Reflexive Application of EU Law in Non-EU Member States: Lis Pendens Alibi, Forum Non Conveniens, and the (Potential) Extra-Territorial Reach of EU Law

27 Nov 2019

 JSC Commercial Bank Privatbank v Kolomoisky & Ors [2019] EWCA Civ 1708

Part One of this article considered the decision of the Court of Appeal that the English courts did have jurisdiction over Messrs Kolomoisky and Bogolyubov as foreign defendants ‘anchored’ to the English Companies under Article 6 of the Lugano Convention.

Part Two turns to whether the Judge had been correct to consider he could apply Article 28 of the Lugano Convention, which permits stays on proceedings on the basis of lis pendens alibi in the courts of other Contracting States, by analogy to related proceedings in Ukraine, a non-Contracting State.

The Ukrainian Proceedings

An article was published in a Ukrainian magazine alleging that Mr Kolomoisky had siphoned funds from the Bank through a fraudulent scheme. This article became the subject of defamation claims brought by Mr Kolomoisky in the Ukrainian courts, to which the English, and BVI Companies were joined as third parties. The English Companies subsequently commenced their own defamation claims, and both sets of proceedings remain pending.


The Court Below

There was no challenge to the finding of Fancourt J (‘the Judge’) that there was a substantial overlap in the factual allegations underpinning the Ukrainian defamation and English fraud proceedings. The Judge therefore considered whether he should order a stay on proceedings.

Proceedings were so stayed against the English Companies under Article 34 of the Brussels Recast Regulation (‘the Regulation’). The Judge further concluded that even if, contrary to his determination, the English court had jurisdiction to try the claims against Messrs Kolomoisky and Bogolyubov, he would have exercised his discretion to grant a stay on those proceedings by reflexive application of Article 28 of the Lugano Convention (‘the Convention’).


The Law

Where general or special jurisdiction is founded in the court of a Member State under the Regulation, Article 34 provides for stays based on ‘related’ proceedings in a court of a third State.

Article 34 was introduced under the Recast iteration of the Brussels regime, however the Convention was not amended to include a similar provision. The Convention thus continues to provide for stays based on lis pendens alibi only if the proceedings are pending in a Contracting State. Article 28 of the Convention is in the following terms (with the limitation emphasised):


Article 28

  1. Where related actions are pending in the courts of different States bound by this Convention, any court other than the court first seised may stay its proceedings.

It was common ground that Article 28 did not apply directly because Ukraine is not a Convention State. The issue was whether it should be applied reflexively or by analogy, as though Ukraine was a Convention State.


Relationship with Forum Non-Conveniens

In Owusu v Jackson (Case C-281/02) [2005] QB 801, the CJEU ruled that a national court with jurisdiction over a defendant under the general rule of domicile cannot decline jurisdiction on the basis that the courts of a third State are the more appropriate forum for the dispute.

The reasoning of the CJEU was that to confer such a wide forum non conveniens discretion on national courts would undermine the very principle of legal certainty which the Brussels regime sought to promote. The CJEU declined to answer the second question referred, as to the position if proceedings had been pending in the third state, on the grounds that it was hypothetical.

Advocate-General Léger, however, had addressed that second question in his Opinion, albeit, indirectly. He had concluded that the court was not entitled to decline jurisdiction founded on the general rule of domicile, save under the derogating provisions expressly contained in the Brussels regime. Advocate-General Léger, however, concluded that those provisions permitting stays based on lis alibi pendens were not engaged in the case before him because those provisions were confined to courts of Member States (in materially the same terms as Article 28 cited above). Even if, therefore, parallel proceedings were pending, they would have been before the courts of a non-Member State. Hence, the Regulation did not permit for the grant of a stay.

Various first instance judges have subsequently taken different views on the effect of Owusu, given that the CJEU did not rule on the second question.

In Catalyst Investment Group Ltd v Lewinsohn [2009] EWHC 1964 (Ch), parallel proceedings were pending in the courts of Utah. It was not submitted that this in itself was the basis for a stay, but that by virtue of those parallel proceedings, EU law was engaged reflexively and enabled the court to apply conventional forum non conveniens principles. Barling J rejected the submission, holding instead that it was not open to him to stay proceedings properly founded on the general rule of domicile. To do so would be to “introduce the wide forum non conveniens discretion by the back door” contrary to the ruling and reasoning of both the ECJ and Advocate General in Owusu.

In JKN v JCN [2010] EWHC 843 (Fam), Lucy Theis QC, as a Deputy High Court Judge, declined to follow Catalyst, following a careful analysis of the authorities and the academic writings. She noted implicit criticisms in Lucasfilm v Ainsworth [2009] EWCA Civ 1328 of the reasoning in Catalyst, and concluded that it was neither necessary nor desirable to extend the Owusu principle relating to forum non conveniens and a third State to proceedings actually pending in third State. Her reasons were:


  1. Parallel proceedings give rise to the risk of irreconcilable judgments, which undermines two important objectives of the Brussels regime: avoiding irreconcilable judgments and ensuring recognition of judgments between Member States.
  2. The absence of any mechanism in place for resolving the situation of parallel proceedings would give rise to a lacuna which increased uncertainty and cost.
  3. In the words of Jacob LJ in Lucasfilm, the Regulation did not construct a “non-exclusive world tribunal for wrongs done outside the EU by persons who happen to be domiciled within the EU.”


  1. Owusu is not incompatible with retaining the discretionary power where there are parallel proceedings in a non-Member State. It does not undermine certainty for the defendant, as he will be bringing the proceedings in the non-Member State; there would be less risk of irreconcilable judgments given in Member States which are not recognised in another Member State.

The two competing lines of authority were most recently considered in Ferrexpo AG v Gilson Investments Ltd [2012] EWHC 721 (Comm). Ultimately, Andrew Smith J considered that, although the principles of forum non conveniens and lis alibi pendens were undeniably connected, he saw:


no difficulty in giving effect to the ECJ’s injunction that because of article 2 a defendant cannot dispute that his domicile is an appropriate forum (and so not contend that it is forum non conveniens), but be protected from multiplicity of proceedings.


He therefore declined to follow Baring J in Catalyst, preferring the approach of Lucy Theis QC in JKN.


The Court of Appeal

In a combined judgment, David Richards, Flaux, and Newey LJJ preferred the analysis in Ferrexpo and, contrary to the reasoning in Catalyst, did not consider that giving reflexive effect to Article 28 would lead to uncertainty inconsistent with the purpose of the various European Conventions.

The Court of Appeal accepted that these various Conventions provided an exclusive code, but did not consider the matters which they covered purported to extend extra-territorially beyond jurisdiction as between Member and Convention States and those domiciled there. Not to apply the Conventions by analogy would, in fact, have extra-territorial effect in third States, simply because the defendant happened to be domiciled in the EU and the courts of the EU Member State could not decline jurisdiction.

The Court of Appeal further noted that nothing in the Conventions precluded the application of their provisions by analogy and to do so would not be an impermissible extension of their scope. Rather, such application by analogy would recognise that the same principles which underlie those articles should be applicable in the case of proceedings pending in a third State. This would not subvert the application of the Conventions but would, on the contrary, be in line with its objectives.

The Court of Appeal therefore considered that the Judge had been correct to conclude that Article 28 should be given reflexive effect.



This case gives much-needed clarity on the relatively recent and loosely defined concept of ‘reflexive application,’ which may well be of increasing significance if/when the UK becomes a third State for the purposes of EU law.

Should this occur, although Article 34 of the Regulation does expressly permit stays based on lis alibi pendens in third States, practitioners should note that the conditions for doing so are limited. It is therefore important to understand how reflexive application operates and to maintain an understanding of the principle, keeping up to date with it and other related developments in private international law in anticipation of Brexit.

One such related development is the confirmation by the Court of Appeal that Owusu concerns stays based on forum non conveniens but does not necessarily apply to stays based on lis pendens alibi. Although in theory both concepts go to preventing multiplicity of proceedings, and the presence of parallel proceedings may well be a factor in a consideration of the most appropriate forum, they remain distinct doctrines that attract different practical considerations.

Finally, it is somewhat ironic that applying EU law to third States as though they were EU Members should indeed have the effect of ensuring EU law does not apply extra-territorially.