In JSC Commercial Bank Privatbank v Kolomoisky and Ors [2019] EWCA Civ 1708, a Ukrainian bank had commenced English proceedings alleging fraudulent misappropriation of over US$1.9 billion against two Swiss individuals, three English companies and three BVI companies.

The English Court of Appeal decided that, in view of prior parallel proceedings pending in a non- "EU/Lugano" country (in this case Ukraine), English Courts not only had the ability (depending on the circumstances) to stay English proceedings against:

  • EU-domiciled (in this case UK) Defendants - pursuant to the express entitlement to do so that had been introduced in the Brussels I Regulation when it was re-cast; and
  • non- "EU/Lugano" (in this case BVI) Defendants - as part of its forum conveniens discretion,

but also those against (non-EU) Lugano-domiciled (in this case, Swiss) Defendants. That was so notwithstanding the absence of express wording in the 2007 Lugano Convention entitling them to do so (the wording included in Recast Brussels I not yet having been added).

It reached that decision on the basis of its determination that provisions in the Lugano Convention - which, on their face, only served to allocate jurisdiction as between the Courts of Lugano States - could be applied "reflexively", despite the Owusu v Jackson principle, so as to permit such a stay in favour of the Courts of a non-Lugano country.

The Court of Appeal further found that a discretion to stay the proceedings against the UK and Swiss Defendants in fact existed in this case since they were "related" to the Ukrainian (defamation) proceedings for the purposes of Brussels/Lugano - in that it would be "expedient" (which in its view meant "desirable" rather than "practicable" or "possible") for them to be heard and determined together to avoid the risk of irreconcilable judgments.

As it happened, the Court of Appeal decided that (contrary to the views of the first instance Judge) the discretion should not be exercised in the circumstances. That was primarily because the claims could not be consolidated with the Ukrainian proceedings and since it would be "entirely inappropriate" to stay such a serious fraud claim because of a defamation claim.

The most notable of these decisions, however, was that the discretion in respect of the proceedings against the (non-EU) Lugano-domiciled (Swiss) Defendants existed at all.

Strictly, that ruling concerned the "reflexive effect" of provisions:

  • under the 2007 Lugano Convention, rather than under Recast Brussels I; and
  • which related to parallel proceedings rather than exclusive jurisdiction clauses (albeit that the Court of Appeal said obiter that its views on Lugano applied, even more strongly, to the latter too).

However, it nevertheless creates a tension with, and undermines, various aspects of the recent decision in Gulf International Bank BSC v Aldwood [2019], in which a first instance Judge had said that the provisions of Recast Brussels I could not be applied "reflexively" so as to justify a stay of proceedings against an EU-domiciled Defendant in view of an exclusive jurisdiction clause in favour of a non- "EU/Lugano" country.

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