The application before the Court is an application by the Defendant (“Imagina”) for a stay of these proceedings (“the English Proceedings”) until after judgment in proceedings brought by Imagina against the Claimant (“TVV”) in the Paterna Court of First Instance in Valencia, Spain (“the “Spanish Court” and “the Spanish Proceedings”). The application is made pursuant to Article 27(1) alternatively Article 28(1) of Council Regulation (EC) No. 44/2001 (“the Brussels I Regulation”) alternatively section 49(3) of the Senior Courts Act 1981.

Imagina and TVV are both Spanish companies. Imagina is in the business of acquiring and managing broadcasting rights in audiovisual works and sub-licensing those rights. TVV is a publicly-owned broadcaster for the Region of Valencia.

Both the Spanish Proceedings and the English Proceedings relate to an agreement entitled “Television Sublicensing Rights Agreement in relation to FIA Formula One World Championship” entered into between Imagina and TVV on 20 July 2009 (“the Agreement”).

In April 2007 Imagina acquired certain rights to broadcast the FIA Formula One World Championship (“the Championship”) for the 2009-2013 seasons in Spain and Andorra from Formula One Administration Ltd. Usually the Championship season starts in around March and finishes in November each year.

In about March or April 2008 Imagina granted Gestoria de Inversions Audiovisuals La Sexta, S.A. (“La Sexta”) a sub-licence to broadcast the Championship for the seasons 2009-2013 throughout Spain and in any official language in Spanish except Valencian. La Sexta is a privately-owned broadcaster.

Under the Agreement Imagina sub-licensed to TVV the right to broadcast the Championship within Valencia and in the Valencian language for the 2010–2013 seasons (and to retransmit in the 2009 season).

The Agreement consists of a short main document with eight Annexes. Annex 1 contains the principal terms. Clause 1.1 defines the “Primary Rights” granted, which are said to be “Shared”. Clause 1.3.1 explains that “Shared” “means shared actually with La Sexta” and briefly describes the rights granted to La Sexta. By clauses 1.3.2 and 1.3.3 Imagina undertakes not to grant various rights in the same language and in the same territory to any other party, with certain exceptions. By clause 1.4 Imagina reserves various rights to itself.

Clause 2.2 provides that the period of the Agreement is from 1 January 2010 to the “Expiry Date”, namely 31 December 2013. Clauses 7.1-7.3 set out a number of grounds on which Imagina may terminate the Agreement before then. Clause 7.5 enables TVV to terminate the Agreement if Imagina fails to perform any of its material obligations in the manner specified and such failure is either not capable of being remedied or is not remedied within 14 days of notice.

Clause 17.1 provides that the Agreement is governed by English law. Clause 17.3 provides that the Agreement is in English, and in the event of translation into any other language the English version shall prevail.

Clause 17.2 provides as follows:

The payment terms are set out in Annex 2. Clauses 1.1 and 1.2 provide that, in consideration for the rights granted under the Agreement, TVV shall pay Imagina:

a “signing fee” of €2 million by 31 July 2009;

a “rights fee” of €1 million for 2009;

a rights fee of €4 million for 2010;

a rights fee of €4.5 million for 2011;

a rights fee of €5 million for 2012;

a rights fee of €5.5 million for 2013.

Clause 1.3.1 provides that, subject to receipt of Imagina’s invoice 15 days prior to the relevant date, the rights fees are to be paid “annually in instalment [sic] … [f]or 2010 and all subsequent years, fifty percent (50%) plus the applicable VAT on or before January 31^st, and fifty percent (50%) plus the applicable VAT on or before June 1^st, in each such year”.

Clause 1.3.2 provides that timely payments of the fees “is of the essence and an express condition precedent to” TVV’s right to exercise any of the sub-licensed rights under the Agreement and that late payments shall be subject to interest at a specified rate. Clause 1.2.5 [sic] provides that payments shall be made without set-off or counterclaim.

By September 2010 TVV had not paid Imagina any of the fees due under the Agreement, amounting to €7 million before VAT and interest.

Accordingly Imagina commenced the Spanish Proceedings on 19 September 2010 by means of a Complaint seeking a judgment:

On 25 January 2011 TVV submitted its Reply (equivalent to a Defence under English procedure). TVV did not dispute the validity of the Agreement. Nor did it dispute that it had not paid the fees to Imagina. Instead, it contended that it was entitled to withhold payment of those sums as result of a guarantee/set-off arrangement involving Imagina’s parent company, Mediaproducción S.L.U.

On 16 January 2012 there was a preliminary hearing before the Spanish Court. At the hearing, Imagina asked the Spanish Court to admit into the proceedings the invoices which had fallen due for payment since the commencement of the proceedings, namely those for January 2011, June 2011 and January 2012, and the Spanish Court did so. At some point the trial was scheduled for 25 April 2012.

On about 7 February 2012 Imagina terminated its agreement with La Sexta on the ground of non-performance by La Sexta, and instead granted a sub-licence in similar terms to Antena 3 de Television S.A. (“Antena 3”) for the 2012 and 2013 seasons. Antena 3 is a privately-owned broadcaster, and the Antena 3 channel is said by TVV to be the most popular TV channel in Spain.

On 15 February 2012 TVV requested confirmation from Imagina that it had granted a sub-licence to Antena 3 in place of La Sexta. Imagina confirmed this on 21 February 2012.

On 9 March 2012 TVV terminated the Agreement on the ground that Imagina’s grant of a sub-licence to Antena 3 in place of La Sexta was a repudiatory breach of the Agreement which TVV accepted (“the Antena 3 Issue”). Imagina disputes the validity of the termination.

On 19 April 2012 TVV filed a writ to introduce the Antena 3 Issue into the proceedings as a “new fact” under Article 286 of the Rules of Civil Procedure. TVV argued that, as a result of this new fact, it opposed the validity of the Agreement for the 2012 and 2013 seasons and denied that it owed Imagina any fees for those reasons. As a result, the trial was adjourned.

On 2 May 2012 Imagina filed a writ of its own requesting that TVV’s writ should not be admitted or should be rejected. Imagina argued that the Antena 3 Issue was irrelevant to the dispute before the Spanish Court. Imagina also argued that the English Courts had exclusive jurisdiction over the Antena 3 Issue. As Imagina pointed out, however, at that time TVV had not commenced any proceedings in England.

On 18 May 2012 the Spanish Court issued an interim decision refusing to admit the Antena 3 Issue into the proceedings on the ground that it would “change the action”.

Under Spanish procedural rules, an interim decision of that kind can be appealed to the same court. On 30 May 2012 TVV appealed against the decision dated 18 May 2012. In its appeal TVV emphasised that it was not asking the Spanish Court to determine the Antena 3 Issue, but only to refrain from ruling on the validity of the Agreement for the 2012 and 2013 seasons. Furthermore, TVV announced that it intended to commence proceedings in England for the determination of the Antena 3 Issue.

On 4 June 2012 Imagina issued an invoice in the sum of €2.5 million plus VAT, being the second tranche of the rights fee for 2012. TVV returned this unpaid.

On 15 June 2012 Imagina responded to TVV’s appeal, arguing that there was no connection between the Spanish Proceedings and the new proceedings which TVV had threatened to bring in England to determine the Antena 3 Issue: “In short, the new proceedings do not affect the facts established in these proceedings since those facts clearly predate the breach of contract that TVV intends to allege”.

On the same date Imagina filed a further writ to admit new facts into the proceedings. First, Imagina sought to introduce the fact that TVV had included the invoices for the 2009-2011 seasons, amounting to €12,385,000, in a Supplier Payment Plan organised by the Regional Government of Valencia, as demonstrating that TVV accepted that its obligations to pay those amounts were enforceable (contrary to its defence of guarantee/set-off). Secondly, Imagina sought to introduce the June 2012 invoice and TVV’s non-payment thereof.

Also on 15 June 2012 TVV filed a further writ to admit new facts. First, TVV sought to introduce the fact that Imagina had accepted the Supplier Payment Plan, and thereby extinguished the debt for the 2009-2011 seasons. On this basis TVV requested that the proceedings be dismissed or at least dismissed with respect to those seasons. Secondly, TVV sought to introduce the fact that it had commenced the English Proceedings seeking determination of the Antena 3 Issue. TVV argued that, if it was successful in the English Proceedings, the result would be that the Agreement would not be in force for the 2012 and 2013 seasons and therefore no fees would be due under it. TVV requested a stay of the Spanish Proceedings pending the determination of the English Proceedings on the ground that otherwise there was a risk of contradictory judgments, although it contended that Articles 27 and 28 of the Brussels I Regulation were not applicable.

Also on 15 June 2012 the Spanish Court dismissed TVV’s appeal and issued an interim decision on Imagina’s writ to introduce new facts. It admitted the Supplier Payment Plan, but declined to admit the June 2012 invoice.

The trial took place on 19 June 2012. During the trial the Spanish Court rejected TVV’s writ to introduce new facts. It also dismissed both parties’ appeals against the rejection of their respective writs. The Spanish Court reserved its judgment on the merits of the dispute.

On 27 June 2012 Imagina was paid €12,385,000 by the Regional Government of Valencia under the Supplier Payment Plan.

On 28 June 2012 Imagina filed a writ to introduce new facts into the proceedings, namely the payment it had received the day before. Imagina argued that this confirmed that TVV had no defence of guarantee/set-off, but accepted that it constituted partial satisfaction of its claim. Imagina requested that the Spanish Court order TVV to pay the outstanding invoices for 2012 totalling €5.9 million including VAT and the costs of the proceedings.

On 6 July 2012 TVV filed a writ to introduce new facts into the proceedings, namely Imagina’s acceptance of the payment made on 27 June 2012. TVV argued that Imagina’s claim in the Spanish proceedings was limited to the claim for the January 2012 invoice, since the June 2012 invoice had not been admitted by the Spanish Court.

To date there has been no ruling by the Spanish Court on either party’s post-judgment writs, nor any judgment on the merits. It is common ground that a judgment would ordinarily have been expected by the end of 2012. Recently, however, the parties have been unofficially informed of an unexpected turn of events. It appears that the judge who heard the trial of the Spanish Proceedings on 19 June 2012 has gone missing. As a result, the trial may have to be re-heard before another judge.

These proceedings were commenced by a Claim Form issued on 14 June 2012 which was served with Particulars of Claim on 9 July 2012. TVV claims the following relief:

a declaration that it has validly terminated the Agreement;

damages for breach of the Agreement, to be assessed;

interest on such damages.

On 28 August 2012 Imagina issued the application notice which is now before the Court supported by evidence.

On 19 October 2012 TVV served its evidence in answer to the application. This included a first witness statement by Paloma del Moral Roger, a lawyer qualified in Spain who is employed as Head of the Legal Services Department of TVV’s parent company. In her statement Ms Moral states that she is responsible for instructing the lawyers who represent TVV both in the Spanish Proceedings and the English Proceedings and that she is duly authorised to make the statement on behalf of TVV. She goes on to make two important points.

First, she states that, although under Spanish procedural law TVV would be entitled once the Spanish Court has given its final judgment to appeal to the Spanish Court of Appeal against the dismissal by the Spanish Court of TVV’s appeal against the interim decision dated 18 May 2012 not to admit the Antena 3 Issue, TVV undertakes, in the event that Imagina’s application is dismissed, not to make any such appeal.

Secondly, after pointing out that under clause 17.2 of Annex 1 to the Agreement TVV cannot bring proceedings to determine the Antena 3 Issue in Spain without Imagina’s consent, she states:

Articles 27 and 28 provide as follows:

Section 49(3) provides:

When the court is confronted by an application such as the present, it is often instructive to ask why proceedings have been brought in different Member States. So it is here. The first proceedings in time were the Spanish Proceedings. It is common ground that Imagina was entitled to bring those proceedings in Spain under the second paragraph of clause 17.2 of Annex I to the Agreement. The second proceedings in time were the English Proceedings. It is common ground that, by virtue of the first paragraph of clause 17.2, TVV was obliged to bring those proceedings in England unless Imagina consented to the proceedings being brought in Spain under the third paragraph of clause 17.2.

As noted above, TVV has offered to discontinue the English proceedings and to commence proceedings in relation to the Antena 3 Issue in Spain instead if Imagina will consent to that. I asked counsel for Imagina whether Imagina was prepared to accept that offer and consent to the Antena 3 Issue being determined in Spain. He informed me that Imagina declined to consent to the Antena 3 Issue being determined in Spain, either in the existing Spanish Proceedings or in fresh proceedings. It is therefore clear that the party which is responsible for there being proceedings in England as well as proceedings in Spain concerning the Agreement is Imagina.

Counsel for Imagina attempted to justify Imagina’s stance on the basis that TVV had not attempted to introduce the Antena 3 Issue into the Spanish Proceedings until 19 April 2012, only four working days before the then trial date. He submitted that this was part of a pattern of delaying tactics on the part of TVV. I am unimpressed with this submission. Although the trial was adjourned, it was only for a short period. What is more important is that Imagina successfully opposed the Antena 3 Issue being introduced into the Spanish Proceedings. If Imagina had consented to the Antena 3 Issue being introduced into the Spanish Proceedings, I see no reason to doubt that it would have been admitted. That would have enabled the Spanish Court to deal with all issues between the parties and thus avoid any risk of irreconcilable judgments.

Counsel for Imagina accepted that, given Imagina’s stance, the English courts have exclusive jurisdiction over the Antena 3 Issue. He also accepted that this Court was first seised of the claims raised by TVV in the English Proceedings, namely for a declaration that TVV had validly terminated the Agreement on 9 March 2012 and for damages for breach of the Agreement.

Counsel for Imagina informed me that Imagina wished to pursue its claim for the rights fees in respect of the 2012 and 2013 seasons as part of the Spanish Proceedings, and that so far as Imagina was concerned the English Proceedings could take their course once the Spanish Court had given judgment. As he accepted, however, if the Spanish Court had given judgment by the end of December 2012 it would not have dealt with the fees for 2013 as they had not yet fallen due. Even now, Imagina will have to file a writ to admit new facts if it wishes to try to recover the sum due in January 2013.

As for the fees for 2012, counsel for Imagina accepted that, if it was held that TVV had validly terminated the Agreement on 9 March 2012, then it must follow that TVV would not be liable to pay the June 2012 invoice. He submitted that that would not relieve TVV of its obligation to pay the January 2012 invoice, although TVV could claim a refund of part or all of the first tranche of the rights fee for 2012 by way of damages in the English Proceedings.

Imagina’s case in support of its application under Article 27(1) can be summarised as follows:

it is presently unclear what matters the Spanish Court considers itself seised of;

this Court is obliged to stay its proceedings until the extent of the Spanish Court’s jurisdiction is established;

the extent of the Spanish Court’s jurisdiction will be established once the Spanish Court gives judgment.

The Court of Justice of the European Union held in Case C-406/92 The Tatry [1994] ECR I-5460 (a decision under Article 21 of the Brussels Convention, the predecessor to Article 28 of the Brussels I Regulation) as follows:

In my judgment it is clear that the Spanish Proceedings and the English Proceedings involve different causes of action and different objects.

As Lawrence Collins LJ, with whom Rimer and Tuckey LJJ agreed, explained in Kolden Holdings v Rodette Commerce Ltd [2008] EWCA Civ 10, [2008] Bus LR at [93]:

It follows that the comparison is between Imagina’s Complaint in the Spanish Proceedings and TVV’s Particulars of Claim in the English Proceedings.

The cause of action in the Spanish Proceedings is TVV’s alleged breach of the Agreement in failing to pay fees as and when they fell due. The causes of action in the English Proceedings are Imagina’s alleged repudiatory breach of the Agreement in granting a sub-licence to Antena 3 in place of La Sexta and TVV’s claim that it validly terminated the Agreement on 9 March 2012 on that ground. The facts and the rules of law relied on are both different.

The object of the Spanish Proceedings is recovery by Imagina of the debts owed by TVV. The object of the English Proceedings is to establish whether TVV validly terminated the Agreement on 9 March 2012, and whether Imagina must pay TVV damages for breach of the Agreement and, if so, in what amount.

Furthermore, for the reasons explained above, there is in fact no dispute now that (a) the Spanish Court has exclusive jurisdiction over Imagina’s claim to recover the unpaid fees and (b) this Court has exclusive jurisdiction over TVV’s claims for a declaration that it has terminated the Agreement and for damages.

It follows that Article 27(1) has no application to the present situation. To be fair to counsel for Imagina, he did not seriously argue to the contrary. Rather, he concentrated on Article 28 and section 49(3).

Imagina’s case in support of its application under Article 28(1) can be summarised as follows:

it is presently unclear what matters the Spanish Court considers itself seised of;

as a result there is a risk of irreconcilable judgments;

once the Spanish Court gives judgment it will be clear what it has decided and what it has not decided;

accordingly the English Proceedings should be stayed until then.

In Research in Motion UK Ltd v Visto Corp [2008] EWCA Civ 153, [2008] FSR 20 the Court of Appeal held at [37] that Article 28:

I do not consider that this is an appropriate case for a stay under Article 28(1) for the following reasons.

First, in my judgment the Spanish Proceedings and the English Proceedings are not “related” with the meaning of Article 28(3). As a result of Imagina’s stance, there is no possibility of Imagina’s action and TVV’s action being heard and determined together: cf. J.P. Morgan Europe Ltd v Primacom AG [2005] EWHC 508 (Comm), [2005] 1 CLC 493 at [57].

Secondly, I consider that the risk of irreconcilable judgments resulting from the Spanish Proceedings on the one hand and the English Proceedings on the other hand is very slight.

On the evidence before me, it seems clear that the Spanish Court is only likely to render a judgment in respect of the invoices down to and including January 2012. Given that the invoices prior to January 2012 have now been paid, the only possible issues relating to those invoices arise out of Imagina’s claims for interest and costs. The Spanish Court has refused to admit the Antena 3 Issue into the proceedings, suggesting that it recognises that (absent consent from Imagina to proceedings being brought by TVV in Spain) this Court has exclusive jurisdiction over that matter. Consistently with that, the Spanish Court has also refused to admit the June 2012 invoice into the proceedings, suggesting that it recognises that, if TVV prevails on the Antena 3 Issue, then TVV will not be liable to pay the June 2012 invoice.

Whatever decision the Spanish Court makes in respect of the January 2012 invoice, nothing that this Court may decide in the English Proceedings would be irreconcilable with it. At the risk of stating the obvious, there would be no inconsistency between the Spanish Court declaring that the Agreement was valid and enforceable down to 9 March 2012 (which is not even in dispute), and hence the January 2012 invoice was payable, and this Court deciding that the Agreement was validly terminated on 9 March 2012.

The only risk of inconsistency which counsel for Imagina was able to identify concerned the June 2012 invoice. He argued that it was unclear whether the Spanish Court was going to give judgment in respect of that invoice, and that if it found in favour of Imagina with respect to that invoice, but this Court decided that TVV had validly terminated the Agreement on 9 March 2012, there would be inconsistency. I am unable to understand how this is likely to occur given that it is Imagina’s own evidence (confirmed by TVV’s evidence) that the Spanish Court has refused to admit the June 2012 invoice into the Spanish Proceedings.

I do not regard the slight risk that, contrary to my present expectations, the Spanish Court may give judgment in respect of the June 2012 invoice as sufficient to justify a stay of the English Proceedings.

Thirdly, if there is a risk of irreconcilable judgments, that risk has been created by Imagina’s stance in refusing to agree to the Antena 3 Issue being tried in Spain. It does not lie in the mouth of the party who has created a risk of irreconcilable judgments by refusing to agree to all claims being tried together to say that the other party’s claim should be stayed as a result. When I put this to counsel for Imagina, he argued that the risk of irreconcilability had been created by TVV by its attempts to introduce the Antena 3 Issue into the Spanish Proceedings. That argument is completely untenable. As I have said, introduction of the Antena 3 Issue into the Spanish Proceedings would have avoided any risk of irreconcilable judgments.

It seems to me that, in reality, what Imagina is trying to do is to achieve a tactical advantage by obtaining a judgment from the Spanish Court before this Court can pronounce upon the validity of TVV’s termination of the Agreement. As counsel for Imagina was forced to accept, as a matter of logic, Imagina’s insistence that the Antena 3 Issue be determined in the English Proceedings would suggest that that the Spanish Proceedings should be stayed until this Court has given judgment, because only then will the Spanish Court know whether or not the Agreement was terminated on 9 March 2012 and hence whether TVV is obliged to pay invoices issued by Imagina after that date. But when TVV requested such a stay, Imagina opposed it. Counsel for Imagina informed me that Imagina remained opposed to such a stay even if, as appears likely, there will have to be a re-trial in Spain.

Fourthly, whatever might have been the position if it had appeared likely that the Spanish Court would give its judgment soon, that is not the case. On the contrary, it appears likely that there will have to be a re-trial. Thus the effect of granting a stay would be to delay the progress of the English Proceedings for an unknown and potentially significant period even though the Antena 3 Issue can only be determined in those proceedings.

Imagina’s case under section 49(3) is essentially the same as its case under Article 28(1). In my judgment a stay is no more appropriate by virtue of section 49(3) than by virtue of Article 28(2).

Articles 27 and 28 of the Brussels I Regulation are specific manifestations of the general duty of sincere cooperation between the courts of the Member States, and other institutions of the European Union, which arises under Article 4(3) of the Consolidated Treaty of the European Union. That duty goes beyond avoiding inconsistent decisions and extends to the exercise of overlapping jurisdictions: see Ryanair Holdings plc v Office of Fair Trading [2012] EWCA Civ 643 at [11], [36]-[38]. I consider that it will assist the Spanish Court to know what this Court has decided and why. Accordingly, I shall direct that both parties ensure that a copy of this judgment is provided to the Spanish Court as soon as is practicable.

Imagina’s application is dismissed. I shall give directions for the conduct of these proceedings when this judgment is handed down.