Weighing Anchors Again: Commercial Court Confirms Applicability Of Merits Test To Claims Against "Anchor Defendants" Under Article 8(1) Of Brussels Recast

• Published date: 03 August 2020
• Subject Matter: Consumer Protection, Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Dodd-Frank, Consumer Protection Act
• Law Firm: Quadrant Chambers
• Author: Mr Tim Marland

In Senior Taxi Aereo & Others v Agusta Westland S.p.A & Others [2020] EWHC 1348 (Comm) the Commercial Court has confirmed what had previously only been addressed in obiter judgments, namely that the Court should apply a 'Merits Test' in evaluating a claim against an anchor defendant before exercising its ancillary jurisdiction over defendants domiciled in other EU Member States pursuant to Article 8(1) of Regulation EU 1215/2012 ('the Regulation').

The Rules

The rules, formerly found in Article 6(1) of the original Brussels I Regulation (44/2001) and which are now found in identical terms in Article 8(1) of the Regulation provide that:

"A person domiciled in a Member State may also be sued:

1. where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings;"

Within the Brussels jurisdiction regime this rule serves a similar function to the common law's "necessary or proper party" joinder rule that is now found in CPR 6.37 and PD6B para. 3.1(3), but the Regulation's rule is much narrower than the common law. One defendant has to be domiciled in England and Wales (the so-called "anchor defendant") and the exercise of ancillary jurisdiction under the Regulation is subject to the proviso that the claims brought against that anchor defendant and the other EU domiciled defendants are "... so closely connected" that it is "expedient" to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.

In Sabbagh v Khoury [2017] EWCA Civ 1120, the Court of Appeal considered whether a merits test should be applied to the claim against the anchor defendant. However, having found that in the Sabbagh case the claim against the anchor defendant did have merit, the Court's pronouncements on the issue were obiter. Moreover, Sabbagh resulted in a split decision, with the majority (Patten and Beatson LLJ) finding that a merits test did apply, but Gloster LJ, in a fully and closely reasoned dissent, finding that it did not. The Sabbagh decision, and the 'grab bag' of CJEU case law on the relevant provision which preceded Sabbagh, are discussed in Michael McParland QC's previous 'Weighing Anchors' article, which can be found on Lexology here.

In Sabbagh the Court had been agreed that Article 8(1) was...