Practice and Procedure


PUBLISHED February 3, 2003

Where the decision to arrest a vessel in Panama was made by the London branch of the respondent mortgagee bank, the English court had jurisdiction over the action.Claimant's appeal from the decision of Nigel Teare QC on 13 June 2002. The issue was whether the judge was right to hold that the provisions of Art.5(5) Lugano Convention did not confer jurisdiction on an English court. The appellant argued as follows: (i) the words of Art.5(5) should be given their natural meaning; (ii) there was clearly a link between the activity of the respondent's London branch and the dispute as the arrest arose out of the loan issued by the London branch, and it was the London branch that made the decision to arrest and that gave power of attorney to Panamanian lawyers; and (iii) the judge had wrongly compared the connections between the dispute and the London branch with the connections between the dispute and Panama, and should have compared the connections between the dispute and London with the connections between the dispute and Norway. The respondent argued as follows: (a) the judge had been correct, and what had to be established was a link between the dispute and the English court not merely the London branch; (b) the activity of the London branch had to produce the harmful event within the jurisdiction in order for the English courts to have jurisdiction, which had not occurred in the present case; (c) paragraph 13 of the judgment in Somafer v Saar Fern Gas AG [1978] ECR 2183 applied and remained good authority.HELD: (1) The effect of the decisions of the European Court of Justice on provisions that were common to both the Brussels and Lugano Conventions should not be artificially circumscribed. The provisions should be given their natural effect. The decision in Lloyd's Register v Camperonon Bernard (1995) [1995] ECR I-961 robbed para.13 of Somafer (supra) of the authority it might otherwise have had. The circumstances giving rise to liability in a claim in tort could vary widely, and it was not desirable to formulate a test for whether a dispute had arisen out of the activity of a branch. That matter turned on the facts of a case. (2) The actions giving rise to the dispute arose out of the London banking business carried out by the London branch, which gave instructions to enforce the security. London was not the most convenient forum, but if the considerations of, or akin to, the principle of domicile accorded with the due administration of justice, London should be available as an alternative jurisdiction.Appeal allowed. Leave to appeal to the House of Lords granted.

[2003] EWCA Civ 147