C-351/96

* Original language: English. 'Where proceedings involving the same cause 1 — The Convention of 27 September 1968 on Jurisdiction and of action and between the same parties are the Enforcement of Judgments in Civil and Commercial brought in the courts of different Contract­ Matters (OJ 1978 L 304, p. 36), as amended by the Conven­ tion of 9 October 1978 on the Accession of the Kingdom of ing States, any court other than the court Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland (OJ 1978 L 304, p. 1) and the Conven­ first seised shall of its own motion decline tion of 25 October 1982 on the Accession of the Hellenic jurisdiction in favour of that court. Republic (OJ 1982 L 388, p. 1), hereinafter 'the Convention'. Article 21 has been amended by Article 8 of the Convention of 26 May 1989 on the Accession of the Kingdom of Spain and the Portuguese Republic (hereinafter 'the San Sebastian Convention'; OJ 1989 L 285, p. 1), but the amended version entered into force between France and the Netherlands — the two Contracting States concerned by the legal pro­ ceedings brought in the present case — only on 1 February 1991. Although the facts of this case arose in 1990, no A court which would be required to decline changes made by the San Sebastian Convention arc material jurisdiction may stay its proceedings if the to it. jurisdiction of the other court is contested.'

I - 3077

OPINION OF MR FENNEIXY — CASE C-351/96

'3. [I]f the judgment is irreconcilable with a judgment given in a dispute between the same parties in the State in which recogni­ tion is sought.' 3 — According to the order for reference, the vessel was owned by MrWalbrecq and chartered by MrVelghe. However, it emerged at the oral hearing that Mr Walbrecq, having died m 1981, had actually been replaced as owner of the Sequana by MrVelghe sometime before the accident occurred. In their B — Factual background and procedure written observations Drouot and the Commission submitted that MrVelghe was also the captain of the barge at the time before the referring court it sank, and that the barge had in fact been chartered by another company not involved in either of the actions at issue in the main proceedings. This view, which was gener­ ally accepted at the hearing, is consistent with the judgment of the Cour d'Appel, which is included in the case-file sent to the Court. 6. Consolidated Metallurgical Industries 4 — For convenience, I shall hereinafter refer to this action as 'the French action'. (hereinafter 'CMI') charged MrVelghe to 5 — It appears from Drouot's written observations that the transport on a barge, known as the Sequana, action against GIE was initiated separately on 11 February a cargo of ferrochromium from Rotterdam 1991. 6 — The nature of the system of general average will be discussed in the Netherlands to Garlinghem-Aire-la- below (see, in particular paragraphs 17 to 19). An average adjuster is a professional who specialises in determining the amounts of the contributions which should be made, respec­ tively, by each of the participants in the venture to which the general average relates. 7 — In view of the death in 1981 of Mr Walbrecq, the CMI and 2 — The first recital in the preamble to the Convention refers to Protea action may now only concern MrVelghe and the sta­ the desire of the Contracting States 'to secure the simplifica­ tus of Mr Walbrecq is not material to the reference before tion of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals'. the Court.

8. According to the judgment of the Cour d'Appel, CMI and Protea contended before that court that the object of the two actions 10. The Cour de Cassation, being of the was the same and that Drouot was not a view that the appeal before it turned on the party to the Netherlands action only because interpretation of the concept of the 'same Dutch procedural rules did not permit insur­ parties' used in Article 21 of the Conven-

9 — At the oral hearing, counsel for Drouot explained that, under 8 — This action will for convenience hereinafter be referred to as the procedural rules of the Cour de Cassation, it had not 'the Netherlands action". When reference is hereinafter made been possible for it to question the finding of the Cour to both actions collectively, they will be described as 'the d'Appel regarding its presence through its insured in the two actions'. Netherlands action.

I - 3079

OPINION OF MR FENNELLY — CASE C-351/96

tion, decided to refer the following ques­ proceedings in which the insured is tion to the Court pursuant to Articles 1 to 3 involved" so that the insurer of the vessel is in fact also involved, through the intermedi­ of the Protocol of 3 June 1971 on the inter­ 1 ary of the insured, in the case brought first.' pretation of the Convention: 1

III — Observations

I - 3080

DROUOT ASSURANCES v CMI AND OTHERS

14. France submits that the autonomy of the conditions required for the occurrence of a lis alibi pendens by Article 21 of the Conven­ tion would be undermined if the peculiarities of the procedural law of a Contracting State were to determine whether the 'same parties' 1 are present. 4 It laid particular emphasis on the need to respect the rights of defence, or 12 — It refers to Case 129/83 Zeiger v Salinilri [1984] ECR 2397 (hereinafter 'Zeiger'), Case 144/86 Giibisch Maschinenfab- fair hearing, of the insured. An insurer is not rik v Pahimbo [1987] ECR4861(hereinafter 'Gubisch') and Case C-406/92 The Tatry [1994] ECR I-5439. 13 — Drouot cites Zeiger, paragraph 15, in favour of this conten­ tion and alleges that, in French law, it could not, by virtue merely of being the insurer of the Sequana, be considered a 14 — It refers especially to paragraph 19 of the Opinion of Advo­ party to the Netherlands action. cate General Tesauro in The Tatry, loc. cit.

I-3081

OPINION OF MR FENNELLY - CASE C-351/96

represented in national proceedings by its action is unsuccessful, it must remain pos­ insured. It does not have access to the court sible for the party whose second action was in legal proceedings involving its insured, so affected by that plea subsequently to resume as to permit it to present its own arguments its action before the second court. or defend its position, and the legal rights and interests of an insurer and its insured often do not coincide. Thus, even assuming identity between insurer and insured, the rights of defence of insurance companies could only properly be guaranteed if Article 21 of the Convention were inter­ preted as requiring, as a prerequisite to upholding a plea of lis alibi pendens, that the parties supposedly present in both actions actually be involved as principal parties.

I - 3082

DROUOT ASSURANCES v CMI AND OTHERS

not be well served by making the insurer average contribution. A short review of the await the outcome of a first set of proceed­ particularities of the legal doctrine of general ings to which it is not a party whenever it average will, I think, assist the application in wishes to claim, in a different action, that, this particular case of the concept of identity for example, no subrogation actually arises. of parties in Article 21 of the Convention. In the Commission's view the wording of Article 21, by referring to the same parties and not to other parties who may have rights or liabilities arising from the rights or liabili­ ties of the actual parties, supports this approach. At the hearing, the Commission's agent questioned the practicality of the approach suggested by Germany: if the sec­ B •— The notion of general average ond court seised were obliged systematically to assess the binding effects of a potential judgment to be given by the first court seised before upholding a plea, the practical appli­ cation of the notion of lis alibi pendens in Article 21 would become unduly compli­ cated. 18. The notion of general average lies at the heart of both the proceedings instituted by Drouot in France and the alternative claim 6 by Protea and CMI in the Netherlands. 1 It is a notion of maritime law of great antiq­ uity. Its origins can be traced to the Rhodian Sea Law, which also found later expression in Roman Law, whereby the owner of cargo IV — Analysis subjected to jettison (¡actus factiis levandae navis gratia) to save a vessel could spread his loss, by claiming contribution, among the owner of the vessel and other cargo own­ 17 ers. It came, over time, to include claims based on other types of damage and expense A — Introduction incurred to avoid it. In modern times, it gen­ erally takes the form, in practice, of the incorporation into contracts of affreightment

and policies of marine insurance of the con­ general average contribution is, therefore, ventional York-Antwerp Rules. These rules, not necessarily made by an insurer. regularly revised since the first International General Average Rules were adopted at York in 1864, appear to have been given effect in 18 French law by a law of 1967. The nautical event giving rise to the claims at issue before the Dutch and French courts did not, how­ ever, take place at sea but on a part of the Rhine and Moselle waterway system. Coun­ 20. That conclusion seems to me to have a sel for Drouot explained at the hearing that, bearing on the question of the capacity of by virtue of a law of 1895, passed during the MrVelghe (and MrWalbrecq) before the period of the attachment of Alsace to Ger­ Dutch court. It is true that an insurer, having many, maritime law was applied to naviga­ fully discharged its liability to its insured, tion on the Rhine and Moselle. The rules may in certain circumstances, by virtue of a specifically applied in the charter-party in right of subrogation, effectively step into the this case are those of Rhine, Antwerp and shoes of the insured so as to pursue claims Rotterdam and, as appears from the case-file, (including a claim for general average contri­ general average is therein defined as the sac­ bution) against third parties. This right may, rifices and expenses reasonably made and depending on the applicable law, be exercised incurred with the object of saving a boat and either in the name of the insured or by the its cargo from common peril. insurer in its own name, but only so as to invoke the rights of the insured and after payment. That clearly does not apply to the Netherlands action; nor does it apply to the French action where Drouoťs claim is not based on subrogation to any rights of MrVelghe but on its general average claim. The precise nature of the action before the Dutch court is known only indirectly; but it is generally agreed that it includes, as one element, a claim for a negative declaration that CMI and Protea be held not liable to contribute to general average. Thus, in the 19. The gist, therefore, of the notion of gen­ particular context of a general average claim, eral average is that participants in a common it is difficult to see how the prima facie lack commercial adventure should contribute of identity between MrVelghe and Drouot equitably to the damage or loss of one of the should be merged into an identity of interest. participants who has, for the benefit of all, suffered a sacrifice or, by extension, reason­ ably incurred expense to prevent loss. Insur­ ers of the hull and cargo are treated as par­ ticipants and may claim or be liable for general average contribution. A claim for

ing whether a party should be treated as rep­ key to the application of Article 21 of the resenting his insurers for the purposes of Convention. The Drouot claim is made in its Article 21 of the Brussels Convention. The capacity as a party to the enterprise having court in the Contracting State where the made a sacrifice. It is not made as representa­ issue of lis alibi pendens in the sense of tive of Mr Velghe. Indeed, any claim made Article 21 of the Convention is raised, and by the owner of a vessel which had sunk which is informed of the existence of a prior against the owner of the damaged cargo action claimed to be between the same par­ would be met, to say the least, with surprise, ties in another Contracting State, will need unless it were itself based on general average, to conclude that an insured, a named party in i. e. on sacrifice. However, in the present the other contracting State, should be treated case, Mr Velghe would not appear to have as being the same party as his insurer. To participated in the salvage of the vessel and, start with, that court will need to investigate thus, would scarcely have incurred any such the relationship between insurer and insured. sacrifice. It is notorious that disputes between insurer and insured take a great variety of forms. I will cite only a few. The very existence of the policy may be in dispute; if its existence is established or admitted its validity may be contested on grounds of fraud, misrepresen­ tation or non-disclosure; its application to the particular loss may be in doubt, as may 23. Consequently, viewing the matter be the quantum of the loss, the means of exclusively within the context of the present proving it or the time for payment. Even in claim for general average contribution, there the present case, there is a dispute between is no such identity of interest between CMI and Protea, on the one hand, and Drouot and Mr Velghe as would justify, even Drouot, on the other (though not, so far as I if that were permitted, overlooking their am aware, between Drouot and Mr Velghe), nominal and real differences of identity so as regarding the scope of the cover under to treat them as the 'same party'. Drouot's policy of insurance. The second national court, in my hypothesis, might have to reach a conclusion on any of those poten­ tially complex issues by reference to the law applicable in the other, or even a third, Con­ tracting State. C — The same parties

to point out that the provisions of the Con­ international contract of sale ... [while] an vention were not cited to the Cour d'Appel. action was subsequently brought against him Nevertheless, the approach which it has by the other party in another Contracting adopted is not, in my opinion, compatible State for the rescission or discharge of the 22 with the Court's decisions in Gubisch and same contract'. The Court declared that The Tatry, where the Court declared unam­ the conditions laid down by Article 21 are biguously that the 'substantive conditions' exhaustive; namely, the two actions must be prescribed by Article 21 of the Convention 'between the same parties and involve the for a successful plea of lis alibi pendens 'must same cause of action and the same subject- 23 be regarded as independent'. 19 These sub­ matter'. It proceeded, in circumstances stantive conditions represent a considered where the present issue of identity of parties choice and the implicit rejection of the pos­ was not in doubt, to take the view that the sibility of referring to the term lis alibi pen- concept of the same cause of action 'cannot dens as used in the different national legal be restricted so as to mean two claims which 24 systems of the Contracting States. 20 The are entirely identical'. That the Court was application of the Convention concept of clearly motivated by the need to avoid con­ 'the same parties' cannot, in my view, flicting judgments emerges clearly from its depend on the existence and scope of the statement that in circumstances such as those 25 Netherlands-law principle relied upon by the of the case before it: Cour d'Appel, since that represents a consid­ eration of the law of the first court seised.

25. Next, it is necessary to assess what guid­ 22 — Loc. cit., paragraph 13. ance the Court's case-law furnishes in 23 — Gubisch, paragraph 14. The Court, by oversight, stated, also in paragraph 14 that only 'the German version of respect of the autonomous Convention con­ Article 21 (which refers to: "... Klagen wegen desselben Anspruchs zwischen denselben Parteien anhängig gemacht") cept of the 'same parties'. Zeiger is not rel­ does not expressly distinguish between the terms "subject- evant because it only concerned the proce­ matter" and "cause of action"' and that, accordingly, it must be construed in the same manner as the other lan­ dural formalities regulating the temporal guage versions, all of which make that distinction' (empha­ sis added). In fact, at least the English and Irish versions of point at which a court may be regarded as Article 21 of the Convention also make no such distinction; 21 having been seised of an action. In thus, the English version refers to proceedings 'involving the same cause of action and between the same parties Gubisch, the Court was concerned with a while the Irish version refers to '...imeachtaí leis an gcuis situation whose 'salient features' were that chéanna chaingne agus idir na pâirlithe céanna' (emphases added). The Danish text, for example, would also appear 'one of the parties [had] brought an action merely to contain two conditions: '... derhar samme gen- stand og hviler pa samme grundlag' (emphasis added). before a court of first instance for the However, in paragraph 38 of its judgment in The Tatry, the enforcement of an obligation stipulated in an Court implicitly corrected the slip made in Gubisch by rec­ ognising that 'the English version of Article 21 does not expressly distinguish between the concepts of "object" and "cause of action"'. Reiterating the principle declared in Gubisch, the Court stated that 'that language version must however be construed in the same manner as the majority 19 — Gubisch, paragraph 11: sec also The Tatry, paragraph 30. of the other language versions in which that distinction is made'. 20 — See footnote 10 above regarding the possible position in 24 — Gubisch, paragraph 17. French law. 25 — Ibid., paragraph 18. 21 — Loc. cit., see paragraphs 13 to 16.

27. The judgment in The Tatry confirms this view and has the merit of having addressed the issue of identity of parties, albeit not in 26. CMI and Protea have argued from the radical form suggested in the instant case. Gubisch for a broad and flexible interpreta­ The Court had to examine whether the Con­ tion of the concept of the 'same cause of vention could be regarded as applicable in action' and, by extension, of 'the same par­ the case of two sets of proceedings involving ties' as those terms are used in Article 21 of the same cause of action but where some but the Convention. It is true that, in Gubisch, not all of the parties were the same; i.e. the Court held that the concept of 'the same where at least one of the plaintiffs and one of subject-matter', which, in effect, it inter­ the defendants to the proceedings first com­ preted into the English text by reference to menced were among the plaintiffs and defen­ the other language versions, could not 'be dants in the second proceedings, or vice 27 restricted so as to mean two claims which are versa. The Court first agreed with the rec­ 26 entirely identical'. In practice, it applied ommendation of its Advocate General to the that reasoning to the two actions one of effect that the identity of the parties 'cannot which was brought to enforce and the other depend on the procedural position of each of to rescind or discharge the same contract. In doing so, it attached great importance to the purpose expressed, inter alia, in Article 27(3) 27 p ag h — See ar rap s 29and 30. The fifth question concerned the of the Convention of avoiding irreconcilable alleged identity of the causes of action in the two actions: judgments between the same parties and how namely, an action brought by cargo owners in one Con­ tracting State (the Netherlands) in respect of damage caused such judgments could arise if the competing during transit to their goods and an action previously brought in another Contracting State (the United King­ claims had to be 'entirely identical' before a dom) by the _ shipowner whereby the latter effectively sought a negative declaration regarding its possible liability for the damage to the cargo. The Court took the view that such causes of action were the same, since the positive and negative terms in which they were couched did not render their object (to wit the determination of liability) different; 26 — Paragraph 17. sec, in particular, paragraph 43.

28. Thus, in The Tatry, the Court ruled that, 'where some of the parties are the same as the parties to an action which has already been started, Article 21 requires the second 30. This does not, to my mind, create too court seised to decline jurisdiction only to rigid a framework for the operation of the extent to which the parties to the pro­ Article 21 of the Convention. On the con­ ceedings pending before it are also parties to trary, it is in conformity with the objective the action previously started before the court of 'simplification of formalities governing of another Contracting State'. 31 I agree with the reciprocal recognition and enforcement the Commission's contention that the appli­ of judgments ...' found in Article 220 of the cation of Article 21 of the Convention can­ EC (formerly EEC) Treaty, which authorised not depend on the court before which the the Member States, among other things, to plea of lis alibi pendens is raised carrying out enter into the Convention. Simple and trans­ an inquiry into the true capacity of parties parent rules, capable of being applied on the basis of objective and readily accessible fac­ before the court of a different Contracting tors best serve this objective. Cases where a State. broader discretion is required to stay pro­ ceedings where related actions are brought in the courts of different Contracting States are 28 — Ibid., paragraph 31; see also paragraph 14 of the Opinion of catered for by Article 22 of the Convention. Advocate General Tesauro. 29 — The Tatry, paragraph 32. As Advocate General Tesauro explained in 30 — Ibid., paragraph 33 (emphasis added). In the English lan­ his Opinion in The Tatry, the idea of 'irrec­ guage, at least, the adjective 'identical' refers to a thing that agrees 'in every detail' with another thing (see, for example, oncilable' judgments in the third para­ The Cortase Oxford Dictionary, Oxford, 1990, at p. 585). graph of Article 22 does not bear 'the same 31 — The Tatry, paragraph 34 (emphasis added).

31. Moreover, I share the concerns expressed, particularly in the observations of France and the Commission, that a more flexible approach to the application of the condition that the parties must be the same in order for an obligation to decline jurisdic­ tion to arise under Article 21 of the Conven­ tion could seriously imperil the right to a fair 32. The conclusion which must, to my mind, hearing and, in some cases, even the efficient be drawn in circumstances such as those of administration of justice. In the instant case, the present case is that no lis alibi pendens it is apposite to recall that the principle of for the purposes of Article 21 of the Con­ Netherlands procedural law which forms the vention arises. basis for the supposed implicit presence of Drouot in the Netherlands action — at least

34 — It should perhaps be added, although no criticism of the Cour d'Appel is intended, that there is nothing on the case- file to indicate that its finding in respect of Dutch law was based either on expert evidence or other reliable sources of 32 — See paragraph 28 of his Opinion. that law. 33 — Ibid. 35 — See paragraph 19 of his Opinion.

I - 3089

OPINION OF MR FENNELLY — CASE C-351/96

V — Conclusion

33. In the light of all the foregoing considerations, I recommend that the Court answer the question referred by the French Cour de Cassation as follows: