The Appeal: Ablynx NV and Another v Vhsquared Ltd and Others

A frigate of the Belgian navy possibly armed with torpedoes

/Author Ein Dahmer Licence CC BY-SA 3.0 Source Belgian Navy

Jane Lambert

Court of Appeal (Lord Justice Lewison and Newey and Lady Justice Asplin) Ablynx NV and another v VHsquared Ltd and others [2019] EWCA Civ 2192 (10 Dec 2019)

This was an appeal against His Honour Judge Hacon's decision in Ablynx NV and another v Vhsquared Ltd and others [2019] EWHC 792 (Pat) (29 March 2019) which I discussed in Choice of Forum - Ablynx NV and Another v Vhsquared Ltd and Others 28 July 2019.  A patentee and its exclusive licensee brought patent infringement proceedings in the Patents Court against the English company, VHSquared Ltd. and various members of the Unilever group.  The defendants relied on a licence from the patentee that conferred exclusive jurisdiction on the Belgian courts.  They applied for the infringement proceedings in England to be stayed pending the Belgian courts' decision on whether the claim should proceed in the UK or Belgium.   Judge Hacon refused their application on the ground that the English courts had exclusive jurisdiction in cases where the validity of a patent would be in issue pursuant to art 24 (4) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ L 351, 20.12.2012, p. 1–32).

Vhsquared and the Unilever companies appealed on the grounds that Judge Hacon had usurped the jurisdiction of the Belgian courts.  Art 31 (2) of the Regulation provides:

"Without prejudice to Article 26, where a court of a Member State on which an agreement as referred to in Article 25 confers exclusive jurisdiction is seised, any court of another Member State shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement."

They contended that the judge had to decide only whether the court of a member state on which exclusive jurisdiction was conferred had been seised.  If he decided that it had, then his duty was to stay the English proceedings.  It was true that art 25 (4) provides that agreements conferring jurisdiction shall have no legal force if they are contrary to art 24 but it was for the Belgian courts to reach that decision.  If they found that art 24 overrode the exclusive jurisdiction clause the English proceedings could continue.

The appeal came on before Lord Justice Lewison, Lord Justice Newey and Lady Justice Aplin on 27 Nov 2019.   In Ablynx NV and another v VHsquared Ltd and others [2019] EWCA Civ 2192 which they delivered on 10 Dec 2019, they allowed the appeal. Lord Justice Lewison delivered a full judgment with which Lord Justice Newey and Lady Justice Aplin agreed.   At paragraph [110] he said that the Court should stay the proceedings under art 31 (2) until such time as the Belgian court (a) decides whether it has jurisdiction and (b) if it decides that it has, rules on the scope of the licence.

The Court of Appeal agreed with the defendants.  In its view, Judge Hacon had mixed up arts  24 (4) and 25 (4), which are substantive rules about jurisdiction, with art 31 (2), which is a procedural rule about which court should take the lead in deciding the question of jurisdiction where there are parallel actions.   The judge was therefore wrong to consider the effect of art 24 (4).  All that he had been required to do was to decide whether there was a prima facie case that art 25 (4) did not invalidate the jurisdiction agreement. Once he had reached that conclusion, it was up to the Belgian court to decide definitively.

After reviewing the case law Lord Justice Lewison observed that art 24 (4)  of the Regulation conferred exclusive jurisdiction on the member state for which the patent had been granted only in respect of validity and registration and not in respect of all matters in dispute.   A number of issues were in dispute between the parties and these could be determined as well by the Belgian courts as they could by the courts in England.

I shall try to follow the progress of this case in Belgium and report back.  In the meantime, anybody wishing to discuss this case note or the Recast Brussels Convention Regulation in detail should call me on +44 (0)20 7404 5252 or send me a message through my contact form.