment, whether the arbitration exception affected that question, and whether inconsistency with an award or related domestic judgment could engage public policy under Article 34(1).
5. The questions were important, the logistical objections were not weighty, and the court considered that a reference would not prejudice either party. A proposed human-rights question was not suitable because it was primarily one of English public policy and too fact-sensitive to admit useful CJEU guidance.
6. The court ordered a reference to the CJEU. The parties were directed to collaborate on its formulation in accordance with CPR Part 68 and the relevant practice direction.

The judgment was a first-instance decision on Spain’s application for a preliminary reference during the trial of The Club’s appeal against the registration order. The judgment itself records that the registration order had been made by Master Cook on 28 May 2019.