Debt Collection London Ltd & Anor v SK Slavia Praha- Fotbal AS

There are two applications before the court. In these proceedings in England the Claimants (“DCL” and “Enic”) claim repayment of money advanced to the Defendant (“SSPF”). SSPF carries on the business of a football team in the Czech Republic. Enic is an associate of the company which was at least until recently the majority shareholder in SSPF. Since about May 2009 there has been a dispute about the shareholding.

On 3 August 2009 DCL/Enic issued an Application Notice by which they asked the court to order that judgment be entered under CPR 12.3(1), in default of Acknowledgement of Service, in the sum of £3,628,609 plus interest. At the hearing DCL reconsidered this application. It still asks the Court to declare that SSPF failed to file a valid Acknowledgement of Service within the period prescribed by the Rules. But instead of asking for judgment, DCL ask the court to give directions to give SSPF an opportunity to file and serve evidence relating to any alleged defence to the claim, and, for this application then to proceed on the basis that it is an application for summary judgment under CPR 24.

On 24 August 2009 SSPF issued an Application Notice by which it asked the court, pursuant to CPR 11(1) to declare that it has no jurisdiction, or to decline to exercise any jurisdiction it might have, alternatively, that these proceedings be stayed pending determination of jurisdiction of the Municipal Court of Prague, in the Czech Republic (“the Czech court”).

By way of background, the parties are engaged in litigation with each other in the Czech court on other matters (in effect the rights of DCL/Enic as shareholders of SSPF). And SSPF claim that the Czech court was the court first seised of the cause of action to which these English proceedings relate.

The applications raise issues as to the interpretation of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“the Judgments Regulation”), and of Regulation No 1393/2007 of the European Parliament and of the Council of 13 November 2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents) and repealing Council Regulation (EC) No 1348/2000. I shall refer to Regulation (EC) No 1348/2000 as the 2000 Service Regulation, and Regulation No 1393/2007 as the 2007 Service Regulation.

The applications also require consideration of Czech law. There has been an exchange of witness statements on the subject of Czech law.

SSPF invited me to have regard to the evidence of Mr Radek Matous, who is an advokat and senior associate of the firm of Czech lawyers advising SSPF, Balcar Polansky Eversheds. He was the lawyer responsible for drafting and filing the defective Acknowledgement of Service of 20 July. He has made three witness statements on the subject of Czech law. They are dated 5, 19 and 23 October.

DCL/Enic have submitted witness statements of Mr Rotislav Pekar, who is in practice as an advokat in association with Squire, Sanders & Dempsey. They are a firm of lawyers in Prague, who are retained by DCL/Enic. His three statements are dated 12 , 22 and 23 October.

The parties each refer to the evidence of Mr Matous and Mr Pekar as ‘expert evidence’, but their statements are not in the form of an expert’s report as prescribed in CPR 35 PD para 2.1. There is a Consent Order for Directions dated 1 September 2009. This provides for evidence to be served by DCL/Enic by 21 September 2009 and evidence in reply by SSPF to be served by 5 October 2009. There is no provision in any order for service of evidence other than that, and no permission has been given for either party to put in evidence an expert’s report, as required by CPR 35.4.

The parties have asked me to make findings as to the applicable Czech law on the basis of these witness statements. None of the makers was required to attend for cross-examination.

I indicated at the outset of the hearing that I regarded this as an unusual and unsatisfactory state of affairs. But I have read all the witness statements and heard submissions upon them.

The issues relate entirely to matters of jurisdiction. There is no material before the court relating to the merits of any defence.

DCL sues as the assignee from Enic of debts said to be due from SSPF. The Particulars of Claim in the English proceedings set out a series of 18 advances made pursuant to loan agreements made between January 2005 and May 2007, £2,877,670 being advanced in total. The loan agreements are expressed to be governed by English law and provide for repayment on demand. Repayment was demanded by letters dated 25 March 2009 and 23 April 2009.

The Particulars of Claim in the English proceedings also set out a claim for the balance of money due under a “Discounted Funding Agreement” (“DFA”) made on or about 14 October 2005, also expressed to be governed by English law. The effect of this agreement, as alleged by DCL, is that Enic advanced £900,000 to SSPF in consideration of SSPF agreeing to repay £1,000,000 in specified circumstances.

On 15 April 2009 SSPF lodged proceedings in the Czech court against DCL, seeking a declaration that its obligations had been fulfilled under the DFA. It is this that gives rise to the question whether the Czech court has been seised with any proceedings which might engage Arts 27 or 28 of the Judgments Regulation. Those proceedings have not yet been served on DCL.

On 12 June 2009 DCL/Enic issued the Claim Form in these English proceedings, pursuant to art 5(1)(a) of the Judgments Regulation (“the court for the place of performance of the obligation in question”). They were unaware at that time of the proceedings lodged with the Czech court on 15 April.

On 15 June 2009 DCL/Enic purported to commence separate proceedings against SSPF in the Czech court seeking repayment of the same sum of money as they seek in these proceedings. DCL/Enic say that this was a precautionary measure, against the event that there was a problem with these English proceedings.

On 18 June 2009 DCL/Enic issued an Amended Claim Form and Particulars of Claim in these proceedings.

On 29 June 2009 the English Claim Form and other related documents were purportedly served in person by a Czech lawyer, Mr Slach, on SSPF at its registered office in the Czech Republic. SSPF does not accept that this service was valid. This and the service effected on 30 June 2009 give rise to the issue under the Service Regulations.

On 30 June 2009 the same English documents were purportedly served by post on SSPF in the Czech Republic. SSPF does not accept that this service was valid.

On 20 July 2009 Czech lawyers acting for SSPF, Balcar Polansky Eversheds, filed with this court by fax what purported to be an Acknowledgement of Service of the English proceedings. It is agreed that this was defective in two respects: it did not give an address for service within England and Wales and it was not signed by SSPF, or on behalf of SSPF by authorised legal representatives: CPR 6.23 and 10.5.

On 17 July 2009 the Czech court requested SSPF to pay the court fee in respect of the claim lodged on 15 April.

On 31 July 2009 Balcar Polansky Eversheds wrote to this court challenging its jurisdiction and referring to the Czech proceedings of 15 April.

On 3 August 2009 DCL/Enic issued the Application Notice referred to above.

On 4 August 2009 the English proceedings were served on SSPF through the Czech court. SSPF accepts that this service was valid in form, but it would be no answer to any point that SSPF might have under Art 27 or 28 of the Judgments Regulation.

On 6 August 2009 the fee required by the Czech court was paid by SSPF.

On 19 August 2009 English solicitors, Eversheds, filed an Acknowledgement of Service in this court. DCL/Enic accept that this was validly done, subject to it being out of time.

On 24 August 2009 SSPF issued their Application Notice referred to above.

On 28 August 2009 the Czech court issued a request addressed to SSPF requesting information whether SSPF has knowledge of any ‘advokat’ or other Czech speaking person representing DCL, so that the Czech court could communicate with such person without the necessity of an official translation of the action and its service abroad. On 7 September 2009 SSPF gave the court the name of Mr Peter Slach, who is the person who represents DCL in its proceedings lodged on 15 June. SSPF could not say that he represents DCL for the purpose of the proceedings lodged by SSPF on 15 April. Mr Slach is also the person who served the English proceedings on SSPF on 29 and 30 June.

There are four main issues. They are helpfully summarised by Mr Keith for SSPF as follows. Issues (iii) and (iv) arise whatever the outcome on issues (i) and (ii). :

Issues (iii) and (iv) each raise three separate sub issues. The first sub-issue is the same for both: was the Czech court seised of the proceedings on 15 April? The second sub-question arises only if the answer to the first question is Yes. The second sub-question in relation to Art 27 is whether the 15 April proceedings in the Czech court and these English proceedings ‘involve the same cause of action’. The second sub-question in relation to Art 28 is whether the 15 April proceedings in the Czech court and these English proceedings are ‘related actions’. In each case there is a third sub-issue, namely whether any stay of these English proceedings should relate only to the claim in respect of the DFA (that being the sole contract referred to in the 15 April Czech proceedings) or whether it should also embrace the claims on the loan agreements.

Service on 29 and 30 June was purportedly made pursuant to the Convention between the United Kingdom and the Czechoslovak Republic relative to Legal Proceedings in Civil and Commercial Matters signed on 11 November 1924 (“the 1924 Convention”). There is no dispute that, if the 1924 Convention is still in force, then service was made in accordance with it.

SSPF contends that this Convention ceased to have effect after (or more precisely has not been ‘maintained’ since) the 2000 Service Regulation entered into force on 31 May 2001 (art 25 of the 2000 Service Regulation).

This contention of SSPF is founded on art 20 which is in the same form in each of the Service Regulations. It provides:

“Article 20

Relationship with agreements or arrangements to which Member States are party

1.

This Regulation shall, in relation to matters to which it applies, prevail over other provisions contained in bilateral or multilateral agreements or arrangements concluded by the Member States, and in particular Article IV of the Protocol to the Brussels Convention of 1968 and the Hague Convention of 15 November 1965.

2.

This Regulation shall not preclude individual Member States from maintaining or concluding agreements or arrangements to expedite further or simplify the transmission of documents, provided that they are compatible with this Regulation.

3.

Member States shall send to the Commission:

(a)

a copy of the agreements or arrangements referred to in paragraph 2 concluded between the Member States as well as drafts of such agreements or arrangements which they intend to adopt; and

(b)

any denunciation of, or amendments to, these agreements or arrangements.

No point is taken by SSPF under art 20.2: in other words it is accepted that the 1924 Convention is compatible with the Service Regulations.

What SSPF submit turns on Art 20.3(a). It is common ground that (while there has not been ‘any denunciation of, or amendments to’ the 1924 Convention by either state party) neither the Czech Republic nor the United Kingdom has sent to the Commission a copy of the 1924 Convention. It is submitted that the effect of this omission is, on the true interpretation of Art 20.3, that the 1924 Convention has not been ‘maintained’ within the meaning of Art 20.2.

During submissions I questioned whether this court could, or should, in these proceedings seek to determine whether or not the 1924 Convention was or was not ‘maintained’, or in force, following the coming into force of the 2000 Service Regulation. There seemed to me to be potential difficulties. Neither state party has made submissions to this court, and, so far as I am aware, neither has been invited to make submissions or put any other material before the court. These are purely private law proceedings. But the determination which is sought could have effects on other proceedings between parties who are unaware of this case.

Mr Matous referred in his witness statement of 5 October to statements made to him by an officer in the Czech Ministry of Justice, saying then that the Ministry declined to issue a written confirmation unless an official request was made to the Ministry by a court or other state authority (para 10). However, in his second witness statement dated 19 October 2009 Mr Matous exhibits a letter dated 13 October 2009 from the Ministry of Justice of the Czech Republic addressed to, and in response to an enquiry from, himself. He states:

“I have succeeded in acquiring a written statement from the Ministry of Justice of the Czech Republic dated 13 October 2009 which supports my legal analysis and conclusions … Although the Czech Ministry of Justice uses in its response to my letter dated 2 October 2009 a reference to the original Regulation 1348/2000, it is obviously an error in not affecting the unambiguous position of the Czech Republic in relation to inapplicability of Part II of the Convention”.

In his letter of 2 October 2009 to the Ministry of Justice Mr Matous stated his own view, namely that direct service is required in accordance with art 15 of the 2007 Service Regulation, and the view of his ‘adversary’ based on the 1924 Convention, that service can be by a Czech attorney and by mail. He then asks (as it appears in the translation):

“…. The aforementioned Agreement signed on 11 November 1924 is not included in the list of bilateral international treaties that must be communicated by the Member States to the Commission pursuant to Art 20(3) of the Regulation, should they be applicable.

Am I thus right to consider that

-

Regulation No 1393/2007 precludes the application of the Agreement and that direct service of document by the Czech attorney of an English plaintiff (either in person or by mail) is not possible in the territory of the Czech Republic (without due court authorization, also after the last amendment to the Code of Civil Procedure with effect from 1 July 2009?

-

The action was duly served only when the defendant received the action through the competent Czech court in accordance with Regulation No 1393/2007 of 13 November 2007?”

The reply dated 13 October 2009 (in translation) is signed by ‘Mgr Katerina Putnova, Entrusted substitute of Director of European civil law department Mgr Jana Novotna’. It reads:

“It is only possible to serve judicial documents from Great Britain to the Czech Republic and reversely according to Council Regulation (EC) No 1348/2000, on service in the Member States of judicial and extrajudicial documents in civil or commercial matters. The Convention on legal aid in civil matters (decree no 70/1926 Coll.) can not be applied, because the treaty was not notified by the Czech Republic in the list of treaties which the Czech Republic wishes to be henceforth legally bound to in relation to the Member States (see Article 20(3) of the Regulation).

The Czech Republic stated in its Notification under the Regulation that it is not possible to serve judicial documents on the territory of the Czech Republic directly, this means that Article 15(1) can not be applied in the Czech Republic. It is possible to proceed only according to the Article 14 of the Regulation and send the judicial documents directly by post service”.

Mr Pekar exhibits printouts showing that the 1924 Convention remained available on the website of the Czech Ministry of Foreign Affairs and Ministry of Justice at least until 5 February 2008. He also exhibits a web page published by the Foreign and Commonwealth Office, at least until 5 February 2008, listing the 1924 Convention among those described as being ‘in force’.

Neither side was able to refer me to any jurisprudence on the interpretation to be put upon Art 20 of the Service Regulations. I enquired whether an obligation to notify the Commission of agreements between Member States, such as appears in Art 20.3, appears in any other Regulation, but the researches of counsel had not revealed any other examples.

Mr Keith submits that the failure of the Czech Republic to notify the 1924 Convention under Art 20.3 of the Service Regulations means that it has decided not ‘maintain’ the Convention. He cites the argument to that effect in the second witness statement of Mr Matous dated 19 October, and the letter of 13 October from the official at the Czech Ministry of Justice. He adds that this is consistent with statements made by Mr Matous about Czech procedural law, to the effect that, prior to 1 July 2009, the Czech Republic did not permit direct service at all, and has permitted it since that date only with the previous authorisation of a Czech court. This evidence as to the conduct of the Czech Republic is adduced as evidence in support of the true interpretation of Art 20 of the Service Regulations.

Mr Brettler submits first that Art 20.3(a) refers to ‘agreements … concluded between Member States …’. He contrast that with Art 20.2 which refers to ‘maintaining or concluding agreements’. So he submits Art 20.3(a) does not refer to agreements unless they were concluded between Member States (that is after the accession of the Czech Republic to the European Union). In other words, it only refers to agreements to which the Czech Republic became a party before it acceded to the European Union.

Mr Keith submits that the distinction between agreements made before and after accession makes little sense. I agree with this submission.

Alternatively, Mr Brettler submits that Art 20 does not state what is to be the consequence of a failure to notify the Commission. Had it been the intention that the consequence should be that the agreement ceased to have effect, the Regulation would have so provided. He notes that under Art 20.3(b) a denunciation of an agreement is also required to be notified. While it is not suggested by either party that the 1924 Convention has been denounced, it would be odd if a denunciation had to be notified, but a failure to ‘maintain’ it, which is said to be the effect of a failure to notify under Art 20.3(a), arises by implication alone.

On the footing that I am to approach the interpretation of Art 20 purely as a matter of interpretation of EU legislation, I prefer the alternative submission of Mr Brettler. I see nothing in Art 20 which leads the conclusion that a non-notification under Art 20.3(a) has the consequence that the agreement ceases to have effect. On the submissions and information before me, it is unclear what the consequence may be of a failure to notify the Commission under Art 20.3.

Save to the extent that they agree, and the parties adopt what they agree in the submissions of counsel, I derive little assistance from the witness statements of Mr Matous or Mr Pekar. They appear to me to be little more than advocacy by the lawyers. The advocacy of the Czech lawyers adds nothing to that of Mr Keith and Mr Brettler. And I derive little assistance from the letter of 13 October. It seems to me to be the expression of her opinion by the writer of the letter, on the issue of interpretation which I am myself required to resolve. And it is not even apparent whether she is a lawyer, or to what use she understands her letter is expected to be put to in these proceedings.

Since the parties are agreed that the 1924 Convention did have effect until the 2000 Service Regulation came into force, and that service on 29 and on 30 June was in accordance with the 1924 Convention (subject to its remaining in force), it follows that I find that service was validly effected upon SSPF on 29 June 2009.

This issue turns on the interpretation of Arts 27 and 28, and Art 30 of the Judgments Regulation, and upon Czech law of procedure.

These articles read as follows:

“Article 27

1.

Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.

2.

Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court.

Article 28

1.

Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings.

2.

Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.

3.

For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.

Article 30

For the purposes of this Section, a court shall be deemed to be seised:

1.

at the time when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have service effected on the defendant, or

2.

if the document has to be served before being lodged with the court, at the time when it is received by the authority responsible for service, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have the document lodged with the court.

The document delivered to the Czech court on 15 April recites what SSPF alleges is the effect of the DFA; it states that SSPF has paid £714,321, and it contains (as appears from the translation) a claim by SSPF for a declaration that it

“has fulfilled its obligations under the [DFA] in the full amount and that [SSPF] is no longer obliged to provide any fulfilment to [DCL] under the Agreement”.

Mr Brettler submits that this claim is disingenuous in that it recites that the obligation under the DFA was that the amount which SSPF was bound to repay DCL was no more than £1,000. In the DFA there is a reference to a sum expressed as ‘£1,000,00’, which Mr Brettler submits is obviously a typographical error in which the last nought has been omitted from a figure which should read ‘£1,000,000’. E-mails had been exchanged between SSPF and the Finance Director of Tottenham Hotspur Football and Athletic Co Ltd (which is associated with DCL/Enic). In one dated 4 June 2008 the representative of SSPF had written:

“As I understand it well, we signed our ‘Discounted ….’; you sent us 900 th GBP in several payments and we should repay 1 mil. GBP. The deadline was 31.12.06. … as we didn’t repay it at 31.1.2006 we should calculate the interest from this date (under the same conditions like other loan contracts). So I put it into the sheet. Correct me if it is mistake”.

However, Mr Brettler accepts that the merits of SSPF’s claim in the Czech court are irrelevant to anything that I have to decide under Article 27 (as opposed to Article 28). If it is a bad claim, and if the Czech court has jurisdiction pursuant to the Judgments Regulation, then the Czech court must deal with arguments as to the merits.

Mr Brettler submits that the effect of Art 30.1 is that the Czech court is not seised of the proceedings brought by SSPF. He submits that the proviso to Art 30.1 is engaged. While the document was lodged on 15 April, SSPF has subsequently failed to take the steps it was required to take to have service effected on the defendant.

The parties agree that that payment of court fees is regulated under Cech law in the Act No 549.1991 Coll. Mr Pekar cites the following provisions (in translation):

“Section 4

Creation of a duty to pay a fee

(1)

If a fee for proceedings is involved a duty to pay a fee is created (a) by filing an action or other petition for commencement of proceedings …

Section 7

Maturity of Fees

(1)

A fee becomes payable by creation of fee duty …

Section 8

Payment of fees

… (3) The fees are paid onto an account opened with the Czech National Bank for the court … (hereinafter the ‘Court’s Account’).

(4)

The fees not exceeding CZK 5,000.00 may be paid by fee stamps

Section 9

Consequences of Non-payment of fees

(1)

If a fee for proceedings which became payable by filing a petition for commencement of proceedings, … is not paid the court shall call the payer to payment thereof within a period of time stipulated by the court; after a lapse of such period without effect the court will stay the proceedings”

Annex
FEE TARIFFS
Item 2
For petition for commencement of a civil judicial proceedings, the subject of which is not a monetary performance … (c) in other cases, unless further stipulated otherwise CZK 1,000”

Accordingly Mr Pekar states that the fee payable for the claim for a declaration is CZK 1.000. He states this is the equivalent of about £35.

Mr Pekar cites the Opinion of the Supreme Court of the Czechoslovak Socialist Republic No Cpj 257/87, dated 29 September 1988, published in the Collection of Court Decisions and Opinions under No 2/1989. That includes the following:

“Unless the proceedings are objectively exempt from court fees …, the court shall not serve the motion to commence proceedings on the other parties to the proceedings (provisions of Sec. 79(2) of Civil Procedure Code) before the fee has been paid by the petitioner …”

Mr Matous in addition summarises Section 9(1) and (7) as follows:

“Pursuant to Section 9(1) … if the court fee is not paid on the date when the action is filed the court will request the claimant to pay the court fee within a period stipulated by the court. Pursuant to Section 9(7) … the court will then cancel this resolution if the court fee is paid within the statutory time period to file an appeal against this resolution”.

Mr Matous exhibits a copy of Section 9, including sub-section (7), but it is not translated.

It is common ground that, as a matter of fact, no fee was paid on lodgement on 15 April. Mr Matous states that the Czech court.

“by resolution dated 23 June 2009 requested [SSPF] to specify and amend the action filed on 15 June 2009. This court resolution was delivered to [SSPF] in 30 June 2009 and [SSPF] duly responded within the prescribed time limit of 15 July 2009. The court request to pay the court fee dated 17 July was delivered to [SSPF] on 28 July 2009 and duly paid by [SSPF] on 6 August 2009”

It is agreed that the Czech court requested SSPF to pay the fee, but not until 17 July 2009, and payment of the fee of CZK 1,000 was made in the form of duty stamps, but not until 6 August. The effect in law of these facts is not agreed.

It is the submission of Mr Brettler, and the opinion of Mr Pekar, that the payment of the fee was a step which SSPF were required to take subsequently to lodging the documents with the Czech court, in order to have service effected, but that SSPF failed to take that step. So, it is submitted, the proviso to Art 30 applies, and the Czech court had not been seised within the meaning of Art 30 before payment on 6 August.

Mr Keith in his submissions adopts the opinion of Mr Matous (paras 28-35 of his second witness statement). Mr Matous states that:

“under Czech law the procedural and material effects of the proceedings come into force on the date on which the action is filed and remain in force as long as the claimant continues the commenced proceedings. The payment of any fee is irrelevant to that date”.

Mr Matous agrees with Mr Pekar that in most cases the courts should request the payment of the court fee before taking further steps in the proceedings. But he relies on a number of facts to demonstrate that that is not always what happens. First he refers to the resolution (in effect, so I understand, a court order) of 23 June addressed to SSPF by the Czech court. He also points to events relating to the proceedings which DCL had commenced in the Czech court.

In my judgment the issue that I have to decide in relation to this point depends only in part upon Czech law as to the effect of the non-payment of a fee. The Opinion of the Supreme Court cited in para 58 above establishes (and Mr Matous does not dispute) that the court shall not serve the proceedings before the fee has been paid. Whether lodging a claim with the Czech court but not paying the fee, has the effect that the Czech court is seised within Arts 27 and 28 is a point of EU law, not Czech law. It is not suggested that payment of the fee was required before lodgment of the documents. I therefore take the failure by SSPF to pay the fee to have been subsequent to the lodgement of the claim. And it was a failure to take a step that SSPF was required to take to have service effected on DCL.

It follows in my judgment that the Czech court was not seised of SSPF’s claim within the meaning of Arts 27 and 28 of the Judgments Regulation before 6 August. That is to say, it was not seised of the proceedings before the date on which it has been contended that the English Court was seised. In my judgment the English court was the court first seised.

In the light of this conclusion the other issues identified in para 31 above do not arise. But I shall state my views upon them briefly.

A number of cases were cited to me as to what is meant by “the same cause of action” and “related actions” within the meanings of Arts 27 and 28, and when actions can be split. These included: Gubisch Maschinenfabrik KG v Palumbo Case 144/86 [1987] ECR 4861, The Tatry Case C-406/92 [1999] QB 515, Sarrio SA v Kuwait Investment Authority [1999] AC 32, Research in Motion UK Ltd v Visto Corp [2008] EWCA Civ para 37, Evialis v SIAT [2003] 2 Lloyds Rep 377 and Bank of Tokyo-Mitsubishi Ltd v Baskan Gida Sanayi [2004] 2 Loyds Rep 395.

In Gubisch at para 8 the ECJ stated that the rules now set out in Arts 27 and 28 of the Judgments Regulation

“are … designed to preclude, in so far as is possible and from the outset, the possibility of a situation arising … that is to say the non-recognition of a judgment on account of its irreconcilability with a judgment given in a dispute between the same parties in the State in which recognition is sought”

Mr Brettler points to the undoubted fact that in these English proceedings DCL/Enic sue on the loan agreements as well as the DFA, whereas in the Czech proceedings SSPF seek a declaration only in relation to the DFA.

But Mr Keith submits that it is impossible to disentangle the claims on the loans from the claims on the DFA, because it is common ground that some repayments were made, but that these were not appropriated to any particular loan or to the DFA. In the English proceedings repayments of £714,321 and £211,504 are credited generally against the total indebtedness claimed of £3,575,434, to which interest is added, again unappropriated to any specific loan, to arrive at the total claimed of £3,628,609 inclusive of interest to the date of the claim.

Mr Brettler submits that an appropriation of the repayments can be treated as having been done in the manner most favourable to SSPF. He submits that what he refers to as the bulk of the money is due under the loans, rather than the DFA, and that is what ought to be decisive.

Having regard to the purpose of the rules in Art 27, I find that these English proceedings and the Czech proceedings do involve the same cause of action, in the sense in which those words are to be understood in EU law. If I am wrong about that, I find that they “are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings”. And for the same reasons, I would not accept that it would be appropriate to split the actions.

The final question is which of two kinds of orders I should now make.

Mr Keith submits that the court should remedy the defects in the original Acknowledgement of Service under CPR 3.10, or extend time to 19 August under CPR 3.1(2)(a) and/or 3.9.

Mr Brettler submits that the court should declare that SSPF failed to file a valid Acknowledgement of Service within the period prescribed by the Rules, and give directions to enable SSPF to file and serve evidence relating to any alleged defence to the claim, and, for this application then to proceed on the basis that it is an application for summary judgment under CPR 24.

Mr Matous explains how he came to file the defective Acknowledgement of Service. He states that he did not appreciate that the term ‘legal representative’ is defined by CPR 2.3, as it is, (by reference to the Courts and Legal Services Act 1990 definition of a barrister or solicitor) or that an address for service within the UK was required. He did not notice what was said in the Guidance Notes. There is no challenge to what Mr Matous states on this point.

The fact that DCL/Enic are no longer applying for judgment in default means that there may be little difference which of the routes suggested by counsel is followed in the drafting of the order. But that also means that there will be no significant prejudice to DCL/Enic if I grant the extension of time that SSPF seek.

In my judgment the just course is to grant the extension of time, so that the Acknowledgement of Service of 19 August 2009 is effective as such.

For the reasons set out above, I decline to make a declaration that this court has no jurisdiction or should not exercise its jurisdiction. I shall hear further argument as to other directions that it may be appropriate to make to ensure that the application for summary judgment which DCL/SSPF proposes to make is heard as soon as possible.