Athena Capital Fund Sicav-Fis S.C.A. & Ors. v Secretariat of State for the Holy See

A case-management stay is governed by the single question whether it is in the interests of justice. A stay pending foreign proceedings will ordinarily require a powerful, exceptional reason. An exclusive English jurisdiction clause and the jurisdictional scheme in the Judgments Regulation are weighty factors against a stay.

Negative declarations require utility, assessed pragmatically as a matter of discretion. A party which has positively asserted in criminal proceedings that it is the victim of wrongdoing and has sought compensation is not neutral. Parallel foreign criminal proceedings do not, without more, justify preventing an English civil claim from proceeding in the parties’ chosen forum.

The appellants sought wide declarations that they bore no civil liability to the Secretariat concerning the sale of a London property. The Framework Agreement and share purchase agreement selected English law and the exclusive jurisdiction of the English courts.

The Secretariat joined criminal proceedings in the Vatican City State as a parte civile, alleging that it was an injured party and seeking compensation from Mr Mincione and others. The Commercial Court held that the Secretariat was neutral, that the declarations presently lacked utility, and stayed the English claim despite finding that it was justiciable and within the English court’s exclusive jurisdiction: [2021] EWHC 3166 (Comm).

The appeal concerned whether that stay was justified.

1. Appeal allowed. Lord Justice Males, with whom Lord Justice Birss and Lord Justice Peter Jackson agreed, set aside the case-management stay.

2. The power to stay proceedings under section 49(3) of the Senior Courts Act 1981 is broad. The governing question is whether a stay is in the interests of justice. Although stays pending foreign proceedings will only rarely be justified, “rare and compelling circumstances” is not a separate legal test. Access to justice, Article 6 ECHR, the exclusive English jurisdiction clauses, and the allocation of jurisdiction under the Judgments Regulation were powerful factors against a stay.

3. The court accepted the established approach to negative declarations. Their grant is discretionary and depends upon practical utility. They should be scrutinised carefully because they reverse the usual procedural roles, but are available where they assist justice. A real civil dispute may exist even where related criminal proceedings are pending elsewhere.

4. The judge’s essential finding that the Secretariat was neutral was untenable. By electing to join the Vatican criminal proceedings as a parte civile, the Secretariat had positively asserted that it was an injured and damaged party, alleged that it had suffered loss through the defendants’ conduct, sought full compensation, and wished the charges to be pursued. That position was inconsistent with neutrality. It was also incorrect to treat the Secretariat as unable fairly to answer the English claim.

5. There was therefore no compelling reason to stay a justiciable claim within the English court’s exclusive jurisdiction. The fact that proceedings concerning related subject matter would continue in the Vatican did not displace the parties’ selected English forum. The Commercial Court could manage the claim and narrow the numerous declarations sought, without the Court of Appeal expressing any view on their merits.

• Court of Appeal (Civil Division) Allowed the appeal and set aside the case-management stay: [2022] EWCA Civ 1051.
• High Court, Commercial Court Found that the English court had exclusive jurisdiction over most claims, but stayed the proceedings on case-management grounds: [2021] EWHC 3166 (Comm).