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What is the meaning of the term "irreconcilable judgments" in article 22 of the Brussels Convention, and what are the forms of relief available to the court under that article? These issues were the subject of an appeal to the House of Lords in Sarrio v Kuwait Investment Authority.
Article 22 provides that where there are related actions pending in the courts of two contracting states, the court second seized may stay in proceedings or decline jurisdiction where it is expedient to hear and determine the actions together to avoid a risk of irreconcilable judgments.
In Sarrio, the Court of Appeal found that a risk of irreconcilable judgments arises where there is a conflict between issues which it will be essential for the courts in both jurisdictions to decide. This approach was rejected by the House of Lords, whose decision was provided this month.
The European Court authority of The Maciej Rataj establishes that courts are required to take a broad approach to this issue, and that judgments will be irreconcilable where they conflict with each other only as regards their reasoning.
A further criticism of the Court of Appeal's approach is that it gave insufficient emphasis to the fact that article 22 is discretionary. The risk of irreconcilable judgments is the gateway to article 22. Where such a risk is established, the court must then decide whether it is expedient to hear two actions together to avoid the risk of irreconcilable judgments, and the discretionary relief should be granted.
In cases where the risk of conflict between two judgments is not significant, the court has discretion not to grant relief.
This means there is no need to place a restrictive interpretation on the gateway concept of irreconcilable judgments.
The House of Lords agreed that the Court of Appeal's test was too restrictive. However, since a reasoned judgment has not yet been handed down, it is unclear what their lordships consider the correct test to be.
The subsidiary issue considered by the House of Lords was the form of relief available under article 22. Sarrio contended that a court second seized has the power to stay the proceedings before it until the conclusion of the proceedings in the court first seized.
This wait-and-see approach, Sarrio contended, would allow the court second seized to take account of any findings made by the court first seized, and thereby avoid the risk of a conflict between the judgments of the two courts. The House of Lords also rejected this approach, ordering a declination of jurisdiction.
The House of Lords has preferred a flexible European approach to the Brussels Convention over the restrictive approach of the Court of Appeal - a welcome move.