Seven Licensing Company Sarl and another company v FFG-Platinum SA and other companies: Queen’s Bench Division, Commercial Court (Mr Justice Gloster): 16 November 2011 Maciej Rataj, The, Tatry (cargo owners) v Maciej Rataj: C-406/92  All ER (EC) 229 applied; Owens Bank Ltd v Bracco (No 2): C-129/92  1 All ER 336 applied; Sarrio SA v Kuwait Investment Authority  4 All ER 929 considered; Research in Motion UK Ltd v Visto Corpn  All ER (D) 72 (Mar) considered; Cooper Tire & Rubber Co Europe Ltd v Bayer Public Co Ltd  All ER (D) 291 (Jul) considered. Conflict of laws – Challenge to jurisdiction – Parties entering into licence agreement The first claimant, (SLC) was a company incorporated under the laws of Luxembourg. The second claimant, (Seven) was a company incorporated under the laws of Hong Kong. The first defendant, (FFG-SA), was a company incorporated under the laws of Greece. The second defendant, (FFG-IP) and the third defendant, (FFG-DH) were companies incorporated under the laws of Cyprus. SLC and FFG-SA entered into a licence agreement (the licence). The claimants’ case was that FFG-SA failed to honour the licence. Without exercising its rights to sue FFG-SA for breach of the licence, SLC agreed to sell the trademark which was the subject of the licence to FFG-IP pursuant to a memorandum of agreement (the MOA). The MOA contained an English law and jurisdiction clause. In return, FFG-IP agreed to pay SLC a total of $12.5m way of six annual instalments, and to secure these amounts by irrevocable and transferable bank guarantees. Pursuant to a side agreement dated on or around 29 February 2008 (the side agreement), FFG-IP designated FFG-DH as its nominee to pay and deliver to SLC the instalment payment of the $12.5m, and also the bank guarantees. FFG-IP had secured the first instalment of the purchase price by causing the Bank of Cyprus to issue to HSBC an irrevocable bank guarantee dated 14 December 2007 for the benefit of Seven (the first bank guarantee). Pursuant to the side agreement, FFG-DH caused the National Bank of Greece (NBG) to issue to HSBC an irrevocable bank guarantee for the benefit of FFG-IP (the second bank guarantee). The claimants contended that FFG-IP and/or FFG-DH consistently failed to meet the instalment payment and bank guarantee programme. Meanwhile, the defendants obtained an injunction from the Greek court prohibiting payment under the first bank guarantee when the claimants attempted to enforce their security. Despite coming to an agreement to extend the date for payment of the first instalment, FFG-IP missed the new payment deadline and FFG-IP and/or FFG-DH also missed the payment deadline for the second instalment. HSBC, on behalf of Seven, made a demand on NBG for payment of $2m under the second bank guarantee. On 9 February 2010, FFG-DH obtained an interim injunction in Greek proceedings against NBG and Proton Bank SA (which was the original issuer of the second bank guarantee) (Proton) restraining them from paying any sums to Seven under the second bank guarantee. That injunction was later continued by the Greek court prohibiting any payment under the second guarantee by NBG and Proton to Seven until trial, which was due to be heard in November 2012. The claimants issued a claim in the English courts contending that, to date, FFG-IP and FFG-DH had only paid $2.5m of the total agreed consideration of $12.5m, as against $6.5m which, on the claimants’ view, should by now have been paid in accordance with the parties’ agreement. The defendants contended in the English and the Greek proceedings that the claimants were estopped from demanding payment or calling on the second bank guarantee, as the parties to the MOA, together with Seven and FFG-DH, had agreed to a revised schedule agreement in relation to the second and subsequent instalments. The defendants issued an application for a stay of the English proceedings pursuant to article 28 of Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the regulation). The defendants submitted, inter alia, that: (i) the English and the Greek proceedings were related; (ii) there was a risk of conflicting decisions if both the English and the Greek proceedings went ahead; and (iii) as a matter of discretion, the appropriate order would be for the English proceedings to be stayed pending the outcome of the Greek proceedings. The application would be dismissed. It was established law that actions were related if they involved the risk of conflicting decisions, without necessarily involving the risk of giving rise to mutually exclusive legal consequences. There were three factors which might be relevant to the exercise of the discretion; first, the extent of the relatedness and the risk of mutually irreconcilable decisions. Secondly, the stage reached in each set of proceedings; and thirdly the proximity of the courts to the subject matter of the case. The closer the connection between the proceedings in question, the more necessary it would appear for the court second seised to stay its proceedings (see ,  of the judgment). In the particular circumstances of the case, the degree of connection between the sets of proceedings was limited. Not only were the issues with which the Greek court was concerned narrow (since they related to the obligation to pay the second instalment), but the parties to those proceedings were the relevant banks (Proton and NBG) and FFG-DH. FFG-IP, the primary defendant in the English proceedings, was not a party to the Greek Proceedings. The only jurisdiction where all the parties were present and involved was in the proceedings in England. The claims in the English proceedings would go ahead irrespective of the Greek Proceedings, since the latter only related to whether the banks were obliged to honour the second bank guarantee. It had to be legitimate to take into account, in the exercise of the court’s discretion, the fact that the defendants’ argument in relation to whether the dates for payment under the MOA had been agreed to be rescheduled was so weak as to be the likely subject of a summary judgment application. Further, the risk of mutually irreconcilable decisions was remote, given the fact: (a) that the Greek court would have to apply English law to determine the defendants’ obligations under the MOA; (b) of the limited issues in play in the Greek proceedings; and (c) of the stage reached in the Greek proceedings. Finally, the English court was clearly in the best position to decide the issues raised in the English proceedings and so far as they overlapped and/or were based on English law, the issues raised in the Greek proceedings (see -]51],  of the judgment). David Cavender QC (instructed by Norton Rose LLP) for the claimant; Jeffrey Chapman QC (instructed by K&L Gates LLP) for the defendants.