Summary
The claimants, the Sherdleys, invested in two individual unit-linked life insurance contracts with the defendant, Nordea. The defendant was domiciled in Luxembourg.
The claimants’ investment did not go well, and they commenced proceedings in England on the basis of Article 23 of Brussels I.
The claimants were domiciled in Wales at the time of the conclusion of the contract. They subsequently acquired a Spanish domicile which they still had at the time when they started suing in England.
Nordsea challenged the jurisdiction of the English court.
The defendant’s challenge was upheld by Mr Justice Vos, holding that the English court had no jurisdiction.
The claimants made an appeal against the High Court’s judgment. The appeal was dismissed by the Court of Appeal. Lord Justice Rix held:
“63 In any event, an agreement which does not fall within art.13(2) (or any other provision of art.13 ) clearly cannot be enforced against the insured. It follows that the Luxembourg clause ( art.29.5 ) could not be effective to prevent the Sherdleys suing in the country of their domicile. It may, however, be argued to be effective to prevent Nordea suing the Sherdleys in the country of their domicile? However, it is difficult to see why a mutual clause which cannot be mutual should be binding on either party: it would have been agreed in error. Moreover and in any event, a clause which cannot operate according to its own terms hardly seems like a strong candidate to contend with other arguably competing and inconsistent terms.
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66 In sum, it would seem that none of the exclusive jurisdiction clauses canvassed in these proceedings could survive art.13(2) . For this reason, and subject to any question of the Sherdleys’ current domicile (see below), I would conclude that this appeal must be in any event dismissed, albeit on different grounds from those of the judge. […]
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69 As for the first submission, that domicile at the time of contract would suffice, a pure point of law albeit one that could always have been taken, I would reject it. Article 9 states where an insurer “may be sued”, and looks to the time of suit, not to the time of contract. Article 9 ’s “may be sued”, allowing for the option contained in the article, reflects art.2 ’s “shall be sued”, which operates at the time of suit. Special jurisdiction “in matters relating to a contract” is granted by art.5(1) , but that makes no special jurisdiction available by reference to the time of contract, and in any event is not reproduced in art.9 . […]
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71 In my judgment, it would be wrong to allow the Sherdleys to make a new factual case at this very late stage to the effect that, at the time of commencement of suit, their domicile for the purposes of art.9 was in the United Kingdom because their (habitual) residence in Spain was only temporary.[…]
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74 I would therefore dismiss this appeal and confirm that the Sherdleys lack jurisdiction to sue Nordea in the courts of England and Wales. I regret this conclusion, because I am unable to see how, on the complex contractual documentation of this case, all of which is of Nordea’s own making, it befits the insurer to take such a point against its consumer insureds; and particularly where the Directive seeks to vindicate for the insured the possibility of agreeing the proper law of their own nationality (which in practice would have carried English jurisdiction with it). [...] a principal reason why the Sherdleys preferred to sue in this country was because they were able here to take advantage of a conditional fee agreement with their solicitors which would not be available to them in Spain or Luxembourg. [...] the costs advantage available here to the Sherdleys was neither a relevant nor a legitimate reason for departing from the strict requirements of the Judgments Regulation.” [63,66,69,71,74]