STAYING ENGLISH PROCEEDINGS IN FAVOUR OF PENDING PROCEEDINGS IN NON-EU COUNTRIES
In a recent judgment involving an issue of lis pendens, Fancourt J stayed proceedings brought in the Chancery Division against three English companies on the basis that there were already related proceedings pending in Ukraine: Privatbank v Kolomoisky, Bogolyubov and others [2018] EWHC 3308 (Ch).
This judgment addressed some interesting points relevant to stay applications for stays in favour of related proceedings outside the EU (pursuant to Article 34, Brussels I Regulation (recast)):
Marc Delehanty acted for the Third to Eighth Defendants (led by Sonia Tolaney QC and Thomas Plewman QC; instructed by Pinsent Masons LLP).
Background
The claimant, a major Ukrainian bank, claimed that the Third to Fifth Defendants (English companies) were part of an alleged misappropriation of US$1.9 billion of its money by two Ukrainian oligarchs prior to the bank’s nationalisation in 2016.
Before the English proceedings had been commenced, the First Defendant had brought defamation proceedings in Ukraine against the Bank (and other defendants) concerning statements made about the alleged misappropriation. The Third to Fifth Defendants were joined to those proceedings as affected third parties.
The Third to Fifth Defendants – who had been sued in England under the Recast Brussels Regulation on the basis of their English domicile – applied for a stay of the English proceedings under Article 34(1), recast Brussels I Regulation (also known as the Judgments Regulation), which provides:
Before the stay application was determined, the Ukrainian proceedings were dismissed on procedural grounds at first instance but this dismissal was subject to appeal.
Summary
Fancourt J analysed the nature of the proceedings in England and Ukraine and exercised his discretion to grant the stay. In so doing, he held that:
Fancourt J also held that, where English proceedings are brought against a defendant in reliance on the jurisdictional provisions of the Lugano Convention 2007 (i.e., against those domiciled in Denmark, Switzerland, Iceland or Norway), a stay of those proceedings can be ordered in favour of foreign proceedings outside the EU / EEA. That is so notwithstanding that, unlike the recast Regulation, the Lugano Convention 2007 does not expressly provide for a power to do so. See: para 125.
Also, as part of the same judgment, Fancourt J discharged and refused to re-grant a worldwide freezing order made against the Defendants and found that there was no jurisdiction to try the claim against the First, Second and Sixth to Eighth Defendants.
Fancourt J granted the Bank permission to appeal against his decisions on jurisdiction, including in relation to the decision to stay proceedings against the Third to Fifth Defendants on grounds of lis alibi pendens.
The full judgment may be accessed here
