Lis alibi pendens
Encyclopedia
The principle of lis alibi pendens (Latin
for "dispute elsewhere pending") applies both in municipal law
, public international law, and private international law to address the problem of potentially contradictory judgments. If two courts were to hear the same dispute, it is possible they would reach inconsistent decisions. To avoid the problem, there are two rules. Res judicata
provides that once a case has been determined, it produces a judgment either inter partes
or in rem
depending on the subject matter of the dispute, i.e. although there can be an appeal
on the merits, neither party
can recommence proceedings on the same set of facts in another court
. If this rule were not in place, litigation might never come to an end. The second rule is that proceedings on the same facts cannot be commenced in a second court if the lis i.e. action, is already pendens, i.e. pending, in another court. Lis alibi pendens arises from international comity
and it permits a court to refuse to exercise jurisdiction
when there is parallel litigation pending in another jurisdiction. Shany (2003) considers the problem within the public international law field where, for example, the Southern Bluefin Tuna dispute could have been determined either by the International Court of Justice
(ICJ), or by tribunals established under the United Nations
Convention on the Law of the Sea (UNCLOS), and the Swordfish dispute, which was submitted simultaneously to both the International Tribunal for the Law of the Sea
(ITLOS) and a dispute settlement panel of the World Trade Organisation (WTO). Kwak and Marceau (2002) consider the jurisdiction between the dispute settlement mechanisms of regional trade agreements (RTAs) and that of the WTO.
). For an analysis of the relationship between EU law and the New York Convention, see Balkanyi–Nordmann (2002).
The European Court of Justice
ruled in Overseas Union Insurance Ltd. v New Hampshire Insurance Co. (1991) ECR I-3317 that Article 27 applies to all proceedings commenced in the courts of the European Union
regardless of the habitual residence
or domicile
of the parties. The Article provides for the court first seised to have priority in the same cause of action
between the same parties without giving a second court the right to examine the first court's grounds for accepting jurisdiction
with Article 27(2) imposing a mandatory duty on the second court to decline any jurisdiction unless the first court determines not to accept jurisdiction. This places a duty on the first court to make the decision expeditiously. In Turner v Grovit Case C-159/02 judgment on April 27, 2004, an English court, being the first court seised, issued an injunction
to restrain one of the parties from pursuing the proceedings they had commenced in Spain. Even where the defendant is acting in bad faith with the intention of frustrating the existing proceedings, the issue of an injunction was inconsistent with the Convention. The English court should trust the Spanish court to apply Article 27(2) (Blanke: 2004).
The question is what constitutes the "same cause". In Gubisch Maschinenfabrik v Palumbo (1987) ECR 4861 (Hartley: 1988) and The Tatry v The Maciej Ratja (1994) ECR I-5439, the test is whether the factual basis of the claim and the laws to be applied are the same with a view to obtaining the same basic outcome. The test cannot be formal. It must look to the substance of each claim so that technical or procedural differences cannot be used to justify invoking separate jurisdictions in different Member States. One difficulty has been in rem jurisdiction, e.g. as in shipping law, but the substance test looks behind the res and identifies who the parties are and identifies what their purpose or objects are in the litigation. The parties must also be the same although the roles may be reversed between plaintiff/claimant
and defendant (Seatzu: 1999). However, in multi-party actions, the subsequent court is only obliged to decline jurisdiction between the same parties, i.e. new parties may intervene and be heard in subsequent proceedings. But the courts are careful to look at the substance of the relationship between each set of parties. Thus, because an insurer has the right to use subrogation
, the insurer and the insured would be considered the same person since they are both interested in achieving the same outcome. Similarly, a wholly owned subsidiary company can be regarded as the same party as its parent.
Article 28 deals with cases that are related, i.e. actions which 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. But Article 28(3) allows the second court a discretion to consider whether it should stay the second action. Article 29 provides for conflicts of exclusive jurisdiction
, but its application is still uncertain. Under Article 16 some courts are granted exclusive jurisdiction over a cause, e.g. under Article 16(4) the courts of the place of registration of a patent have exclusive jurisdiction on issues of validity and infringement, but if a party has already commenced proceedings in another state, Article 27(2) obliges the second court to dismiss the second suit.
The new Article 30 seeks to introduce an autonomous interpretation of the concept of seisin. The original rule identified the time of commencement by reference to the local rules in each Member State. This could lead to difficulties when a second state had different rules as to when an action commenced because it might allow a second action to overtake the first on a technicality (e.g. in some states the rule was that an action had not commenced until it was served, whereas others held that an action commenced on the day the pleadings were lodged or registered in the court office. The new Article 30 now provides that an action commences when the plaintiff/claimant takes the necessary steps to continue the proceedings which will usually be service and the system will, for the most part, avoid unfairness (see Eisengraeber: 2004 at pp19–21 for an explanation of difficulties in the English procedural system).
, it actually turns it into a race (Hartley: 1988). Where one party in a legal relationship foresees that action may be brought against them, they can pre-empt this and bring their own action to the court of their choice. This will result in the delaying of proceedings while jurisdiction is established. It may also mean that the case is decided in the court they wish, if it is established that the court has jurisdiction. This strategy has become known as a "torpedo" proceeding. The abuse of Article 27 was first described by Franzosi (1997 and 2002) in intellectual property disputes where a party infringing a patent commenced proceedings for a declaration before a court with long delays because of the number of cases waiting to be heard. Thus, no other European court could accept jurisdiction in cases alleging infringement by the patent holder. One possible response to this abuse of process might arise from the relationship between exclusive jurisdiction granted under Article 16 and the Article 27(2) mandatory duty. Article 29 reserves the priority for the first court when both courts have exclusive jurisdiction under Article 16. But the ECJ has not ruled on the situation where only the second court has exclusive jurisdiction. Article 35 provides that a judgment that conflicts with the provisions on exclusive jurisdiction cannot be recognised and enforced. Since Article 16(4) allows exclusive jurisdiction to the forum in the place of registration, this might provide an arguable case that the second court could review the ground upon which the first court had accepted the action. A further interesting development lies in the application of Article 6 which provides for multi-party proceedings and allows a person domiciled in a Member State to be sued in the state of any one of the defendants so long as there is a real connection between the cause of action and that state. The justification of this provision is one of efficiency. If an action involving many defendants and states can be consolidated, a single judgment enforced in all the relevant states saves costs and time and some Member States are now issuing cross-border injunction
s in intellectual property (IP) disputes (see Eisengraeber (2004) for a detailed evaluation of this option). A final option to consider is that the IP licensor should include exclusive jurisdiction clauses in the grant of all licences. Although such clauses almost certainly do not prevail over lis alibi pendens, some courts have been persuaded to prefer the parties' choice over torpedo actions. However, this approach will potentially create conflicting judgments and Article 35 will deny recognition to the subsequent forum's decisions. This situation may represent a breach of Article 6 European Convention for the Protection of Human Rights
which stipulates that everyone is entitled to a fair and public hearing within a reasonable time. As it stands, one party's selection of a forum suffering from inordinate delays, effectively denies all the other parties a hearing. But it is uncertain whether the European Court of Human Rights
would find this prejudice to be a breach of Article 6.
, Seguros Del Estado SA v. Scientific Games Inc. U.S. 11th Circuit Court of Appeals (2001) there was alleged parallel litigation in Georgia
and Colombia
. It was held that the threshold question was whether the two cases were genuinely parallel. Applying Finova Capital Corp. v. Ryan Helicopters U.S.A., Inc., 180 F.3d 896, 898 (7th Cir. 1999), the court concluded that the two cases were not parallel since they involved materially different issues, documents, and parties. Thus, lis alibi pendens did not apply to terminate the proceedings.
Latin
Latin is an Italic language originally spoken in Latium and Ancient Rome. It, along with most European languages, is a descendant of the ancient Proto-Indo-European language. Although it is considered a dead language, a number of scholars and members of the Christian clergy speak it fluently, and...
for "dispute elsewhere pending") applies both in municipal law
Municipal law
Municipal law is the national, domestic, or internal law of a sovereign state defined in opposition to international law. Municipal law includes not only law at the national level, but law at the state, provincial, territorial, regional or local levels...
, public international law, and private international law to address the problem of potentially contradictory judgments. If two courts were to hear the same dispute, it is possible they would reach inconsistent decisions. To avoid the problem, there are two rules. Res judicata
Res judicata
Res judicata or res iudicata , also known as claim preclusion, is the Latin term for "a matter [already] judged", and may refer to two concepts: in both civil law and common law legal systems, a case in which there has been a final judgment and is no longer subject to appeal; and the legal doctrine...
provides that once a case has been determined, it produces a judgment either inter partes
Inter partes
The term inter partes is the Latin for "between the parties." It can be distinguished from in rem, referring to a legal action whose jurisdiction is based the control of property, or ex parte referring to a legal action that is by a single party....
or in rem
In rem
In rem is Latin for "against a thing." In a lawsuit, an action in rem is directed towards a piece of property rather than against a person . The action disputes or seeks to transfer title to property. When title to real estate In rem is Latin for "against a thing." In a lawsuit, an action in rem...
depending on the subject matter of the dispute, i.e. although there can be an appeal
Appeal
An appeal is a petition for review of a case that has been decided by a court of law. The petition is made to a higher court for the purpose of overturning the lower court's decision....
on the merits, neither party
Party (law)
A party is a person or group of persons that compose a single entity which can be identified as one for the purposes of the law. Parties include: plaintiff , defendant , petitioner , respondent , cross-complainant A party is a person or group of persons that compose a single entity which can be...
can recommence proceedings on the same set of facts in another court
Court
A court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law...
. If this rule were not in place, litigation might never come to an end. The second rule is that proceedings on the same facts cannot be commenced in a second court if the lis i.e. action, is already pendens, i.e. pending, in another court. Lis alibi pendens arises from international comity
Comity
In law, comity specifically refers to legal reciprocity—the principle that one jurisdiction will extend certain courtesies to other nations , particularly by recognizing the validity and effect of their executive, legislative, and judicial acts...
and it permits a court to refuse to exercise jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
when there is parallel litigation pending in another jurisdiction. Shany (2003) considers the problem within the public international law field where, for example, the Southern Bluefin Tuna dispute could have been determined either by the International Court of Justice
International Court of Justice
The International Court of Justice is the primary judicial organ of the United Nations. It is based in the Peace Palace in The Hague, Netherlands...
(ICJ), or by tribunals established under the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
Convention on the Law of the Sea (UNCLOS), and the Swordfish dispute, which was submitted simultaneously to both the International Tribunal for the Law of the Sea
International Tribunal for the Law of the Sea
The International Tribunal for the Law of the Sea is an intergovernmental organization created by the mandate of the Third United Nations Conference on the Law of the Sea. It was established by the United Nations Convention on the Law of the Sea, signed at Montego Bay, Jamaica, on December 10, 1982...
(ITLOS) and a dispute settlement panel of the World Trade Organisation (WTO). Kwak and Marceau (2002) consider the jurisdiction between the dispute settlement mechanisms of regional trade agreements (RTAs) and that of the WTO.
European rules
Articles 27–30 of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (September 1968, O.J. 1998) as amended by the "Brussels Regulation", i.e. Council Regulation (EC) No 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, lay down a framework of regulation to avoid conflicting judgments (see Brussels RegimeBrussels Regime
The Brussels Regime is a set of rules regulating which courts have jurisdiction in legal disputes of a civil or commercial nature between individuals resident in different member states of the European Union and the European Free Trade Association...
). For an analysis of the relationship between EU law and the New York Convention, see Balkanyi–Nordmann (2002).
The European Court of Justice
European Court of Justice
The Court can sit in plenary session, as a Grand Chamber of 13 judges, or in chambers of three or five judges. Plenary sitting are now very rare, and the court mostly sits in chambers of three or five judges...
ruled in Overseas Union Insurance Ltd. v New Hampshire Insurance Co. (1991) ECR I-3317 that Article 27 applies to all proceedings commenced in the courts of the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
regardless of the habitual residence
Habitual residence
In conflict of laws, habitual residence is the standard used to determine the law which should be applied to determine a given legal dispute. It can be contrasted with the law on domicile, traditionally used in common law jurisdictions to do the same thing....
or domicile
Domicile (law)
In law, domicile is the status or attribution of being a permanent resident in a particular jurisdiction. A person can remain domiciled in a jurisdiction even after they have left it, if they have maintained sufficient links with that jurisdiction or have not displayed an intention to leave...
of the parties. The Article provides for the court first seised to have priority in the same cause of action
Cause of action
In the law, a cause of action is a set of facts sufficient to justify a right to sue to obtain money, property, or the enforcement of a right against another party. The term also refers to the legal theory upon which a plaintiff brings suit...
between the same parties without giving a second court the right to examine the first court's grounds for accepting jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
with Article 27(2) imposing a mandatory duty on the second court to decline any jurisdiction unless the first court determines not to accept jurisdiction. This places a duty on the first court to make the decision expeditiously. In Turner v Grovit Case C-159/02 judgment on April 27, 2004, an English court, being the first court seised, issued an injunction
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...
to restrain one of the parties from pursuing the proceedings they had commenced in Spain. Even where the defendant is acting in bad faith with the intention of frustrating the existing proceedings, the issue of an injunction was inconsistent with the Convention. The English court should trust the Spanish court to apply Article 27(2) (Blanke: 2004).
The question is what constitutes the "same cause". In Gubisch Maschinenfabrik v Palumbo (1987) ECR 4861 (Hartley: 1988) and The Tatry v The Maciej Ratja (1994) ECR I-5439, the test is whether the factual basis of the claim and the laws to be applied are the same with a view to obtaining the same basic outcome. The test cannot be formal. It must look to the substance of each claim so that technical or procedural differences cannot be used to justify invoking separate jurisdictions in different Member States. One difficulty has been in rem jurisdiction, e.g. as in shipping law, but the substance test looks behind the res and identifies who the parties are and identifies what their purpose or objects are in the litigation. The parties must also be the same although the roles may be reversed between plaintiff/claimant
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
and defendant (Seatzu: 1999). However, in multi-party actions, the subsequent court is only obliged to decline jurisdiction between the same parties, i.e. new parties may intervene and be heard in subsequent proceedings. But the courts are careful to look at the substance of the relationship between each set of parties. Thus, because an insurer has the right to use subrogation
Subrogation
Subrogation in its most common usage refers to circumstances in which an insurance company tries to recoup expenses for a claim it paid out when another party should have been responsible for paying at least a portion of that claim....
, the insurer and the insured would be considered the same person since they are both interested in achieving the same outcome. Similarly, a wholly owned subsidiary company can be regarded as the same party as its parent.
Article 28 deals with cases that are related, i.e. actions which 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. But Article 28(3) allows the second court a discretion to consider whether it should stay the second action. Article 29 provides for conflicts of exclusive jurisdiction
Exclusive jurisdiction
In civil procedure, exclusive jurisdiction exists where one court has the power to adjudicate a case to the exclusion of all other courts. It is the opposite situation from concurrent jurisdiction, in which more than one court may take jurisdiction over the case.Exclusive jurisdiction is typically...
, but its application is still uncertain. Under Article 16 some courts are granted exclusive jurisdiction over a cause, e.g. under Article 16(4) the courts of the place of registration of a patent have exclusive jurisdiction on issues of validity and infringement, but if a party has already commenced proceedings in another state, Article 27(2) obliges the second court to dismiss the second suit.
The new Article 30 seeks to introduce an autonomous interpretation of the concept of seisin. The original rule identified the time of commencement by reference to the local rules in each Member State. This could lead to difficulties when a second state had different rules as to when an action commenced because it might allow a second action to overtake the first on a technicality (e.g. in some states the rule was that an action had not commenced until it was served, whereas others held that an action commenced on the day the pleadings were lodged or registered in the court office. The new Article 30 now provides that an action commences when the plaintiff/claimant takes the necessary steps to continue the proceedings which will usually be service and the system will, for the most part, avoid unfairness (see Eisengraeber: 2004 at pp19–21 for an explanation of difficulties in the English procedural system).
Torpedo proceedings
Arising out of comity which requires each Member State to respect the courts and judgments of other Members, the theory underpinning Article 27 is a blunt and inflexible instrument because its effect is to stimulate each party to initiate proceedings before the court most likely to produce a favourable outcome. Thus, instead of avoiding forum shoppingForum shopping
Forum shopping is the informal name given to the practice adopted by some litigants to get their legal case heard in the court thought most likely to provide a favorable judgment...
, it actually turns it into a race (Hartley: 1988). Where one party in a legal relationship foresees that action may be brought against them, they can pre-empt this and bring their own action to the court of their choice. This will result in the delaying of proceedings while jurisdiction is established. It may also mean that the case is decided in the court they wish, if it is established that the court has jurisdiction. This strategy has become known as a "torpedo" proceeding. The abuse of Article 27 was first described by Franzosi (1997 and 2002) in intellectual property disputes where a party infringing a patent commenced proceedings for a declaration before a court with long delays because of the number of cases waiting to be heard. Thus, no other European court could accept jurisdiction in cases alleging infringement by the patent holder. One possible response to this abuse of process might arise from the relationship between exclusive jurisdiction granted under Article 16 and the Article 27(2) mandatory duty. Article 29 reserves the priority for the first court when both courts have exclusive jurisdiction under Article 16. But the ECJ has not ruled on the situation where only the second court has exclusive jurisdiction. Article 35 provides that a judgment that conflicts with the provisions on exclusive jurisdiction cannot be recognised and enforced. Since Article 16(4) allows exclusive jurisdiction to the forum in the place of registration, this might provide an arguable case that the second court could review the ground upon which the first court had accepted the action. A further interesting development lies in the application of Article 6 which provides for multi-party proceedings and allows a person domiciled in a Member State to be sued in the state of any one of the defendants so long as there is a real connection between the cause of action and that state. The justification of this provision is one of efficiency. If an action involving many defendants and states can be consolidated, a single judgment enforced in all the relevant states saves costs and time and some Member States are now issuing cross-border injunction
Cross-border injunction
In European law, and especially in European intellectual property law, a cross-border injunction is an injunction by a court in one European country, such as a court in the Netherlands forbidding infringement in several other European countries....
s in intellectual property (IP) disputes (see Eisengraeber (2004) for a detailed evaluation of this option). A final option to consider is that the IP licensor should include exclusive jurisdiction clauses in the grant of all licences. Although such clauses almost certainly do not prevail over lis alibi pendens, some courts have been persuaded to prefer the parties' choice over torpedo actions. However, this approach will potentially create conflicting judgments and Article 35 will deny recognition to the subsequent forum's decisions. This situation may represent a breach of Article 6 European Convention for the Protection of Human Rights
European Convention on Human Rights
The Convention for the Protection of Human Rights and Fundamental Freedoms is an international treaty to protect human rights and fundamental freedoms in Europe. Drafted in 1950 by the then newly formed Council of Europe, the convention entered into force on 3 September 1953...
which stipulates that everyone is entitled to a fair and public hearing within a reasonable time. As it stands, one party's selection of a forum suffering from inordinate delays, effectively denies all the other parties a hearing. But it is uncertain whether the European Court of Human Rights
European Court of Human Rights
The European Court of Human Rights in Strasbourg is a supra-national court established by the European Convention on Human Rights and hears complaints that a contracting state has violated the human rights enshrined in the Convention and its protocols. Complaints can be brought by individuals or...
would find this prejudice to be a breach of Article 6.
United States
In the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, Seguros Del Estado SA v. Scientific Games Inc. U.S. 11th Circuit Court of Appeals (2001) there was alleged parallel litigation in Georgia
Georgia (U.S. state)
Georgia is a state located in the southeastern United States. It was established in 1732, the last of the original Thirteen Colonies. The state is named after King George II of Great Britain. Georgia was the fourth state to ratify the United States Constitution, on January 2, 1788...
and Colombia
Colombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...
. It was held that the threshold question was whether the two cases were genuinely parallel. Applying Finova Capital Corp. v. Ryan Helicopters U.S.A., Inc., 180 F.3d 896, 898 (7th Cir. 1999), the court concluded that the two cases were not parallel since they involved materially different issues, documents, and parties. Thus, lis alibi pendens did not apply to terminate the proceedings.
External links
Other
- Balkanyi-Nordmann, Nadine. (2002). The Perils of Parallel Proceedings". Nov 2001–Jan 2002. Dispute Resolution Journal.
- Blanke, G. (2004) "The Turning Tides of Turner". October BLR pp. 261–270.
- Eisengraeber, Julia. (2004). "Lis alibi pendens under the Brussels I Regulation – How to minimise "Torpedo Litigation" and other unwanted effects of the "first-come, first-served" rule." Centre for European Legal Studies. Exeter Papers in European Law No. 16. http://www.law.ex.ac.uk/cels/documents/papepr_llm_03_04_dissertation_Eisengraeber_001.pdf
- Franzosi, Mario. (1997). "Worldwide Patent Litigation and the Italian Torpedo". 19 (7) European Intellectual Property Review p. 382 at 384
- Franzosi, Mario. (2002). "Torpedoes Are Here to Stay". 2 International Review of Industrial Property and Copyright Law p. 154.
- Hartley, Trevor. (1988). "Article 21: Lis Alibi Pendens" 13 European Law Review p. 217.
- Kwak, Kyung & Marceau, Gabrielle. (2002). "Overlaps and Conflicts of Jurisdiction Between the WTO and RTAs". Conference on Regional Trade Agreements World Trade Organisation. http://www.wto.org/english/tratop_e/region_e/sem_april02_e/marceau.pdf
- Reinisch, August. (2004). "The Use and Limits of Res Judicata and Lis Pendens as Procedural Tools to Avoid Conflicting Dispute Settlement Outcomes", 3 The Law and Practice of International Courts and Tribunals pp. 37–77.
- Schutze, Rolf A. (2002) "Lis Pendens and Related Actions". 4(1) European Journal of Law Reform p. 57.
- Seatzu. F. (1999). "The Meaning of 'Same Parties' in Article 21 of the Brussels Jurisdiction and Judgments Convention", Vol 24(5) European Law Review pp. 540–544.
- Shany, Yuval. (2003) The Competing Jurisdictions of International Courts and Tribunals. Oxford: Oxford University Press. ISBN 0-19-925857-0.