First come, first served?

The judgments regulation contains rules allocating non-exclusive jurisdiction, rules allocating exclusive jurisdiction and rules dealing with lis alibi pendens. Suppose that claims are brought in two member states, A and B. The claim in A comes first. The defendant there, however, maintains that B has exclusive jurisdiction. Must the courts
in B defer to the judgment
made in state A about its own jurisdiction even if it’s a mistake?

In Case C-116/02 Gasser [2003] ECR I-14693, the Court of Justice of the European Union insisted that the first court gets to
decide, and its conclusion is binding on all other courts. That remained true even though the issue concerned an exclusive jurisdiction clause. The first court gets to decide whether it has jurisdiction, and its conclusion
is definitive even if wrong.

That case focused on one type of exclusive jurisdiction (that conferred by jurisdictional agreements under article 23). Should the same principle be applied to other heads of exclusive jurisdiction, notably the exclusive jurisdiction over rights in rem over immovable property, conferred by article 22?

That was the issue in C-438/12 Weber (3rd Chamber, 3 April 2014), which came out of a family dispute over pre-emption rights to a valuable Munich flat. One side brought proceedings in Italy seeking a determination that pre-emption rights were invalid. The other brought proceedings in Germany, seeking to enforce those rights. The Italian proceedings came first.

The CJEU had little difficulty in concluding (clearly correctly) that both sets of proceedings concerned rights in rem over immovable property. It followed that the Italian court ought to decline jurisdiction, but it had not done so. What was the German court to do? Should it follow the ‘usual’ course and stay its proceedings until the Italian court ruled, thereafter declining jurisdiction if the Italian proceedings progressed?

You may think that Gasser provided the answer, but the various heads of exclusive jurisdiction are not created equal. In particular, the regulation itself draws a distinction when it comes to
the enforcement of judgments.

It is not permissible for a
court to refuse to enforce a judgment given in proceedings brought in breach of an exclusive jurisdiction agreement. However, article 35 expressly provides that a court may decline to enforce a judgment if the judgment was based on a legally incorrect application of the grounds of exclusive jurisdiction set out in article 22. These all concern matters (such as rights to land, public registers, or company constitutions) where there is a strong public interest in definitively fixing jurisdiction
in one member state.

A similar hierarchy appears from articles 24 and 25. Under article 24, if a defendant participates in proceedings without objection, that fact itself confers jurisdiction unless the proceedings are subject to the exclusive jurisdiction under article 22.

Appearing without objection is normally a ‘tacit acceptance’ of jurisdiction, and can be treated as establishing it (as was confirmed in Case C-1/13
Cartier parfums – Lunettes
SAS (27 February 2014)). But
it is irrelevant if the case is
within another member state’s exclusive jurisdiction under article 22. Under article 25, a court must of its own motion reject a case in relation to which article 22 allocates exclusive jurisdiction elsewhere,
whatever the parties want.

So, the CJEU had a sound reason to decide that in
Weber the German court, as
the only proper court under article 22, need not suspend
its proceedings. Such a suspension was pointless,
as any Italian judgment would be unenforceable.

This would equally apply to
the other heads of exclusive jurisdiction under article 22 (at least if the issue is about the law, not the facts, as it usually will be). But it does not question the basic principle in Gasser, including in cases of exclusive jurisdiction agreements,
which have a lesser status.

SJ

Paul Stanley is a barrister practising from Essex Court Chambers