English court had jurisdiction to try action

LAW REPORT v 5 July 1995

Grupo Torras SA and another v Sheikh Fahad Mohammed al Sabah and others; Court of Appeal (Lord Justice Stuart-Smith, Lord Justice Hobhouse and Lord Justice Millett) 26 May 1995

An English court had jurisdiction, under the European Convention on Civil Jurisdiction and Judgments, to hear an action brought by a Spanish company against, among others, its own directors and officers, notwithstanding the existence of legal proceedings involving the same parties in Spain, because the English court was the "first seised" and the case was concerned with alleged fraud upon, rather than "decisions of the organs of", the companies concerned.

The Court of Appeal dismissed appeals by all but one of 22 defendants to an action begun on 14 April 1993 by the plaintiffs, Grupo Torras SA, a Spanish company, and Torras Hostench London Ltd, its London subsidiary, against the refusal of Mr Justice Mance to set aside or stay the action on the ground that it should instead be tried in Spain.

Michael Briggs QC, Terence Mowschenson, Jeffrey Onions and John McCaughran (Peters & Peters; Simmons & Simmons; Lawrence Graham; and Ashurst Morris Crisp), variously, for the defendants; Gordon Pollock QC, Andrew Popplewell and Paul Wright (Baker & McKenzie) for the plaintiffs.

Lord Justice Stuart-Smith, giving the judgment of the court, said the plaintiffs claimed damages for fraudulent conspiracy and breach of duty and monies alleged to be due under constructive trust. The defendants included directors, officers and professional advisers of the plaintiff companies and companies allegedly used to carry out the frauds.

The defendants argued that the "object" of the proceedings was "decisions of [the] organs" of Grupo Torras, so the courts of Spain, being the contracting state in which Grupo Torras had its seat, had exclusive jurisdiction pursuant to article 16(2) of the Convention scheduled to the Civil Jurisdiction and Judgments Act 1982 as amended by Order in 1990 (SI 2591).

By article 16(2) "proceedings which have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or the decisions of their organs, the courts of the contracting state in which the company, legal person or association has its seat" should have "exclusive jurisdiction, regardless of domicile".

The defendants argued that the proceedings were principally concerned with the decisions of Grupo Torras, its officers and shareholders, and consequently the Spanish courts should have exclusive jurisdiction.

In their Lordships' judgment, The subject matter of this action was not decisions of the organs of Grupo Torras but the frauds which the defendants were alleged to have practised on the plaintiff companies. Accordingly, article 16(2) did not debar the English court from assuming jurisdiction.

The defendants also argued for the action to be stayed under article 21 of the Convention, because the proceedings involved "the same cause of action" and were "between the same parties" as proceedings already pending before the Spanish courts, and the English court was not the "first seised".

The defendants relied on two sets of Spanish proceedings. One was begun by a "querella" filed by Grupo Torras on 8 January 1993. Such proceedings were primarily criminal but the court could also give a civil judgment awarding compensation to the victim. The other was a civil action filed in June 1992 against Grupo Torras in which some of the present defendants were plaintiffs.

However, under Spanish law, a civil action was not "definitively pending" for the purposes of the Convention until it had been filed, admitted and served; until then it merely had a provisional character. Since the Spanish proceedings were not served on the relevant parties until October 1993, the English proceedings, which had all been served by June 1993, came first.

Finally, the civil aspect of the querella proceedings could not be regarded as definitively pending until February 1994, when the criminal proceedings were admitted. It followed that this ground of appeal also must fail.

Paul Magrath, Barrister

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs People

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

HR Business Partner (Maternity Cover 12 Months)

£30000 - £34000 Per Annum 25 days holiday, Private healthcare: Clearwater Peop...

Project Manager (Procurement & Human Resources)

Unpaid: Cancer Research UK: If you’re a professional in project management, lo...

Geography Teacher

£85 - £140 per day: Randstad Education Cheshire: We require a teacher of Geogr...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service