The UK recently formally requested accession to the Lugano Convention. This is likely to represent the touchstone for English jurisdiction in the near future. How timely, then, is the judgment of Waksman J last week in Mastermelt Ltd v Siegfried Evionnaz SA [2020] EWHC 927 (QB), which neatly highlights one of the persisting deficiencies of that scheme?
This was a contractual dispute involving parallel proceedings brought in the UK and in Switzerland (a pure “Lugano” state). The first set of proceedings in time (for a negative declaration) was brought in the UK and the second set was brought in Switzerland. The party suing in Switzerland relied on a Swiss exclusive jurisdiction clause in the contract.
Had the proceedings been governed by Brussels I (Recast), the court which was the subject of the exclusive jurisdiction clause (i.e. the Swiss court) would have had priority to decide its own jurisdiction first, notwithstanding the fact that the English proceedings were the first in time: art. 31(2).
But this provision, implemented to prevent the infamous “Italian torpedo” tactics, has not been introduced into the Lugano Convention. Waksman J rejected an argument that the Lugano Convention was automatically subject to a de facto amendment by the introduction of the Recast Brussels regime. The Italian torpedo jurisprudence established by Erich Gasser GmbH (C-116/02) [2003] ECR I-14693 still applies. This meant that the English court, which was the court first seised, did not in principle have to stay its proceedings pending the outcome on jurisdiction in Switzerland.
A timely reminder for English lawyers that, while the Lugano regime is very similar to the Brussels rules, there are some important differences that can and will have a significant practical impact in post-Brexit litigation.
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