Advokatfirmaet Glittertind
  • Hjem no
  • Fagområder no
    • Entreprise no
    • Energi og industri no
    • Tvisteløsning og prosedyre no
  • Oss no
    • Om Glittertind no
    • Advokater no
    • Administrasjon no
  • Artikler no
  • Klima no
    • Klima og Glittertind no
    • Klimasøksmålet no
  • Karriere no
    • Traineer no
  • Kontakt no
  • Våre verdier no
  • Home en
  • About Glittertind en
  • Expertise en
    • Construction en
    • Energy and industry en
    • Dispute resolution and litigation en
  • Our people en
    • Lawyers en
    • Administration en
  • Contact en
  • Our values en
english

Newsletter Glittertind, 8 August 2019

Clarification of the interpretation of the Lugano Convention​

1. Introduction
Borgarting Appeal Court passed 26 March 2019 a clarifying decision (case 18-176694ASK-BORG/04) regarding the interpretation of the Lugano Convention where the plaintiff has argued multiple and separate grounds for establishing jurisdiction before Norwegian courts.
 
The court held that when two or more legal actions must be deemed as one and the same claim, and jurisdiction is established for one of these actions, Norwegian courts will have jurisdiction also for the other actions.
 
The decision was subject to an appeal by the defendants, who argued i.a. that ECJ case law provide the opposite solution. However, the Norwegian Supreme Court rejected the appeal 28 June 2019 (case HR-2019-1271-U). Thus, the decision must be regarded to reflect established Norwegian law.

2. Background
Two individual investors and partners, one domiciled in Norway and the other in France, entered into an advisory agreement in connection with two larger wind development projects in the northern part of Norway. The investors entered the agreement through an entity to be incorporated, in the claimant's view by the investors jointly with registered business address in Oslo. They were to provide the service themselves. The counterpart was a German based financial and asset management provider which was to pay a fee of MEUR 3,75 for the advice.

However, the entity to be established by the individual investors was never incorporated. Later, the investor domiciled in France – without the other investor's knowledge – accepted two reductions of the fee of a total MEUR 2. The first reduction was accepted despite of clear rejection by the claimant and without his involvement. The second reduction was accepted without the claimant's knowledge. Thus, the claimant initiated legal proceedings against his partner and the German counterpart before Oslo City Court. The action was based on:

  1. Primarily that the claimant must be considered as a direct party to the agreement as the entity which was to be incorporated never was established as agreed and since the investors rendered their services. Failure to pay to the claimant half of the originally agreed fee of MEUR 3,75 therefore constitutes a contractual breach. The claimant had neither knowledge or accepted any reduction and is thus not bound by these.
  2. Alternatively that the actions of the defendants - should the claimant not be considered a direct party to the agreement - nevertheless entitles the claimant to damages (tort) for the same amount due to i.a. disloyal conduct. The defendants let the claimant fulfil his part of the services believing that he would be entitled to half of the originally agreed fee.

The defendants requested the case to be dismissed arguing that Oslo City Court lacks jurisdiction as they are domiciled in France and Germany respectively. The claimant contested this and invoked that Oslo City Court has jurisdiction based:

  1. Firstly on the jurisdiction clause in the agreement, cf. Art. 23 of the Lugano Convention,
  2. Secondly on the claimant's obligations under the agreement which was to be performed in Oslo, cf. Art. 5 no. 1 of the Lugano Convention, and/or
  3. Thirdly that the claimant's alternative claim for damages must be allowed should the defendants succeed that he cannot invoke the agreement as a direct party since the harmful event(s) occurred in Oslo, cf. Art. 5 no. 3 of the Lugano Convention.
3. The court's decision
Borgarting Appeal Court referred initially to Art. 2 of the Lugano Convention stating that a defendant domiciled in a state bound by the convention shall as a main rule be sued before the courts of that state. The court thereafter considered whether the above-mentioned alternatives making special exceptions from the main rule could establish jurisdiction in Norway.

The court held that Oslo City Court had jurisdiction for the tort claim according to Art. 5 no. 3 of the Lugano Convention (the third alternative). The basis for the court's decision was that the defendants' negligent actions had had an effect in Oslo where the claimant's office was situated, that the agreement was entered in Oslo, and that the claimant had provided his services from his office in Oslo.

The court did not consider it necessary to assess whether Oslo City Court had jurisdiction according to Art. 23 and 5 no. 1 of the Lugano Convention (the first and second alternatives respectively). The reason is that the court held that both the claimant's primary contractual action and alternative tort action were in fact to be considered to constitute the one and same claim. On this basis, the court found that Oslo City Court has jurisdiction for both actions provided that one of the actions was subject to the jurisdiction of the Court. The court's rationale seems to be based on: 
Picture
  1. Norwegian civil procedural rules regarding whether two pretended claims (e.g. a claim for damages and a claim for price reduction for the same deficit) is to be deemed as separate claims or just as separate legal actions of the same claim, and
  2. The litis pendens rule in Art. 27 of the Lugano Convention, which states that any other court than the court first seized shall stay its proceedings when proceedings involving the same cause of action and between the same parties are brought in the courts of different states. In this regard, reference was made to the ECJ case Gubisch v. Palumbot (case C-144/86) para 16 in which the relevant question is what "lies at the heart of the two actions". Borgarting Appeal Court found that the question whether the defendants could agree to reductions of the fee without the claimant's involvement "lies at the heart" of both the primary and alternative actions in our case.

The defendants argued in their appeal that the decision is contrary to ECJ case law, notably Kalfelis v. Schröder and others (case C-189/87v) in which the ECJ stated that each material claim in which the grounds for special jurisdiction is based needs to be assessed autonomously and independently and that "a court which has jurisdiction under Article 5 (3) over an action in so far as it is based on tort or delict does not have jurisdiction over that action in so far as it is not so based", cf. para 14-19.
 
This does not automatically mean that the ECJ would reject that separate legal actions that are strongly connected must be deemed as one claim, and that jurisdiction for one of the actions also must result in the court having jurisdiction for the other actions. In the mentioned case, the ECJ states that separate legal actions in certain circumstances might be heard before the same court if there is an adequate connection between the legal actions, cf. para 11 and 20.

4. Final remarks
​The court's rationale, where national rules of civil procedure and the litis pendens rule influence the interpretation of the relationship between the rules of special jurisdiction in the Lugano Convention, is interesting. It provides in our opinion a clarification of the jurisdiction of Norwegian courts based on the special jurisdiction rules of the Lugano Convention. Legal practitioners should be aware of this when handling cases subject to the Lugano Convention involving separate legal actions which potentially are based on the same claim.​

​Senior lawyer Mohsin Ramani represents the claimant.

Picture
Mohsin Ramani
Senior lawyer

​mohsin.ramani@glittertind.no
+47 938 90 768
Picture
Mads Berg Neergaard
​Associate

​mads.berg.neergaard@glittertind.no
​
+47 905 64 523

Advokatfirmaet Glittertind AS | Dronning Mauds gate 15,  0250 Oslo | P.O. Box 1383 Vika,  0114 Oslo ​ | +47 21 67 67 22 
Developed by AGS IT-partner
  • Hjem no
  • Fagområder no
    • Entreprise no
    • Energi og industri no
    • Tvisteløsning og prosedyre no
  • Oss no
    • Om Glittertind no
    • Advokater no
    • Administrasjon no
  • Artikler no
  • Klima no
    • Klima og Glittertind no
    • Klimasøksmålet no
  • Karriere no
    • Traineer no
  • Kontakt no
  • Våre verdier no
  • Home en
  • About Glittertind en
  • Expertise en
    • Construction en
    • Energy and industry en
    • Dispute resolution and litigation en
  • Our people en
    • Lawyers en
    • Administration en
  • Contact en
  • Our values en