Factual and Procedural Background
The Respondents, trustees of employee benefit plans linked to Company A, alleged that the Defendant, former president of the Castor Group, orchestrated a fraud that induced the Respondents to invest approximately £120 million in insolvent companies. On 1 August 1996 a writ was issued in England naming the Defendant and thirty-six others. At that date the Defendant was resident in London. By the time service was attempted (11 March 1997) he had left for Germany, having taken steps to avoid personal service.
Six of the original defendants—two domiciled in Switzerland (“the Convention Appellants”) and four domiciled in Panama, Liechtenstein and the Netherlands Antilles (“the non-Convention Appellants”)—contested jurisdiction. Judge Rattee dismissed their challenge. A majority of the Court of Appeal (Judge Nourse and Judge Waller) affirmed that decision; Judge Pill dissented on the pivotal date issue. The present appeal to the House of Lords concerned only questions of law arising under the Lugano Convention.
Legal Issues Presented
- Whether the word “sued” in Articles 2 and 6 of the Lugano Convention refers, in English proceedings, to the date of issue of the writ or to the date of its service.
- Whether Article 6(1) requires prior service on an “anchor” defendant before co-defendants can be served.
- The correct standard of proof for establishing a defendant’s domicile when jurisdiction is challenged—“good arguable case” or “balance of probabilities.”
Arguments of the Parties
Appellants' Arguments
- “Sued” must mean service; jurisdiction should depend on the defendant’s domicile when the writ reaches him, not when it is issued.
- Article 6(1) can be invoked only after the anchor defendant has been served; otherwise plaintiffs could manipulate forum selection.
- The domicile of the anchor defendant should be established on the civil standard of balance of probabilities, not merely a good arguable case.
Respondents' Arguments
- “Sued” means the initiation of proceedings—i.e., issue of the writ—which best promotes certainty and prevents defendants from evading service by changing domicile.
- No textual basis exists in Article 6(1) for insisting on prior service of the anchor defendant; abuse of process can be policed at an inter partes hearing.
- The conventional “good arguable case” test suffices; requiring full proof would create expense and delay contrary to the Convention’s objectives.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Canada Trust Co. v. Stolzenberg (No. 2) [1998] 1 WLR 547 |
Court of Appeal ruling that the issue date is critical for Article 6(1) |
Provided the immediate judicial history; majority view affirmed by the House |
| Shearson Lehman Hutton Inc. v. TVB mbH (Case C-89/91) [1993] ECR I-139 |
Need for autonomous Convention concepts followed by national application |
Cited to explain the two-step interpretative approach |
| Zelger v. Salinitri (Case 129/83) [1984] ECR 2397 |
Definition of when a court is “first seised” under Article 21 |
Distinguished: tie-break rules differ from initial jurisdiction rules |
| Dresser UK Ltd. v. Falcongate Freight Management Ltd. [1992] QB 502 |
English law holds a court “seised” upon service for Article 21 purposes |
Considered but not followed for Articles 2 and 6; different context |
| Neste Chemicals SA v. DK Line SA (The Sargasso) [1994] 3 All ER 180 |
Reaffirmed Dresser on Article 21 |
Same distinction drawn as above |
| Mulox IBC Ltd. v. Geels (Case C-125/92) [1993] ECR I-4075 |
Emphasised certainty and foreseeability in Convention jurisdiction |
Supported choosing the issue date to maximise predictability |
| Mölnlycke AB v. Proctor & Gamble Ltd. [1992] 1 WLR 1112 |
Limits on abusive invocation of Article 6 |
Noted; no abuse alleged in present case |
| Seaconsar Far East Ltd. v. Bank Markazi Jomhouri Islami Iran [1994] AC 438 |
“Good arguable case” as domestic test for jurisdictional facts |
Adopted as appropriate test for domicile under the Convention |
| Grupo Torras SA v. Sheikh Fahad Mohammed Al-Sabah [1996] 1 Lloyd’s Rep 7 |
Practical problems of multi-party litigation under service-based rules |
Used illustratively to favour an issue-date approach |
| The Maciej Rataj [1995] 1 Lloyd’s Rep 302 |
Risk of fragmented proceedings |
Same contextual support for the Respondents’ position |
Court's Reasoning and Analysis
Step 1 – Interpretation of “sued”: The House, led by Judge Steyn, examined the language, structure and purpose of the Lugano Convention. Articles using “sued,” “bring proceedings,” and “instituted” were treated as interchangeable, indicating initiation rather than service. Tie-break provisions (Articles 21 & 22) were distinguished as addressing a different problem.
Step 2 – Objective of certainty: Selecting the issue date furnishes a fixed, easily verifiable moment common to all Contracting States, thereby serving the Convention’s aim of predictability for both plaintiffs and defendants.
Step 3 – Practical considerations: A service-based test would allow defendants, like the present Defendant, to frustrate jurisdiction by evading service through domicile changes. Requiring repeated domicile checks before serving each co-defendant was deemed “singularly unattractive.”
Step 4 – National application: Under English procedure an action commences when the writ is issued; hence the Defendant was “sued” on 1 August 1996 while domiciled in England.
Step 5 – Prior service argument: Nothing in Article 6(1) obliges plaintiffs to serve the anchor defendant first; jurisdiction can be reviewed adequately once any defendant challenges it.
Step 6 – Standard of proof: Consistent with Seaconsar, a “good arguable case” is sufficient to establish domicile at the interlocutory stage; insisting on a balance of probabilities would cause undue delay and expense.
Holding and Implications
Holding: the appeal is DISMISSED.
Consequently, English courts retain jurisdiction over both the Convention and non-Convention Appellants. The ruling clarifies that, for Articles 2 and 6 of the Brussels/Lugano regime as applied in England, a defendant is “sued” when the writ (now claim form) is issued. No new cause of action is created, but litigants now have authoritative guidance that domicile is tested at the moment of issue and that prior service on an anchor defendant is unnecessary under Article 6(1), reinforcing procedural certainty across multi-party, cross-border disputes.