Mastermelt Ltd v Siegfried Evionnaz SA

Under Article 27 of the 2007 Lugano Convention, the court first seised ordinarily determines jurisdiction, even where the proceedings in the other state concern an exclusive jurisdiction clause. A later amendment to the Recast Brussels Regulation cannot, without amendment to the Convention or a sufficient legal basis, be read into Article 27 by analogy. A foreign court’s procedural decision refusing a stay does not bind the English court on the interpretation of the Convention where the foreign court has not determined the validity of the jurisdiction clause.

For Article 23, consent to an exclusive jurisdiction clause must be clearly and precisely established in, or evidenced by, writing. The requirement is applied flexibly, and the writing need not be the same document as the clause. Mere contractual performance, without more, is insufficient. On the facts, the purchase orders, subsequent communications and performance established a good arguable case that the clause was incorporated.

Mastermelt, an English precious-metal reclamation company, sought negative declaratory relief in England against Siegfried, a Swiss pharmaceutical manufacturer. Siegfried’s standard terms contained Swiss governing-law and exclusive jurisdiction clauses. Mastermelt issued first in England, while Siegfried later commenced proceedings in Zurich.

Siegfried applied for the English proceedings to be stayed or set aside. It argued that Article 27 of the 2007 Lugano Convention should be interpreted in line with Article 31.2 of the Recast Brussels Regulation, so that the court chosen by the exclusive jurisdiction clause should determine jurisdiction first. Alternatively, it argued that the clause satisfied Article 23 of the Convention.

The court therefore had to determine whether the Swiss court’s decision refusing a stay was binding, how Article 27 should be interpreted, and whether the contractual documents established the required agreement in writing.

1. Issue 1—Swiss decision and Article 27. The Swiss court had decided only that it should proceed first on jurisdiction. It had not determined the validity of the exclusive jurisdiction clause. The binding-effect principle in Gothaer v Samskip [2013] QB548 concerned recognition of a foreign judgment whose operative decision and necessary ratio determined the validity of a jurisdiction clause. That principle did not extend to the Swiss procedural decision. The court was therefore entitled, and required, to interpret Article 27 for itself.
2. Article 27 retained the rule of strict temporal priority. The Recast Brussels Regulation’s Article 31.2 could not be imported into the Convention merely because the instruments formed a harmonised jurisdictional system. The Convention contained its own amendment procedure. The decision in Gasser v MISAT [2005] 2B1 remained relevant outside the Regulation and had not become obsolete for all purposes. The court therefore rejected the Swiss court’s interpretation and refused to stay the English proceedings pending the Swiss court’s jurisdictional decision.
3. Issue 2—Article 23. Siegfried bore the burden of showing a good arguable case. The question was one of objective analysis of the contemporaneous documents. Article 23 requires not merely a written jurisdiction clause, but agreement to that clause which is in, or evidenced in, writing. The courts adopt a flexible approach to the form of written evidence. It may appear in a document separate from the clause, and later documents may evidence an earlier agreement. However, conduct alone, without written evidence, is insufficient.
4. PO2 objectively operated as a counter-offer incorporating Siegfried’s standard terms. Mastermelt’s communications of 4 January 2018, its decision to proceed, and later statements and invoices referring to the purchase order objectively evidenced acceptance of the purchase order and terms. The terms remained capable of incorporation despite particular arrangements differing from standard provisions.
5. PO3 was even clearer. Mastermelt expressly acknowledged the purchase order after the missing pages were supplied, and the prior dealings reinforced incorporation of the standard terms. Siegfried therefore had at least a good arguable case, and in the court’s view much the better argument, that Article 23.1(a) was satisfied. It was unnecessary to decide Article 23.1(b) or (c). The proceedings were to be dismissed or stayed, with consequential matters to be addressed after further argument.