Mr Justice Gross :
INTRODUCTION
- Applications: There are before the Court applications by the Defendants seeking a stay of the Claimants' claims for the arbitration already proceeding between the First Claimant and the Eighth and Ninth Defendants in Paris ("the Paris arbitration"), challenging the Court's jurisdiction in respect of any claims not so stayed, alternatively striking out or staying in the exercise of the Court's case management powers any claims not stayed for arbitration.
- For their part, the Claimants contend that the Paris arbitration has a narrower scope than that suggested by the Defendants. They submit that any claims not stayed for arbitration are properly brought here and are not to be struck out, though they do not or not seriously dispute that any remaining claims brought against individual Defendants should be stayed in the exercise of the Court's case management powers pending the outcome of the Paris arbitration. The Claimants further apply to amend the Claim Form, so as, inter alia, to add the Sixth and Seventh Claimants to the proceedings.
- It will already be apparent that a convenient approach to these bitterly fought applications is as follows:
i) What is the true scope of the Paris arbitration and, accordingly, which claims should be stayed for arbitration? ("Issue (I): The scope of the Paris arbitration");
ii) In respect of any claims not stayed for the Paris arbitration, can they proceed here or must the Court decline jurisdiction or ought such claims to be struck out? ("Issue (II): The fate of the remaining claims");
iii) In respect of any surviving claims, should they be stayed in the exercise of the Court's case management powers pending the outcome of the Paris arbitration? ("Issue (III): Case Management Stay").
- Dramatis Personae: In neutral terms, the Claimants may be described as a group of companies who, pursuant to a contract ("the contract") with the Eighth and Ninth Defendants (together, "Eurotunnel") market and sell tickets to freight clients, in both Eastern and Western European countries, for use of the Eurotunnel truck shuttle service. The First to Fifth Claimants are incorporated respectively in Luxembourg, England and Wales, the Netherlands, France and Spain. The First to Fifth Claimants are subsidiaries of the (intended) Sixth and Seventh Claimants; in effect, the First Claimant is a joint venture vehicle established by the Sixth and Seventh Claimants to carry out the contract. The Sixth Claimant is incorporated in Italy and the Seventh Claimant in Luxembourg.
- The First to Fifth Defendants (collectively, "the ET Plus Defendants") were formerly directors of or employed by one or other of the Claimant companies and, as is common ground, have all now been recruited by Eurotunnel. So, on the undisputed evidence before me:
i) The First Defendant ("Mr. Welter"), domiciled in Italy, was employed by the Sixth Claimant, an Italian company, as the ET Plus Group Finance Director and was also a director of the First, Second and Third Claimants. His service contract was in writing and was governed by Italian Law.
ii) The Second Defendant ("Mr. Buscher"), domiciled in the Netherlands, was employed by the Third Claimant, a Dutch company, as a commercial director. He had a written contract of employment, governed by Dutch Law.
iii) The Third Defendant ("Mr. Delaplanque"), domiciled in France, was President and a director of the Fourth Claimant, a French company. He was not an employee of the Fourth Claimant.
iv) The Fourth Defendant ("Ms. Barrie"), domiciled in England, was employed by the Second Claimant, an English company, from September 2004 as its Commercial Director. She had a written contract of employment governed by English Law.
v) The Fifth Defendant ("Mme Villaescusa"), domiciled in Spain, was employed by the Fifth Claimant, a Spanish company, as its office manager. She had a written contract of employment, governed by Spanish Law.
- As will be apparent, the Sixth and Seventh Defendants are likewise individual Defendants – but throughout, if it may be expressed that way, in the Eurotunnel "camp". Again, on the undisputed evidence:
i) The Sixth Defendant ("Mr. Morrison"), domiciled in England, is employed by the Eighth Defendant, a company incorporated in England and Wales, as Senior Legal Adviser.
ii) The Seventh Defendant ("Mr. Broek"), domiciled in the Netherlands, was employed by a French employment services company set up by Eurotunnel, as Commercial Freight Director (until July 2005).
Insofar as it may be relevant, both Mr. Morrison and Mr. Broek worked or worked mainly in France.
- As already foreshadowed, the Eighth Defendant ("CTGL") is a company incorporated in England and Wales. The Ninth Defendant ("France Manche") is incorporated in France.
- A chart, diagrammatically illustrating the position of the Claimants and Defendants, was helpfully placed before me by Mr. Smouha QC (representing the Defendants) with the agreement of Mr. Englehart QC (representing the Claimants). A copy is annexed to this judgment.
- The Contract: There was no or no serious dispute at the hearing as to the background to the contract. In summary, in 1994, Eurotunnel began commercial operations, managing the infrastructure of the Channel Tunnel. Eurotunnel itself operated various freight, car and coach services and also obtained revenue from train operators using the Channel Tunnel. As for freight business, Eurotunnel sold tickets directly to customers and, after a time, also through the Sixth and Seventh Claimants. In early 2002, at the instigation of Eurotunnel, the Sixth and Seventh Claimants created a single brand name, "Eurotunnel Plus"; the intention was that by joining forces and using a single brand name, they would together generate increased Eurotunnel truck shuttle business. Eurotunnel would itself continue to market and sell tickets to around 150 freight customers, referred to as "key accounts"; that apart, Eurotunnel would leave the marketing and selling of such tickets to the Sixth and Seventh Claimants who were to enjoy exclusivity in their respective territories. In late 2002, certain customer details were transferred from Eurotunnel to the Sixth and Seventh Claimants, pursuant to these developments. Various contractual arrangements then followed, resulting (inter alia) in the incorporation of the Second to Fifth Claimants as national subsidiaries of the Sixth and Seventh Claimants. Following discussions in 2003, the First Claimant came to be incorporated as a joint venture vehicle of the Sixth and Seventh Claimants, with a view to the replacement of the previous contracts by a new contract, to which the parties would be the First Claimant ("ET Plus") and Eurotunnel. That new contract, i.e., the contract, was entered into on the 4th March, 2004. In one sense, the description (employed at the hearing) of the Claimants' business commencing as a "carve out" from Eurotunnel's existing business, can be seen to be accurate; whether this description assists in the resolution of the disputed issues between the parties, is another matter.
- The original language of the contract is French. In translation, the contract provides, inter alia, as follows:
" INTRODUCTION
In application of the Treaty of 12th of February 1986 and the concession contract of 14th of March 1986 EUROTUNNEL operates the Cross-Channel fixed link.
This operation consists, among other things, of transporting heavy goods vehicles on EUROTUNNEL shuttles.
This business, known as freight business, has as clients road haulage companies from the United Kingdom and throughout continental Europe.
With a view to increasing EUROTUNNEL ticket sales with road haulage companies throughout Europe, but also with a view to simplifying the management of this sales business which involves a large number of client accounts spread throughout Europe, EUROTUNNEL wished to find a partner, a specialist in road haulage who has the capacity to increase the volume of EUROTUNNEL sales of tickets with road haulage companies and to manage some EUROTUNNEL clients.
Two contracts have been signed for this purpose with TRANSFERRY and CTS.
As a result of existing synergies, EUROTUNNEL proposed that TRANSFERRY and CTS should set up a joint-venture, in which each of the partners should hold 50 per cent of the shares in order to maintain a balanced split between them. This joint venture, known as ET PLUS SA, should allow the administrative management and financial relationships to be centralised and to bring together the management of risks.
The contracts previously signed between EUROTUNNEL and TRANSFERRY and EUROTUNNEL and CTS should therefore be brought together under a single contract…..
ARTICLE 1: DEFINITIONS
The Contract and only the Contract shall contain all the documents to which reference may be made to determine the rights and obligations of the Parties.
ARTICLE 2: PURPOSE
This Contract has the purpose of:
- The exclusive concession by EUROTUNNEL of the brand license EUROTUNNEL PLUS, a brand which belongs to EUROTUNNEL, as well as all the additional commercial services which may be developed in order to promote the brand and offer to the EUROTUNNEL PLUS clients additional services
- The exclusive marketing by ET PLUS of EUROTUNNEL transport tickets and EUROTUNNEL PLUS services to freight clients other than those with which EUROTUNNEL will maintain a direct link and which are shown in the list in attachment 2
ARTICLE 4-2: SALES TERMS AND CONDITIONS
As regards the Western Europe zone, ET PLUS shall be held to a performance obligation at the following conditions.
In the case where it should appear, at equivalent market conditions (that is to say taking into account the volumes, capacities and prices) that the sales performance of ET PLUS for the western Europe Zone remains below the change in the market by more than 10% for 18 months, EUROTUNNEL shall be able to renegotiate the Contract terms relating to this Zone or to cancel the Contract, limited it only to that same Zone, with 12 months notice. It is furthermore agreed that the Contract shall remain in full force for the other Zones (Italy Balkans and Eastern Europe)
The sales objectives that ET PLUS undertakes to achieve shall be calculated on the basis of the increase in the market for Channel crossings and not on the achievements of ET PLUS.
The cross-channel accompanied freight market to be taken into consideration is the crossing of the Channel over the Straits of Dover by any of the Maritime Lines serving either at departure or arrival, the ports of BOULOGNE SUR MER, CALAIS and DUNKIRK.
ARTICLE 5: UNDERTAKINGS OF ET PLUS
…ET PLUS undertakes to supply to EUROTUNNEL all the sales and financial information concerning the business carried out under the EUROTUNNEL PLUS license.
ET PLUS agrees to provide EUROTUNNEL once a month with a detailed report of the sales activity realised in Western Europe…..
CLAUSE 11: PERIOD
With regard to the WESTERN EUROPE and ITALY/ BALKANS zones, the duration of the contract is 3 years from July 1st 2002, ending on June 30th 2005.
With regard to the EASTERN EUROPE zone, the duration of the contract is 3 years from January 1st 2003, ending on December 31st 2005.
For each Zone, the contract shall be renewed for a period of 3 years, except where one of the parties informs the other of its intention not to renew, respecting a notice period of 12 months.
CLAUSE 17: COMPLETENESS OF THE CONTRACT
This Contract ….contains all of the terms and conditions that the Parties have agreed to.
It annuls and replaces any previous document or agreement, with the Parties expressly waiving the right to enforce any other agreement prior to the signing of the Contract.
CLAUSE 21-3: CONSEQUENCES
…Upon termination of the contractual relations, EUROTUNNEL's clients who existed on the date of the start of the partnership with TRANSFERRY and who have been transferred to ET PLUS shall be transferred back….
CLAUSE 23: APPLICABLE LAW
The parties agree to subject this Contract to French Law.
CLAUSE 24: ALLOCATION OF COMPETENCE
The Parties hereby agree to submit any potential disputes regarding the performance or the interpretation of this Contract to an arbitration tribunal constituted under the aegis of the International Chamber of Commerce of Paris…."
(Note: (1) As to cl. 24, I have used an amalgam of the two translations supplied to me. (2) For simplicity, I shall refer throughout to clauses of the contract, even though some are termed articles in the contract itself.)
- In the event, relations soured between the parties and, following, it would appear, some board or management changes, Eurotunnel purported in June 2004 to give notice that the contract would not be renewed for Western Europe and Italy/Balkans at the end of its term for those zones on 30th June 2005. The question of whether the notice was effective to bring the contract to an end for these zones is very much in dispute between the parties and undoubtedly forms part of the Paris arbitration, commenced by ET Plus in March 2005. For completeness, it may be noted that ET Plus does not dispute that notice was validly given by Eurotunnel in September 2004, bringing the contract to an end as regards Eastern Europe on 31st December, 2005.
- It should be noted that termination of the contract will not prevent the Claimants from purchasing Eurotunnel truck shuttle tickets and on-selling them to their own freight clients; there is no dispute that as a matter of competition law, Eurotunnel would not be entitled to refuse to sell such tickets to the Claimants. However, after termination, the Claimants will not be entitled to make use of the "Eurotunnel Plus" brand. Moreover, after termination of the contract, the Claimants and Eurotunnel will or may be direct competitors for the same freight clients.
THE PRESENT PROCEEDINGS: HISTORY AND BACKGROUND
- The factual background preceding the commencement of proceedings is certainly striking.
- Concerted resignations: On the same day, the 1st April, 2005, Mr. Buscher, Mr. Delaplanque and Ms. Barrie all gave notice to terminate their employment with effect from the 30th June, 2005, i.e., the date when Eurotunnel maintained that the ET Plus exclusive distributorship would be at an end.
- The First Eurotunnel Letter: On the 19th April, 2005, Eurotunnel circulated a round robin letter to ET Plus customers ("the First Eurotunnel Circular"). The body of this circular read as follows:
"Dear Customer,
I am delighted to inform you that with effect from 1 July 2005 Eurotunnel will be moving to a sale distribution channel across Europe. Our contract with the current distributor for your Eurotunnel business expires on 30 June 2005.
Your business is very important to us. We will make every effort to ensure a smooth transition and will be in touch again in the coming weeks with details of the changes and how they will affect you. At the same time we will also provide more information on the benefits that the change will bring."
The circular is signed by Mr. Broek.
- Drafting and translation: Plainly the First Eurotunnel Circular does not canvass the possibility that customers might continue to obtain their freight tickets from the Claimants; manifestly, the object of the letter was to attract or entice business away from the Claimant companies. Still more significantly, for present purposes, is the fact that this circular was drafted and translated into French, English and Spanish by the Third to Fifth Defendants – at a time when each of these Defendants remained a senior executive of the respective Claimant companies. That much at least is clear from the April e-mail traffic, disclosed by an examination of Mr. Delaplanque's and Ms. Barrie's laptops. It is further alleged (but denied by him) that Mr. Buscher translated this circular into Dutch or was at any rate complicit in its production. From the e-mails, it appears that Mr. Welter was likewise implicated in the production of the circular, though it is to be borne in mind that he had by then resigned from his positions with the Claimant companies.
- The flavour of these events appears from the e-mails. On the 15th April, 2005, Ms. Barrie sent an e-mail to Mr. Welter, copied to Mr. Buscher. It said this:
" As discussed, this is a draft of the amended Eurotunnel letter in English. I've copied Johan [i.e., Mr. Buscher] as you can see and will fax a copy to Gerard [presumably Mr. Delaplanque] when he texts me his private fax number.
When we are all happy with the message, we must send to Dirk [presumably, Mr. Broek]. He has requested a copy as soon as possible….He's keen to get it sent before our meeting on Wednesday…"
On the 17th April, Ms. Barrie sent a further e-mail to Mr. Broek, copied to Mr. Buscher, Mr. Delaplanque, Mr. Morrison and Mr. Welter. This e-mail read as follows:
" Please find attached a draft of the amended Eurotunnel letter in English. Jean Paul [Mr. Welter], Johan [Mr. Buscher], Gerard [Mr.Delaplanque] & I all believe this conveys the message we want at this stage with the information we're able to give.
It's not too different from the original version. Can you approve it? Gerard and Johan can provide French and Dutch translations by Monday. Jean Paul is arranging a Spanish translation."
Still on the 17th April, Mr. Delaplanque replied to Ms. Barrie, copying in Messrs. Welter and Buscher, saying:
"Coming back to your draft letter I totally share the content of this letter which according to me is enough for the moment to inform our customers about the changes."
The italics are added; in context, the words are noteworthy. On the 18th April, an e-mail from Mme Villaescusa attached the Spanish version of the circular.
- BIMS database in Eurotunnel's possession: By way of explanation, information relating to the Second to Seventh Claimants' freight clients was and is contained on a single database ("the BIMS database"). This database contains the names, addresses and individual contact details of all the ET Plus clients in the various European countries. It also contains information about the volume of Eurotunnel truck shuttle business transacted through ET Plus by each client and information about the prices (or average prices) charged to each such client by ET Plus for freight tickets. Mr. Mario Alberti, in practical terms a directing figure in the Claimant group of companies, said this in his Witness Statement (dated 7th June, 2005) as to the BIMS database:
" The BIMS database has continued to be developed and operated since March 2003 in the same way as prior to March 2004 ie it is continually updated by the Second to Seventh Claimants (with information relating to existing clients, and information relating to new clients). Only a handful of key employees of the Sixth Claimant have or have had access to all of the freight client information on the BIMS Database and, of the First to Fifth Defendants, only the First Defendant had such access. Each of the other Claimants has access to freight client information relating to the clients operating in its territory…."
The Claimants assert that the information on the BIMS database was and is of a sensitive commercial nature and that the database constitutes a highly confidential compilation.
- Examination of Mr. Buscher's and Mrs. Barrie's laptops in late April, revealed that the contents of BIMS database files covering at least 2059 of the Claimants' freight clients in the United Kingdom, France, Benelux and Spain, had been disclosed to Eurotunnel. Though the precise mechanics of disclosure remain unclear, computer analysis is said by the Claimants to suggest that disclosure of these files to Eurotunnel was the work of Mr. Welter, Mr. Buscher and Ms. Barrie or that each was (at the least) complicit in such disclosure and that the files had been worked on by Eurotunnel. E-mails before the Court show that on the 13th April, 2005, an analysis of "ET Plus price/volume distribution" was for discussion on the next day, between (amongst others) Mr. Welter and Mr. Broek and, on the 18th April, Mr. Welter asked Ms. Barrie to "see the file with analysis of range and price for country."
- Use of the BIMS database: Nor do matters end there. It is apparent or at least strongly arguable that the First Eurotunnel Circular was sent to customers, whose names, addresses and individual contact details were taken directly from the BIMS database. Indeed, it would appear that Mr. Welter accepts this. Instructively, one of the copies of the First Eurotunnel Circular contains identical misprints to those found on the BIMS database.
- The indemnity: Examination of Mrs. Barrie's laptop further revealed that in March 2005 (i.e., before she had tendered her resignation), she had been in negotiation with Eurotunnel concerning the provision to her of an indemnity against any liability which she might incur for breach of contract and/or fiduciary duty towards the Second Claimant. Solicitors had been engaged and, on any view, matters had proceeded as far as the production of a draft indemnity agreement. In broad terms, the trigger for the indemnity was that any breach or alleged breach of contract or fiduciary duty was committed at the request or approval of Mr. Broek. Cl. 2.2.3 of the draft agreement is itself noteworthy in its linkage of the (proposed indemnity) to:
"…Eurotunnel's objectives in removing Ms. Barrie and her colleagues from ET Plus…."
- Provision of staff information: On the 4th March, 2005, Ms. Barrie supplied Mr. Welter with contact details and salary information concerning the Second Claimant's staff. It is not apparent what legitimate reason she had for doing so; by this time, Mr. Welter had resigned from his positions held with the Claimant companies.
- The Claim Form: On the 3rd May, 2005, the First to Fifth Claimants commenced proceedings in this Court. The Claim Form claimed the following relief against the Defendants:
i) An injunction restraining the Defendants from making any use of the Claimants' confidential information as listed in the attached schedule, namely: (1) Names of Claimants' customers; (2) Value of business provided in 2004 from Claimants' customers; (3) Prices and credit ratings relating to Claimants' customers; (4) Commercial information relating to Claimants' customers and business operations.
ii) Damages for unlawful interference with the Claimants' business and/or conspiracy to injure the Claimants' business and/or conspiracy to use unlawful means.
iii) Damages against the First to Fourth Defendants for breach of contract and/or breach of fiduciary duty.
iv) Damages against the Sixth to Ninth Defendants for procuring breach of contract and/or breach of fiduciary duty by the First to Fourth Defendants.
The Claim Form stated that this Court has power under the Civil Jurisdiction and Judgments Act 1982 ("the CJJA 1982") to hear this claim and that no proceedings concerning the same cause of action are pending in Scotland, Northern Ireland or another Convention territory of any contracting state.
- The Second Eurotunnel Circular: Following the issue of the Claim Form, on or about the 11th May, solicitors acting on behalf of Eurotunnel offered an undertaking that any confidential information belonging to the Claimants, received by it from the other Defendants and within the categories set out in the schedule to the Claim Form, would not be used ("the 11th May undertaking"). That undertaking was not accepted.
- On the 20th May, 2005, Mr. Broek sent out another circular ("the Second Eurotunnel Circular"). It read as follows:
"Dear Eurotunnel Customer,
Important Changes at Eurotunnel effective 1 July 2005
Further to our letter dated 19 April 2005, Eurotunnel would like to remind you that the new sales distribution channel comes into operation on 1 July 2004. In order for us to provide you with the best possible service from this date please amend the attached form and fax it back by 1 June 2005….
Eurotunnel will contact you during the week commencing 23 May 2005, to enable you to provide us with commercial data necessary to open an account and to also answer any queries you may have…."
The "attached form" contained contact, volume and payment details for the customer contacted. As with the First Eurotunnel Circular, it seems inescapable that the object of this second circular was to encourage the Claimants' freight clients to transfer their business to Eurotunnel. The source of the information for the Second Eurotunnel Circular is much in dispute; the Claimants say that this Circular utilised the information (allegedly wrongly) furnished by the First, Second and Fourth Defendants to Eurotunnel; the Defendants aver that no use was made of any such information (even if furnished as alleged) for the purposes of the production of this Circular. Given the 11th May undertaking, a degree of "feeling" underlies this particular debate.
- Particulars of Claim ("the PoC"): These were issued on or about the 27th May, 2005 and served on the 31st May. The PoC set out the history of wrongdoing on the part of the Defendants (as perceived by the Claimants) and then go on to identify the causes of action relied upon against each Defendant. In summary, the Claimants complain of:
i) As against the First, Second, Fourth, Sixth and Seventh Defendants and Eurotunnel, the misuse of confidential information; this charge relates to the disclosure of material from the BIMS database to Eurotunnel and its use in the First and/or Second Eurotunnel Circulars.
ii) As against the First to Fifth Defendants, breach of their respective contracts of employment and/or fiduciary duty. The substance of this charge varies as between these individual Defendants, some but not all of whom were involved in the alleged misuse of confidential information. All of these Defendants, however, are charged in respect of the First Eurotunnel Circular. Finally, there are additional allegations relating to the (alleged) wrongdoing of Ms. Barrie (summarised above).
iii) As against the Sixth and Seventh Defendants and Eurotunnel, procuring breaches of contract on the part of the First to Fifth Defendants. The allegation is that the First to Fifth Defendants were caused and/or encouraged to act as they did by the Defendants who are the subject of this complaint. As will become apparent, there is now a dispute as to whether this allegation encompasses a claim for procuring a breach of fiduciary duty. For convenience, I will simply refer to the claim for procuring breaches of contract and I will later address the issue of whether it encompasses a claim for breach of fiduciary duty.
iv) As against Eurotunnel, breach of Art. 82 of the EC Treaty; it is alleged that Eurotunnel has a dominant position in the market, which it has abused through its conduct towards the First to Fifth Defendants and in bringing about the publication of the First and/or Second Eurotunnel Circulars.
v) As against the Eighth and Ninth Defendants and the First to Fifth Defendants, breach of Art. 81 of the EC Treaty. The gravamen of this complaint is that the relevant parties' actions constituted an agreement between undertakings with the object or effect of distorting competition on the market for the supply of Eurotunnel Truck Shuttle Service tickets to freight truck customers, which may affect trade between Member States.
vi) As against all the Defendants, unlawful interference with the Claimants' businesses. The complaint relates back to the (alleged) wrongdoing already summarised and alleges deliberate interference, unlawful means and the intention of inflicting injury on the Claimants.
vii) As against all the Defendants, tortious conspiracy.
By way of relief, the Claimants seek injunctions, damages and/or equitable compensation and interest.
- Though Mr. Smouha QC was critical of the generality with which he said the claims had been advanced, save for the matters to which I turn next, it did not seem to me that any "pleading" point would (as such) determine the fate of the various claims formulated in the PoC – though, as will be seen (below) in the light of a point raised late in the day by Mr. Englehart QC, there are disadvantages in pleading as the Claimants have done.
- In two respects, however, the PoC must be subjected to further scrutiny. First, only the First to Fifth Claimants were listed in the Claim Form. The PoC purport to add the Sixth and Seventh Claimants. Secondly, the PoC purport to add claims under Arts. 81 and 82 of the EC Treaty. As already foreshadowed, these matters (amongst certain others) form the subject of an application to amend the Claim Form. In the context of a jurisdiction dispute, these proposed amendments give rise to understandable concern and will be revisited later.
- The application for an injunction: By Application Notice dated 6th June, 2005, the Claimants sought interim "springboard" injunctive relief (see, Bullivant v Ellis [1987] FSR 172), i.e., relief designed to prevent the Defendants from taking advantage of their (alleged) misuse of confidential information belonging to the Claimants and the (alleged) breach(es) of fiduciary duty by former employees or officers of the Claimants. Additionally, the application extends to various ancillary orders for delivery up of documents and disclosure. The hearing date for that application and for the jurisdiction disputes now before the Court was fixed for the 27th June, 2005 but was not ultimately effective.
- Developments in the Paris arbitration: In the events which happened, a hearing took place on the 21st June, 2005, before the Paris ICC arbitration tribunal ("the arbitration tribunal"), which had also been approached by the Claimants with a view to interim relief. By its order dated 6th July, 2005 ("the 6th July order") the arbitration tribunal (inter alia) ordered Eurotunnel to continue to perform the contract for the Western Europe and Italy/Balkans Zones until the question of the possible renewal of the contract has been determined in the Paris arbitration. Following a telephone conference call on the 12th July, 2005, the arbitration tribunal, by letter dated 15th July, 2005 ("the 15th July letter") produced a provisional timetable, envisaging a final hearing on the merits in or about April 2006.
- The 15th July letter further contained an expression of the arbitration tribunal's views as to which claims and counterclaims were before it. In summary, these include the following:
i) Renewal, abrupt breaking-off and termination of the contract;
ii) Rebates and tariffs;
iii) Bank guarantee and credit-risk cover;
iv) Eurotunnel's counterclaim concerning the scope of cl. 5 of the contract;
v) Analysis of French law, including interpretation of the contract;
vi) Eurotunnel's counterclaim for loss arising out ET Plus bringing proceedings before this Court.
- Against the background of – or certainly following - the 6th July order, the Claimants have accepted the 11th May undertaking. Accordingly, the Claimants' application for an interim injunction is no longer effective. That said, aside from the matters currently "live" before the Court (as already summarised), there remains a very live dispute as to costs concerning the Claimants' application for an injunction, amongst other matters.
- The Defendants' stance: While much of the history recounted above is incontrovertible – in that it is derived from the Defendants' own e-mail traffic or admissions made in witness statements – it is of course necessary and fair to record the Defendants' stance on the facts. The Defendants dispute the confidentiality of any information supplied by the First, Second or Fourth Defendants to Eurotunnel, not least on the basis that Eurotunnel (they say) was the source of most of it; they assert that Eurotunnel was in any event entitled to such information under the contract. They deny that the BIMS database was as such copied or supplied to Eurotunnel though there are admissions that customer information was supplied, relating at least to the identities of customers and contact details sufficient to form the basis of the First Eurotunnel Circular and disclosing average but not specific pricing in respect of those customers. Further, Mr. Buscher (in particular) denies the primary facts alleged against him. Misuse of any information is denied by all Defendants; instead it is averred that any information received by Eurotunnel from the First to Fifth Defendants was "quarantined" or "ring fenced" after service of the Claim Form. The Second Eurotunnel Circular was, it is said, not derived from any such source(s) of information. There was no conspiracy or intention to interfere with the Claimants' business; the non-renewal of the contract involved a legitimate business decision taken by Eurotunnel. I turn to the principal issues.
ISSUE (I): THE SCOPE OF THE PARIS ARBITRATION
- The parties to the arbitration: Obviously, the Paris arbitration cannot encompass claims other than those between the parties to it. Those parties are ET Plus and Eurotunnel (i.e., the Eighth and Ninth Defendants).
- It necessarily follows, first, that any claims between Claimants other than ET Plus against Eurotunnel would fall outside the arbitration; but this is largely theoretical in that, notwithstanding the broad reference to "Claimants" in the Claim Form and PoC, with one exception, realistically no such claims were pressed. The exception concerns the vesting of the cause of action for procuring breaches of contract; this matter was first raised by Mr. Englehart QC after receipt of the draft judgment and is dealt with below. Secondly, it also follows and was not in dispute, that any claims by the Claimants (including ET Plus) against individual Defendants must likewise fall outside the arbitration. To those I shall return.
- Accordingly, the true focus of the debate on the present issue concerns the question of whether all, some or none of the ET Plus claims against Eurotunnel, advanced in these proceedings, come within the scope of the Paris arbitration.
- The rival submissions: In a nutshell, the rival submissions were as follows. For the Defendants, Mr. Smouha submitted that all the ET Plus claims against Eurotunnel advanced in the Claim Form and the PoC came within the scope of the Paris arbitration. They should be stayed accordingly, pursuant to s.9 of the Arbitration Act 1996 ("the 1996 Act"). The arbitration clause in the contract (cl. 24) was in wide terms; there was a presumption that the parties intended to refer all their disputes to a single forum for resolution; there was no suggestion that French Law approached such questions differently from English Law. It would be for the arbitrators to determine all issues of validity, arguability and applicable law of any claims stayed for arbitration. If there was any doubt as to claims coming within the scope of the arbitration clause, then one solution was to leave it to the arbitration tribunal to decide (at least in the first instance) on its own jurisdiction. Questions of jurisdiction and strike out would arise in respect of any claims not stayed for arbitration.
- For the Claimants, Mr. Englehart submitted that arbitration clauses were to be construed in accordance with ordinary canons of construction. Cl. 24 was a deliberately narrow clause; it was not to be equated with clauses expressly covering all claims "connected with" or "arising out of" the contract; the parties had not chosen such wide wording. The claims advanced in the Claim Form and PoC by ET Plus against Eurotunnel were not based in any way on the contract. Cl. 24 could not be stretched to cover the tortious claims advanced here. There should be no stay for the Paris arbitration pursuant to s.9 of the 1996 Act.
- Pausing here, it is convenient to reflect on the impact of the rival submissions on the proceedings as a whole. First, save by consent, there is no possibility of trying all the disputes in a single forum, given the provision for Paris arbitration in the contract. Secondly, the Defendants' case postulates that all the ET Plus claims against Eurotunnel are to be arbitrated in Paris, whereas the Claimants' case envisages a far more limited Paris arbitration, essentially confined to contractual disputes between ET Plus and Eurotunnel. Thirdly, as will be seen below, the Claimants' case entails bringing together both the corporate and all (or almost all) the individual defendants in litigation in this country in respect of the ET Plus tortious claims; by contrast, the Defendants' case involves the fragmentation of the proceedings against individual Defendants, with each individual Defendant to be pursued (if at all) in the jurisdiction of his/her domicile, while all claims against Eurotunnel proceed in the Paris arbitration. Fourthly, it may be observed that neither proposed solution is without some complexity, not least given the applicable mandatory rules of law as to stay(s) for arbitration and jurisdiction (see below), which may preclude any tidy split.
- The true construction of cl.24 of the contract: Free of authority or presumptions, as an ordinary exercise of construction, I begin with the wording of cl.24 itself. Accordingly:
i) This arbitration clause applies to "any potential disputes", thus suggesting a wide field of application; however, the disputes covered by the clause are qualified by the wording which follows; the clause only covers disputes "regarding" the "performance" or "interpretation" of the contract.
ii) As a matter of language, I take "regarding" as equivalent to "concerning" the "performance" or "interpretation" of the contract.
iii) As a commonsense matter of construction or necessary implication, "performance" must include non-performance; it is of course failures in performance rather than performance in accordance with the contract which gives rise to disputes.
iv) "Interpretation" of the contract is synonymous with "construction" of the contract.
- Accordingly, simply as a matter of language, the scope of cl.24 covers any potential disputes concerning the performance or non-performance or construction of the contract. If this is right, then there is no warrant as a matter of language for excluding tortious claims, provided they are sufficiently connected to the performance or non-performance of the contract so as to satisfy the requirement contained in the word "regarding"; i.e., the language of the clause extends to disputes going beyond the four corners of the contract. There is thus no basis in the language for concluding that the clause covers contractual claims between ET Plus and Eurotunnel regarding non-performance of the contract but not closely connected tortious claims relying on the same facts. Furthermore, with reference to the present matter, a dispute regarding or concerning the construction of the contract will plainly encompass an issue as to the scope of cl. 5 thereof.
- Contractual clauses are not of course to be construed in a vacuum. Cl. 24 is an arbitration clause. As a matter of English Law, there is in this context a presumption in favour of "one-stop adjudication". In other words, the Court should be slow to attribute to reasonable commercial parties "…an intention that there should in any foreseeable eventuality be two sets of proceedings" between the same parties: see, Continental Bank v Aeakos [1994] 1 WLR 588, esp. at p.593, together with the authorities there cited; see too, the attractive new work by David Joseph QC, Jurisdiction and Arbitration Agreements and their Enforcement (Sweet & Maxwell, 2005) (hereafter, "Joseph"), at pp. 110 and following. Effectively, such "presumptions" merely apply what is taken to be the intention of a reasonable businessman. It follows that the context serves to reinforce the view of the scope of the clause to which, as indicated, I am inclined to come on the language alone; namely, as between ET Plus and Eurotunnel, there should not be one set of proceedings for contractual claims regarding non-performance of the contract and a second set of proceedings for tortious claims regarding non-performance of the contract.
- In this field, there are a number of commonly used wordings, which are generally taken to have wider or narrower scope (see, Joseph, at pp. 113 and following). The present clause does not employ any of these industry-standard wordings. Instead, it contains pointers going both ways. So, for instance, the reference to "interpretation" of the contract suggests a narrow focus on the construction of the contract, perhaps not extending to extra-contractual claims. Conversely, however, the clause extends (as already discussed) to disputes "regarding" non-performance of the contract; that, to me, suggests a wider scope, especially if it is correct to read "regarding" as synonymous with "concerning": Joseph, at pp.116-117. Against this background, I cannot accept Mr. Englehart's submission that by failing to adopt one of the "standard" wider wordings, the parties have opted for a narrower wording. In any event, I do not think that it would be right to approach this clause by seeing what it has added to or subtracted from some other wording; it is the wording chosen by the parties, considered as a whole and in context, which must be construed.
- It is not to be forgotten that, as is undisputed, by virtue of cll. 23 and 24 of the contract, the scope of cl. 24 must be determined as a matter of French Law. In this regard, first, there has been no suggestion that French Law would view the scope of the arbitration clause differently or more restrictively than English Law. Secondly, though too much should not be made of it, I derive some reassurance from the following extracts from the well-known French Law text on international arbitration, Fouchard, Gaillard, Goldman On International Commercial Arbitration, (hereafter "Fouchard"):
" 480. … The interpretation of arbitration agreements by the French courts has, likewise, never been strict nor restrictive. For example, in a case concerning an international arbitration, the Cour de cassation held that an arbitration clause conferring jurisdiction on the International Chamber of Commerce 'for all disputes arising during performance [of the contract]' encompassed disputes arising from the termination of the contract. The least that can be said is that this was hardly a restrictive interpretation.
524. There is nothing to prevent the referral of extra-contractual issues to arbitration. There is no doubt that disputes of a tortious nature are arbitrable….
From a purely procedural standpoint, the arbitrators will have jurisdiction over claims in tort and for quasi-contract provided that the terms of the arbitration agreement are wide enough for it to be established that the parties intended such claims to be resolved through arbitration. That will be the case, for instance, where the clause refers to all disputes arising 'during the performance of the present contract' or 'in connection with the present contract'. "
- Pulling the threads together, I construe cl. 24 of the contract in the manner already provisionally indicated; namely, the clause extends beyond the four corners of the contract; it will cover disputes as to its true construction and it will further extend to both contractual and tortious claims, provided these are sufficiently connected to the non-performance of the contract so as to satisfy the test encapsulated in the word "regarding".
- The ET Plus claims in tort against Eurotunnel: I must now apply my conclusions as to the scope of cl. 24 of the contract to the various claims made by ET Plus against Eurotunnel, set out in the Claim Form and the PoC. In my judgment, deferring for the moment questions as to Arts. 81 and 82 of the EC Treaty, all the tortious claims advanced by ET Plus against Eurotunnel come within the scope of this arbitration clause. My reasons follow.
- First, as to the misuse of confidential information. As will already be apparent, a key issue here concerns the scope of cl.5 of the contract; if the information in question was (as Eurotunnel contends) information to which it was entitled under the contract, then there is or may well be a complete defence to this claim. In these circumstances, it would be at least curious for the English (or some other) Court to enter on the issue of (alleged) misuse of confidential information, while the arbitration tribunal proceeded to rule as between the same parties on the anterior question of the true construction of cl. 5. In my judgment, the claim as to misuse of confidential information is inextricably bound up with the interpretation of the contract and, hence, is plainly one "regarding" the "interpretation" of the contract. In any event, as it seems to me, any such claim must be one "regarding" the non-performance of the contract, given the factual basis relied upon by ET Plus.
- Secondly, there is the claim that Eurotunnel procured the breach(es) of contract of the First to Fifth Defendants.
i) As it seemed to me, this claim is closely connected to the non-performance of the contract; instead of performing the contract with ET Plus, the allegation is that Eurotunnel procured breaches of contract (as already summarised) on the part of senior executives of the Claimant companies. If established, it is difficult to postulate conduct more likely to undermine performance of the contract.
ii) I was accordingly minded to stay this claim for the Paris arbitration, pursuant to s.9 of the 1996 Act. Indeed, I indicated as much in the draft judgment sent to the parties.
iii) Before hand-down, I received a Note from Mr. Englehart QC, saying that, in summary, this claim could not be stayed for arbitration pursuant to s.9 of the 1996 Act, because ET Plus had no relevant cause of action; the causes of action against Eurotunnel for procuring breaches of the respective employment contracts and fiduciary duties were vested and vested only, in the respective employer companies and companies of which the ET Plus Defendants were directors (set out above). It is obvious (as already noted) that there can be no stay pursuant to s.9 in respect of any parties not party to the Paris arbitration. The importance of this point is the disclaimer that ET Plus has a relevant cause of action.
iv) This point was neither raised nor flagged at the hearing. Insofar as it is suggested that it was raised in post-hearing inter-solicitor correspondence copied to me, I am wholly unable to accept that that was an appropriate mode of doing so; certainly, on a brief glance at the correspondence (which tended to be prefaced by an apology for troubling the Court with inter-solicitor skirmishing), the point eluded me.
v) Nonetheless, it must now be dealt with, leaving over for the moment, all questions of costs. There cannot be a stay for the Paris arbitration in respect of entities who are not parties to it. Moreover, it must be appropriate to proceed on the assumption that Mr. Englehart's concession in respect of ET Plus is rightly made; certainly, in the context of this case, I would not be minded to compel parties to go to arbitration in respect of a claim disclaimed by the only claimant entity which is a party to the arbitration in question. It follows that there will be no stay under s.9 in respect of any claim by any Claimant that Eurotunnel procured the breach of contract of the First to Fifth Defendants. The fate of these claims is addressed below.
- Thirdly, as to unlawful interference and conspiracy, claims which may be taken together for present purposes. Once again, these allegations largely centre on the same facts (the misuse of confidential information and the preparation and distribution of the First and/or Second Eurotunnel Circulars) but reformulate them in legal terms and add the ingredient of intention to injure the Claimants. For my part, I have no real hesitation in viewing these claims as giving rise to disputes "regarding" the "performance" of the contract; instead of performing the contract with ET Plus, Eurotunnel was (for example) conspiring with others to use unlawful means against the Claimants.
- In the circumstances, all the ET Plus claims in tort against Eurotunnel with which I have so far dealt must be stayed for the Paris arbitration, pursuant to s.9 of the 1996 Act. This is a conclusion I am not unhappy to reach. At the centre of this dispute lies the relationship between ET Plus and Eurotunnel. On any view, that relationship (and its breakdown) will be before the arbitration tribunal. Whatever the attractions of the split proposed by the Claimants (if otherwise achievable) in terms of trying the tortious claims against both the corporate and individual Defendants together in this jurisdiction, any such split would necessarily entail two sets of proceedings between the same parties (ET Plus and Eurotunnel). One set of proceedings would deal with the interpretation of the contract and any contractual disputes regarding non-performance; the other, with tortious claims regarding non-performance. Both sets of proceedings would essentially turn on the same facts. For my part, I would not lightly infer that the parties drafted cl. 24 with any such intention.
- The Arts. 81 and 82 claims: There is no realistic doubt that such "competition" or "anti-trust" claims are arbitrable; the issue is whether they come within the scope of the arbitration clause, as a matter of its true construction. I confess that my initial reaction was one of misgiving. I doubted whether complaints of breaches of Arts. 81 and 82 could be said to give rise to disputes regarding the performance or interpretation of the contract. But on closer examination of the facts relied upon (as already summarised), it is apparent that these claims are simply a variant on the familiar factual theme: the misuse of confidential information in the BIMS database, the First and Second Eurotunnel Circulars, the suborning of the Claimants' executives and so on. In the circumstances, though claims for breach of Arts. 81 and 82 of the EC Treaty do raise considerations distinct from those of the other tortious claims (dealt with above), I have reached the conclusion that these claims – as against Eurotunnel – must likewise be stayed for the Paris arbitration, pursuant to s.9 of the 1996 Act. I am bound to observe, further, that my provisional inclination was that these claims were tenuous in the extreme, so that had I not stayed them, I may well have proved sympathetic to Mr. Smouha's submissions that they should be struck out (as will become apparent when I return to the Art. 81 claim against the ET Plus Defendants, where no question of a stay for the Paris arbitration arises). That, however, is not a reason for declining a stay in respect of the Art. 81 and 82 claims against Eurotunnel and it will be for the arbitration tribunal to decide finally on the merits of these claims.
- A procedural footnote: As already foreshadowed, there are procedural difficulties with regard to the proposed addition of the Sixth and Seventh Claimants together with the Arts. 81 and 82 claims emerging for the first time in the PoC, rather than in the claim form: cf. Parker v Schuller (1901) 17 TLR 299; Youell v Kara Mara [2000] 2 Lloyd's Rep 102, esp. at paras. 78 and following. Sensibly, if I may say so, Mr. Smouha did not press for the Claimants to begin again with a new Claim Form including these claims. But he rightly submitted that the test for jurisdiction in respect of these parties and claims could not be circumvented by their insertion into the PoC. He invited me therefore to consider the new parties and the new claims on an individual basis, so as to determine whether jurisdiction could be exercised. I agree and I also reserve in this connection any related questions of costs. In the event, so far as concerns the Arts. 81 and 82 claims against Eurotunnel, these must be stayed for the Paris arbitration, as I have already indicated.
ISSUE (II): THE FATE OF THE REMAINING CLAIMS
- Introduction: With the ET Plus claims against Eurotunnel stayed for the Paris arbitration, the remaining claims in the litigation are advanced (1) by Claimants other than ET Plus against Eurotunnel or (2) by Claimants, including ET Plus, against individual Defendants.
- In addressing the claims against the individual Defendants it will be convenient to keep in mind (as already noted) that they fall into two distinct categories: (1) the First to Fifth Defendants, comprising the ET Plus Defendants; (2) the Sixth and Seventh Defendants, both employees of Eurotunnel. Although Mr. Smouha sought to criticise the Claimants' pursuit of the individual Defendants, the claims against the ET Plus Defendants cannot occasion real surprise in a dispute of this nature; to put it neutrally, these are Defendants who have transferred their allegiance from the Claimant companies to Eurotunnel. Different questions arise with regard to the Sixth and Seventh Defendants. All that said, it is further necessary to bear in mind that individual Defendants within these categories will in any event require separate consideration and that various issues cut across the division between these categories.
- Of all the individual Defendants, only Ms. Barrie and Mr. Morrison are domiciled in this country. There are thus no jurisdictional issues in connection with the proposed claims against them; the Defendants' stance is instead that the claims against them are unsustainable and should be struck out.
- The other individual Defendants (viz., the First, Second, Third, Fifth and Seventh Defendants) are not domiciled in this country but are all domiciled in Member States, parties to Council Regulation (EC) No 44/2001 ("the Regulation"), in effect the successor to the Brussels Convention. The general rule under Art. 2 of the Regulation is that persons domiciled in a Member State are to be sued in the courts of that Member State. It follows that the Claimants need to be in a position to establish jurisdiction in this country against these Defendants, in accordance with some other provision(s) of the Regulation. If they do not, that is an end of the matter; if they do, there remains the question of whether any surviving claims are unsustainable and should be struck out.
- So far as concerns the First, Second, Third, Fifth and Seventh Defendants, the sole ground advanced by the Claimants for this Court exercising jurisdiction, is Art. 6(1) of the Regulation, which provides as follows:
" Article 6
A person domiciled in a Member State may also be sued:
1. where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims 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."
It follows that the position of the English Defendants will require particular scrutiny; the English Defendants serve as "anchor" Defendants, as, self evidently, without claims against them, there would be no basis for invoking Art. 6(1) against the foreign Defendants. In the light of the stay for the Paris arbitration, the Eighth Defendant can no longer fulfil any such role; accordingly, Ms. Barrie and Mr. Morrison are the only potential candidates to serve in this capacity.
- Before proceeding further, it is appropriate to note a concession helpfully made by Mr. Englehart. By virtue of Art. 20(1) of the Regulation:
"An employer may bring proceedings only in the courts of the Member State in which the employee is domiciled."
As is plain from Art. 18(1) of the Regulation, the rule in Art. 20(1) is mandatory, subject only to irrelevant exceptions and overrides Art. 6(1). Against this background, Mr. Englehart rightly accepted at the hearing that "pure" employment claims (i.e., claims for breach of contracts of employment) against the First, Second, Third and Fifth Defendants could not be pursued in this Court. Mr. Englehart further accepted that, as a result, the proceedings could not continue against the Fifth Defendant at all, notwithstanding the range of the allegations made against her in the PoC. It follows that Mme Villaescusa departs from the proceedings and that nothing further need be said of the claims for breach of contracts of employment made in the PoC against the First, Second and Third Defendants.
- Art. 6(1) of the Regulation: There was some debate at the hearing as to the correct approach to Art. 6(1) of the Regulation. As it seems to me:
i) The test now contained in Art. 6(1) of the Regulation, codifies the effect of the earlier decision of the Court of Justice of the European Communities ("the European Court") on the Brussels Convention in Kalfelis v Schroeder, Muenchmeyer, Hengst & Co. [1988] ECR 5565, at p.5584 (para. 12), namely: whether there is such a connection between the claims at the time when they are instituted that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings ("the Kalfelis test"). The risk of irreconcilability may arise from potential conflicting findings of fact or from potential conflicting decisions on questions of law: Gascoine v Pyrah [1994] I.L. Pr. 82, at 93. While Art. 6(1) constitutes an exception to the general rule contained in Art. 2 (that the defendant's domicile governs jurisdiction) and must not be abused, it does not follow that Art. 6(1) is so subservient to Art. 2 that it could only be invoked in special circumstances: Gascoine v Pyrah, at 94.
ii) In applying the Kalfelis test, a "broad commonsense approach" is to be adopted and an "over sophisticated analysis" is to be avoided: Casio v Sayo [2001] ILPr 43 , at paras. [32] – [37], together with the authorities there cited. In my judgment, this decision of the Court of Appeal furnishes the approach to Art. 6(1) to be followed, certainly in this country and it would not be right to be deterred from it by observations of the European Court, in Reunion Europeenne SA v Spliethoff's Bevrachtingskantoor BV [1998] ECR I-6511, esp. at I-6549, para. 50. In Reunion, the European Court appeared to favour a rigid test – so much so, that the mere fact that one claim was in contract whereas the other was in tort meant that the two could not be sufficiently connected for the purposes of Art. 6(1). It is, however, at once to be noted that on the facts of the case such observations were obiter, not least because (it would appear) no defendant was being sued in the courts of his domicile. Further, the Court of Appeal in Casio (at para. 33) treated the observations in Reunion as doing no more than applying the principles of Kalfelis to the facts before it; nothing in the judgment in Reunion "cuts down, qualifies or explains" what was said in Kalfelis. Still further, in Watson v First Choice Holidays [2001] 2 Lloyd's Rep 339 , the Court of Appeal plainly doubted the reasoning in Reunion, remarking (with respect, persuasively) that, but for the observations in Reunion, it would have held that the fact that one claim was based in contract and the other in tort was, at most, only one factor to be considered in deciding whether the connection between the claims was sufficient for the purposes of Art. 6(1); in the event, the Court of Appeal in Watson, to which unfortunately Casio was not cited, went on to order a reference to the European Court, on the basis that Reunion could not be ignored – but the reference was withdrawn when the case settled. Nor do any textbook commentaries shown to me lend any support to Reunion. In Layton & Mercer, European Civil Practice (2nd ed.), there is a reference to the suggestion that the full implications of Reunion may not have been considered by the European Court. Robustly, Briggs & Rees, Civil Jurisdiction and Judgments (3rd ed.) (hereafter, "Briggs") describes the observations in Reunion as "extraordinary and…simply wrong". In the circumstances, it is unnecessary and would be inappropriate for me to say more; it suffices, as already indicated, that I simply follow the approach laid down in Casio.
iii) As to the strength of the case against the "anchor" defendant, there was no dispute of the need for the Claimants to establish a "good arguable case" as to the facts essential for establishing jurisdiction ("jurisdictional facts"). In general, Mr. Smouha accepted that, as to the merits of each claim, it was for the Claimants to establish that there was at least a serious issue to be tried (as in the old RSC O.11, authoritatively established by Seaconsar v Bank Markazi [1994] 1 AC 438 and as in the present CPR 6.20). However, with regard to the merits of the claim against the anchor defendant, Mr. Smouha submitted that this was a matter of jurisdictional fact; accordingly, the Claimants needed to establish a good arguable case on the merits against the anchor defendant. By contrast, Mr. Englehart submitted that all that was necessary for the assertion of jurisdiction against foreign defendants under Art. 6(1) was a real or serious issue to be tried against the anchor defendant. In the view which I take of the matter (see below), it is strictly unnecessary to resolve this difference. But my strong inclination is to prefer Mr. Englehart's submission, for the reasons which follow. First, it is plain that the domicile of the anchor defendant is a matter of jurisdictional fact; so, the Claimants must here establish with regard to the relevant anchor defendant at least a good arguable case that that defendant is domiciled in England: see: Canada Trust v Stolzenberg (No. 2) [2002] 1 AC 1, at p.13. Secondly, I am minded to accept that the existence of at least a serious or real issue to be tried against the anchor defendant constitutes jurisdictional fact in the context of Art. 6(1) – if the claim against the anchor defendant is entirely spurious, the Kalfelis test either does not arise or cannot be satisfied: Briggs, at para. 2.165. But, thirdly, it does not at all follow that the Claimant needs to establish anything more than a serious or real issue to be tried on the merits against the anchor defendant in order to invoke jurisdiction against other defendants under Art. 6(1). The matter may be simply tested; provided there is a real issue to be tried between claimant and anchor defendant, those proceedings (at least ordinarily) cannot be struck out in this country and will continue; if so, then the Kalfelis test is capable of being satisfied; whether, in any given case, it will be satisfied on all the facts is, of course, another matter. Insofar as the contrary was suggested, nothing in Canada Trust v Stolzenberg (No. 2) suggests otherwise. See too, The Rewia [1991] 2 Lloyd's Rep. 325, at 329.
- Misuse of confidential information: I come to the individual claims, beginning with the complaint as to misuse of confidential information. This claim is advanced against the First, Second and Fourth Defendants, of the ET Plus defendants and against the Sixth and Seventh Defendants. The anchor defendant is Ms. Barrie (the Fourth Defendant). I therefore begin by considering the claim against her.
- In the light of the history and the matters set out in the PoC (all as summarised above), the Claimants' position as against Ms. Barrie is simplicity itself. Given her role in the disclosure to Eurotunnel of material from the BIMS database and its use in (at the least) the First Eurotunnel Circular, Mr. Englehart submits that there is a strong case against Ms. Barrie.
- Somewhat ambitiously, if I may say so, Mr. Smouha argued that there was neither a good arguable case nor even (if that was the test) a serious issue to be tried in respect of the claims arising from the misuse of confidential information. In carefully developed submissions, he laid stress on the terms of the contract and, in particular, cll. 5 and 21 thereof; this was information to which Eurotunnel was entitled. Insofar as Mr. Alberti suggested (in his witness statement) that cl. 5 did not reflect the agreement between the parties, the suggestion was untenable – and there was no claim for rectification. In any event, the information was not by its nature confidential and/or had been effectively quarantined by Eurotunnel. Furthermore, the claim was inadequately particularised and it remained unclear which claimant had "ownership" of the information.
- In my judgment, the position with regard to Ms. Barrie under this head of claim is as follows:
i) It is not disputed that she is domiciled in this country.
ii) Whatever the final outcome of the proceedings against her may be, I have no doubt that there is, at the lowest, a good arguable case that there was a misuse of confidential information to which she was a party; a fortiori, there is a real or serious issue to be tried. Accordingly, the issue (discussed above) as to the requisite strength of the case against the anchor defendant is academic. On the factual material before me, in this as in a number of other respects, Ms. Barrie (as does Eurotunnel) has much to answer or at least explain. While there undoubtedly will be argument as to the true scope of cll. 5 and 21 of the contract, it cannot begin to be said, not least as a matter of commercial commonsense, that there is not at the lowest a good arguable case that what was done here went way outside and beyond those contractual provisions. Further, when considering the information supplied from the BIMS database, it is not to be forgotten that it is the compilation which must be taken into account – not simply the individual items of information: see, Bullivant v Ellis, esp. at p.181. Even insofar as the information or some of it originated with Eurotunnel (at the time of the "carve out"), there is at least a good arguable case that by 2005, the (relevant) Claimants had developed their business and the information in question. Still further, there is a powerful case (whatever the later steps as to "ring fencing") that the information was misused for the purpose of the First Eurotunnel Circular. Finally, the strength of the Claimants' case in this regard is not, in my judgment, diminished even assuming Mr. Alberti to be simply wrong in his views as to cl.5 of the contract.
iii) So far as particularisation is concerned, I do not see force in the point that the confidential information has been inadequately particularised.
iv) As to the question of which claimant owned the confidential information, the relevant candidates in the case of Ms. Barrie must be one, some or all of the First, Second, Sixth and Seventh Claimants. The proposed amendment to add the Sixth and Seventh Claimants is accordingly justified in accordance with the approach outlined earlier (and subject of course to any question of costs). The relevant potential claimants are therefore all before the Court. I do, however, think that here and elsewhere, there is much to be said from a case management viewpoint of in due course requiring further information from the Claimants as to which claimant is making which claim; in the context of this case, however, that is a matter of "particularisation" rather than a matter going to jurisdiction or striking out the claim.
- Having reached these clear conclusions with regard to Ms. Barrie, I can deal shortly with Mr. Welter and Mr. Buscher. When considering their positions, I have considered carefully the various denials and matters of exoneration raised in their witness statements. Nonetheless, having regard to the conclusions reached in respect of Ms. Barrie to the extent that they are applicable here, the e-mail traffic and, in Mr. Welter's case, the admissions made in his witness statement, I am amply satisfied that there is at least a real or serious issue to be tried against these two defendants on the merits. For completeness so far as concerns Mr. Buscher, it is to be kept in mind that the Claimants' case under this heading extends to the misuse of confidential information in the First Eurotunnel Circular; in that regard, I readily infer from the e-mail traffic that Mr. Buscher was "in it together" with the other Defendants with whom I am here concerned. It follows that even if Mr. Buscher's denial that he was at all involved in the initial disclosure of confidential information was to be accepted, there would remain a real or serious issue to be tried concerning his involvement in its use in the First Eurotunnel Circular.
- The Kalfelis test remains to be considered. On the face of it, there is a strong case for saying that these claims against these three defendants (Messrs. Welter and Buscher and Ms. Barrie) are such as readily to satisfy that test. It is correct to say that insofar as this claim is based in tort, systems of law other than English Law may in due course need to be taken into account. That said, there is nothing in the material before the Court (beyond assertion) which casts doubt on the apparent likelihood that to hear and determine these claims separately would give rise to a very real risk of irreconcilable judgments.
- Accordingly, I conclude that the Claimants are entitled to proceed in this country under Art. 6(1) of the Regulation against Messrs. Welter and Buscher in respect of the claim for misuse of confidential information. They are of course as of right entitled to do so against Ms. Barrie. Furthermore, with regard to all three of these defendants, I dismiss the application to strike out this claim.
- I shall return later to the position of the Sixth and Seventh Defendants.
- Breach of contract: As already underlined, claims for breach of contracts of employment, advanced against the First, Second, Third and Fifth Defendants are no longer pursued in this jurisdiction. The claim against Ms. Barrie, for breach of her contract of employment, will proceed in this jurisdiction, as is accepted by the Defendants.
- Breach of fiduciary duty: Claims under this heading are advanced against the First to Fourth Defendants. As a matter of English Law, as explained by Mr. Gatt QC (who also appeared for the Defendants), such claims are independent and distinct from claims for breach of a contract of employment; see too, Nottingham University v Fishel [2000] IRLR 471.
- For the Claimants to found jurisdiction in this country under Art. 6(1) against the First to Third Defendants, Ms. Barrie must again be considered as the potential anchor defendant. In the light of the material already summarised and my conclusions on the misuse of confidence claim, there can be no doubt that there is, at the least, a good arguable case (and, a fortiori, a real or serious issue to be tried) against Ms. Barrie for breach of fiduciary duty. The allegations are helpfully set out in the PoC:
" The Claimants rely upon (1) the Fourth Defendant's complicity in creating and/or drafting and/or translating the First Eurotunnel Letter, and in the sending of that letter to the Claimants' freight clients while employed by, and a director of, the Second Claimant; (2) the Fourth Defendant's misuse of the Claimants' Freight Client Information as aforesaid, (3) the Fourth Defendant's misuse of the Second Claimant's Staff and Salary Information as aforesaid, and (4) the Fourth Defendant's attempts to obtain an Indemnity Agreement from Eurotunnel in respect of her breaches of contract and/or fiduciary duty."
- The next question which arises relates to all of the First to Third Defendants; namely, whether Arts. 18(1) and 20(1) of the Regulation preclude the bringing of these proceedings against these Defendants in this country, even if jurisdiction may otherwise be established pursuant to Art. 6(1) of the Regulation. In my judgment, at least absent some particular provision of the domestic law of a Member State equating the position of a director with that of an employee (not applicable here and which might require special consideration), I would not be minded to extend the protection afforded by Art. 20(1) of the Regulation to claims for breach of fiduciary duty. The rationale of Art. 20(1) is plain; it is to afford protection to potentially vulnerable employees. I am not persuaded that there is any need for such special protection in respect of claims against directors for breach of fiduciary duty. It of course remains the case that for such a claim to be brought against the director in a country other than that of his/her domicile, a claimant will have to establish the applicability of some exception to the general rule enshrined in Art. 2 of the Convention.
- At this point, other objections arise, concisely summarised in Mr. Smouha's skeleton argument, as follows:
"93. So far as Welter, Buscher and Delaplanque are concerned, they were directors of Luxembourg, Dutch and French companies respectively. Cs have compendiously pleaded English law equitable fiduciary duties but these concepts are not known to the systems of law governing such companies. The (unchallenged) evidence served by Ds is that such duties as were owed by these Ds in their directorial capacity would be governed by the relevant system of law and would not be analogous to the English law concept of fiduciary duty…
94. There is accordingly no good arguable case that these defendants owed fiduciary duties in their capacities as directors of foreign companies.
95. There is, in any event, no jurisdictional basis for making such claims….a claim by French company A against its director X under French law is not 'closely connected' to a claim by Dutch company B against its director Y under Dutch law."
- To all this, Mr. Englehart's response was that there was a strong case of breach of fiduciary duty against all of the First to Third Defendants on the facts. The Defendants' attempt to distinguish between the different systems of law was unreal; though the details might differ, the substance of the duties owed was the same as that of the English Law fiduciary duty. If, as here alleged, all of the First to Fourth Defendants had been acting in concert, it was expedient that the claims for breach of fiduciary duty should be determined in a single forum.
- Pausing here, I am minded to think that the relevant test is whether there is a real or serious issue to be tried of breach of fiduciary duty against the First to Third Defendants. But again, in the view which I take of the matter, I doubt that there will be any practical significance in the difference between this test and that of a good arguable case.
- As it seems to me, the Claimants are entitled to plead a case under English Law, at least to begin with, on the presumption that there is no difference between English and any other applicable system(s) of law. If, however, some such relevant difference does appear on the evidence, then I am entitled and bound to take it into account on an inter partes hearing of this nature. In considering whether there is any such relevant difference between English Law and another system of law, my concern must lie with the substance of the duty in question. If the duty owed by a director of a foreign company to his company is essentially analogous to the fiduciary duty owed by the director of an English company to his company, then it would be a triumph of form over substance to treat a difference in label as by itself fatal to the exercise of jurisdiction. If the substance of the allegation of breach of duty is plain from the Claim Form and the PoC, then an amendment to add the appropriate provisions of the foreign law relied upon would be appropriate but would not add a new cause of action. Costs of course raise separate questions; in that context, there may well be a sanction for any deficiency in the pleading.
- I turn to apply this approach to the position of the First to Third Defendants, considered individually. The only evidence has been adduced by the Defendants, through the witness statements of Ms. Bateman of their solicitors.
i) As regards Mr. Welter, he was a director of the First, Second and Third Claimants. On the face of it, the objection, that the concept of an equitable fiduciary duty is unknown to the relevant system of law, cannot apply to him at least insofar as he was a director of the Second Claimant – an English company. Furthermore, Ms. Bateman's evidence only concerns the position in Italian Law – perhaps because Mr. Welter's service contract was governed by Italian law – even though none of the companies in question is Italian. Be all that as it may, at least a good arguable case appears from Ms. Bateman's evidence that, under Italian Law, Mr. Welter owed duties of trust and loyalty to the company(ies) of which he was a director, "stronger" than those which would have been incumbent on an employee. Although there is also the assertion in Ms. Bateman's witness statement that such duties were analogous with those owed by employees, I am (for present purposes) amply satisfied that the substance of Mr. Welter's duties under Italian Law is closely analogous to the fiduciary duty owed by a director of an English company under English Law. Accordingly, while some tidying up of the pleadings may well be appropriate, this objection to the claim against Mr. Welter fails.
ii) The position as to Mr. Buscher is different and may safely be taken to be governed by Dutch Law. The contention in Ms. Bateman's evidence is that it is misconceived to talk in Dutch Law of breach of fiduciary duty. While Ms. Bateman's evidence is not as clear as it might have been as to the applicable standard of liability in Dutch Law relevant to a director sued as such who was also an employee, there is a sufficient flavour of the need to establish gross negligence or recklessness, to require pause for thought. In these circumstances, it does not seem right to me that the Claimants should be permitted to proceed against Mr. Buscher for breach of fiduciary duty; there is, on the evidence, a clear difference in terminology between English and Dutch Law; more than that, I could not, on the evidence, safely say that that difference was one of form only. If Ms. Bateman is right, the difference is one of substance and goes to the content of the duty. Accordingly, the Claim Form and PoC will not do. In the absence of evidence from the Claimants answering Ms. Bateman, I cannot say that there is a real or serious issue to be tried or a good arguable case against Mr. Buscher for breach of fiduciary duty. I reach this conclusion with some reluctance but the Claimants have only themselves to reproach for not furnishing evidence clarifying or correcting the position as it pertains under Dutch Law; in the event, they chose not to do so and it cannot be for the Court to fill the gap. For the avoidance of doubt, in coming to my decision concerning Mr. Buscher, I took into account the contention in Ms. Bateman's second witness statement that Dutch (domestic) Law asserts exclusive jurisdiction over such claims. Without expressing any concluded view, my inclination was that such a consideration could not prove decisive under the Regulation.
iii) As to Mr. Delaplanque, Ms. Bateman's evidence, upon analysis, contains nothing to suggest that the position under French Law as to the duty owed by a director to his company, is in substance different from an English Law fiduciary duty. This objection to the claim against Mr. Delaplanque therefore fails.
- For completeness and the avoidance of any doubt, I am amply satisfied that, quite apart from any question(s) of legal categorisation, there is at the least a real or serious issue to be tried on the merits under this heading, against both Mr. Welter and Mr. Delaplanque.
- I come finally to the Kalfelis test, with regard to the position of Mr. Welter, Mr. Delaplanque and Ms. Barrie. Although the complaints against Ms. Barrie range considerably wider than those made against Mr. Welter and (even more so) Mr. Delaplanque, there is a common core allegation of their acting in concert in relation to the First Eurotunnel Circular. In my judgment, the Kalfelis test is here readily satisfied and, indeed, it would be unfortunate in the extreme if this allegation were not disposed of in a single forum.
- It follows that the claim for breach of fiduciary duty goes on against these two Defendants. This claim cannot however be proceeded with against Mr. Buscher – but that is at least to some extent academic, as other heads of claim can be pursued against him in this jurisdiction (see above and below).
- Procuring breach of contract: As foreshadowed, the need to deal here with this head of claim arises from Mr. Englehart's post-hearing submission. The claims in question all relate to procuring breaches of the respective contracts of employment and are advanced against CTGL and France Manche as follows:
i) By the Sixth Claimant in respect of Mr. Welter;
ii) By the Third Claimant in respect of Mr. Buscher;
iii) By the Second Claimant in respect of Ms. Barrie;
iv) By the Fifth Claimant in respect of Ms. Villaescusa.
- Mr. Englehart's submission prompted a spirited exchange in which Mr. Smouha initially contended that save in respect of Ms. Barrie none of these claims should be permitted to proceed in this country. On reflection, Mr. Smouha accepts – as I understood it and rightly in my judgment – that these claims can proceed here. First, there is no jurisdictional difficulty; CTGL is a company incorporated in England and Wales; with CTGL as the anchor Defendant, Art. 6(1) of the Regulation plainly entitles the relevant Claimants to found jurisdiction against France Manche. Secondly, the impact of questions as to the jurisdiction, governing law and fate of the claims for breach of contract against the individuals is not such so as to prevent the claims for procuring the breach of these contracts from proceeding in this jurisdiction.
- Procuring breach of fiduciary duty: This head of claim likewise comes to be considered in the light of Mr. Englehart's post-hearing submission that the cause of action was not vested in ET Plus but in the various Claimant companies of which the respective Defendants were directors; accordingly, this claim against Eurotunnel cannot be stayed for the Paris arbitration under s.9 of the 1996 Act. Here, the post-hearing fray has taken a somewhat different course. Mr. Smouha accepts that there is a reference to procuring breach of fiduciary duty in the Claim Form; but, on a close analysis of the PoC, he submits that no such claim is there pleaded. The effect of the failure to plead this claim in the PoC is that it is to be taken as "dropped" subject to any later application to amend so as to bring it back in. On my inquiry as to why (in effect), if this be so, an application for permission to amend should not be allowed, Mr. Englehart said that there was no good reason why any such technical deficiency should not be cured by a "properly formulated amendment". However, for various reasons (not least the question of a case management stay, see below), the Claimants would wish to defer making any such application. Mr. Smouha's response was that in these circumstances, nothing further was currently required from the Court; further, he reserved the Defendants' position to contend that any properly formulated amendment would have to plead the applicable foreign law.
- With some reluctance, given the overwhelmingly technical nature of the objection, I conclude that Mr. Smouha is right as to the state of the pleadings and the "dropping" of this head of claim from the PoC. It follows that to reintroduce this head of claim, a properly formulated amendment would be required. As there is no application before me for permission to amend, there is nothing more for me to do in this regard. It follows, as it seems to me, that there is currently no extant claim for procuring a breach of fiduciary duty before the Court. I say nothing to pre-judge the fate of any application to amend or the reservation expressly made by Mr. Smouha.
- Art. 81 of the EC Treaty: I return to matters which were before me at the hearing and I can take this topic very shortly indeed. Given the stay for the Paris arbitration, the Eighth and Ninth Defendants will no longer be concerned with these proceedings. I am, however, prepared to proceed on the footing that jurisdiction in this country for this claim could be founded under Art. 6(1) of the Regulation against the First to Third Defendants on the basis of the Fourth Defendant serving as anchor defendant. Thereafter, difficulties arise. Essential to this claim is the allegation that the First to Fourth Defendants constituted "undertakings independent of their employers the Claimants in the light of the unauthorised nature of their conduct" who entered into an agreement with the Eighth and Ninth Defendants, contrary to Art. 81 of the EC Treaty. Accepting readily as I do that an individual is capable of constituting an "undertaking", I regard as fanciful the notion that the First to Fourth Defendants constituted undertakings here; it is instructive that the examples given in Bellamy & Child, European Community Law of Competition (5th ed.) are far removed from the facts of the present case. In my judgment, this claim has no real prospect of success and should be struck out.
- Unlawful interference and conspiracy: While unlawful interference and conspiracy constitute separate causes of action, for present purposes, they may be taken together. For my part, I am satisfied that these claims may be pursued against the First to Fourth Defendants. In summary:
i) Essentially for the same or similar reasons as those given before in relation to the misuse of confidential information and breach of fiduciary duty claims, there is jurisdiction to proceed against the First to Third Defendants founded on Art. 6(1) of the Regulation. So far as concerns conspiracy, there was force in Mr. Englehart's submission that it was likely to amount to a "paradigm case" for the application of Art. 6(1).
ii) Granting that the substance of the matter will be hotly disputed at trial, there is at least a good arguable case, a fortiori, a real or serious issue to be tried, as to the merits, in the light of my conclusions so far as to the misuse of confidential information and breach of fiduciary duty claims. I take into account that no case of misuse of confidential information is advanced against Mr. Delaplanque and, of course, my conclusion in respect of Mr. Buscher and the claim for breach of fiduciary duty. Nonetheless, a glance at the e-mail traffic and the briefest consideration of the First Eurotunnel Circular serve to demonstrate a sufficient case to go to trial on the Defendants acting in concert. The question of unlawful means, turns on questions previously discussed. So far as concerns the intention to injure the Claimants, this is at least a good arguable inference on the material already considered; on any view, it is not a matter properly the subject of an application to strike out. If the Defendants wish to have further particularisation, they can of course apply.
- The position of the Sixth and Seventh Defendants: I come next to Mr. Morrison and Mr. Broek. There are allegations against these defendants of misuse of confidential information, procuring breach of contract, unlawful interference and conspiracy.
- I take Mr. Morrison first. The mere fact that he is and was an in-house lawyer rather than a commercial director (the position held by Mr. Broek) cannot confer any immunity on him. That said, I am simply unable to detect, on the factual material available to me, any proper basis for a claim against him with a real prospect of success. At its highest, the case against Mr. Morrison is that he procured a breach of contract or duty in that he was involved in the negotiation or drafting of the draft indemnity agreement concerning Ms. Barrie. Without any allegation that he caused or encouraged Ms. Barrie to act as she allegedly did, the claim against him must be doomed; in any event, it would be unreal to suppose that an external legal adviser could have been personally sued in tort on the same facts. In my judgment, all the claims against Mr. Morison must be struck out.
- The position of Mr. Broek is somewhat different. On the evidence of the e-mail traffic, the First Eurotunnel Circular and his own witness statement (even allowing for the denials and exculpatory material), it can fairly be said that there is a good arguable case, a fortiori, a real or serious issue to be tried, that he was closely involved with the activities of the First to Fourth Defendants forming the subject of the claims against them discussed above.
- In the light of the position now reached, jurisdiction would not, by itself, present particular difficulty in the way of pursuing claims against Mr. Broek in this jurisdiction pursuant to Art. 6(1) of the Regulation. So far as concerns procuring a breach of contract, CTGL would serve as anchor defendant. As to the remaining claims against him, Ms. Barrie would fulfil that role.
- The real difficulty is whether all these claims are properly brought against Mr. Broek as an individual, rather than against Eurotunnel. On behalf of Eurotunnel, Mr. Smouha accepted in terms, in Court in the course of the hearing, that no point has been or would be taken on Mr. Broek acting without authority or otherwise than in the course of his employment. Having anxiously considered the matter, the realistic prospect is that if these claims are made good, liability will be established against Eurotunnel (which will be answerable for Mr. Broek's conduct), rather than against Mr. Broek personally. I therefore rule that these claims against Mr. Broek should likewise be struck out. I add only this; aside from any question as to costs, there is no more than the most remote prospect that the Claimants will suffer any practical disadvantage consequent upon this ruling.
ISSUE (III): CASE MANAGEMENT STAY
- This Issue can be summarily dealt with. By the conclusion of the hearing and the post-hearing submissions, there was no or no serious dispute that all surviving claims should be stayed under the Court's inherent jurisdiction, pending the outcome of the Paris arbitration, as a matter of case management: see, Reichhold Norway v Goldman Sachs [2000] 1 WLR 173. I agree entirely. In my judgment, the central dispute in this matter lies between ET Plus and Eurotunnel. To proceed in tandem with the English Court proceedings and the Paris arbitration would be wasteful of costs. Whether or not the Paris arbitration is ultimately decisive of the surviving claims, it will at the very least clarify the landscape. I grant this stay accordingly.
- I shall be grateful for the assistance of counsel in drafting the appropriate order. I reserve all questions of costs to a hearing which has already been foreshadowed.
