Lloyd's Maritime and Commercial Law Quarterly
JURISDICTION OVER RESTITUTIONARY CLAIMS
Kleinwort Benson v. Glasgow City Council
1
The long running jurisdictional battle between Kleinwort Benson Limited and Glasgow City Council (Glasgow) is finally over. Under the Modified Convention,2 which regulates jurisdiction between the courts of different parts of the United Kingdom, the House of Lords has decided, by a 3-2 majority, that Kleinwort Benson must sue Glasgow in the Scottish courts, as the courts of the defendant’s domicile. The provisions of “special jurisdiction” over claims in contract and torts upon which Kleinwort Benson relied to invoke the jurisdiction of the English courts do not apply to a claim for restitution of monies paid under an ultra vires contract. Since the European Court of Justice has already decided,3 upon a reference from the Court of Appeal,4 that it has no jurisdiction to provide a ruling which does not directly involve the interpretation of the Brussels Convention, the parties will now have to confine themselves to contesting the merits.5 In submitting their claim for fees, both sets of legal advisers may be comforted by the fact that this appeal
1. Kleinwort Benson Ltd v. City of Glasgow District Council [1997] 3 W.L.R. 923.
2. Civil Jurisdiction and Judgments Act 1982, Sched. 4. The Modified Convention is based on the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 (ibid., Sched. 1) and the material parts of the Articles in question are identical in both.
3. [1995] I ECR 615: noted E. Peel [1996] LMCLQ 8.
4. Barclays Bank Plc v. Glasgow City Council [1994] Q.B. 404. Somewhere along the line, Barclays Bank withdrew from the action.
5. It seems that the motive for a jurisdictional dispute which has been waged for just over six years was the more generous limitation period which Kleinwort Benson would have enjoyed in the English courts, an advantage which would have become all the more important if they succeed in their argument that the mistake of law bar to recovery in restitution should be lifted: Kleinwort Benson Ltd v. Birmingham City Council (12 July 1996) Unreported (Langley, J., in chambers). The appeals in this and three related cases have been “leapfrogged” to the House of Lords and are due to be heard in March.
22