AMT Futures Ltd v Marzillier & Ors [2017] UKSC 13

AMTF, a London broker, sued German lawyers MMGR in England for inducing former clients to breach exclusive English jurisdiction clauses by suing AMTF in Germany. The Supreme Court held English courts lacked jurisdiction under article 5.3, as the harm occurred in Germany.

Facts

AMT Futures Ltd (AMTF), a London-based execution-only derivatives broker, contracted with clients domiciled in Germany, Austria, Switzerland and Belgium. Each contract contained an English exclusive jurisdiction clause and an English governing law clause. Approximately 70 former clients, introduced by German brokers, sued AMTF in Germany under the German law of delict, alleging accessory liability for the brokers’ bad investment advice. Many of these claims were settled, costing AMTF approximately £2.19 million.

AMTF alleged that Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbH (MMGR), a German law firm, had induced the former clients to commence those German proceedings in breach of the exclusive jurisdiction clauses. AMTF commenced proceedings in the High Court in London against MMGR, claiming damages and an injunction based on the English tort of inducing breach of contract, asserting jurisdiction under article 5.3 of Council Regulation (EC) No 44/2001 (the Judgments Regulation).

Popplewell J held that the English courts had jurisdiction, finding that the harm occurred in England through deprivation of the contractual benefit of the exclusive jurisdiction clause. The Court of Appeal reversed, holding that the harm occurred in Germany. AMTF appealed to the Supreme Court.

Issues

The principal issue was whether, under article 5.3 of the Judgments Regulation, the English courts had jurisdiction over AMTF’s tort claim against MMGR because the ‘place where the harmful event occurred’ was England. A subsidiary issue was whether a reference to the Court of Justice of the European Union was required. MMGR also cross-appealed on costs.

Arguments

AMTF

AMTF accepted that the event giving rise to the damage (inducement) occurred in Germany but submitted that the relevant damage occurred in England, being the deprivation of the contractual benefit of dispute resolution in England under English law. It argued that this interpretation was supported by the principles underlying article 5.3 (foreseeability, close connection, sound administration of justice), the nature of the contractual benefit of an exclusive jurisdiction clause, and the accessory nature of the tort. It invited the Court to craft a special rule, akin to those developed in cases such as eDate Advertising, Wintersteiger and Cartel Damage Claims, locating the harm at the contractually adopted forum. Alternatively, AMTF sought a reference to the CJEU.

MMGR

MMGR contended that the harm occurred in Germany, where the proceedings were brought and where AMTF incurred its expenditure, and challenged the jurisdiction of the English courts. It also argued that English proceedings would impermissibly interfere with the German court’s jurisdiction.

Judgment

Lord Hodge, giving the judgment with which the other Justices agreed, dismissed the appeal.

Approach to article 5.3

The Court reviewed the established CJEU jurisprudence, noting that derogations from the general rule of jurisdiction at the defendant’s domicile (article 2) must be interpreted restrictively. The phrase ‘place where the harmful event occurred’ refers to either the place of the event giving rise to damage or the place where the direct and immediate damage occurred, not consequential or indirect financial loss (Dumez France, Marinari, Kronhofer).

Application to the facts

The Court held that identifying the place of harm was straightforward in this case. The former clients were under no positive obligation to sue AMTF in England; their obligation was negative — not to sue elsewhere than in England. This distinguished the case from Dolphin Maritime & Aviation Services Ltd v Sveriges Angfartygs Assurans Forening, where the breached obligation was a positive duty to pay money into an English bank account. The direct harm suffered by AMTF was the expenditure occasioned by the German proceedings, which occurred in Germany. Any loss of focus of AMTF’s London business model was merely consequential.

No special rule

The Court rejected AMTF’s invitation to craft a special rule for the tort of inducing breach of contract where the breached term is an exclusive jurisdiction clause. Lord Hodge drew a clear distinction between the connecting factor (the occurrence of direct and immediate harm) and the rationale for article 5.3 (foreseeability and sound administration). A claimant cannot establish jurisdiction by invoking the rationale alone. The CJEU has consistently refused to elide tortious and contractual jurisdictional grounds (Kalfelis, Réunion Européenne), even at the cost of fragmenting related disputes. Creating a special rule tailored to the English tort of inducing breach of contract would undermine certainty and foreseeability across the EU.

No reference to the CJEU

Applying CILFIT, the Court held the matter was acte clair. Recent CJEU case law (Melzer, Coty Germany, Kolassa, Universal Music) confirmed the restrictive approach to article 5.3 and the focus on initial damage. The recast Judgments Regulation’s enhanced protection for exclusive jurisdiction clauses (article 31(2)) did not assist AMTF in locating the harmful event in England.

Costs cross-appeal

The Court declined to disturb the Court of Appeal’s costs order, noting the broad discretion under CPR rule 44.2 and finding no basis to impugn the appellate court’s evaluation of relative success on the issues.

Implications

The decision confirms that under article 5.3 of the Judgments Regulation, jurisdiction in tort depends on the location of the direct and immediate harm, not on consequential financial loss or the location of the contractual forum that has been bypassed. The Supreme Court declined to create a bespoke jurisdictional rule for the tort of inducing breach of an exclusive jurisdiction clause, even though the practical effect is to fragment litigation between the contractual claims (in England) and the tort claim against the inducer (in Germany).

The judgment reaffirms the primacy of the defendant-domicile rule and the restrictive interpretation of article 5.3, prioritising legal certainty and foreseeability across the EU over the convenience of consolidated proceedings. It also illustrates that an exclusive jurisdiction clause cannot be pleaded against non-parties (article 23) and that special CJEU-developed rules (such as the ‘centre of interests’ test) are confined to situations where the place of harm cannot otherwise be identified.

For practitioners advising parties who rely on English exclusive jurisdiction clauses, the case is significant: protection against third-party inducement of breach must generally be pursued in the courts of the inducer’s domicile. The decision underscores the limits of jurisdictional self-help via tort claims framed around contractual breaches and confirms that any inconvenience flowing from fragmented proceedings is the price of the Regulation’s predictable jurisdictional scheme.

Verdict: Appeal dismissed. The English courts do not have jurisdiction under article 5.3 of the Judgments Regulation over AMTF’s claim against MMGR, as the place where the harmful event occurred was Germany. MMGR’s cross-appeal on costs was also dismissed.

Source: AMT Futures Ltd v Marzillier & Ors [2017] UKSC 13