The High Court has held that the English court will only have jurisdiction against a co-defendant under article 8(1) of the recast Brussels Regulation where a merits test against the anchor defendant has been satisfied: Senior Taxi Aereo Executivo Ltda v Agusta Westland S.p.A  EWHC 1348 (Comm). In doing so, it largely followed obiter comments by the majority in a previous Court of Appeal decision (Sabbagh v Khoury  EWCA Civ 1120, considered here).
Under article 8(1), co-defendants domiciled in EU member states can be joined to proceedings commenced in England against an English domiciled defendant (the anchor defendant) where the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.
There is no merits test in respect of the case against the co-defendants, but it has been unclear whether that is also the case in respect of the case against the anchor defendant. The majority in Sabbagh considered that there was such a test, but Gloster LJ gave a strong dissenting judgment, leaving the position in doubt. The judge in this case (Waksman J) held there is such a test, preferring the reasoning of the majority, although clearly the issue is ripe for consideration by the Court of Appeal or CJEU.
Although the recast Brussels Regulation will no longer apply in the UK after the end of the transition period following the UK’s departure from the EU (save in respect of proceedings started before the period ends), the decision will remain of relevance if the UK joins the Lugano Convention, as the Convention contains the same provision regarding co-defendants as the Regulation.
If the UK does not join the Lugano Convention, the decision will cease to have relevance, as the common law jurisdiction rules will apply to co-defendants. Under those rules, a merits test clearly does apply to the claim against the anchor defendant. Continue reading