20 August 2013 #Dispute Resolution
The English Courts have two parallel systems that determine whether the English Courts have jurisdiction: the EU rules for determining jurisdiction as set out in Regulation 44/2001 (the “Regulation”) and English Common Law rules. The Common law rules will only apply when the Regulation does not. As a result, there can be situations where it is unclear which test the Courts should be using and this can have profound consequences for the parties involved.
Scope of the Regulation
The Regulation applies if the Defendant is domiciled in an EU Member State or one of the three EFTA states. Each Member state has its own definition for “domicile”. In England and Wales the basic test is that an individual defendant must have been living in this jurisdiction for over three months and have no immediate plans to leave. A corporate defendant should have been incorporated in England and Wales.
The Brussels Regulation applies to all “civil and commercial matters”. However, the question of what constitutes a “civil and commercial matter” has been left undefined by the Regulation, save to say that certain types of disputes, such as public law matters, family matters, insolvency/ bankruptcy matters and arbitration are outside its scope.
Factual Background to the Case
In British Airways v Sindicato Espanol De Pilotes De Lines Aereas and another  the High Court was asked to consider whether a claim against a Spanish trade union for breach of the Claimant’s right of freedom of establishment and to provide cross-border services was a “civil and commercial matter” for the purpose of finding jurisdiction under the Regulation.
The Defendants were a Spanish trade union and an English association of pilots who had called for strikes in Spain. The Claimants, British Airways and its parent company (which also owned Iberia Airways), had argued that the strikes were unlawful under Spanish laws and were in breach of their right to freedom of establishment and to provide cross-border services.
The Court’s Decision
The Spanish trade union sought a declaration that the Claimants could not bring the claim against them in England. The Claimants argued that the Regulation applied and that jurisdiction could be established on two grounds:
The High Court agreed with the Spanish Trade Union that this could not be considered to be a Civil and Commercial matter for the purposes of the Regulation. The Court decided that this was a public law matter rather than a dispute between private individuals.
As a result of this finding, the Court was free to apply English common law rules on finding jurisdiction. Under these rules, the Court give permission for the claim to take place in England if one of the jurisdictional gateways under CPR PD6B 3.1 applies. In this case, the Claimants could rely on the fact that the Claim would be served on the English association of pilots in this jurisdiction and that the Spanish Trade Union would be a co-Defendant.
However, the Courts also have to be satisfied that England is the “Proper Place” to bring the Claim and that there is no other jurisdiction with a better claim to hear the dispute. The Court is allowed to take into account a wide variety of factors in coming to this conclusion. In this case, the Court decided that the English Courts did not have jurisdiction in a dispute about whether a Spanish trade union had breached Spanish law by calling for strike action in Spain contrary to an order that the dispute be settled by arbitration by the Spanish government.
The case is very interesting since it demonstrates the wide ranging implications for parties in relation to which test for jurisdiction should apply. If the Court had accepted that the scope of the Regulation was sufficiently wide to encompass the dispute, the dispute itself would have been heard in England.