Vigeland v Zurich Insurance Ltd Company (Approved)

Factual and Procedural Background

The appeal arises from a jurisdictional dispute under the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (the Lugano Convention), specifically Article 22(5), which concerns exclusive jurisdiction in “proceedings concerned with the enforcement of judgments.”

A holding company incorporated in State C (Company B) made unsuccessful investments in a company incorporated in State B (Company D). Company B transferred its right to pursue a claim for the investment losses to its wholly owned subsidiary, an Irish‑registered company in State A (Company C). The Appellant was one of two directors of Company B and, at one point, held a substantial minority shareholding, while the majority shareholding was held by a foundation in State C (the Foundation) in which the Appellant held most roles. Prior to early 2023, the Appellant was the sole director of Company C.

Company C initiated proceedings in State B against Company D and several of its former directors to recover the investment losses (the Company D proceedings). The claim failed. On a date in late 2022, a court of appeal in State B ordered Company C to pay a substantial sum in legal costs (approximately equivalent to EUR 1 million) to the former directors of Company D. Company C had never been capitalised and never held a bank account; its litigation costs had been met entirely by Company B. The costs order against Company C remains unsatisfied. The Appellant attempted, unsuccessfully, to place Company C into voluntary liquidation in State A and then resigned as its director in early 2023, after which Company C has had no directors.

The directors of Company D were insured for legal costs with a branch in State B of a large insurer incorporated in State A (Company A, the Respondent). Under the policy, Company A was subrogated to the directors’ entitlements under the costs order in State B. Because Company C had no assets, Company A took the view that the Appellant, as the real decision‑maker behind the relevant companies, should be personally liable for the costs.

Company A therefore commenced proceedings in State B (the Company A proceedings) seeking to hold the Appellant personally liable. In State A this would be described as pursuing a non‑party costs order, but in State B law the claim is framed as a separate tort action under legislation referred to as the Disputes Act, directed against the decision‑maker in a company.

In early 2023, Company A applied ex parte to a district court in State B for a protective order freezing certain assets of the Appellant as security for its pending tort claim. After an inter partes hearing, and again on appeal to a court of appeal in State B, the protective order was upheld. The courts of State B found that Company A’s claim under the Disputes Act was sufficiently “probable” and “proved” for the purposes of granting such relief and accepted that the Appellant was the “real decision‑maker” behind the relevant corporate structures.

In a subsequent appeal decision in State B in March 2023, the appellate court held that the transfer of claims between Company B and Company C likely provided a basis for personal liability, as it isolated the companies from responsibility for costs in a way that created a clear risk for Company A. The Appellant was found to be connected to and responsible for these dispositions. Company A then issued substantive proceedings in a district court in State B, claiming damages against the Appellant equivalent to the costs order, together with interest and costs.

Before the final judgment of the appellate court in State B was handed down, the Appellant commenced plenary proceedings in the courts of State A on 27 February 2023 (the State A proceedings) against Company A. Two forms of relief were sought:

• Damages for alleged tortious interference by Company A in commencing the Company A proceedings in State B.
• A negative declaration that the Appellant is not personally liable for any loss, damage, costs or expenses incurred by Company A in respect of the Company D proceedings.

The Appellant endorsed the summons on the basis that the High Court of State A had jurisdiction under the general rule in Article 2(1) of the Lugano Convention, as Company A was domiciled in State A for the purposes of Article 60. At the hearing of the present appeal, the Appellant’s counsel accepted that, for the purpose of the jurisdictional issue, only the negative declaratory relief was relevant.

In parallel, the district court in State B ordered a stay of the Company A proceedings in June 2023 under Article 27 of the Lugano Convention, pending the determination of the jurisdictional issue by the courts of State A.

Company A applied in the High Court of State A to have the plenary summons set aside and the proceedings dismissed for want of jurisdiction, arguing that, by reason of Article 22(5) of the Lugano Convention, the courts of State B had exclusive jurisdiction because the case was “concerned with the enforcement of judgments.” In a judgment delivered in November 2023, the High Court accepted this argument and dismissed the proceedings, holding that Article 22(5) applied and conferred exclusive jurisdiction on the courts of State B.

The Appellant appealed. In February 2025, the Court of Appeal of State A dismissed the appeal and upheld the High Court’s order. It accepted that the outcome depended on the interpretation and application of Article 22(5) and concluded that both the Company A proceedings in State B and the negative declaratory proceedings in State A were properly characterised as “concerned with the enforcement” of the costs judgment in State B, thereby engaging the exclusive jurisdiction of the courts of State B.

The Appellant then appealed to the Supreme Court of State A. The judgment summarised here is that of the Supreme Court, delivered by a member of that Court. The Supreme Court is a court of last resort for the purposes of Article 267(3) of the Treaty on the Functioning of the European Union (TFEU).

Legal Issues Presented

1. Whether proceedings in State A in which a third party (the Appellant) seeks a negative declaration that he is not personally liable in tort for a sum equivalent to a costs order made by a court in State B are “proceedings concerned with the enforcement of judgments” within the meaning of Article 22(5) of the Lugano Convention.
2. If such proceedings are not within Article 22(5), whether the courts of State A have jurisdiction under the general rule of the Lugano Convention, based on the domicile of Company A in State A.
3. Given the novelty and importance of the interpretation of Article 22(5), whether the Supreme Court, as a court of last resort, should refer a question to the Court of Justice of the European Union (CJEU) under Article 267(3) TFEU to obtain an authoritative ruling on the scope of Article 22(5).

Arguments of the Parties

Appellant's Arguments

• Article 22(5) of the Lugano Convention is an exception to the general rule of jurisdiction based on the defendant’s domicile and, as such, must be construed strictly.
• On a strict construction, Article 22(5) applies only to proceedings that concern the actual enforcement or execution of a judgment, or at least something that closely approaches that stage (such as recourse to force, constraint, or distraint over property).
• The State A proceedings are different: they are not an attempt to execute the costs judgment from State B, but rather an application for a negative declaration that the Appellant is not personally liable for that costs order, assessed by reference to the tort law of State B and its Disputes Act.
• The Company A proceedings in State B are framed as a separate tort action, not a direct enforcement process. The Appellant was not a party to the original costs judgment, and Company A itself was also not a party to those original proceedings. This supports the view that the action is distinct from enforcement.
• Because Article 22(5) does not apply, jurisdiction should revert to the general Lugano rule at Article 2(1), under which the courts of the defendant’s domicile — here, the courts of State A, where Company A is domiciled — have jurisdiction.
• The negative declaratory proceedings do not improperly usurp the authority of the courts of State B; instead, they are a legitimate use of the Lugano/Brussels system, which, as recognised by the CJEU, permits actions for negative declarations.

Respondent's (Company A's) Arguments

• An application seeking to impose personal liability on a non‑party for an existing costs order is intrinsically and directly bound up with the enforcement of that costs order and is not a separate or extraneous tort action.
• Under the Disputes Act in State B, the Company A proceedings are functionally equivalent to an application for a non‑party costs order in State A. They are designed to achieve the effective implementation of the original costs judgment by identifying an individual ultimately liable for those costs.
• The necessary “degree of proximity” and connection to enforcement identified by the CJEU in case law such as CJEU Case C‑722/17 is satisfied. Therefore, the proceedings fall within the exclusive jurisdiction rule in Article 22(5).
• If the negative declaration proceedings in State A were allowed to proceed, and if the Appellant were successful, the resulting declaration would necessarily prevent enforcement of the costs judgment in State B against the Appellant. This demonstrates that the State A proceedings are also “concerned with the enforcement” of that judgment.
• Allowing such negative declaratory proceedings in another jurisdiction would provide a means to circumvent the exclusive jurisdiction conferred by Article 22(5), undermining the uniform application of the Lugano Convention and the sound administration of justice.
• Consequently, Article 22(5) vests exclusive jurisdiction in the courts of State B, and the courts of State A lack jurisdiction over the negative declaratory claim.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
High Court of State A, [2023] IEHC 630 (same litigation)	Held that proceedings to determine personal liability for a costs order, even against a non‑party to the original judgment, are “concerned with the enforcement of judgments” for the purposes of Article 22(5), thereby granting exclusive jurisdiction to the courts of the judgment‑rendering State.	Cited as part of the procedural history. The Supreme Court explains that the High Court characterised the dispute as relating to enforcement of the costs order and therefore found that the courts of State B had exclusive jurisdiction under Article 22(5).
Court of Appeal of State A, [2025] IECA 24 (same litigation)	Affirmed the High Court’s approach, holding that proceedings seeking to impose personal liability on a third party for an existing costs judgment, and mirror‑image negative declaratory proceedings elsewhere, are “concerned with enforcement” within Article 22(5).	The Supreme Court summarises and critically re‑examines the Court of Appeal’s reasoning, ultimately expressing provisional disagreement with its conclusion that Article 22(5) is engaged.
Irish Supreme Court, [2018] IESC 33; [2019] 1 IR 417	Recognised and approved the concept of non‑party costs orders in State A as a means of holding persons behind corporate litigation structures liable for costs.	Referred to in the Court of Appeal’s judgment (as recounted by the Supreme Court) to argue that the Company A proceedings in State B under the Disputes Act are equivalent in substance to a non‑party costs order in State A and hence part of the enforcement process.
Irish case [1993] 3 IR 342	Stands for the principle that derogations from the general jurisdiction rule (based on domicile) in the Brussels/Lugano system must be construed strictly so as not to undermine the basic rule.	Cited by the Supreme Court to emphasise that Article 22(5), as a derogation, must be given a narrow construction consistent with general CJEU jurisprudence.
CJEU Case C‑189/87, EU:C:1988:459	Confirmed that exceptions to the general jurisdiction rule based on domicile must be interpreted so as not to jeopardise the principle that jurisdiction is primarily vested in the courts of the defendant’s domicile.	Used to reinforce the requirement of strict interpretation of Article 22(5), underlining that expansive readings of exclusive jurisdiction provisions are inconsistent with the structure of the Convention.
CJEU Case C‑261/90, EU:C:1992:149	Held that an action aimed at setting aside a fraudulent transfer of property, brought to preserve a creditor’s ability to enforce a judgment in future, does not qualify as a proceeding “concerned with the enforcement of judgments” under the then‑equivalent of Article 22(5).	The Supreme Court relies on this authority to draw a sharp distinction between measures that merely protect or preserve a creditor’s position and those that constitute actual execution or enforcement of a judgment. It concludes that Article 22(5) is about the latter, not the former.
English Court of Appeal, [2008] EWCA Civ 303; [2009] QB 450	Described the equivalent exclusive jurisdiction provision as reflecting the principle of international law that one State should not take enforcement measures within the territory of another State.	Quoted by the Supreme Court to support the view that Article 22(5) is intended to protect the jurisdiction and sovereignty of the State where enforcement measures, such as execution against assets, are physically carried out.
UK House of Lords, [2003] UKHL 31; [2004] 1 AC 300	Held that enforcement of a judgment by way of a garnishee or third‑party debt order operates in rem against a debt located in another State, thus falling within the exclusive jurisdiction of that other State under the enforcement provision analogous to Article 22(5).	Cited to illustrate how the exclusive jurisdiction rule applies where actual enforcement measures are directed against assets situated in a particular State, and to emphasise that foreign enforcement measures may be perceived as infringing that State’s sovereignty.
CJEU Case C‑722/17, EU:C:2019:577	Clarified that the exclusive jurisdiction rule for enforcement applies only where there is a sufficiently close connection and high degree of proximity between the proceedings and actual enforcement measures, such as acts of the authorities tasked with enforcement.	The Supreme Court draws on this case to underline that not every proceeding linked to a judgment qualifies as an “enforcement” proceeding; rather, the proceeding must directly concern the acts of enforcement authorities or the process of execution itself.
CJEU Case C‑133/11, EU:C:2012:664	Recognised the permissibility of actions seeking negative declarations within the Brussels/Lugano system and clarified that such actions can be brought under the general jurisdiction rules.	The Supreme Court refers to this decision to explain why, despite potential practical oddity, a negative declaratory action in State A relating to a dispute governed by State B law is consistent with the Lugano framework and not barred merely because of its defensive nature.
CJEU Case C‑561/19, EU:C:2021:799	Discussed the nature of the obligation on courts of last resort to make preliminary references under Article 267(3) TFEU and the circumstances in which such a reference is desirable or required.	Cited to justify the Supreme Court’s decision to refer the interpretative question on Article 22(5) to the CJEU, given the novelty and importance of the issue and the absence of authoritative CJEU case law directly on point.

Court's Reasoning and Analysis

The Supreme Court begins by situating Article 22(5) of the Lugano Convention within the broader scheme of the Lugano/Brussels regime. The starting point of that regime is the general rule in Article 2(1) that jurisdiction lies with the courts of the defendant’s domicile. Any derogation from this principle, including the exclusive jurisdiction rule in Article 22, must therefore be strictly construed. This approach is supported both by national case law and CJEU authority.

The Court notes that Article 22(5) of the Lugano Convention is, in substance, identical to the original Article 16(5) of the 1968 Brussels Convention and to Article 24(5) of the current Brussels Regulation. Accordingly, the Court treats the case law and doctrinal commentary on these provisions as interchangeable with respect to the scope of the enforcement‑related exclusive jurisdiction.

The Court reviews explanatory reports prepared for the Brussels and Lugano instruments. These reports indicate that “proceedings concerned with the enforcement of judgments” are those that involve recourse to force, constraint, or distraint over movable or immovable property in order to ensure the effective implementation of judgments and authentic instruments. The reports also emphasise that, for some categories of subject matter, exclusive jurisdiction is justified because of the special closeness between the court and the situation and because the sound administration of justice is best served by assigning disputes to the courts most familiar with the relevant local rules and practices.

Turning to the CJEU case law, the Supreme Court stresses a number of points:

• In one leading CJEU decision, an action brought to set aside a transfer of property intended to defeat creditors (an action paulienne) was held not to fall within the enforcement exclusive jurisdiction. Although such an action preserves the creditor’s interests and may facilitate later enforcement, it is not itself a proceeding involving the use of force or distraint on property and therefore is not “concerned with the enforcement of judgments” in the technical sense.
• In another CJEU decision concerning opposition to enforcement in the context of a compulsory sale of immovable property, the Court recognised that the proceedings were linked to enforcement, but found that they lacked the required degree of proximity to the actual acts of the enforcement authorities. Because the challenger did not contest the enforcement measures themselves, the exclusive jurisdiction rule did not apply.

From these authorities, the Supreme Court concludes that Article 22(5)/Article 24(5) has a narrow scope. To fall within it, proceedings must:

• directly relate to the execution or implementation of a judgment; and
• involve, or be closely bound up with, the acts of the authorities responsible for enforcement (for example, court‑appointed officials executing against assets).

The Court then examines the structure and purpose of Article 22 as a whole. The other sub‑paragraphs of Article 22 (relating to immovable property, company law acts, public registers, and intellectual property rights) are all connected to matters that closely involve the exercise of public authority or sovereign functions. In that context, Article 22(5) is best understood as allocating exclusive jurisdiction to the courts of the State where enforcement is physically carried out, so as to preserve that State’s juridical sovereignty and control over coercive measures taken against assets within its territory.

The Court further relies on national case law in other jurisdictions, which has interpreted the equivalent enforcement provision as embodying the principle that one State must not take enforcement measures within another State’s territory, and which has treated garnishee orders and similar measures as enforcement actions located in the State where the relevant debt or asset is situated.

Against that backdrop, the Supreme Court turns to the question: do the State A proceedings (the negative declaratory action) fall within the scope of Article 22(5)?

The Court considers the reasoning of the Court of Appeal, which had held that:

• The Company A proceedings in State B were properly characterised as enforcement proceedings, aimed at giving effect to the costs judgment in the Company D litigation by identifying a person (the Appellant) upon whom that judgment could effectively bite.
• The negative declaratory proceedings in State A were the mirror image of those enforcement proceedings, since a successful declaration would hinder or prevent enforcement in State B. Thus, they too should be regarded as “concerned with enforcement” and fall within Article 22(5).

The Supreme Court expresses provisional disagreement with this analysis. It emphasises that:

• The Company A proceedings in State B are themselves treated in that jurisdiction as a separate tort action under the Disputes Act, rather than as a procedural step within the original Company D proceedings. Both the Appellant and Company A were not parties to the original proceedings that generated the costs judgment.
• The State A proceedings, seeking a negative declaration on the Appellant’s personal liability in tort, are likewise not directed at the mechanics of execution, such as seizure or sale of assets, or acts of enforcement authorities. Rather, they concern the prior question whether the Appellant can be held substantively liable in tort for the amount of the costs.
• While the negative declaratory proceedings are undoubtedly connected to the earlier costs judgment (because the quantum claimed corresponds to that judgment and the claim arises out of the same overall factual matrix), they do not seek to regulate or challenge the actual process of enforcement.

The Court addresses an argument advanced by Company A, namely that because enforcement of any judgment against the Appellant would ultimately take place in State B (where the Appellant’s assets are located), the negative declaratory proceedings in State A must be regarded as “concerned” with enforcement in the sense of Article 22(5). The Court points out that this line of reasoning would lead to anomalous results:

• If the Appellant’s enforceable assets were instead located in another State (for example, State D), then, by the same logic, the courts of that State would enjoy exclusive jurisdiction over the negative declaratory proceedings.
• If the Appellant had assets in multiple States, each could be argued to have “exclusive” jurisdiction, which is logically impossible.

These difficulties, in the Supreme Court’s view, indicate that “concerned with the enforcement of judgments” must refer to proceedings that are part of, or closely bound up with, the execution process in a specific territory (such as orders directing a receiver or enforcement official), rather than any upstream dispute about liability that might affect whether enforcement will ultimately occur.

The Court acknowledges that it may seem counter‑intuitive that the courts of State A could have jurisdiction over a dispute that is governed by the law of State B and relates to a judgment rendered there. However, the Court notes two important features of the Lugano/Brussels regime:

• The common law doctrine of forum conveniens does not apply within this system. Jurisdiction is allocated according to the Convention’s rules, not on discretionary convenience grounds.
• The CJEU has expressly approved the use of actions for negative declarations as a legitimate procedural strategy under the Brussels/Lugano system, including in cross‑border tort disputes. Therefore, the mere fact that the Appellant’s claim takes the form of a negative declaration does not disqualify it from falling within the general jurisdiction rules.

In light of this analysis, the Supreme Court’s provisional conclusion is that proceedings concerning the potential liability of a third party (such as the Appellant) for non‑party costs are not “proceedings concerned with the enforcement of a judgment” within the meaning of Article 22(5). Consequently, the exclusive jurisdiction of the courts of State B under that provision is not engaged, and the courts of State A would, in principle, have jurisdiction to hear the negative declaratory proceedings, because Company A is domiciled in State A.

However, the Court recognises that this issue has not yet been addressed authoritatively by the CJEU and that the interpretation of Article 22(5) in this specific context is novel and practically important. As a court of last resort, the Supreme Court is subject to the obligations under Article 267(3) TFEU. Referring to CJEU case law on that obligation, the Court considers it desirable to seek a preliminary ruling to ensure uniform interpretation of the Lugano Convention’s enforcement provision.

The Supreme Court therefore formulates a specific question for the CJEU, asking whether proceedings such as the present negative declaratory action in State A, brought by a third party to establish non‑liability in tort for a sum equivalent to a costs order issued in State B, are “proceedings concerned with the enforcement” of that judgment within Article 22(5), with the consequence that the courts of State B would enjoy exclusive jurisdiction.

Finally, the Court notes that all parties accepted that the Supreme Court has jurisdiction to make such a reference under the Lugano Convention’s Protocol, even though the jurisdictional dispute relates to a non‑EU Contracting State. This removes any procedural obstacle to the reference.

Holding and Implications

The Supreme Court does not finally determine the jurisdictional issue. Instead, it adopts a provisional view and takes procedural steps to obtain guidance from the CJEU.

The Court:

• Expresses a provisional conclusion that separate proceedings concerning the potential personal liability of a third party for non‑party costs are not “proceedings concerned with the enforcement of a judgment” within the meaning of Article 22(5) of the Lugano Convention.
• Indicates that, if this interpretation is correct, the courts of State A would have jurisdiction over the negative declaratory claim based on the domicile of Company A in State A.
• Decides, however, that the issue should be authoritatively resolved by the CJEU.

The Court therefore orders that:

A preliminary reference be made to the Court of Justice of the European Union under Article 267(3) TFEU, and that the present appeal be STAYED pending the outcome of that reference.

The referred question asks, in substance, whether a negative declaratory action in the courts of the claimant’s domicile (here, State A), brought by a third party to establish non‑liability in tort for a sum equivalent to a costs order made by a court in another Contracting State (here, State B), is a proceeding “concerned with the enforcement” of that judgment under Article 22(5) of the Lugano Convention, so that the courts of State B would have exclusive jurisdiction.

As a result, the immediate practical implication for the parties is that the proceedings in State A are paused until the CJEU gives its ruling. The Supreme Court has not yet overturned the decisions of the High Court or Court of Appeal; their orders remain in place pending the CJEU’s answer and the Supreme Court’s final determination.

More broadly, the judgment highlights:

• The narrow and strictly interpreted nature of the exclusive jurisdiction provision for enforcement in Article 22(5) of the Lugano Convention.
• The potential limits of treating non‑party costs claims and related negative declaratory actions as “enforcement” proceedings.
• The importance of maintaining the balance between the general domicile‑based jurisdiction rule and special exclusive jurisdiction rules in cross‑border litigation.

No final substantive precedent is set on the scope of Article 22(5) in relation to third‑party costs and negative declarations; the ultimate legal position will depend on the forthcoming CJEU ruling and the Supreme Court’s subsequent application of that ruling to the facts of this case.