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In a two day hearing at the beginning of October, the Supreme Court heard the case of AMT Futures Ltd v Marzillier & Ors focussing on the question of which EU member state has jurisdiction in international tortious claims.
Background
AMT Futures Ltd, a UK based derivatives broker had a number of clients in Germany. Each of the agreements between AMT and their German investor-clients contained English governing law 
provisions together with a clause specifying the courts of England and Wales as having exclusive jurisdiction.
These clients lost money on the trades they had conducted with AMT, and, on the advice of the law firm Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbH (MMGR), each sued AMT, alleging they had been badly advised. These actions were brought in Germany rather than England as the contract had stated. AMT incurred costs in relation to all of these claims in excess of £2 million.
AMT therefore sued MMGR for having induced the breach of the contracts that had existed between AMT and their investor-clients. AMT claimed that by persuading the AMT’s investor clients to sue AMT in Germany rather than in England as the contract provided, MMGR was responsible in tort for the costs AMT had incurred. AMT brought the claim (for injunctive relief and for damages in tort) against MMGR in England.
Before the substantive case as to whether MMGR’s conduct was actionable under the tort of inducement to breach a contract, MMGR applied to the court claiming that the English courts did not have jurisdiction to decide the claim brought against them by AMT. This is because under the Judgments Regulation (Council Regulation (EC) No. 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters) the proper place to hear a claim in tort would either be “the place where the defendant is domiciled” (Article 2) or “the place where the harmful event occurred” (Article 5(3)). The answer to both, MMGR claimed, was Germany.
High Court
MMGR argued that the alleged inducement to breach a contract was in their persuasion of AMT’s clients to sue AMT in Germany rather than England. The positive act that caused the breach of contract therefore was the investor suing AMT in Germany and as such the alleged tort was committed in Germany. MMGR therefore claimed the proper place to be sued by AMT would be Germany.
Popplewell J however disagreed with MMGR’s reasoning and dismissed the application. Instead, he ruled that an exclusive jurisdiction clause, as was included in each of the contracts between AMT and their clients, creates a positive obligation to bring litigation (should it be deemed necessary by a claimant) in a particular jurisdiction. Therefore although the clients sued in Germany, the “harmful event” was experienced in England, the jurisdiction where the client was supposed to bring their claim.
This he compared to a contractual obligation to deliver of goods. If there is a contract to send goods from France to the UK, the lack of sending the goods in France leads to their non-arrival in the UK. The significant harmful event is the lack of the arrival of the goods in the UK and as such that would be the correct jurisdiction to bring the claim even though the actions, or lack thereof, were performed in France.
The judge continued by citing from Dolphin Maritime & Aviation Services Ltd v Sveriges Angfartygs Asssurans Forening (The Swedish Club) [2009] EWHC 716 (Comm) whereby The Swedish Club had paid settlement money to a Turkish underwriter rather than to Dolphin despite a contract between the underwriter and Dolphin providing that the money should be paid directly to Dolphin, a contract that The Swedish Club knew about. In that case, since the money should have been paid to Dolphin in the UK, the court ruled that the harmful event had occurred in the UK and thus the UK was a correct jurisdiction for Dolphin to pursue a claim for inducement for breach of contract against The Swedish Club.
Accordingly, MMGR’s claim that the English courts did not have jurisdiction was rejected by the High Court.
Court of Appeal
The Court of Appeal overturned this decision.
Christopher Clarke LJ distinguished the current case from that of Dolphin (a case he had presided over in the High Court). In Dolphin, argued Clarke LJ, it was right that the harmful event was deemed to have occurred in England as the non-arrival of funds in England was the “sole, direct and immediate cause of the loss which the claimant had suffered.” In the present case however “the failure to start proceedings in England against AMT did not cause AMT any loss at all.” Instead, the £2 million of loss, which was made up of settlement amounts, fees and other related costs, resulted from the German litigation itself. It was Germany where the event “directly produced its harmful effects”, where the “actual damage” was suffered and the place where damage was sustained which could be attributed to the harmful event by a “direct and causal link”.
It is worth noting the Clarke LJ did “not reach this conclusion with any great enthusiasm” given the exclusive jurisdiction clauses included in the contract to which this tort relates were very specific that claims should be brought in the UK. That being said, he felt that the proper determination of the locality of the harm was Germany and as such granted the appeal.
Supreme Court
The issue of law facing the Supreme Court now is the question as to how to determine the proper place of a harmful event, especially in complex cases such as this one. Over the course of the two decisions thus far numerous citations of doctrines have been made in attempt to answer this question with the High Court primarily focussing on where a benefit would have been enjoyed (and conversely where a loss would have been experienced when the benefit was not performed), and the Court of Appeal focussing on the event that is most closely connected with the resulting damage, a test which may not always be clear in the situations of resulting, indirect or economic loss. In the first case of its kind in the UK, the Supreme Court must now therefore provide clear guidance on the application Article 5(3).
