Introduction

The case of Akcil & Ors v. Koza Ltd & Anor ([2019] UKSC 40) represents a significant development in the interpretation and application of Article 24(2) of the Brussels I Recast Regulation. This regulation governs jurisdiction and the recognition and enforcement of judgments in civil and commercial matters within the European Union (EU). The dispute involves Koza Ltd, an English subsidiary of Koza Altin, a publicly listed Turkish company, and Mr. Ipek, a Turkish individual. The central issue revolves around the English courts' jurisdiction over claims related to corporate governance and authority, particularly in the context of actions taken by trustees appointed in Turkey.

Mr. Ipek alleged that the trustees in Turkey acted unlawfully to entrench his control over Koza Ltd through changes in the company's constitution and share structure. The legal contention focused on whether the English courts had exclusive jurisdiction under Article 24(2) of the Recast Regulation to hear these claims, despite Turkey not being an EU member state.

Summary of the Judgment

The United Kingdom Supreme Court concluded that Article 24(2) of the Brussels I Recast Regulation does not grant the English courts exclusive jurisdiction over the authority claims against Koza Altin and the trustees. The court emphasized the necessity of a strict interpretation of Article 24(2), aligning with the Court of Justice of the European Union’s (CJEU) jurisprudence, particularly in cases like Hassett v South Eastern Health Board and Berliner Verkehrsbetriebe v JP Morgan Chase Bank NA. The Supreme Court held that the authority claims were distinct and not inextricably linked to the English company law claims, thereby falling outside the exclusive jurisdiction of the English courts under the Recast Regulation.

Analysis

Precedents Cited

The judgment heavily references key decisions by the CJEU to elucidate the boundaries of Article 24(2). Notably:

• Hassett v South Eastern Health Board (Case C-372/07): This case established that Article 24(2) must be interpreted narrowly, covering only disputes directly related to the validity of a company’s constitution or the decisions of its organs.
• Berliner Verkehrsbetriebe (BVG) v JP Morgan Chase Bank NA (Case C-144/10): Reinforced the strict interpretation of Article 24(2), emphasizing that ancillary claims do not extend the provision’s scope.
• EON Czech Holding AG v Dědouch (Case C-560/16): Further clarified that exclusive jurisdiction under Article 24(2) does not extend to claims merely linked to a decision but are not primarily about the decision's validity.

Legal Reasoning

The Supreme Court underscored that Article 24(2) is designed to centralize jurisdiction in courts closely connected to a company’s seat, ensuring legal certainty and preventing conflicting judgments. The Court criticized the lower courts' "evaluative approach," which considered the overall context of the proceedings to extend jurisdiction beyond its intended scope. Instead, the Supreme Court advocated for analyzing each claim individually to determine if it falls within the exclusive jurisdiction granted by Article 24(2).

Additionally, the Court highlighted the importance of Article 24(2) in maintaining predictability in jurisdictional matters, aligning with the Recast Regulation’s objectives. The presence of trustees appointed in Turkey, a non-EU state, further complicated jurisdictional assertions, as the Recast Regulation primarily addresses member states.

Impact

This judgment reinforces the principle of strict interpretation of jurisdictional provisions within the EU framework. It clarifies that exclusive jurisdiction clauses cannot be broadly applied based on linked or ancillary claims. Consequently, parties must ensure that their claims align directly with the exclusive jurisdiction criteria to benefit from such provisions. This decision also underscores the limitations of EU regulations when dealing with entities outside the EU, as seen with Koza Altin being a Turkish company.

Furthermore, this ruling may influence future cases involving cross-border corporate governance disputes, particularly those intersecting EU and non-EU jurisdictions. It emphasizes the necessity for precise legal framing when invoking jurisdictional rules under the Brussels I Recast Regulation.

Complex Concepts Simplified

Article 24(2) of the Brussels I Recast Regulation

This provision grants exclusive jurisdiction to the courts of the member state where a company is headquartered (its seat) for disputes related to the company's constitutional validity, dissolution, or decisions of its governing bodies. Essentially, if a dispute falls under these categories, only the courts in the member state where the company is based can adjudicate.

Exclusive Jurisdiction

Exclusive jurisdiction means that only the designated courts have the authority to hear and decide on specific types of legal disputes. In this case, those courts are in the member state where the company's seat is located.

Authority Claim

An authority claim involves questioning the legitimacy or validity of decisions made by those in control of a company, such as its board of directors or, in this instance, trustees appointed by a foreign entity.

Evaluative Approach

An evaluative approach refers to assessing the overall context and interconnections within legal proceedings to determine jurisdiction. The Supreme Court criticized this approach for Article 24(2), advocating instead for a strict, claim-by-claim analysis.

Conclusion

The Supreme Court's decision in Akcil & Ors v. Koza Ltd & Anor underscores the necessity for a narrow and precise interpretation of jurisdictional provisions under the Brussels I Recast Regulation. By rejecting the broad application of Article 24(2) to encompass distinct authority claims, the judgment reinforces legal certainty and predictability, fundamental objectives of the Regulation. This case sets a precedent for how courts should approach exclusive jurisdiction clauses, particularly in complex cross-border corporate disputes involving non-EU entities.

Practitioners and companies must carefully consider the jurisdictional boundaries outlined in the Recast Regulation to effectively manage legal risks in international operations. The ruling serves as a reminder that despite interconnected claims, each legal issue must independently satisfy the criteria for exclusive jurisdiction to be upheld.