Cousins Material House Limited v The Swatch Group AG & Ors

A foreign judgment within the Lugano Convention must be recognised unless recognition is manifestly contrary to public policy. The exception is narrow and cannot become a disguised appeal on the foreign court’s assessment of evidence, fact or law. A complaint under Article 6 of the European Convention of Human Rights must identify a genuine denial of a fair hearing, not dissatisfaction with the result. Where the foreign court admitted and considered the evidence, and refused further evidence for stated reasons, no manifest breach arises. Issues and causes of action determined in the foreign proceedings cannot be relitigated in England, including issues raised and rejected on appeal or issues which the party should have raised earlier.

Cousins brought English competition-law proceedings concerning Swatch’s withdrawal of supplies of watch spare parts to a wholesaler. The claims relied on Articles 101 and 102 TFEU and sections 2 and 18 of the Competition Act 1998.

Swatch had first obtained negative declaratory relief in Switzerland. The Commercial Court of Bern assumed jurisdiction and ruled in Swatch’s favour. The Swiss Federal Supreme Court dismissed Cousins’s appeal, making the Swiss judgments final and binding. Swatch applied for recognition of those judgments under the Lugano Convention and for the English claim to be set aside or stayed.

Cousins relied on the public-policy exception, alleging breaches of Article 6 of the European Convention of Human Rights. It also argued that its Article 101 claim concerning the selective distribution system and a possible divergence under section 60A of the Competition Act 1998 had not been determined.

1. Recognition and public policy. The Swiss courts had jurisdiction and their judgments were entitled to recognition under Articles 33(1) and 34(1) of the Lugano Convention. The public-policy exception is confined to a manifest breach of a fundamental rule or right. Article 36 prevents a review of the foreign judgment’s substance.
2. Article 6 complaint. Cousins’s criticisms that the Bern Court had not expressly addressed all its evidence amounted in substance to an attack on the merits. The Bern Court had admitted the written evidence, considered the role of wholesalers and the asserted competitive advantages of a one-stop shop, and gave reasons for refusing further evidence and disclosure. Cousins had also voluntarily waived an oral hearing and did not appeal the interlocutory order. There was no breach, still less a manifest breach, of the right to a fair hearing.
3. Article 101 and the selective distribution system. The Bern Court considered Cousins’s case that the selective distribution system breached Article 101 TFEU. It held that the interruption of supplies was unilateral and fell to be examined under Article 102 TFEU. That issue was therefore determined and was res judicata.
4. Section 60A. The Bern Court recorded the parties’ position that UK and EU competition law did not diverge and found no apparent reason for divergence. The Swiss Federal Supreme Court upheld that conclusion. Cousins was estopped from advancing a new divergence case in England.
5. Swatch was granted a declaration that the High Court would not exercise any jurisdiction it might have to try the claim. The Amended Claim Form issued on 5 June 2017 was set aside.

The judgment describes Swiss proceedings in which the Commercial Court of Bern granted Swatch negative declaratory relief on 22 December 2021. The Swiss Federal Supreme Court dismissed Cousins’s appeal on 13 September 2022, making the Swiss judgment final and binding. The present court recognised those judgments and barred relitigation in England.