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England and Wales High Court (Commercial Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Messier-Dowty Ltd & Anor v Sabena SA & Ors [1999] EWHC 282 (Comm) (03 December 1999) URL: http://www.bailii.org/ew/cases/EWHC/Comm/1999/282.html Cite as: [1999] EWHC 282 (Comm) |
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Case No: 1999 Folio 626
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 3rd December 1999
| (1) MESSIER-DOWTY LIMITED (2) X-MD LIMITED |
Claimants |
|
| - v - | ||
| (1) SABENA SA (a company incorporated under the laws of Belgium) (2) GIE AIRBUS INDUSTRIE (an economic interest grouping registered under the laws of France) (3) BRITISH AEROSPACE AIRBUS LIMITED |
Defendants |
The Hon. Mr Justice Langley
COPIES OF THIS JUDGMENT ARE AVAILABLE IN WORD 6 for WINDOWS 3.1 ON PROVISION OF A CLEAN DISC. APPLY TO THE CLERK TO THE HONOURABLE MR JUSTICE LANGLEY Telephone 0171-936-6395
Mr Justice Langley:
The Second and Third Defendants (to whom for convenience I shall refer together as "Airbus") seek an order staying the proceedings in this court pending the delivery of a report by experts appointed by the Tribunal de Commerce de Paris. The stay is sought until the end of June 2000 on the basis that such a period will allow for production and consideration of the report.
The application arises out of an incident at Brussels airport on 29th August 1998 when the right-hand landing gear of a Sabena Airbus A340-200 "MSN014" collapsed during landing. Fortunately only minor injuries were sustained by four passengers on board.
In simple (if not wholly accurate) terms sufficient for this judgment, the Claimant companies (to whom I shall refer as "Dowty") were the manufacturers, designers and suppliers of the landing gear for the aircraft and other aircraft of its type; Airbus were the manufacturers and suppliers of the aircraft and others of its type; and Sabena purchased the aircraft from Airbus and operated it.
The contract between Sabena and Airbus contains an exclusive jurisdiction clause naming the Paris court and a French law clause. The supply contract for the landing gear between Dowty and Airbus contains exclusive English jurisdiction and English law clauses.
On April 15, 1999 Sabena applied to the Paris court for the appointment of an "Expertise" investigation. The application was made under Article 145 of the Nouveau Code de Procedure Civil (NCPC). Article 145 provides a summary procedure "for retaining or establishing prior to any action at law proof of facts on which the solution to a dispute may depend". An Expertise, if ordered under Article 145, is normally a precursor to the commencement of substantive proceedings. The respondents to Sabena's application included Airbus and Dowty.
On April 30, Dowty issued the Claim Form in the proceedings in this Court. The claims are for declarations of non-liability to Sabena and Airbus for the incident and the costs of any investigations and more general remedial works which might arise from it. This step was admittedly and indeed unashamedly taken because Dowty was apprehensive that the Article 145 procedure in Paris might result in Dowty being drawn into proceedings in Paris thus undermining the agreement of Dowty and Airbus that the appropriate forum for the resolution of disputes between them was England.
Dowty also opposed Sabena's application to the Paris court under Article 145 of the NCPC. Dowty was not successful in its opposition and, on May 11, the court gave judgment appointing two experts to conduct the Expertise. The decision of the Paris court was based, in part, on the conclusion that Article 145 concerned "provisional measures" such that under Article 24 of the Brussels Convention the French courts retained jurisdiction to order such measures notwithstanding that under the Convention the English courts had jurisdiction as to the substance of the dispute between Dowty and Airbus. Dowty have appealed this decision. Dowty say that the Expertise cannot be justified under Article 24 and the French court was wrong to do so. Although to some extent both Mr Crane and Mr Howard have sought to persuade me of the strengths of their clients' cases on this appeal, I see no need to express any conclusion or to second guess the French appeal court. What is of some relevance is that I am satisfied that Dowty's appeal is one which raises serious issues and is properly brought and reasonably arguable. No date has been fixed for the appeal but the evidence is that it is likely to be heard early next year, the precise date depending on when Airbus respond to Dowty's submissions in support of the appeal. Meantime the Expertise has proceeded and Dowty have participated in it.
The brief of the experts is summarised in the evidence on behalf of Airbus as follows:
(i) To research the causes of the breakage (of the landing gear)
(ii) To describe the origin and process of the failure which caused the accident
(iii) To describe the possible faults in the design or construction of the undercarriage
(iv) To obtain a variety of information including information relating to the design of the undercarriage and technical and operational specifications supplied with a view to the design or manufacture of the undercarriage
(v) to request the assistance of any other expert, if necessary, whether French or foreign.
(vi) Having heard the parties and collected their comments and written statements, to draft and file a report written within six months of, at the latest, 30 June 1999.
It is accepted by Airbus that the report will not be filed by 30 December 1999 in accordance with paragraph (vi) of the brief. At the earliest, it is said, it could be expected on March 31, 2000. The suggested end date for the proposed stay (June 30) is I think, on the evidence , probably more realistic.
Also on May 11, 1999 Sabena applied to set aside service of Dowty's Claim form in these proceedings upon Sabena. Airbus did not dispute the jurisdiction of the English courts and had no basis for doing so. On July 26 Moore-Bick J found in favour of Sabena, substantially on the ground that the claims for negative declarations against Airbus were not a sufficient basis for joining Sabena in the proceedings and thereby depriving Sabena of rights under the Brussels Convention to have its disputes determined by the Paris court. This decision is also the subject of an appeal which is due to be heard in the Court of Appeal in early February 2000. Meanwhile Dowty's claim against Sabena is stayed.
On June 14 1999 Dowty had served Particulars of Claim in these proceedings. There is no need to refer to them in any detail. But it is material to note that the nature of Dowty's case against Airbus is clearly set out. It is that Airbus provided certain specified data to Dowty concerning the operation and weight of the aircraft against which Dowty designed and manufactured the landing gear. The data is said to have been inaccurate and to have compromised the design.
On June 17, Sabena issued substantive proceedings in the Paris court against Airbus but not Dowty. That, so Mr Howard for Dowty submits, is not surprising because it is difficult to imagine how Sabena could have a better claim against Dowty than against Airbus. These substantive proceedings are, as is normal, stayed pending the outcome of the Expertise.
The present application by Airbus was made on June 22. In consequence no defence has been served and these proceedings have effectively been in abeyance already for some 5 months. The "reasons" for the application particularly identified in it were :
(1) The Expertise result will assist the English court to limit and define the relevant issues.
(2) The determination of the Expertise will save time and costs before the English court.
(3) the expertise will continue in any event and it is desirable to avoid potentially conflicting factual findings before the English and the French courts.
The third of these reasons has not really been pursued. That is no doubt because it is accepted that any findings of the Expertise cannot be binding on an English court (even if proved and admissible) and indeed are not binding on the French court either, albeit they usually carry considerable weight. In the course of his submissions, Mr Crane also placed emphasis on the possibility that the findings of the Expertise might assist and encourage a settlement.
By way of an idea of the sums involved, Sabena's claim is said to be of the order of US $50m, and the sums involved in ensuring that any design or manufacturing problems of a general nature are addressed are potentially much greater.
There have been a number of meetings with the experts. Each party has presented its case as to the cause of failure of the landing gear. Each party has engaged its own experts to assist it. The process has involved disclosure of a substantial volume of documentation by Airbus and Dowty. There is more to come, at least from Airbus. Metallurgical tests are being conducted. Questions have been raised concerning Sabena's maintenance procedures and a previous incident in 1993 involving the same Airbus MSN014. In addition, and of course as would be expected from responsible and safety-conscious parties such as those involved, the parties have been and are working together and with the relevant authorities to address all the issues which could arise from the incident.
Nonetheless, and despite the work that has already been done, Mr Crane acknowledged in answer to a question from the court (arising from Mr Howard's statement that Dowty still did not know what Airbus' case was in answer to the allegation that inaccurate data were supplied to Dowty) that Airbus had not yet stated its case on the issue either in the course of the Expertise to date or otherwise. Indeed Mr Crane said he could not spell out that case in a few sentences and he did not attempt to do so. He did say that Airbus could however plead its case now if it had to do so.
As to disclosure, the process before the experts is a responsive one in the sense that a party may seek from the experts a direction for disclosure from another party, and the experts may then require it. That is not, of course, the same procedure or principle as applies in this court for disclosure. Generally there will be an obligation to make standard disclosure. Moreover there must, I think, be real doubt as to whether the experts are concerned with any documents other than those which relate to the technical issues which it is their brief and expertise to investigate. The obligation of disclosure in an English court would of course extend to commercial documents and internal memoranda which on occasion can prove both revealing and an encouragement to settlement.
The jurisdiction to stay proceedings is to be found in Section 49(3) of the Supreme Court Act 1981. It applies when the court "thinks it fit" to make such an order.
The general power is also to be found in CPR Part 3 Rule 3.1(2) (f).
Mr Crane also referred me to the (as yet) unreported decision of the Court of Appeal in Reichold Norway ASA v. Goldman Sachs International (28 June 1999). In that case a company called Jotun AS wanted to sell one of its subsidiary companies and engaged Goldman Sachs to act for it in seeking a sale. Jotun agreed to indemnify Goldman Sachs against any losses or claims arising from the engagement except to the extent that they resulted from the gross negligence or bad faith of Goldman Sachs. The subsidiary company was sold to Reichold by Jotun. The sale agreement contained warranties about the operation, assets and liabilities of the subsidiary and a clause requiring arbitration of disputes in Norway. Reichold issued proceedings against Goldman Sachs claiming breach of a duty of care in the provision of information about the subsidiary. Reichold also commenced arbitration proceedings against Jotun. Goldman Sachs sought a stay of the court proceedings pending the outcome of the arbitration. The Court of Appeal upheld Moore-Bick J's decision granting a stay. Moore-Bick J noted that Reichold had put forward no reasoned grounds as to any practical advantages of pursuing the litigation before the arbitration, and that it did not suggest the stay would cause any prejudice nor that there was any legitimate reason for pursuing Goldman Sachs rather than Jotun. He concluded that "In the somewhat unusual circumstances of this present case I do not think that the court is obliged to give undue weight to the mere preference of one party. Considerations of cost and convenience and of the interests of justice generally seem to me to weigh more heavily in favour of granting a stay".
In the Court of Appeal the Lord Chief Justice, Lord Bingham (with whom the other members of the Court agreed), at page 16 of the transcript, accepted that there was a discretion to grant a stay, held that Moore-Bick J had given "a fair and judicious summary of all the matters properly to be considered" in the exercise of that discretion and said:
It will very soon become clear that stays are only granted in cases of this kind in rare and compelling circumstances. Should the upholding of the judge's order lead to the making of unmeritorious applications, then I am confident the judges will know how to react.
I see nothing in the circumstances of the present application to justify a different approach in principle nor did Mr Crane submit otherwise. It requires therefore compelling circumstances to justify this court making the order sought by Airbus and so depriving Dowty of the right to pursue their claim in the ordinary way in the forum chosen by the parties for that purpose.
The factors which by Mr Crane submitted the court should take into account in favour of a stay were that:
(1) Dowty are the natural defendants not claimants to claims arising out of the incident. That is because Dowty has suffered no loss and it is illustrated by the fact that Dowty's real claim is one to establish non-liability.
(2) The findings in the Expertise, although binding on no party, will be of direct relevance to the issues in the English proceedings; they will serve to focus minds, identify and eliminate issues and set the parameters of subsequent disclosure, and so save costs.
(3) The report of the experts "may lead to, or at least encourage, settlement."
The factors which Mr Howard submitted are material are that:
(1) Dowty is entitled to know what Airbus' case is on the matters Dowty has pleaded. Dowty is also entitled to disclosure in accordance with English procedure. Those, in practical terms, are the next steps in the proceedings which would be completed in the period for which a stay is sought if it were not granted.
(2) The Expertise is uncertain both as to the content of any report which may be produced, its timing, and (bearing in mind Dowty's appeal) whether Dowty will in any event be or continue to be a party to it. In any case the report is binding on no party and could only be adduced in evidence in the English proceedings if the experts gave evidence. So long as (even if they could establish jurisdiction) Sabena do not seek to join Dowty in the substantive proceedings in France there is no risk of inconsistent findings nor any need for a French court to address the issues between Airbus and Dowty.
(3) The sums and issues involved are such that the prospect of the report encouraging a settlement is remote, but even if it did it will do so when it is produced in any event.
(4) In context, the cost and resources required to plead a case and make disclosure is of no significance and the probability must again be that both will have to be done in any event.
(5) These proceedings in the jurisdiction in which it is agreed the issue between Airbus and Dowty must be litigated have already been delayed by the present application, and there is no justification for further delay. If a further stay was granted it would postpone a trial date by the length of the stay. A date fixed now would probably be no earlier than 2001. Dowty wants as early a resolution of the matter as can be achieved.
(6) there is no advantage in delaying the proceedings for such uncertain if not ephemeral benefits and no reason at all why the proceedings and Expertise should not proceed in tandem.
In my judgment the balance of these submissions falls heavily in favour of Mr Howard and Dowty. Indeed I think far from there being compelling circumstances to justify the grant of a stay, in my judgment there is a compelling case against one. Essentially this court is being asked to delay proceedings in the chosen jurisdiction of the parties for a period of over 7 months on the basis of a possibility that something of use in the proceedings may emerge from the Expertise. I use the word "possibility" because there is undoubtedly at least real uncertainty as to whether and when the Expertise may produce matters of real relevance to the issues in these proceedings. I cannot see how that can justify a party not pleading its case and making appropriate disclosure. If the Expertise is to report on relevant issues it will do so. Airbus knows and should state what its case is. Insofar as disclosure has been made in the Expertise it need not be made again. Insofar as it has not been made and further disclosure is appropriate it can and I think should be made. There is no reason at all to suppose that such steps would in any way stretch the resources of parties such as these companies or affect the pursuit of any other investigations they are pursuing. Further, none of those steps need or indeed are likely to prejudice the utility of the Expertise should it prove material either to the issues or the prospects of settlement. I can also see nothing to be lost and something to be gained from establishing a trial date for these proceedings now rather than at the end of June 2000.
There is also, I think, a potential injustice to Dowty if a stay were to be granted. Insofar as the Expertise produces little of relevance there can be nothing to be said for a stay. But the greater the relevance of any report, the more it can be said to trespass on matters which the parties have agreed must be determined in this jurisdiction.
In my judgment therefore, the application for a stay should be refused and I will hear the parties as to the appropriate directions to be made for the future conduct of the proceedings.
