On 7 September 2023, the Court of Justice of the European Union ruled in Case C-590/21, Charles Taylor Adjusting that judgements ordering a party to pay certain sums of money for violating a choice of court agreement are ‘quasi anti suit injunctions’ which violate mutual trust. The courts of Member States are therefore free to consider that such judgements violate public policy and to deny them enforcement under the Brussels I Regulation.
On 3 May 2006, the vessel Alexandros T sank and was lost, along with its cargo, off the bay of Port Elizabeth (South Africa). The companies Starlight Shipping Company and Overseas Marine Enterprises Inc. (‘OME’), the owner and operator of that vessel, respectively requested that the insurers of that vessel pay an indemnity on the basis of their contractual liability arising from the occurrence of the insured incident.
After the insurers refused, Starlight initiated proceedings before English courts and before an arbitral tribunal. The parties settled all these actions in several Settlement Agreements, which contained a jurisdiction clause designating English courts. The Settlement Agreements were ratified by several English judgments in 2007 and 2008.
A few years later, Starlight and OME initiated tort actions in Greek courts related to the actions settled in England. One of the defendants in the Greek proceedings was Charles Taylor Adjusting Limited, a legal and technical consultancy which had defended the insurers of the vessel Alexandros T against the claims made by Starlight before the English court, and against the director of that consultancy.
While those actions were pending, the insurers of the vessel and their representatives, including, in particular, Charles Taylor and its director, the defendants in the Greek proceedings, brought actions against Starlight and ΟΜΕ before the English courts seeking a declaration that the actions brought in Greece constituted infringements of the settlement agreements and applying for declarative relief and compensation.
In 2014, the English High Court awarded the applicants compensation in respect of the proceedings instituted in Greece as well as payment of their costs incurred in England on the basis of the content of the settlement agreements and of the jurisdiction clause that they contained.
Charles Taylor and its director then sought recognition and partial enforcement of the 2014 English judgement in Greece.
The Piraeus Court of Appeal found that the 2014 English judgement amounted to a quasi anti suit injunction and should thus be denied recognition and enforcement. The Greek Court of Cassation referred the matter to the CJEU.
The starting point of the reasoning was obviously Turner and the other judgments of the CJEU which have confirmed that anti-suit injunctions are unacceptable under the EU law of jurisdiction: ‘Any injunction prohibiting a claimant from bringing such an action must be seen as constituting interference with the jurisdiction of the foreign court which, as such, is incompatible with that regulation’.
The key issue was to determine whether other forms of assessment of the jurisdiction of courts of other Member States and sanctions of parties wrongly litigating before the courts of Member States could equally interfere with the jurisdiction of those courts.
The CJEU found that, although it did not order any party to discontinue the foreign proceedings, the English judgment still held:
26. … That judgment and those orders nonetheless contain grounds relating to, first, the breach, by Starlight and OME together with the natural persons representing them, of those settlement agreements; second, the penalties for which they will be liable if they fail to comply with that judgment and those orders; and, third, the jurisdiction of the Greek courts in the light of those settlement agreements. Moreover, that judgment and those orders also contain grounds relating to the financial penalties for which Starlight and OME, together with the natural persons representing them, will be liable, in particular a decision on the provisional award of damages, the amount of which is not final and is predicated on the continuation of the proceedings before the Greek courts.
The CJEU ruled that the 2014 English judgment thus interfered with the jurisdiction of Greek courts, and could thus be classified as a quasi anti suit injunction:
27. … While the purpose of that judgment and those orders is not to prohibit a party from bringing or continuing legal action before a foreign court, they may be regarded as having, at the very least, the effect of deterring Starlight and OME, together with their representatives, from bringing proceedings before the Greek courts or continuing before those courts an action the purpose of which is the same as those actions brought before the courts of the United Kingdom, which matter is, in any event, for the referring court to determine.
The CJEU then discussed whether the prohibition to review foreign judgments under the Brussels Regulation prevented the Greek court from denying enforcement to the 2014 English judgment. The CJEU concludes that the Greek Court could rely on the public policy exception to sanction the infringement to the principle that every court is to rule on its own jurisdiction, that other courts should trust the result, and the principle of access to justice.
The rationale for the judgment seems to be twofold. First, the courts of the Member States should not deter litigants from bringing proceedings before the courts of any other Member State. Second, the courts of the Member States should always refrain from assessing whether the court of other Member States have jurisdiction.
The first reason seems to exclude any interference in proceedings pending before other Member States which could be perceived as exercising pressure on one party to terminate them. It would leave open the possibility to sue after the termination of the proceedings to seek any form of remedy for initiating the foreign proceedings in violation of a choice of court agreement. The second reason, however, would seem to apply even after the foreign proceedings resulted in a judgment.
The broader question is whether it is possible to seek a remedy for abuse of process for seizing wrongly the court of a Member State. For instance, for initiating proceedings in violation of lis pendens. The answer seems to be that such remedy can only be sought in the Member State of the court wrongfully seized, and nowhere else.