|Judgment - Kleinwort Benson Limited v. City of Glasgow District Council continued|
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However the wording of Order 11 Rule 1(1)(d) differs from the wording of Article 5(1) and does not contain the words "in the courts for the place of performance of the obligation in question."
Mr. Pollock further relied on the judgment of the European Court in Arcado v. Haviland  E.C.R. 1539 where the court stated at pp. 1554, 1555:
"The same view must be taken of a claim for compensation for the wrongful repudiation of such an agreement as the basis for such compensation is the failure to comply with a contractual obligation. . . .
"In addition, Article 10 of the Convention on the Law Applicable to Contractual Obligations of 19 June 1980 (Official Journal 1980, L 266, p. 1) confirms the contractual nature of judicial proceedings such as those in point inasmuch as it provides that the law applicable to a contract governs the consequences of a total or partial failure to comply with obligations arising under it and consequently the contractual liability of the party responsible for such breach."
To the same effect was the earlier judgment of the European Court in Effer v. Kantner  E.C.R. 825 where the question referred to the Court was:
In its judgment the Court stated at page 834:
Therefore the European Court has held that the national court has jurisdiction under Article 5(1) to decide a dispute relating to the repudiation of a contract or a dispute as to the existence or non-existence of a contract.
In Tesam Distribution Ltd. v. Schuh Mode Team GmbH  I.L.Pr. 149, where the defendants claimed that no contract had been entered into, the Court of Appeal applied the decision of the European Court in Effer v. Kantner and held:
In his judgment Stocker L.J. recognised that if it were clear that no contract had existed a court would not have jurisdiction under Article 5(1) and stated at page 165:
The learned Lord Justice later stated at page 165:
Therefore, whilst as a matter of legal analysis there may be fine distinctions between a contract which is void and a contractwhich is voidable or unenforceable, there is nevertheless in my opinion for the purposes of Article 5(1) a distinction, which is not difficult to apply in practice, between a case where one party claims that the contract is, or was, in existence and the other party claims that the contract never existed or has ceased to exist, and a case such as the present one where both parties accepted before the commencement of the action that the contract was void ab initio.
Accordingly, in my opinion, the judgments of the European Court give guidance in three respects to a national court considering the ambit of Article 5(1) of the Brussels Convention, and therefore to a court of the United Kingdom considering the ambit of Article 5(1) of Schedule 4 to the 1982 Act. First, the special jurisdiction given by Article 5(1) constitutes a derogation from the general rule contained in Article 2 that jurisdiction is vested in the courts of the State where the defendant is domiciled, and accordingly a wide interpretation of Article 5(1) should be avoided. Secondly, whilst, as in the Peters case, the words "in matters relating to a contract" can apply to a consensual obligation similar to that created by a contract, nevertheless when read with the words "in the courts for the place of performance of the obligation in question," the jurisdiction under Article 5(1) only arises when the claim is to enforce an obligation arising under a contract or a relationship akin to a contract such as membership of an association. Thirdly, the reason for the national court having jurisdiction is that there is a close connecting factor between the dispute giving rise to the claim and that court. Having regard to these considerations, and to the further consideration that in Kalfelis v. Schröder the European Court treated a claim for unjust enrichment as a cause of action separate and distinct from a claim in contract. I consider that the present action for restitution does not come within Article 5(1). Accordingly I am in agreement with the decision of Hirst J. at first instance and the conclusion of Leggatt L.J. in his dissenting judgment in the Court of Appeal. As I consider that the claim must be to enforce an obligation arising under a contract or a relationship akin to a contract I respectfully differ from the view of Roch L.J. that in Article 5(1) the word "contract" embraces a contract that is a nullity, and from the view of Millett L.J. that the word "contract" in Article 5(1) can include "void contract" and that the expression "place of performance of the obligation in question" can mean "intended place of performance of the supposed obligation."
Kleinwort Benson submitted, in the alternative, that the claim fell within Article 5(3) of Schedule 4. As the claim is one based on unjust enrichment, and not on tort or delict, I consider that it does not come within Article 5(3). In my opinion it would be inappropriate to apply the words "where the harmful event occurred" to a claim for unjust enrichment. I further consider that the judgment of the European Court in Kalfelis v. Schröder operates to strengthen the submission of Glasgow that Article 5 (3) is inapplicable rather than to assist the argument of the respondent. In that case question 2 referred to the court for a preliminary ruling was in these terms:
The court considered that question in paragraphs 14 to 21 of its judgment and answered the question as follows:
I agree with Hirst J. that the word "liability" in answer 2(a) must be interpreted as meaning liability within the scope of Article 5(3), namely, liability in tort, delict or quasi-delict. Accordingly, in my opinion, the court in its answer to question 2(b) is stating that a court which has jurisdiction under Article 5(3) over an action in so far as it is based on tort or delict does not have jurisdiction over an action in so far as it is not based on tort or delict but is based on unjust enrichment.
Accordingly I consider, for the reasons which I have given, that the decision of Hirst J. was correct and I would allow this appeal.
|© Parliamentary copyright 1997||Prepared 30 October 1997|