UK: Court of Appeal Overturns Order Granting Permission to Serve Out of the Jurisdiction


    In Howden North America Inc v ACE European Group Ltd [2012] EWCA Civ 1624 the Court of Appeal allowed an appeal by Howden North America Inc (Howden) and set aside the order of Mr Justice Field, which had granted ACE European Group Ltd (ACE) permission to serve out of the jurisdiction (we have previously reported the first instance decision here.

    The principal issue before the court was whether Field J was right to conclude that the English proceedings commenced by ACE (which were, in essence, for declarations that the relevant insurance policies were governed by English (not Pennsylvania) law and that they only responded to losses which occurred or were notified within the period of the policies) could serve a useful purpose.

    Lord Justice Atkins, delivering the judgment of the Court, held that the order granting permission to serve out of the jurisdiction ought to be overturned. Key to his reasoning was the fact that the parallel proceedings commenced by Howden in Pennsylvania were already at an advanced stage (with the hearing as to the correct governing law of the policies in question due in March 2013) and that the Pennsylvania court had already considered and rejected a forum non conveniens application made by ACE.

    Distinguishing the present case from the very similar, but successful, action taken by Faraday against Howden (reported here and here), Atkins LJ noted that unlike in the present circumstances, Faraday had commenced its proceedings in England some months before action was taken against it in Pennsylvania and that the judgment at first instance in the Faraday case had taken before the Pennsylvania decision on forum non conveniens.

    Atkins LJ therefore concluded that Field J had reached the incorrect conclusion at first instance and that ACE had not shown that the declaratory relief it sought would have sufficient utility to justify the granting of permission to serve out of the jurisdiction.

    This case demonstrates the importance of timing when seeking declaratory relief in circumstances where parallel proceedings may exist in different jurisdictions.

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