EUPillar Mazur Media Ltd and another v Mazur Media GmbH and others [2004] EWHC 1566 Ch

Summary

The claimants were English companies. The defendants were German. There were insolvency proceedings in Germany against one of the defendants. The third defendant, Mrs Mazur, entered into a share sale agreement with one of the English companies, Apex. This company was involved, on the claimants’ side, in the English proceedings. According to the terms of the parties' agreement, the defendant was contractually bound to deliver sound recordings to the English company. The agreement included a jurisdiction clause which conferred exclusive jurisdiction to the English courts. The claimants sought: (1) A declaration for the title over the recordings (including the copyright); (2) An order for specific performance (i.e. delivery of the sound recordings); (3) Tortious damages for conversion; (4) Contractual damages for breach of the sale-of-share agreement. The defendants challenged the jurisdiction of the English court. It was held that, on the basis of the jurisdiction clause, the English court had jurisdiction to hear and determine only the contractual claims. The English court refused to stay its proceedings under the Insolvency Act, holding that: “Where the court has jurisdiction under the Judgments Regulation, the power of the court to stay proceedings cannot be used simply because another Regulation state is the forum conveniens.” [69]. Mr Justice Collins went on to hold: “27 The English court has exclusive jurisdiction by virtue of Art.23(1) of the Brussels I Regulation in relation to claims under the Share Sale Agreement and the Assignment. 28 Consequently the English court has jurisdiction to determine the claim by Apex against Mrs Mazur for damages for breach of the obligation in the Share Sale Agreement to deliver the Masters to Apex, or procure them to be delivered. There appears to be no defence to this claim. The English court would also have jurisdiction to order Mrs Mazur to deliver up to Apex such of the Masters as were in her possession, since such an order would be an ancillary order in the contractual claim over which the court has jurisdiction. I should add that in the prayer Mazur Ltd appears to claim damages under the Share Sale Agreement, but this is obviously unsustainable. 29 There is no legal basis for the claim by Apex under the Share Sale Agreement for a declaration against Mrs Mazur that it is the owner of the Masters. The Share Sale Agreement did not transfer, nor could it have transferred, ownership of the Masters from Mazur GmbH to Apex. It was purely an agreement for the sale of the shares in Mazur GmbH. 8 It follows that there can be no claim by Apex against Mazur GmbH, Mr Sack or Mr Rhein for a declaration that it owns the Masters, or for an order for delivery up ancillary to that declaration. 30 I deal below with the question whether Apex can sue any of the Defendants for conversion. But even if it had a cause of action in conversion against Mrs Mazur, the claim would not fall within Art.5(3) because the alleged conversion is precisely the same as the alleged breach of contract, and the action would therefore be related to a contract within the meaning of Art.5(1) , and therefore not within Art.5(3).” [27-30]