MF Tel Sarl v Visa Europe Ltd

For the purposes of the Rome II Regulation, art 4(1), the relevant place is where direct damage occurs. It is not necessarily where the conduct occurred or where indirect financial consequences are felt. The inquiry is fact-sensitive, especially where the claim concerns non-receipt of money rather than a liability already incurred. A pleaded case that damage occurred in France was not bound to fail merely because transaction processing and intermediary payments occurred in England. Strike out under the Civil Procedure Rules 1998, r 3.4(2)(a), and summary judgment under r 24.2 were inappropriate before the facts had been fully established.

The claimant, a French prepaid-card operator, alleged that the defendant’s payment-processing system failed to apply and report optional issuer fees, causing it not to receive sums due. The claim was pleaded primarily under French law, with English law in the alternative, relying on art 4(1) of the Rome II Regulation. The defendant sought strike out of the French-law elements under CPR r 3.4(2)(a), alternatively summary judgment under CPR r 24.2, and a declaration that English law governed. Earlier proceedings in France had been declined on jurisdictional grounds. The central issue was whether the pleaded case made it inevitable that the damage occurred in England rather than France.

The application was dismissed.

1. Strike out under Civil Procedure Rules 1998, r 3.4(2)(a), requires the pleaded claim to be unwinnable or bound to fail. The hurdle is high. Where the relevant law is uncertain or developing, the court may prefer a trial so that the facts can be found before the law is further developed. The approach in Harris v Bolt Burdon [2000] CP Rep 70 and Hughes v Colin Richards & Co [2004] EWCA Civ 266 supported that conclusion.
2. CPR r 3.4(2)(a) and r 24.2 are technically distinct. Strike out ordinarily proceeds on the pleaded facts and asks whether the claim is unwinnable. Summary judgment permits evaluation of the evidence without a mini-trial, requires a real prospect of success, and involves a further limb. The guidance in Easyair Telecom Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) and Anan Kasei Co Ltd v Neo Chemicals & Oxides [2021] EWHC 1035 (Ch) was applied.
3. Under art 4(1) of the Rome II Regulation, the court must identify where the damage occurred. Damage, the event giving rise to it, and indirect consequences are distinct. Article 2(1) directs attention to consequences arising out of the tort. Case law under art 7(2) of the Brussels Regulation is useful only by analogy on the damage limb and must be used cautiously.
4. The authorities show that the place of damage in financial-loss cases is fact-sensitive and may require a finely balanced judgment. The court adopted the observations in Kwok v UBS London [2023] EWCA Civ 222 and Griffin Underwriting Ltd v Varouxakis [2018] EWHC 3259 (Comm).
5. Claims based on non-receipt of money may differ from claims where a liability has already been incurred. The direct economic effect pleaded here was the non-receipt of optional issuer fees in France. It was possible that the loss became irreversible when the intermediary accounted without those fees. The Dolphin Maritime & Aviation Services Ltd v Sveriges Angfartygs Assurans Forening [2010] 1 All ER (Comm) 473 approach could therefore apply.
6. The pleaded facts did not inevitably establish England as the place of damage. The French-law claims were not bound to fail, and the defendant’s incomplete account of the dealings was unsuitable for strike out. The evidence was insufficient for summary judgment, while the claim had a real prospect of success. The second limb of CPR r 24.2 therefore did not require consideration.

not stated in the judgment.