BAT Caribbean SA & Ors v PHP Tobacco Carib SARL & Ors, Court of Appeal - Civil Division, July 31, 2017, [2017] EWCA Civ 1131

Resolution Date:July 31, 2017
Issuing Organization:Civil Division
Actores:BAT Caribbean SA & Ors v PHP Tobacco Carib SARL & Ors

Case No: A3/2017/0190

Neutral Citation Number: [2017] EWCA Civ 1131







Royal Courts of Justice

Strand, London, WC2A 2LL


Before :





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Charles Dougherty QC, Stewart Chirnside (instructed by Penningtons Manches LLP) for the Appellant

John Russell QC, Tom Bird (instructed by Hill Dickinson LLP) for the Respondent

Hearing date: 18 July 2017

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JudgmentLord Justice Beatson :

  1. Overview:

    1. This appeal is against the order dated 21 December 2016 of Andrew Baker J that arrangements between the parties made in August 2016 do not constitute an exclusive jurisdiction agreement in favour of the English Court within the meaning of Regulation (EU) No 1215/2012 on jurisdiction and enforcement of judgments in civil and commercial matters (``the Brussels Regulation Recast'').

    2. The appellant, BAT Caribbean SA (``BATC''), is a Panamanian company in the British American Tobacco Group. It is the defendant in a claim issued on 3 July 2015 by the first respondent, PHP Tobacco Carib SARL (``PHP'') in the Commercial Court under a distribution agreement (``the Distribution Agreement'') conferring jurisdiction on the English courts, for which the trial has been fixed for March 2018. On 5 August 2016, BATC made a without notice application to join PHP Trading S.A. (``PHP Trading'') and SODIPAM SARL (``SODIPAM''), companies related to PHP, and respectively based in Guadeloupe and in Martinique to the proceedings so as to pursue against them a Part 20 claim (``the Additional Claim''). In his order, the judge gave permission for them to be joined as third and fourth parties to the proceedings, but stayed BATC's Part 20 claim because, on 12 October 2016, the Joint Commercial Court of Fort-de-France in Martinique had become seised of proceedings brought by them against BATC. Guadeloupe and Martinique are overseas territories of France and thus, for the purposes of EU law and the Brussels Regulation Recast, are to be considered as part of France.

    3. The sole issue before the court is whether an agreement reached between BATC and PHP, PHP Trading and SODIPAM in correspondence in August 2016 is an exclusive jurisdiction agreement in favour of the English court. If it is, then, as a result of Article 31(2) of the Brussels Regulation Recast, the Additional Claim should not have been stayed. This is because, under Article 25, where parties have agreed that the courts of a Member State of the European Union are to have jurisdiction over any disputes, the designated court shall have exclusive jurisdiction unless the parties have agreed otherwise. In such a case, Article 31(2) provides that, where the designated court is seised, the courts of other Member States shall, even if they were first seised, stay any proceedings until such time as the designated court declares that it has no jurisdiction under the agreement. Absent an exclusive jurisdiction agreement, however, Article 29 provides that any court other than the court first seised shall stay its proceedings until such time as jurisdiction of the court first seised is established. In the case before us, the Joint Commercial Court of Fort-de-France in Martinique was the court first seised. I have set out the relevant provisions of the Brussels Regulation Recast in an Appendix to this judgment.

    4. The remainder of this judgment is organised as follows. Part II provides a summary of the factual and procedural background. Part III summarises the decision of the judge on the matters material to the appeal. Part IV contains my analysis of the law and a summary of the submissions made by the parties. It also gives the reasons for my overall conclusion. I have concluded that the arrangements between the parties made in August 2016 do not constitute an exclusive jurisdiction agreement in favour of the English Court. My reasons are substantially the same as those given by the judge. Accordingly, I would dismiss the appeal.

  2. The factual and procedural background:

    1. PHP is a French company based in Guadeloupe which was engaged for 50 years or so in business as a distributor of cigarettes and other tobacco products of British American Tobacco in territories including Guadeloupe and Martinique. The final contract was the Distribution Agreement between PHP and BATC to distribute such products for five years between 1 January 2010 and 31 December 2014. PHP subcontracted the importation and distribution of BAT products under the Distribution Agreement to PHP Trading in Guadeloupe and SODIPAM in Martinique. Carisma Marketing Services Ltd (``Carisma''), a company in the BAT Group based in Guadeloupe, was involved in the marketing of BAT products. The parties failed to agree to renew the Distribution Agreement, and the arrangement came to an end on 31 December 2014.

    2. On 3 July 2015, PHP issued the proceedings in the English High Court against BATC to which I have referred. It claimed approximately €6.5 million by way of distributor's margin under clause 6.2.1 of the Distribution Agreement, less credit of €1.2 million for outstanding invoices. On 28 October 2015, BATC lodged its defence and a counterclaim on those invoices. BATC also made a counterclaim of around €8.5 million on the basis of a different, oral agreement under which it was alleged that PHP would procure that PHP Trading and SODIPAM would co-operate in bringing claims for the recovery of VAT in Guadeloupe and Martinique on imports of BATC products under the Distribution Agreement (``the VAT Agreement''). BATC claimed that representatives of PHP and Carisma agreed to the VAT Agreement at a meeting in September 2009. PHP denied that any binding contract was concluded in relation to VAT recoveries, but also alleged that, if there was any contract, it had been made between PHP Trading and SODIPAM on the one hand and Carisma on the other, rather than between PHP and BATC.

    3. In view of the nature of the dispute as to what was agreed in the exchanges of correspondence between Penningtons Manches LLP, BATC's solicitors, and Hill Dickinson LLP, PHP's solicitors, it is necessary to refer to them in some detail.

    4. The relevant correspondence starts with an email dated 10 June 2016 from Penningtons Manches to Hill Dickinson. In this, Penningtons Manches informed Hill Dickinson that BATC intended to apply to join PHP Trading and SODIPAM as parties to its counterclaim based on the VAT Agreement. Hill Dickinson replied on 13 June asking on what basis BATC considered the English court had jurisdiction to hear claims against PHP Trading and SODIPAM.

    5. Penningtons Manches's next email, dated 13 June, did not answer the question about the basis of the jurisdiction claimed for the proposed Additional Claim. Penningtons Manches stated that they thought it was ``clearly in the best interests of all parties to have all the relevant disputes resolved together, rather than having piecemeal related litigation in separate jurisdictions and thereby substantially increasing costs''. They reiterated this (including the reference to litigating in separate jurisdictions) in an email dated 29 June. Hill Dickinson replied stating they were still awaiting a response to their question about the basis of the English court's jurisdiction to hear these claims.

    6. Jumping back in the chronology, on 17 June 2016 there was a CMC before Blair J. Notwithstanding the recent exchanges about the Part 20 claims against PHP Trading and SODIPAM, neither party mentioned them at the CMC. The only Part 20 claim mentioned was BATC's existing counterclaim against PHP. Blair J gave full directions, including that a twelve-day trial be fixed for not before June 2017.

    7. It was not until 1 July 2016 that Penningtons Manches responded to Hill Dickinson's question about the basis upon which BATC considered the English court has jurisdiction to hear the proposed Additional Claim against PHP Trading and SODIPAM. As well as explaining why they considered there was jurisdiction, they stated if Hill Dickinson did not agree to...

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