3 September 2007
14 April 2014
10 April 2014
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Court confirms there is a principle of English law that enables a court in very limited circumstances to pierce the corporate veil
24 June 2013
England, traditionally home to fish and chips and warm beer, can also now lay claim to being the home of divorce. For wives or husbands used to having the best that money can buy, funded by the resources of their spouses, England is now the international divorce forum of choice.
Recent months have seen an increase in the number of reported decisions of the English divorce courts and the Court of Appeal in cases with an international element, where forum shopping is the main issue. Various themes may be observed.
In the EU, Council Regulation Brussels II provides the rules for the race to court, and in proceedings involving the same cause of action and between the same parties, first time in wins. No time for conciliation here - it is gloves off, into the ring and a left hook before the bell.
Where proceedings are related but do not involve the same cause of action, Brussels II provides for a discretionary stay. In Prazic v Prazic (2006), the Court of Appeal allowed Borivoje Prazic's appeal and stayed proceedings by Penelope Prazic for a declaration of her equitable interest in two properties where there were ancillary relief proceedings pending in France.
Council Regulation Brussels I governs maintenance. Again first time in applies. The ability to apply for maintenance in some jurisdictions before it is possible to issue divorce proceedings, or where an ancillary financial application is not an option (as in Moore v Moore (2007), encourages satellite litigation aimed entirely at establishing lis pendens.
Outside the EU, in the European Free Trade Association (Efta) countries, the Lugano Convention applies. This is largely the same as Brussels I, but not in all respects. In non-Efta/non-EU countries the Domicile and Matrimonial Proceedings Act 1973 (DMPA) applies. The DMPA provides statutory authority for the grant of a stay on forum non conveniens grounds. The court also has power under its inherent jurisdiction to stay on this principle. The leading House of Lords decision is Spiliada Maritime Corp v Cansulex (1986).
In the UK the DMPA applies to proceedings between England and Wales, Scotland and Northern Ireland, Jersey, Guernsey and the Isle of Man, and provides for an obligatory stay of later proceedings if the requirements of paragraph 8 of Schedule 1 are met.
All relatively straightforward - but then tricky questions arise. For example, when is jurisdiction actually seized? This depends on which international convention applies and/or the procedural law of the relevant country or part of the country. Most recently, the main issues in Bentinck v Bentinck (2007) were whether jurisdiction had been established first by conciliation proceedings for divorce and ancillary matters in Switzerland, or by the service of subsequent divorce proceedings issued in England, and which court should determine that issue.
Effective service of proceedings may be necessary for jurisdiction to be properly established - or not. The Hague Convention on service applies to non-EU countries and the Council Regulation on service applies in the EU.
Other issues peculiar to particular jurisdictions may arise. For example, whether there are sufficient grounds to commence divorce proceedings immediately, and whether maintenance pending suit may be ordered even though the forum dispute is still awaiting determination.
The key is to gain the initiative, take quick and effective advice from specialist family lawyers in all jurisdictions and avoid doing anything until decisions have been taken about which forum is likely to produce the best result and what steps are required to seize that jurisdiction.
Moore was one case where in theory the principle of applicable law should have prevented the forum argument, which perhaps affirms the UK's reluctance to engage in EU legislation to introduce applicable law across Europe.
This may seem sensible, yet the development of EU legislation and jurisprudence moves inexorably in the alternative direction of unification. This does not permit recognition that national and cultural differences produce different results, but perhaps that should not matter. After all, the law applicable in, for example, Blackpool County Court can be rather different to that applied in the Principal Registry. Most litigants cannot afford the luxury of an appeal.
The UK is in a minority among EU states in not allowing the application of a foreign law to an 'international' divorce; it remains to be seen how long this approach is sustainable.
Prior toBrussels II there were several split-forum cases decided on forum conveniens arguments. Brussels II does not seem to have affected this significantly, and arguably Moore seems to confirm the possibility of split forum, especially where the Brussels I jurisdiction would apply the law of another jurisdiction. Kim Moore applied for leave to apply for financial relief following an overseas divorce under the Matrimonial and Family Proceedings Act 1984 (MFPA), since the Spanish court determined that it had no jurisdiction to hear ancillary financial claims.
In this context the spectre looms of more reported decisions on the validity of marriages. In Alfonso-Brown v Milwood (2006) a Ghanian ceremony between two domiciled Ghanaians was found to be an engagement rather than a marriage. The issue of the validity of divorces to empower or otherwise an MFPA claim may also arise. In Abbassi v Abbassi & Attorney General (Intervener) (2006) the Court of Appeal upheld the High Court order refusing Mr Abbassi's application for a declaration of validity of a talaq divorce pronounced in Pakistan, on the undertaking of Mr Abbassi to seek a determination from the court in Pakistan.
Anecdotally, the increase in international divorce cases is being matched by the increase in English pre-marital agreements. Brussels I provides that the parties may choose the forum in relation to maintenance. Brussels II does not. There have been several reported decisions in forum conveniens cases where choice of jurisdiction clauses in pre-marital agreements have been given effect by the English courts. Most recently in Ella v Ella (2007) the Court of Appeal upheld the terms of a pre-marital agreement providing for the law of Israel to apply.
A crystal ball would be a helpful aid in this area, but at least pre-marital agreements increase client awareness about forum shopping. It is likely that pre-marital agreements will become increasingly significant. On one view, it seems ludicrously paternalistic that people can enter freely into onerous contractual arrangements in all manner of situations, but not in connection with their marital status. Further, is it not bizarre that those voluntarily entering into pre-marital agreements in one jurisdiction can sidestep the provisions by forum shopping?
Forum arguments do not come cheap. The Court of Appeal was incredulous at the "extraordinary" feature of Moore incurring legal fees of £1.5m, most in proceedings about whether the divorce should be governed by courts in Spain or England. Given that the Spanish courts would have applied English law, the parties seem to have paid dearly for the speculative possibility of a Spanish judge misapplying English law. Similarly, in Bentinck £330,000 was spent by the parties on the forum dispute.
One thing is for sure: the House of Lords in White v White (2000) and Miller (2006)and McFarlane (2006) has provided international family lawyers with a steady stream of forum shopping clients. Good for business, but not for ongoing familial relationships.
Nigel Shepherd is a partner and Alison Bull is a legal director at Addleshaw Goddard
of course. By Nigel Shepherd and Alison Bull