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

A preliminary reference under Article 267 of the Treaty on the Functioning of the European Union requires a jurisdictional necessity condition to be satisfied. The question must be necessary for the referring court’s operative determination of the issue before it. It is insufficient that the question would improve the court’s reasoning, assist a possible appeal or promote procedural convenience. An unresolved independent ground that could dispose of the matter makes the reference premature.

Once necessity exists, the timing of a reference is discretionary. The prospect that Brexit might deprive a later appellate court of referral powers cannot itself establish necessity. The Court of Appeal may set aside a referral order under domestic law, although the reference remains effective before the CJEU unless withdrawn or amended by the referring court.

The Club appealed against an order made by Butcher J during its challenge to the registration in England of a Spanish judgment under the Brussels I Regulation. After a seven-day trial, the Judge referred three questions concerning the interpretation of the Regulation to the CJEU under Article 267 before deciding a separate human-rights public-policy ground.

The Club argued that the reference was outside the Judge’s jurisdiction because the questions might become unnecessary if the human-rights ground succeeded. It also argued that the anticipated loss of referral powers after IP completion day could not justify an early reference. The central issues were whether the Article 267 necessity condition had been met and, if not, whether the Court of Appeal could set aside the referral and remit the question of withdrawal to the Judge.

The appeal was allowed. Lord Justice Phillips delivered the judgment, with Lord Justices Popplewell and Males agreeing.

1. Necessity. Article 267 imposes a jurisdictional condition precedent, distinct from the later discretion whether to refer. Following H.P. Bulmer Ltd v J. Bollinger SA [1974] Ch 401, the question must be conclusive of an issue which the referring court has to determine. “Judgment” means the operative order or determination, not the reasons supporting it. A question is therefore not necessary merely because it must be addressed in a fully reasoned judgment or might arise on a future appeal.
2. Application. The Judge had heard all issues together and there was no order for a preliminary issue. The unresolved human-rights ground could independently dispose of the Club’s appeal. Until that ground had been decided against the Club, the Brussels I questions might be academic and were not necessary to enable the Judge to give judgment. Multiple questions may be cumulatively conclusive, but that did not assist here.
3. Discretion and timing. Once necessity is established, the court may consider procedural organisation, efficiency and whether the issue may later become academic. The possibility that an appellate court might lose referral powers after Brexit could not satisfy the threshold. The approach adopted in Eli Lilly v Genentech Inc. [2019] EWHC 388 (Pat) had in any event been rejected as hypothetical by the CJEU.
4. Appellate jurisdiction and order. Under domestic law the Court of Appeal had its usual powers, including power to set aside the referral order. Cartesio Oktato es Szolgaltato bt [2009] Ch 354 did not prevent that remedy, although setting aside the order did not automatically terminate the reference as a matter of EU law. The referral order was set aside, and the question whether the Judge should withdraw the reference was remitted to him under rule 52.20(2)(b) of the Civil Procedure Rules 1998.

1. Court of Appeal (Civil Division): allowed the appeal, set aside Butcher J’s order referring questions to the CJEU, and remitted the question of withdrawal.
2. High Court, Commercial Court: Butcher J made the referral order during the Club’s appeal against registration of the Spanish judgment; the decision is reported at [2020] EWHC 3540 (Comm).