Berliner Verkehrsbetriebe (BVG) Anstalt Des Offentlichen Rechts v JP Morgan Chase Bank N.A. & Anor (Rev 2)

Recital (2) to the Regulation states that the objective behind the unification of rules governing jurisdiction and recognition of judgments is to further the “sound operation of the internal market”. Recital (11) stipulates that the general principle for jurisdiction should be the defendant’s domicile and that jurisdiction must be available on this ground “except in a few well-defined situations in which the subject-matter of the litigation or the autonomy of the parties warrants a different linking factor”. Recital (14) confirms that, save in certain special cases, the autonomy of the parties to a contract to determine the court having jurisdiction “must be respected subject to the exclusive grounds of jurisdiction laid down in this Regulation”. That last reference is to Article 22. The structure of the Regulation follows these objectives. Its Articles must therefore be examined and their terms interpreted with these general objectives in mind.

Two relevant general principles about the interpretation of the Brussels Convention have been stated by the ECJ, which continue to apply equally to its replacement, the Regulation. The first is that all the provisions of the Regulation must be given an independent, Community law, interpretation. The second is that because Article 22 is one of the Articles on jurisdiction which creates an exception to the general rule of jurisdiction set out in the Regulation, (ie. that jurisdiction is based on the defendant’s domicile), (Footnote: ¹⁷) it must not be given an interpretation that is broader than is required by its objective. (Footnote: ¹⁸) This is because the effect of Article 22 is to deprive the parties of the choice of forum which would otherwise be theirs, or, in certain other cases, its provisions will result in the parties being brought before a court which is not in the state of the domicile of any of them. (Footnote: ¹⁹)

The ECJ has also stated, in Gesellschaft für Antriebstecnik mbH & Co KG (GAT) v Lamellen und Jupplungsbau Beteiligungs KG (Footnote: ²⁰) (the “GAT case”), that the objective of Article 22 of the Regulation is to ensure that jurisdiction rests with the courts that are closely linked, in fact and law, with the proceedings that are within its provisions. The aim of the Regulation as a whole is to prevent the possibility of conflicting decisions. That is particularly important in relation to the matters dealt with in Article 22. That is why the rules of jurisdiction provided for in Article 22 are of an exclusive and mandatory nature and are specifically binding on both litigants and courts of member states. (Footnote: ²¹)

In relation to Article 22.2 in particular, the ECJ has stated, in Hassett v South Eastern Health Board, (Footnote: ²²)that the essential objective of the rule of attributing exclusive jurisdiction to the courts of the Member State in which the company has its seat is one of centralising jurisdiction in order to avoid conflicting judgments being given as regards the existence of a company or as regards the validity of the decisions of its organs. This objective is achieved by giving exclusive jurisdiction to the courts of the Member State in which the company has its seat. Those courts would appear to be best placed to deal with such disputes, inter alia because it is in that State that information about the company will have been notified and made public. Exclusive jurisdiction is thus attributed to those courts in the interests of the sound administration of justice. (Footnote: ²³)

However, it does not follow that Article 22.2 must apply to any dispute which involves some link with a decision of an organ of a company. If that had been the rule, it would mean that almost all disputes involving companies would fall within the scope of Article 22.2. But, as the ECJ stated in the Hassett case (Footnote: ²⁴):

“…that provision must be interpreted as covering only disputes in which a party is challenging the validity of a decision of an organ of a company under the company law applicable or under the provisions governing the functioning of its organs, as laid down in its Articles of Association.”

Those statements of principle do not, however, deal specifically with a case such as the present, where it is clear that if the English proceedings are to continue they will raise issues concerning not only the validity of the decisions of BVG’s Management Board in March 2007 and its Supervisory Board in April 2007, but also questions concerning alleged misrepresentation and non-disclosure by JPM concerning the JPM Swap and the advice that was given by JPM to BVG about entering into that contract. Therefore it is necessary to consider further the scope of Article 22.2 to see how it is to be applied in multi-issue cases.

The Jenard report on what are now Article 22 and Article 25 makes four important general points. First, the provisions of Article 22 cannot be departed from either by agreement of the parties or by an implied submission to another jurisdiction. Secondly, any court of a state other than the state whose courts have the exclusive jurisdiction must declare of its own motion that it has no jurisdiction: Article 25. Thirdly, a failure to observe these rules is a ground to refuse recognition or enforcement of a judgment: Article 35. Lastly, and most importantly, Jenard comments that “the matters referred to in [Article 22] will normally be the subject of exclusive jurisdiction only if they constitute the principal subject matter of the proceedings of which the court is to be seised”. He also puts it another way: “These rules [in Article 22]…take as their criterion the subject-matter of the action…”.

In commenting on Article 22.2 in particular, Jenard states that the proceedings before the court having exclusive jurisdiction will be “…in substance concerned either with the validity of the constitution, the nullity or dissolution of the company, legal person or association, or with the decisions of its organs”. The rationale for giving exclusive jurisdiction to the courts of the state where the company (or other legal entity within Article 22.2) is that the state concerned will have all relevant information concerning the company and it will be made public. This last point does not strike me as being particularly compelling, at least in proceedings in common law jurisdictions, where all relevant documents and information would have to be disclosed to the other parties involved. But that may not be so in other jurisdictions.

With regard to the words “principally concerned” in Article 25, Jenard makes the comment that they have the effect that a court is not obliged to reject jurisdiction “if an issue which comes within the exclusive jurisdiction of another court is raised only as a preliminary or incidental matter”. This remark gave rise to argument before us. Did it follow that if a court of a member state was seised of proceedings in which one of the issues in it fell within one of the six paragraphs of Article 22, but that issue was not simply “preliminary” or “incidental”, then those proceedings must therefore be “principally concerned” with a matter over which the courts of another member state had jurisdiction by virtue of Article 22? If it did, then the consequence must be, in accordance with Article 25, that the court seised must declare (of its own motion) that it had no jurisdiction.

We were taken through the cases in which various of the paragraphs of Article 22 have been considered by either the ECJ or the English courts. We were not referred to any decisions of other courts of EU member states on the construction of Article 22.2. I will consider first the cases where what is now Article 22.2 has been considered and I will do so in chronological order.

First, we were referred to a decision of Knox J in Newtherapeutics Ltd v Katz. (Footnote: ²⁵)Proceedings were brought by an English registered company against two of its directors, who were domiciled in the USA and in France, alleging breach of their duty as directors of the company. The claim asserted, first, that certain documents relating to a contract with another company had been signed by the defendant directors without calling a board meeting and in excess of authority and, secondly, that the contract was detrimental to the company. The defendants sought to set aside the leave to serve proceedings out of the jurisdiction. The company argued that the English court had exclusive jurisdiction under Article 22.2 of the Regulation.

Knox J stated, first, that the words at the beginning of Article 22.2, “…proceedings which have as their object the validity of the constitution [etc]…”, do not refer to the purpose of the proceedings, but to the subject matter of the proceedings. (Footnote: ²⁶) Secondly, he recorded that it was common ground between the parties that the question of whether an action was governed by Article 22.2 was to be solved by identifying the “…principal subject of the proceedings…” and seeing whether that fell within Article 22.2. (Footnote: ²⁷) Thirdly, he held that the allegations concerning the signature of documents without a board meeting and beyond the directors’ authority came within Article 22.2, but those regarding the characteristics of the contract did not. (Footnote: ²⁸) Lastly, he asked the question, which of the two claims raised by the company against the directors raised the “principal issue”? Knox J appeared to propose two solutions to this conundrum. First, the issue upon which the defendants were likely to lose (so far as the court could tell) is likely to be the principal one “..because they have only to lose one to lose the action”. Secondly, he said that, as a matter of judgment, he regarded the issue concerning the absence of a board resolution to be the principal issue in the case. The judge appears to have preferred the second solution as the correct one and he therefore held that the English court had jurisdiction under Article 22.2. (Footnote: ²⁹)

It was agreed before us that the first of Knox J’s proposed methods of identifying “the principal issue” in a case could not be correct. It has not been followed in later cases and it is easy to understand why. Decisions on jurisdiction have to be made at an early stage in proceedings. At that stage the court is usually in a poor position to judge the merits of a particular claim or defence. Moreover, there may be a degree of manipulation of the importance of certain issues if jurisdictional arguments arise such as the present Article 22.2 issue. A party may lose the whole case on a preliminary point, which may be difficult to characterise as the “principal issue” in terms of material involved, witnesses and so forth.

Mr Lord criticises the second approach of Knox J as imprecise and unprincipled. He submits we should not follow it.

Article 22.2 was next considered, in detail, by Mance J in Grupo Torras SA v Sheikh Fahad Mohammed Al-Sabah and others. (Footnote: ³⁰)An action was brought in the Commercial Court by a Spanish company and its English subsidiary against 22 defendants. Amongst many allegations made it was claimed that certain defendants had been in breach of duty as directors in relation to four particular transactions. The defendants applied to set aside the English proceedings, arguing (amongst many other points) that the case should proceed in the Spanish court because it had exclusive jurisdiction under Article 22.2 as the proceedings had “as their object” the decisions or validity of decisions of organs of the Spanish claimant company.

First of all, Mance J agreed with Knox J that the words “…proceedings which have as their object…” in Article 22.2 are to be interpreted as “…proceedings which are principally concerned with…”. (Footnote: ³¹)Next, Mance J considered the scope of the words “…the validity of the constitution…of companies…or the decisions of their organs…” which was the wording of Article 16.2 of the Brussels Convention. (Footnote: ³²) He said that he preferred a narrower interpretation, so that the words should be read as applying only to proceedings which were principally concerned with the validity of decisions of organs of companies etc, not with the decisions of organs of companies and other legal entities. (Footnote: ³³) In the course of his analysis of the meaning of the phrase, Mance J noted that if the second half of Article 22.2 were to be construed as applying to all proceedings principally concerned with the decisions of organs of companies, that would literally cover any dispute arising from a decision of the board of a company, eg to determine a contract. (Footnote: ³⁴)And, I would add, it would cover any dispute arising out of the decision of a board of a company or other legal entity to enter into a transaction, such as the ICE transaction in this case. That, in my view, would be far too wide a construction.

Mance J next tackled the question of how Article 22.2 was to be applied in a case where there were multiple claims against multiple defendants raising many issues. He starts the discussion by stating the principle that Article 22.2 requires an exercise in “….overall classification”. (Footnote: ³⁵) Mance J rejects the first proposal of Knox J, ie. that the court should try and identify the issue on which a defendant will lose. He then states that the court has to view the litigation overall and (bearing in mind the underlying rationale of Article 22) must attempt to assess “…whether it is likely to be so closely connected with matters of local company law and internal corporate decision-making in respect of one particular company that it should not be tried anywhere but in the courts of the State of that company’s seat”. (Footnote: ³⁶) In the view of Mance J, it is only if the proceedings overall are principally concerned with the relevant company law and practice that Article 22.2 applies. (Footnote: ³⁷)

Mance J then analysed the overall position of the Spanish company claimant towards the various defendants in the context of the claims brought. He concluded that the proceedings were not principally concerned with either the validity of decisions of organs of the Spanish company, or, if it were the correct interpretation of the second half of Article 22.2, with decisions of organs of that company. He reached this “overall conclusion” either by looking at the claims of the Spanish company alone or in connection with its English subsidiary. (Footnote: ³⁸)

In my view it is clear that Mance J interpreted Article 22.2 as requiring a court to look at the proceedings overall and to arrive at what he called an “overall classification” of the nature of the proceedings, in particular where they raised multiple issues. To do this required, in his view, an “overall judgment” to be made on the nature of the proceedings and their connection with matters of local company law and internal corporate decision making.

Mr Lord emphasises the fact that Mance J had used phrases such as whether the case would “turn on” complicated issues of Spanish law; or whether those issues would be “at the core of the issues to be decided at the trial” or “decisive of the outcome”. (Footnote: ³⁹) It is illegitimate to pick up individual phrases such as those and characterise them as setting out the judge’s decision on interpretation of the Article. That has to be gleaned from looking at the tenor of the judgment as a whole but also by examining closely those passages where Mance J particularly analyses the interpretation of Article 22.2. In my view it is clear that Mance J summed up the test in the first sentence of the “Conclusion” on the Article 22.2 issue, where he stated that the proceedings in that case were not “principally concerned with either the validity of decisions of organs of [the Spanish company] or, if it be the test, with decisions of organs of [the Spanish company] within [Article 22.2]”.

The scope of Article 22.2 was next considered by the Court of Appeal in the same case. (Footnote: ⁴⁰) Stuart-Smith LJ (who gave the judgment of the court) stated, first, that it was well-established that the words “…proceedings which have as their object” in Article 22.2, meant “proceedings which have as their subject-matter” or “proceedings which are principally concerned with”. (Footnote: ⁴¹) I would note here that the same phraseology is used in Article 22.1 and 22.3. In Article 22.4 and 22.5 the phrase used is “…proceedings concerned with”. However if one refers to the French text , which has at the outset of all five paragraphs the phrase “…en matière de”, it is plain that no difference of emphasis is intended in any of the paragraphs. (Footnote: ⁴²) This also fits in with the use of the phrase “…principally concerned with” in Article 25 of the Regulation.

Secondly, Stuart-Smith LJ stated that he wished to reserve the question of whether questions of want of authority of directors were within Article 22.2. He said that there was much force in the contention that such issues would fall within its terms. (Footnote: ⁴³) Thirdly, he said that the issue of whether an action fell within Article 22.2 depended upon its subject-matter, ie. the nature of the dispute, not upon the relationship between the parties. (Footnote: ⁴⁴) He concluded that the subject matter of that action was the alleged fraud which the defendants had practiced on the claimant companies, not the decisions of the organs of either the Spanish company or its English subsidiary. Therefore the proceedings fell outside Article 22.2. (Footnote: ⁴⁵)

Chronologically, the next case concerning Article 22.2 to which we were referred is Speed Investments Ltd v Formula One Holdings Ltd (No 2), (Footnote: ⁴⁶)another decision of the Court of Appeal. That case concerned a dispute between parties to a shareholders’ agreement over the appointment of directors to an English registered company. Two claimant companies, who were party to the shareholders’ agreement, challenged the appointment of two directors by another company that was also a party to the shareholders’ agreement; the claimants started proceedings in the English court. That other company then started proceedings in the Swiss courts seeking a declaration that the directors had been validly appointed. It also sought a declaration, in the English proceedings, that the English court had no jurisdiction. The judge held that the English proceedings had “as their object…” the validity of the decisions of the organs of the company that had appointed the directors of the English company whose appointment was challenged, so that the English court had exclusive jurisdiction under Article 22 of the Regulation. (Footnote: ⁴⁷)

On appeal, Carnwarth LJ referred to the Court of Appeal’s decision in the Grupo Torras case, (Footnote: ⁴⁸)with apparent approval of its principles.He held that the “subject matter” of the dispute was the composition of the board of the English company, rather than the effect of the shareholders’ agreement and how it was to be implemented. (Footnote: ⁴⁹) Therefore the proceedings concerned the internal management of the English company, so Article 22.2 applied and the English courts had exclusive jurisdiction.

I confess to having some difficulty with the reasoning in that case. Carnwarth LJ accepted that his analysis of the issues in the case involved some “…expansion of the language of [Article 22.2]…”. He accepted that the issue in the case was not, strictly, the validity of the constitution or the validity of any board decisions of the English company. (Footnote: ⁵⁰) Moreover, Carnwarth LJ accepted that the “..main area of live dispute may be as to the effect of the [Shareholder Agreement]…”, but he nevertheless held that this did not prevent the proceedings from coming within Article 22.2. With respect, I find it difficult to square this analysis with principles laid down by the ECJ on the scope of Article 22.2 and with the statements of the Court of Appeal in the Grupo Torras case. Therefore I would prefer to regard this as a decision on its rather special facts which provides no help with the present problem, save that the Court of Appeal purported to follow the principles set out in Grupo Torras.

There are three further English cases dealing with Article 22.2. In FKI Engineering Ltd v Dewind Holdings Ltd, (Footnote: ⁵¹)Steel J referred to the decisions in the Newtherapeutics case and Grupo Torras. He said the correct approach was to ask whether the substance of the relevant claims involved the validity of a decision of an organ of the relevant company. He held that they did not. In Calyon v Wytwornia Sprzetu Komunikacynego PZL Swidnik SA, (Footnote: ⁵²)which was decided after Teare J had delivered his judgment in this case, Field J followed the approach of Knox J in the Newtherapeutics case. (Footnote: ⁵³)

The last case on Article 22.2 I should examine is the ECJ decision in Hassett v SE Health Board, (Footnote: ⁵⁴)to which I have already referred. In that case, two claimants had sued Irish health authorities in the Irish High Court, alleging medical negligence against two doctors employed by the authorities. The health authorities joined the doctors as third parties. They in turn claimed indemnities from their medical defence union for any damages that they might be liable to pay. The medical defence union was an English registered company. It refused the doctors’ claim, relying on provisions on the Articles of Association which stated that the grant of an indemnity was at the absolute discretion of the Board of Management. The doctors sought to join the medical defence union to the action in the Irish courts. The medical defence union argued that since the claims against it concerned in essence the validity of decisions adopted by its Board of Management, the proceedings against it fell within the scope of Article 22.2, with the result that jurisdiction lay solely with the courts of England and Wales, (the country of its seat), not with the courts of Ireland. The doctors argued that the Irish courts had jurisdiction under Articles 5.3 and 6.2 of the Regulation.

The Irish High Court rejected the argument of the medical defence union. On appeal, the Supreme Court of Ireland referred a preliminary question to the ECJ on whether the dispute between the doctors and the medical defence union fell within the scope of Article 22.2, thus giving the English courts exclusive jurisdiction in respect of that dispute.

The ECJ characterised the question posed by the Irish Supreme Court thus: (Footnote: ⁵⁵)

“By that question, the national court is essentially asking the Court whether point 2 of art. 22 of Regulation 44/2001 is to be interpreted as meaning that proceedings, such as those at issue before the referring court, in the context of which one of the parties alleges that a decision adopted by an organ of a company has infringed rights that it claims under that company's Articles of Association, concern the validity of the decisions of the organs of a company within the meaning of that provision”.

The ECJ held that Article 22.2 was not to be interpreted as embracing all proceedings where a decision of an organ of a company was being challenged; that would give too wide an interpretation to Article 22.2 and would undermine the supremacy of the general jurisdictional regime of the Regulation. In the present case the doctors were challenging the manner in which a decision was taken by an organ of the medical defence union, which was not within Article 22.2. The ECJ therefore answered the preliminary issue as follows: (Footnote: ⁵⁶)

“In the light of the foregoing, the answer to the question referred must be that point 2 of art.22 of Regulation 44/2001 is to be interpreted as meaning that proceedings, such as those at issue before the referring court, in the context of which one of the parties alleges that a decision adopted by an organ of a company has infringed rights that it claims under that company's Articles of Association, do not concern the validity of the decisions of the organs of a company within the meaning of that provision.”

This decision accords with the narrower view of the second part of Article 22.2 preferred by Knox J in the Newtherapeutics case, and by Mance J in the Grupo Torras case. But it does not assist much on the approach that the court must take in deciding how to decide whether proceedings involving multiple issues can be said to be “principally concerned” with matters within Article 22.2.

The other cases to which we were referred concern other paragraphs of Article 22 or its predecessor, Article 16. First I will refer to those dealing with Article 22.4, which relates to proceedings “…concerned with the registration or validity of patents, trade marks, designs or other similar rights…”. The first of these cases is Coin Controls Ltd v Suzo International (UK) Ltd. (Footnote: ⁵⁷)The claimant brought proceedings in the English courts seeking relief against four defendants in respect of infringement of three identical European patents in the UK, Germany and Spain concerning a coin-dispensing device. The defendants challenged the English court’s jurisdiction on several grounds and said that one of the issues on the merits would be a challenge to the validity of the German and Spanish patents. (Footnote: ⁵⁸) One of the defendants’ jurisdiction arguments was that the English court only had jurisdiction to deal with the UK patent and that, by Article 22.4 of the Regulation the courts of the states in which the German and Spanish patents were registered had exclusive jurisdiction to determine issues concerning those patents. Therefore, the defendants argued, the English court was bound by Article 25 of the Regulation to declare it had no jurisdiction in relation to those patents.

Laddie J noted that he had not been shown any case in which the meaning of “principally concerned” in Article 22 of the Regulation had been considered. (Footnote: ⁵⁹) He was not referred to either the Newtherapeutics case, or the Grupo Torras case on the relationship between Article 22 and Article 25. Nor was he shown ECJ decisions which held that the provisions of Article 22 must not be given an interpretation that was broader than was required by their objective. Therefore, with respect, Laddie J was incorrect to state (Footnote: ⁶⁰) “…I can see no reason to give the article a narrow linguistic interpretation”, whether that remark is aimed at Article 22 or Article 25 or both. Nor, in my view, does it follow, as Laddie J seemed to think, that if an issue in litigation is not incidental, it must be a “major feature of the litigation”, which must therefore be “a matter with which the action is principally concerned”. (Footnote: ⁶¹)Laddie J did not deal directly with the correct construction of the words “concerned with” in Article 22.4. So, in my view, the comments of Laddie J concerning the interpretation of Article 22.4 and its relationship with Article 25 have to be treated with caution.

However, Laddie J went on to hold that where infringement of a patent and the validity of a patent were raised in proceedings, they were so closely related that they should be treated “for jurisdictional purposes” as one issue or claim. He demonstrated how an attack on the validity of a patent would directly impinge on the issue of infringement. Thus, on that view of the litigation, he held that the issue of the validity of the German and Spanish patents was something with which the claim in the English proceedings was “principally concerned” for the purposes of Article 25 of the Regulation. Therefore the English court had no jurisdiction in respect of all claims concerning the validity of the German and Spanish patents. (Footnote: ⁶²)

Laddie J’s analysis of the relationship between an allegation of infringement of a patent and a defence of invalidity of the patent for the purposes of Article 22.4 of the Regulation was approved by the Court of Appeal in Fort Dodge Animal Health Ltd v Akzo Nobel NV. (Footnote: ⁶³)Therefore, in an action in which the claimant alleged patent infringement by the defendants and the defendants alleged that the patent was invalid if the alleged infringing acts fell within the ambit of the claim to a patent, for the purposes of Article 22.4, the claim was “principally concerned” with the validity of the patent, which in that case was a UK patent.

Mr Rabinowitz submits that because Laddie J in the Coin Controls case and (so far as one can see from the transcript) the Court of Appeal in the Fort Dodge case, were not referred to the decisions in the Newtherapeutics case and the Grupo Torras case, therefore both Laddie J and the Court of Appeal characterised wrongly the test to be applied in relation to Article 22.4 and Article 25. In my view the statements of Laddie J and the Court of Appeal are relevant only to cases in which infringement and validity of a patent were raised. They are analysed as being cases where there was only one issue or claim involved. Therefore there was no need, in either case, for either court to consider how Article 22.4 or Article 25 had to be interpreted when a case involved multiple issues.

The analyses of Laddie J and the Court of Appeal on the relationship between issues of infringement and validity of a patent for the purposes of Articles 22.4 and 25 appear to have been implicitly approved by the ECJ by its decision in the GAT case. (Footnote: ⁶⁴)The claimant, GAT, brought a declaratory action against the defendant, LuK, in the Dusseldorf Regional Court, to establish that it was not in breach of French patents of which LuK was the proprietor. GAT alleged that those patents were either void or invalid. The Regional Court dismissed the claim. On appeal, the Higher Regional Court stayed the proceedings and referred a question for a preliminary ruling by the ECJ. The question asked whether Article 22.4 applied only where there was an action to declare the patent invalid, or whether it applied also to a patent infringement action in which it is alleged that the patent is invalid or void so that there is no infringement for that reason.

The ECJ characterised the question in these terms:

“…the referring court seeks in essence to ascertain the scope of the exclusive jurisdiction provided for in [Article 22.4 of the Regulation] in relation to patents. It asks whether that rule concerns all proceedings concerned with the registration or validity of a patent, irrespective of whether the question is raised by way of an action or a plea in objection, or whether its application is limited solely to those cases in which the question of a patent's registration or validity is raised by way of an action.” (Footnote: ⁶⁵)

The ECJ noted that the issue of validity was frequently raised in a patent infringement action. (Footnote: ⁶⁶) It is telling that the ECJ concluded that the wording of Article 22.4 could not, by itself, answer the question raised in that case as to its scope; nor could the wording of Article 25. However, the court noted that the rationale of Article 22.4 was that the courts of the state in which the patent was registered were best able to deal with issues of validity according to its national law. Therefore, the exclusive jurisdiction provided for by Article 22.4 should apply whatever the form of proceedings in which the issue of validity was raised, whether the issue is raised in the claim or defence. (Footnote: ⁶⁷)

Mr Lord submits that the GAT case supported his submission because the relationship between issues of validity and infringement of a patent are directly analogous to the relationship between validity or invalidity of the JPM Swap because of the issue of ultra vires. That, to my mind, is a false point. Validity/ultra vires may equate to validity/infringement, which can, as Teare J said, be regarded as one issue. But in the present case there are also other issues which have no equivalent in the patent case that raises only the issues of validity and infringement.

The last case I wish to consider on the interpretation of Article 22 generally is the ECJ’s decision in Land Oberösterreich v CEZ as, (Footnote: ⁶⁸)which I have already cited. That case concerned Article 16.1 of the Brussels Convention, now Article 22.1, ie. proceedings “….which have as their object rights in rem in immovable property…”. The Province of Upper Austria brought an action in the courts of Linz, Austria, against CEZ, a Czech energy supply undertaking in which the Czech state had a 70% ownership, alleging that a nuclear power station owned by CEZ and situated on Czech soil was emitting ionising radiation and thus causing a nuisance to land in Upper Austria, within the meaning of paragraph 364(2) of the Austrian Civil Code. The Province sought an order from the court that CEZ put an end to risk or effect of the ionising radiation on the Province’s land. CEZ submitted that the Austrian courts lacked jurisdiction and argued that the case ought to be heard in the Czech courts. But the Province of Upper Austria argued that the case came within Article 22.1, so the Austrian courts had exclusive jurisdiction.

The case was considered by the Regional Court of Linz, the Higher Regional Court and then the Austrian Supreme Court, which referred a question to the ECJ for a preliminary ruling. The ECJ characterised the question in the following terms: (Footnote: ⁶⁹)

“By its question, the national court asks if [Art.22.1 of the Regulation] must be interpreted as meaning that an action which, like that brought under para.364(2) of the [Austrian Civil Code] in the main proceedings, seeks to prevent a nuisance affecting or likely to affect land belonging to the applicant, caused by ionising radiation emanating from a nuclear power station situated on the territory of a neighbouring State to that in which the land is situated, falls within the category of “proceedings which have as their object rights in rem in immovable property” within the meaning of that provision.”

The ECJ held that it did not. It decided that, on its proper interpretation, Article 22.1 did not encompass all actions concerning rights in rem in immovable property. Actions for damages based on the infringement of rights in rem or based on damage to property in which rights in rem existed did not necessarily fall within the scope of Article 22.1. The judgment of the ECJ continued:

“It is true that the basis of such an action [for cessation of a nuisance] is the interference with a right in rem in immovable property, but the real and immovable nature of that right is, in this context, of only marginal significance…the real and immovable nature of the right at issue does not have a decisive influence on the issues to be determined in the dispute in the main proceedings…”. (Footnote: ⁷⁰)

The ECJ also held that considerations of the sound administration of justice did not require the case to be determined in accordance with the terms of Article 22.1. First, because it was not clear which state’s laws would necessarily apply to the dispute when the alleged nuisance was committed in one state but affected land in another state. (Footnote: ⁷¹) Secondly, because the issues in the case did not require an assessment of facts by the courts of one state such as to “…justify conferring jurisdiction on the courts of one of two states to the exclusion of the other”. (Footnote: ⁷²)

Mr Lord submits that this case established that the test for whether proceedings come within one of the paragraphs of Article 22 is whether the issue that is within the relevant paragraph will have a “decisive influence on the issues to be determined”. He submits that the ECJ held that the fact that the land allegedly affected was in Austria did not have a decisive influence on the matters to be determined and that is why Article 22 did not apply in that case. He contrasts that with the present case, where the ultra vires issue would have a decisive influence on the issues to be determined because it was potentially dispositive.

The ECJ’s decision is important in the present context for two reasons. First, because it shows that a court must examine the issues raised in proceedings carefully to see if they do “principally concern” or have “as their subject matter” something which is within the terms of a relevant paragraph of Article 22. Just because the basis of an action is something which comes within the relevant paragraph (which, in the Land Oberösterreich case the ECJ held was the infringement of a right in rem in immovable property) it does not necessarily follow that the proceedings will fall within the relevant paragraph of Article 22. That will depend on how significant the issue is to the proceedings overall. In that case, the claimant obviously had to demonstrate it had rights in rem in the land said to be affected by the ionising radiation, but once that basis for the nuisance claim had been laid, there were no further issues about “rights in rem” in the land to be determined.

Secondly, the decision shows that the ECJ has taken a practical approach to the sound administration of justice, as is clear from its remarks at paragraphs 37 and 38, referred to above. Conferring exclusive jurisdiction on the courts of one state as opposed to another has to be justified. In my view, that consideration is all the more strong when the two parties to proceedings have agreed which court should determine disputes between them.

I cannot accept Mr Lord’s submission that the ECJ was, in that case, setting out a general test that if a particular issue that falls within one of the paragraphs of Article 22 is raised in proceedings and it could have a “decisive influence”, that is enough to make the proceedings “principally concerned with” that issue. The phrase “decisive influence” is used in paragraph 34 of the judgment in contrast to the statement that the “real and immovable nature” of the claimant’s right in property is, in the context of the case, only of “marginal significance”. The issue is of some significance, of course, because if the claimant had no rights in the land, it could not bring a claim for infringement of rights by virtue of the nuisance alleged. In that sense, the issue of a right in the land would be potentially dispositive of the case. But that is, in the ECJ’s view, not enough.

We were referred to a number of textbooks on the interpretation of Article 22 and its relationship with Articles 27 and 29. (Footnote: ⁷³) The commentary in Kaye might be said to assist JPM but it was not reasoned and was published before nearly all the relevant cases were decided. The other extracts did not deal directly with the issues we face.

The proper interpretation of Article 22.2 has to be derived from its wording, its objective, its position in the scheme of the Regulation, the ECJ decisions on Article 22 and its predecessor, the commentary of Mr Jenard and the English cases on the Article. My conclusions on its interpretation are as follows: first, I think we are bound by English Court of Appeal authority to interpret the words “…proceedings which have as their object…” in Article 22.2 as “proceedings which are principally concerned with”. Although the Court of Appeal in Grupo Torras stated that the words could also mean “proceedings which have as their subject-matter”, I prefer the former formulation, because it links with the wording in Article 25, ie. “…a claim which is principally concerned with….”. That interpretation also accords with the French text. That construction is entirely consistent with the analysis of Mr Jenard to which I have referred above.

Secondly, I reject the submission of Mr Lord that the opening phrase of Article 22.2 must be read in such a way that if proceedings raise any issue within Article 22.2, ie. if the proceedings are concerned with the validity of the constitution of a company (etc) or the validity of the decisions of its organs (etc), then that is sufficient to make those proceedings “principally concerned with” that issue. There is nothing in the wording of the Article to warrant that broad interpretation. It is not consistent with the interpretation suggested by Mr Jenard, who talks of the proceedings being “in substance concerned with” the items set out in Article 22.2. The ECJ has stated more than once that Article 22 generally is to be given an interpretation no broader than is necessary to fulfil its objectives of ensuring that the sound administration of justice is achieved by giving exclusive jurisdiction to the courts of the state concerned with the relevant land, company, public registers, patents and so forth. But it is not axiomatic that any proceedings that raise an issue about the validity of the constitution of a company or the validity of a decision of its organ must necessarily be most soundly dealt with by the court of the state where the company has its seat, particularly if the parties have chosen another jurisdiction to solve their disputes. The validity issue may be one of many other issues which have nothing to do with the validity of the company or the validity of decisions of its organs and those other issues may have to be decided by a different applicable law and may concern facts which are unrelated to the state where the company has its seat. In such a case the sound administration of justice could well require the courts of another state to determine the issues. That is even more so when the parties have agreed a jurisdiction for the resolution of disputes. This conclusion is, I think, clearly supported by the approach of the ECJ in Land Oberösterreich v CEZ as and in Hassett v South Eastern Health Board.

Thirdly, I reject the submission of Mr Lord that if proceedings raise a number of issues and one of them is within the terms of Article 22.2 and the resolution of that issue may be dispositive of the proceedings as a whole, that must mean that the proceedings are “principally concerned with” an issue within Article 22.2. Again, that is not what the Article states. It is inconsistent with Mr Jenard’s commentary. If the test is: what are the proceedings “principally concerned with”, as the English Court of Appeal has held, then one issue which may be dispositive may be what the proceedings are principally concerned with, but it is not necessarily the case. No ECJ decision has given the Article that interpretation. The GAT casedoes not support this proposition because that was a patent case and, as the ECJ makes clear in its judgment, when an infringement claim raises the issue of validity of the patent, they are really two aspects of one issue. The Coin Controls and Fort Dodge cases are to the same effect. For the reasons I have already set out, neither does the Land Oberösterreich case support Mr Lord’s submission.

There are no other English cases which support this submission of Mr Lord. In my view the statements of Knox J in the Newtherapeutics case are contrary to his submission. Although the judge accepted that the company could win the action on either of the two issues raised, Knox J was concerned to find the principal issue in the proceedings, as Teare J noted. (Footnote: ⁷⁴) Further, the whole approach of Mance J in the Grupo Torras case is contrary to Mr Lord’s submission. Mance J held that Article 22.2 called for an exercise in “overall classification”, and an “overall judgment”, by which the court attempts to assess whether the proceedings are so closely connected with matters of local company law and internal corporate decision making that the proceedings should not be tried anywhere else but in the courts of the state of the company’s seat. (Footnote: ⁷⁵) The Court of Appeal in that case endorsed this overall approach. It means that if a court is faced with a dispute on whether Article 22.2 applies, it has to decide on the principal concern of the proceedings overall. I do not accept that the statement of Chadwick LJ in Prudential Assurance Co Ltd v Prudential Insurance Co of America, (Footnote: ⁷⁶)at paragraph 25, is support for the proposition that, for Article 22.2 purposes, one set of proceedings can be principally concerned with several issues. Chadwick LJ was not dealing with such an argument in that case. Article 29 of the Regulation does not itself address the question of how to determine what a particular action is concerned with to see whether the exclusive jurisdiction provisions of Article 22 apply or not. (Footnote: ⁷⁷)

Fourthly, given my view that the Court of Appeal in the Grupo Torras case did endorse the approach of Mance J that a court has to undertake an exercise in “overall classification” and make an “overall judgment” to see whether the proceedings are “principally concerned” with one of the matters set out in Article 22.2, we are bound to follow that interpretation unless there has been a subsequent decision of the ECJ (or House of Lords) which has stated a contrary interpretation. There is none.

In any case, in my respectful view the interpretation of Mance J was correct. It fits with the wording of Article 25. It also fits with the objective of Article 22, which is to give exclusive jurisdiction to the courts of the state which will be best suited to dealing with the relevant issue, depending on which paragraph of Article 22 is in play. It is only necessary to displace the general rule as to jurisdiction or the parties’ own agreed jurisdictional choice if, making an overall judgment, it is clear that granting jurisdiction to the courts of the relevant state (where the land is; where the company has its seat; where the patent is registered etc) will result in the sound administration of justice. In the context of Article 22.2, this will not be the case unless, overall, the proceedings are so closely connected with matters of local company law and internal corporate decision making in respect of the company that the proceedings should not be tried anywhere but in the courts of the state where the company has its seat.

Fifthly, whilst I respectfully accept that Mr Jenard must be right in saying that if an issue within Article 22.2 is only a “preliminary or incidental matter” in some proceedings, they cannot be “principally concerned” with Article 22.2, the converse does not follow. Even if an issue within Article 22.2 is not simply a “preliminary” or “incidental” matter, it does not necessarily mean that, looking at the proceedings overall, they are proceedings which are “principally concerned” with Article 22.2 matters. That will depend on the overall classification or overall judgment. Insofar as Laddie J may have come to the opposite conclusion in the Coin Controls case, (Footnote: ⁷⁸)I think he was wrong.

Therefore, I conclude that Teare J reached the right conclusion on the interpretation of Article 22.2, as stated at [46] of his judgment. Put in the context of this case, I agree with him that the question is whether the English proceedings are, “…in substance principally concerned with the ultra vires issue raised by BVG by way of defence to JPM’s claim”.

After the judge had reached his conclusion on the correct interpretation of Article 22.2, he then considered the nature of the English proceedings and the issues that either had been raised or, in the judge’s opinion, were likely to be raised. He made an assessment of “..all aspects of the litigation, in so far as they are apparent from the materials before the court”, so as to reach an overall judgment of its nature. (Footnote: ⁷⁹) He also considered whether the proceedings were likely to be so closely connected with the German corporate law of ultra vires that the proceedings should not be tried anywhere but in the courts of Germany. That exercise also involved making an assessment of the nature of the proceedings and the importance of various issues raised in them.

CPR Pt 52.11(1) states that “every appeal will be limited to a review of the decision of the court below, unless (a) a practice direction makes different provision for a particular category of appeal; or (b) the court considers that in the circumstances of an individual appeal it would be in the interests of justice to hold a re-hearing”. Neither exception applies in this case. CPR Pt 52.11(3) provides that the appeal court will allow an appeal where the decision of the lower court was “wrong” or was unjust because of procedural unfairness. The second of those does not apply in this case.

It seems to me that the second issue in this case therefore raises a threshold question, which is: to what extent is the Court of Appeal entitled to re-assess a trial judge’s overall assessment of facts by reference to a specific legal standard, which, in this case, is whether proceedings are “principally concerned with” the validity of decisions made by the management and supervisory boards of BVG, within the meaning of Article 22.2 of the Regulation. The judge heard no oral evidence, of course, but he did have written evidence before him, including the opinions of the two German law experts, Professor Dr Assmann and Professor Dr Heckmann.

The question of when the Court of Appeal can interfere with a judge’s overall assessment of facts by reference to a judicial concept or standard has been considered by this court and by the House of Lords in several contexts in recent years, particularly where the judge at first instance has made findings and inferences of fact after hearing evidence. (Footnote: ⁸⁰) An appellate court will be most reluctant to interfere with findings of primary fact based on oral evidence from witnesses. But in cases where a judge has to evaluate primary facts, inferences from facts, opinions (particularly of experts), impressions and nuance, the appellate court will also be reluctant to interfere with the judge’s assessment.

The constraints on the Court of Appeal are at their greatest where it has to consider the exercise of a discretion by a judge at first instance. That is not this case. But, in my view, the present case does involves the application of a legal standard (which is, itself, not altogether precise), to a combination of features of varying importance. (Footnote: ⁸¹) In such a case as this one, in my view, this court has to be very cautious before interfering with the judge’s conclusions, when he has assessed the combination of features and arrived at an “overall classification” to see with what the English proceedings will be “principally concerned” for the purposes of Article 22.2 of the Regulation. I would say that the Court of Appeal cannot interfere unless it is satisfied that the judge has erred in principle in making his “overall classification”, or he has gone outside the bounds within which reasonable disagreement is possible.

Mr Lord attacked Teare J’s analysis and conclusions using the “overall judgment” approach. He submits that the judge failed to take a step back and put the ultra vires issue in its proper context. Mr Lord emphasises, first, that the ultra vires point is potentially dispositive. (Footnote: ⁸²) Secondly, he notes that, logically, the ultra vires is the first point to arise for decision, because if the decision of the BVG boards to enter the JPM was ultra vires, then the claim for a declaration as to its validity and the monetary claim under the JPM Swap must fail. In this regard, Mr Lord points out that the judge himself characterised the issue of ultra vires as “…an important preliminary issue”. (Footnote: ⁸³) Thirdly, Mr Lord submits that the ultra vires issue is central to JPM’s first claim for a declaration as to the validity of the JPM Swap. Lastly, Mr Lord argues that the German law issue on ultra vires is both significant and very substantial and so would be likely to occupy a considerable part of any trial.

The English proceedings have, of course, not reached the stage of pleadings, let alone a List of Issues, so that the potential issues between the parties have not been properly identified and refined. We were shown the Complaint that has been lodged by BVG in the German proceedings. This is an 80 page document (in translation at least), which sets out BVG’s case for the three motions it claims. (Footnote: ⁸⁴) Under the heading “Grounds” there are the following two paragraphs:

“The cause of action is the establishment that the Plaintiff, as a result of the Defendant’s grossly incorrect advice, entered into a derivative transaction (Credit Default Swap) in the form of a Collateralized Debt Obligation (“Credit Default Swap JP Morgan”) which is invalid on the ground of the Plaintiff, as a result thereof, having acted outside its scope of function and sphere of operation and hence ultra vires.

…….

The Plaintiff therefore in a first stage seeks establishment by this court that the Credit Default Swap JP Morgan entered into as a result of the Defendant’s grossly incorrect advice is invalid on the ground of the Plaintiff, as a result thereof, having acted outside its functions and sphere of activity according to its Articles of Association and hence ultra vires…”.

The Complaint also tackles the possible argument that JPM might raise that the proceedings in Germany and in England concern the same cause of action between the same parties so that the German court, being second seised, should stay its proceedings, pursuant to Article 27 of the Regulation. The Complaint characterises the English proceedings and the German proceedings in the following terms:

“Hence, the core of the proceedings conducted in England is an alleged (contested) claim to payment on the part of the Defendant. As a preliminary question, the Defendant also wants to have the validity of the ISDA 2002 Master Agreement dated 17 August 2007 clarified (see Sec. 2 of the Claim Form on page 3).

In contrast, the present action concerns a finding that the Defendant has been seriously at fault with its advice: firstly, it should be held that the Plaintiff, as a consequence of the incorrect advise provided by the Defendant, concluded, in the form of the Credit Default Swap JP Morgan, a derivative credit transaction that lay outside its scope of operation pursuant to its Articles of Association (“Articles”), hence was ultra vires and invalid. Secondly, the Plaintiff pursues claims for damages on the grounds of an infringement by the Defendant of obligations to advise and inform resulting from a consultancy contract and from the infringement of rules of conduct applicable to the Defendant in the STA.……”

The judge identified (Footnote: ⁸⁵) the following issues as being likely to arise in any trial of the disputes between JPM and BVG in relation to the JPM Swap. (1) How the JPM Swap works according to its terms. (Footnote: ⁸⁶) This issue has to be considered in order to deal with the allegations of BVG that JPM gave incorrect advice about the nature and working of the JPM Swap and that JPM made misrepresentations about it, failed to disclose relevant matters and otherwise was in breach of contract. (2) What was said and understood (or not) at the meetings between JPM and BVG between June 2006 and July 2007 regarding the JPM Swap and how it worked. Those events have to be analysed to deal with BVG’s allegations of the incorrect advice, misrepresentation, non- disclosure and breach of contract, which BVG says were the result of what JPM (or those for whom it is responsible) said or wrote at or between meetings in that period. (3) The ultra vires issue. This will involve looking at the relevant German law and also the constitution of BVG. As the judge noted, (Footnote: ⁸⁷) this issue arises independently of the first two I have summarised.

The judge accepted that the ultra vires issue is important because it might be dispositive of the proceedings. He gave weight to that point. But, like the judge, I find it difficult to characterise these proceedings as being “principally concerned with” the ultra vires issue. At this very early stage of the proceedings and on the very limited material we have, I find it hard to see how the ultra vires issue could be completely isolated from the others. The issue (and therefore the German law evidence) will surely have to be placed in the context of the narrative of the meetings and negotiations and a detailed analysis of the nature of the JPM Swap itself to see if resolutions to conclude that contract were ultra vires the powers of the two boards of BVG.

Therefore, like the judge, I would characterise these proceedings as being “principally concerned with” the validity of the JPM Swap and whether JPM can enforce its rights under it. As a part of that overall issue, the court will have to consider various defences put forward by BVG, of which an important one, which could be decisive, is the ultra vires issue. But, the ultra vires issue is not the focus of the proceedings as a whole.

The judge also looked at this question from the viewpoint of whether the proceedings were so likely to be connected with the German law of ultra vires that they should not, as a matter of the sound administration of justice, be tried anywhere but the courts of Germany. I have already summarised the points that the judge took account of under this heading. (Footnote: ⁸⁸)

Mr Lord criticises the judge’s list of what Mr Lord called “policy considerations”. I regard those criticisms as unfounded. First, the ECJ has made it clear that Article 22 should be given no wider an interpretation than its policy requires, precisely because it detracts from the basic jurisdiction rules of the Regulation and its invocation may prevent the parties from being able to use the jurisdiction agreed to deal with disputes. (Footnote: ⁸⁹) So it is right to ask whether, on the grounds of the sound administration of justice, this case demands trial in the courts of Germany. In my view, agreeing with the judge, given all the other issues that arise and given the chosen applicable law of the contract is English law, it does not.

Secondly, the judge was right to emphasise that this action only involves the parties to these proceedings, not others, as may be the case in patent or other intellectual property disputes. That leads back to the question: does the sound administration of justice in this action necessitate it being tried in the German courts? Again, for the reasons given, I agree with the judge that the answer is: no.

Thirdly, the judge rightly points out that even preliminary (and perhaps also incidental) issues have to be decided somewhere. If, taken overall, the proceedings are not “principally concerned with” issues which are within Article 22.2, then the other jurisdictional rules of the Regulation have to apply and their application will avoid conflicting judgments. In this case that means deciding the case in the parties’ chosen forum, pursuant to Article 23 of the Regulation. There is therefore no tension within the Regulation.

Accordingly, I agree with the judge that the ultra vires issue, viewed in its context, is not one for which the policies underlying Article 22 generally or Article 22.2 in particular require a decision by the German courts.

It follows that I agree with the judge’s conclusions on the application of Article 22.2 to this case. I would therefore dismiss BVG’s appeal.

In my view these issues are closely related and so I will deal with them together. On behalf of BVG, Mr Lord submits that the English proceedings must be stayed pending the ECJ’s preliminary ruling to avoid a risk of inconsistent results on jurisdictional issues in the courts of two member states, viz. Germany and the UK. It is said that a failure to stay the English proceedings could distort the scheme of the Regulation and put the UK in breach of the obligation of “sincere co-operation” in EU law between the national courts of member states and the ECJ, which derives from Article 4.3 of the Consolidated Version of the Treaty of European Union. (Footnote: ⁹⁰)Mr Lord relies on the decision of the ECJ in Masterfoods Ltd v HB Ice Cream. (Footnote: ⁹¹)He submits that the first question submitted by the German court (Footnote: ⁹²) raises a number of points which are directly in issue before this court. He argues that the second question, although not before this court, could have an impact on the Article 22.2 argument. The ECJ’s preliminary rulings therefore “may well determine” BVG’s jurisdiction application. Next, Mr Lord submits that if the English court gives its judgment in advance of the ECJ ruling, it may be inconsistent with that ruling. Lastly, any judgment given by a court which conflicts with Article 22 of the Regulation will not be recognised, in accordance with Article 35 of the Regulation. Therefore, the construction of all parts of Article 22 should be uniform to avoid the risk that any judgment of the English court in this case will not be recognised in Germany.

Mr Lord therefore submits that the English proceedings should be stayed pending the ECJ’s preliminary rulings, although he accepts that it would be proper for the English court to express its views on the issues that have been argued. He also accepts that the English court could formulate its own questions for preliminary rulings by the ECJ. (Footnote: ⁹³)

Mr Rabinowitz submits that the court should not stay the present proceedings pending the ECJ’s preliminary ruling of the German court’s questions. He also submits that the court should not refer any questions to the ECJ for preliminary rulings. He notes that the first question posed by the German court is not the question that arises in the present proceedings, because it does not deal with the multi-issues point at all. Therefore there is no prospect that the German court’s reference will resolve it. He also points out that, at no stage of the hearing before us did BVG advance an argument that this court should refer a question for a preliminary ruling to the ECJ. (Footnote: ⁹⁴)

In my judgment, this court should not stay the English proceedings to await the outcome of the ECJ’s preliminary ruling on the questions put to it by the German court. The first question is the most important one and the point is that even if the ECJ’s answer to that question is: “yes it does”, it will not deal with the two issues that we have had to decide. So I do not see the point in awaiting the ECJ’s answer to it. The second question is not in issue before the English courts, so there is no reason to stay the present proceedings to await an answer on it. Neither is the third question. I accept that the third question is an open one for the ECJ, given various remarks in its decision in Overseas Union Insurance Ltd v New Hampshire Insurance Co. (Footnote: ⁹⁵) But as the English court is plainly the court first seised, as such it must be entitled to state its own decision on the issue of whether Article 22.2 applies to the proceedings or not. The fact that the German court, as the court second seised, has referred a question on the position of a court second seised under Article 27 should not prevent this court, as the court first seised, from giving its answer on the Article 22.2 issue, particularly as the German court has, quite properly, refrained from giving its own opinion.

It follows that, in my view, if this court gives its judgment on the issues before it and does not stay the English proceedings, it will not be failing to fulfil its obligation of sincere co-operation. This court would not be making any decision which might be inconsistent with decisions yet to be made by the ECJ on the same subject matter between the same parties, because, as I have tried to show, the issues before this court and those referred to the ECJ by the German court are different. (Footnote: ⁹⁶)

Therefore, there is no basis for staying the present proceedings on the ground of a potential conflict with the preliminary rulings that the ECJ has been asked to give. No other basis is advanced in favour of a stay. In my view, given the conclusions I have reached, there is every reason not to stay the present proceedings. The parties should get on with the litigation as swiftly as possible so that their rights and obligations under the JPM Swap can be determined by the Commercial Court.

In reaching this conclusion I have considered very carefully whether this court should itself refer any questions to the ECJ, despite the fact that neither party invited us to do so in their written or oral submissions at the hearing. If we had been shown any decisions of the ECJ or of courts of other Member States of the EU that supported the submissions put forward by Mr Lord, that might have been a powerful argument for making a reference. But, in my judgment, we were shown none. It seems to me, therefore, that we are bound by the decision of this court in the Grupo Torras case on the interpretation of Article 22.2, which has been followed subsequently and never doubted. The Supreme Court may disagree, in which case it will doubtless consider making a reference, but that would be a matter for it to consider.

I would dismiss the appeal and I would refuse to grant a stay of the present proceedings. I would decline to refer any questions to the ECJ for preliminary rulings.