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Cross-Border Commercial Disputes – The Risk of Conflicting Decisions

Cross-border commercial disputes can often give rise to a risk that conflicting judicial decisions will be reached in different countries under different laws. However, a High Court ruling has underlined that, at least within the European Union (EU), rules are in place to prevent that happening.

Tair france planewo French companies and an English company, all of them involved in developing, producing and selling medical devices, had enjoyed a long-standing contractual relationship which had broken down. Unusually, the English company had launched proceedings in France whilst the French companies had done the same in England, alleging repudiatory breach of contract.

The English company applied to stay the English proceedings. It argued, amongst other things, that there was a danger of divergent decisions being reached in two EU member states on identical facts. However, the French companies pointed out that the contract was governed by English law and contained a non-exclusive English jurisdiction clause.

Refusing the application, the Court rejected arguments that the English proceedings were an abuse of process and merely a device which was designed to obstruct the parallel proceedings in France. The English proceedings had been initiated first in time and, by operation of Article 30 of Regulation (EU) No. 1215/2012 – which is commonly referred to as the Judgments Regulation – the Court in any event had no power to stay the English proceedings.