Akçil and others (Appellants) v Koza Ltd and another (Respondents) - (29 Jul 2019)

A mere link between a claim which engages Article 24(2) of Recast Regulation and one which does not is not sufficient to bring latter within scope of that provision

Civil

Present appeal is concerned with the interpretation of Article 24(2) of the Brussels I Recast Regulation (Parliament and Council Regulation (EU) of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“the Recast Regulation”)), which sets out a special regime to determine jurisdiction in relation to certain matters regarding the governance of corporations. Although, the issue in the present case relates to where a Turkish company and certain Turkish-domiciled individuals may be sued, and Turkey is of course not an EU member state, it is common ground that, Article 24(2) of the Recast Regulation applies to determine the question of jurisdiction which arises in present case.

The issues on the appeal are (i) whether Article 24(2) confers jurisdiction on the English courts to determine the authority claim as against Koza Altin and (ii) whether Article 24(2) confers exclusive jurisdiction on the English courts to determine either the authority claim or the English company law claim as against the trustees.

A mere link between a claim which engages Article 24(2) and one which does not is not sufficient to bring the latter within the scope of that provision. In the present case, the English company law claim and the authority claim can be said to be connected in a certain sense, but they are distinct claims which are not inextricably bound up together. Koza Altin is a shareholder in Koza Ltd and may act as such. The issue, so far as the authority claim is concerned, is whether it has done so validly, acting by relevant organs authorised according to the law of its seat. The English company law claim can be brought and made good on its own terms without any need to get into the merits of the authority claim. The authority claim likewise can be brought and made good on its own terms without any need to get into the merits of the English company law claim.

Article 24(2) of the Recast Regulation does not cover the authority claim, the English Courts have no jurisdiction in relation to the trustees under that provision with respect to that claim. The proceedings against the trustees are principally concerned with the authority claim. Once it is appreciated that, the application of Article 24(2) to the authority claim and its application to the English company law claim are to be considered separately, a strict interpretation of article 24(2) as explained by the Court of Justice leads to the conclusion that, it does not cover the trustees in relation to the latter claim. Further, the rationale underlying Article 24(2) of avoiding conflicting decisions in relation to the relevant subject matter of each respective claim and the rationale that each respective claim should be tried in the courts best placed to do so both support that view.

English Courts have no jurisdiction under Article 24(2) of the Recast Regulation over the trustees in relation to any part of the claims. The English courts have jurisdiction under that provision over Koza Altin in respect of the English company law claim, which is principally concerned with the affairs of Koza Ltd. The English courts have no jurisdiction under that provision over Koza Altin in respect of the authority claim, which is principally concerned with the conduct of the business of Koza Altin. Appeals by Koza Altin and the trustees allowed.

Tags : JURISDICTION REGULATION APPLICABILITY