Summary
There was a Secured Facility Agreement between the parties. The contract contained an exclusive jurisdiction clause in favour of the English courts.
In spite of the English choice-of-court agreement, the borrower initiated proceedings against the banks in Germany which made the German courts the first seised for the purposes of Articles 27 and 28 of Brussels I.
On 23rd December 2004, JP Morgan commenced proceedings before the English court seeking an injunction to prevent possible sale of assets.
On 18th Jan 2005, JP sought from the English court a declaration that the clause which sets the rate of interest and its payment was valid.
On 23rd Feb 2005, JP Morgan initiated proceedings for specific performance, aiming to obtain a copy of a preliminary report delivered by PwC to the borrower.
The borrower challenged the jurisdiction of the English court, seeking a stay of the English proceedings under Art 27 and 28 of Brussels I.
The English court applied Gasser, staying the declaratory proceedings which had started in February 2005. However, the English court dismissed, under Art 27 or 28, the applications for a stay of both the injunction proceedings and the PwC report proceedings.
Mr Justice Cooke held that:
“49 […] I am driven to the conclusion, by reference to the ECJ decisions that the same cause of action is involved in these two sets of proceedings in relation to interest and that the requirements of legal certainty, comity, and trust in the judicial institutions in the Community require me to stay the declaratory proceedings under Art.27.1 until such time as the Mainz Court decides upon its own jurisdiction.
[…]
67 There is no indirect interference with the German courts and the issues with which they are concerned and the evidence indicates that Primacom have brought proceedings in Germany with a view to delaying or frustrating the exercise by JP Morgan and the SSLs of their contractual rights.
68 In such circumstances, I have no hesitation in refusing to stay the injunction proceedings and the PwC proceedings by reference to the terms of Art.28.” [49 and 67-68]