The Race to the Courthouse: Article 27 of the Brussels Regulation - Part 1 Chapter 33 - The Practice of International Litigation - 2nd Edition
Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.
The “race to the courthouse” is not merely proverbial in member countries of the European Union. In this article, we look at a provision of an EU Council Regulation that essentially grants to a court first seized of a matter the right to decide the case to the exclusion of courts in other member countries.
Article 27 of the Brussels Regulation provides the incentive for the race to the courthouse. It states:
1. Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seized shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seized is established.
2. Where the jurisdiction of the court first seized is established, any court other than the court first seized shall decline jurisdiction in favor of that court.
Significantly, Article 27 of the Brussels Regulation is not a unique creation of the European Union. Rather, it is a common feature in continental European procedural law. For example, §261 of the German Code of Civil Procedure provides that, after the filing of a complaint with a court (even if this court has no jurisdiction and is not competent to decide on the merits), the parties may not bring the same subject matter to the attention of another court until the court first seized has rendered a decision. Under this statute, it does not matter whether the court first seized is a German court or a foreign court.
A hypothetical can help frame the issue of comparing Article 27 to United States law. Assume that parties from countries A and B are parties to a contract that calls for disputes to be resolved exclusively in the courts of Country A. In the face of this clause, when a dispute arises, the party from Country B commences a lawsuit in his home court, followed shortly thereafter by the party from Country A commencing a lawsuit in Country A.