HL Deb 21 January 1982 vol 426 cc711-25
Lord Cullen of Ashbourne

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Cullen of Ashbourne.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 1 [Interpretation of references to the Conventions and Contracting States]:

The Lord Chancellor moved Amendment No. 1: Page 2, line 3, before (" Ireland ') insert ("the Republic of").

The noble and learned Lord said: In rising to move this amendment, may I apologise to the Committee for the slight procedural hiccup, which was due to the fact that I was informed that there was to be a debate on the Reserve Forces Bill, so I left my outer garments in my office instead of at a convenient place outside the Chamber.

If I may speak to the first two amendments together and move the first, as I do now, it is purely technical. If the amendment is passed, that will make matters conform with our consistent practice in legislative language, to which I gather importance is attached. The sense remains unaltered. I therefore beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 2: Page 2, line 21, before ("Ireland") insert ("the Republic of").

The noble and learned Lord said: I beg to move.

On Question, amendment agreed to.

Clause 1, as amended, agreed to.

Clauses 2 to 14 agreed to.

Clause 15 [Interpretation of Part I and consequential amendments]:

Viscount Bledisloe moved Amendment No. 3:

Page 8, line 35, at end insert— ("() Save if and in so far as the European Court shall have decided otherwise, where a party seeks relief to prevent the occurrence of any harmful event, that event shall be deemed to have occurred in the place where, but for the grant of such relief, it would have been likely to occur.").

The noble Viscount said: This amendment concerns a problem which I raised on Second Reading concerning the quia timet injunction and its Scots equivalent. That is an injunction which is designed to prevent somebody who is going to beat somebody up from beating them up; an injunction to restrain somebody from knocking your house down before he knocks it down. This is a type of injunction which the court can now grant against any wrong anticipated to happen in this country. I venture to suggest it is a very beneficial remedy indeed.

My concern, and the concern dealt with by this amendment, is that if the Bill passes in the form in which it now stands, the courts will no longer be able to give such an injunction if the potential wrong-doer is a person or company domiciled in another contracting state. I understand that the Government agree that the courts of the country should continue to be able to deal with matters of that kind—anticipated wrongs in this country—but is not in so much agreement with me as to how it should happen.

The problem arises because of the way in which Article 5 (3) of the convention is expressed which gives jurisdiction to the courts of this country over a person domiciled in another EEC country only where this country is the place where the harmful event "occurred"—a word of past significance. My hypothesis is a case where no harmful event has occurred but where a harmful event is anticipated and it is desired to stop that event before it happens.

For instance, if a lady who has been living with an Italian in Italy, says that the Italian is coming here and is about to beat her up and she wants it stopped, there must be a very substantial risk that the courts of this country will have to say: "I am sorry, no harmful event has occurred here. We cannot do anything until it has happened. Go away. But of course you can go to Italy and sue him there if you like". One difficulty is that in most of these cases the matter is urgent. What one is trying to do is to stop something happening soon.

We see from the Marshalled List that amendments are to be made to Clause 23 which will improve the situation somewhat in that they will allow the courts of this country to give relief not only where there are existing proceedings abroad hut where the plaintiff in question intends to bring proceedings abroad. So, when those amendments are made, as I hope they will be, the courts in this country will he able to say to the lady I instanced: "We could stop him beating you up, providing you promise to go to Italy and start proceedings as quickly as possible there as well". That may be some improvement, but it will not be much consolidation, and it really seems extraordinary that, if one is saying, "This French company is about to knock down my house", the question of whether it is going to do so or is to be allowed to do so is tried in France rather than here.

Therefore, while the amendments proposed to Clause 23 and onwards are a good idea, they do not solve the problem of a person having to go to a foreign country and of the courts of that country, rather than of this country, having to decide on a wrong which is threatened over here. I think the noble and learned Lord the Lord Chancellor agrees that there ought to be this jurisdiction, and the question is how to confer it. The Government say, and I agree, that this is ultimately a matter for the European Court. It will have to be decided there one day. If the European Court, contrary to my fear, decides that there is this sort of jurisdiction although no harmful effect has occurred over here, then all will be well. If it decides that there is not, there is nothing at the moment that legislation here can do about it, and one will have to try to renegotiate the convention to confer this jurisdiction. I hope we shall hear that, in those circumstances, the Government would feel minded to push very hard for such a renegotiation.

The problem arises in the meantime. I say that we must have an amendment which will allow judges in the interim until the matter goes to the European Court to give this relief. I believe that my amendment does give relief. It allows jurisdiction in these matters where the harmful event would be going to a trial in this country but for the injunction sought. I fear that, without this amendment, judges who are asked for an injunction of the kind I have suggested will feel bound to say that they have no jurisdiction and the plaintiff then will be sent away without an injunction.

In theory, such a plaintiff could go to the European Court, but, in practice, it is inconceivable that he or she will. What they are doing is seeking to stop an immediate wrong happening, and, long before they could get to the European Court, either it will have happened or the fear will have proved unnecessary; but in no circumstances will the plaintiff turned away by the English courts have the interest or reason to go to the European Court and test the matter. Therefore it will never get tested and in effect this jurisdiction will lapse where the defendant, the potential wrongdoer, is a person domiciled in another European country unless the Government say that the first time such a thing occurs they will themselves take the matter to the European Court and find out the answer.

On my basis, this jurisdiction will continue unless and until the European Court decides otherwise. The Government cannot say it is wrong to have in the Bill any act of provisional interpretation because they already have one. This is not a lawyers' problem, although of course it is a problem in legal language. It is a very real problem. One of the best jurisdictions of the courts is to prevent harm rather than to deal with wrongs when they have happened. In my view, this amendment or something like it is really the only way of dealing with this. I beg to move.

Lord Mishcon

If I may say so, I think the noble Viscount has raised a very real point of substance in this amendment. I should like, if I may, to support him in his plea for it. The quia timer injunction, as many of us know, is often sought in regard to matrimonial or quasi-matrimonial matters. I say "quasi-matrimonial" to cover cases where one is dealing with a common law wife or husband.

The situation may well arise where somebody of moderate or indeed very small means has to go to the court in order to try to get this remedy to prevent a very serious tort being committed so far as he or she is concerned. If the requirement were then made that the relief, the injunction, could only be granted subject to an undertaking that proceedings would be taken in a foreign court—and I hope no one will think that we are belittling Italy if we take an Italian court as an example—it would, of course, mean an impossible situation for that applicant to deal with. I stand to be corrected, but I think I am right in saying that it would be quite impossible, for example, to obtain legal aid in support of the proceedings that would have to be brought in Italy. If I am wrong, and legal aid would be available, it would quite obviously mean a most wrong and unfair burden on public funds. I should have thought that, certainly during the interim period that the noble Viscount mentioned, it would be very proper for this amendment to be in the Bill.

The Lord Chancellor

I was very grateful to the noble Viscount—from the location from which he speaks I never know whether I am to call him "the noble Viscount" or "my noble friend" but for the moment I shall call him the noble Viscount—for raising this point on Second Reading. I immediately gave instructions that it should be looked into most carefully. The result is that we have put down later amendments which I am advised will achieve the purpose the noble Viscount has in mind. We all agree that a quia timet procedure is a valuable one—and may I in parenthesis apologise for my pronunciation of Latin? It is the pronunciation I always use in court and it was that which was always used in this country between the 17th century and the time when I first went to school.

Lord Mishcon

The noble and learned Lord will forgive me, I hope, if I say that from time immemorial at my very saintly and distinguished school, the City of London, the pronunciation was used that I begged liberty to use in this House.

The Lord Chancellor

I was only explaining why 1 called it the quia timer injunction, "and one has to be consistent in these things. One says "bona fide", "prima facie", " quia timet" and things like that, when other and more modern scholars would use a slightly different pronunciation. if I may say so, I am in very good company. I have heard Mr. Harold Macmillan as Chancellor of the University of Oxford use this pronunciation and I know that Warden Sparrow, when he was Warden of All Souls, used it too. I can use all three, but I try to use them consistently.

The fact of the matter is that this is a very valuable thing and I am advised that my Amendment No. 4 and those that go with it achieve the purpose. I cannot really recommend the actual amendment which the noble Viscount has put forward. It seems to me to have a good deal wrong with it, and I will explain why, in addition explaining why I am advised that it is unnecessary. To begin with, it starts by saying: Save ii and in so far as the European Court shall have decided otherwise". That could be contrary, as far as I can see, to the actual terms of the convention, which gives national courts the right to refer any question of interpretation to the European Court. The amendment could well be regarded as preventing United Kingdom courts from themselves referring the question to the European Court but requiring them to exercise the jurisdiction under this amendment until, on a reference from other national courts, the European Court has spoken.

The amendment then does a very curious thing, from the point of view of draftsmanship. It seems to me to create a kind of stage Irishman's Irish bull, because it says that, where a party seeks to prevent something from happening, the event shall be deemed to have occurred. I think that that is going a bit far, and the consequence from deeming it to have occurred is that an action for damages would then arise, I suppose, for something which had not happened. For example, a non-battered wife, in proceeding for a quia timet injunction, could then proceed for damages for having been beaten when she had not then been beaten. So I do not think that the draftsmanship will quite do.

The more practical point, which I should like to put for the consideration of the noble Viscount, is that, if he really studies Article 5(3) of the convention itself, he will see that this amendment is not necessary because one of two things must happen. If you can go for quia timet proceedings in, say, the Chancery Division, if that is what is thought, because you think that you are going to have your house knocked down or, if you might be beaten by someone in Italy, either he will obey the injunction or he will not.

If he obeys the injunction, I suppose that nothing more will happen, because the house will not be knocked down or the wife will not be beaten. But the moment she does get beaten in defiance of the injunction, not only will the person who beats her be liable to be put in prison for contempt of the injunction, but also a tort will have taken place within the jurisdiction here, for which she can bring the substantive action. I can quite well undertake, with a good conscience, that I will look at my own amendments, when they come, in the light of what the noble Viscount has said and see whether they can be improved or whether I have left a gap somewhere. But this particular amendment is one which I hope he will not press to the ultimate of a Division, because I would not be able to support him.

Viscount Bledisloe

I shall happily call it a quia timet injunction, or anything else that might persuade the noble and learned Lord the Lord Chancellor to agree with me. I shall also happily stand the ribbing about the wording of my amendment, and will be delighted to discuss with those who advise the noble and learned Lord some better wording; and I see the force of what he has said. Certainly, one could include words so that for the purposes of jurisdiction only, the deeming shall be taking effect, so that you cannot get damages for what has not happened.

But I venture to doubt that the amendments which are coming, in the name of the noble and learned Lord, answer more than half my problem. As I understand them, all they will do is to allow the court to give interim relief, provided that one is going abroad to have the matter dealt with. What I am saying is that where a French company is about to commit a nuisance by smell which will ruin your property, or to knock down your property, that matter should not only in an interim stage, but in the final stage, be justiciable here and you should not be required to go abroad, having got your interim relief, to have that sorted out abroad.

Unless I have misunderstood them, none of the amendments in the name of the noble and learned Lord the Lord Chancellor allow that final decision on the matter to be had here. It is not right, if I may respectfully suggest that to him, to say that either the tort will happen, in which case you will then have a course of action which you can start over here, or the injunction will stop it so that it does not matter. The point is that if the only relief you are seeking is an injunction to restrain a future wrong, you will be able to get interim relief over here only on terms of going abroad.

It may well be that there is a difference between us not in what we are trying to check, perhaps not even in substance as to how it is best achieved, but as to what the effects of the words are. Therefore, I am happy at this stage to withdraw my amendment. But I remain of the view that this is a matter which needs to be dealt with and, unless the noble and learned Lord convinces me on his subsequent amendments that my criticism of their scope is not justified, I may wish to return to the attack hereafter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 agreed to.

Clauses 16 to 22 agreed to.

Clause 23 [Interim relief in England and Wales and Northern Ireland]:

4.46 p.m.

The Lord Chancellor moved Amendment No. 4: Page 15, line 6, after ("been") insert ("or are to be").

The noble and learned Lord said: May I speak to Amendments Nos. 4, 5 and 6 together? These are the amendments to which I was referring in my reply to the noble Viscount a moment ago. The first two amendments relate to Clause 23(1). Their purpose is to empower the High Court in England and Wales and Northern Ireland to grant interim relief in cases where substantive jurisdiction lies with the courts of another contracting state and proceedings are to be commenced in that state. At present, the clause gives jurisdiction only where the proceedings have already been commenced there.

The normal practice, in cases where the High Court has substantive jurisdiction, is that interim relief will not be granted before the issue of the writ. This is reflected in the present wording of the clause. However, provision is made by Order 29, Rule 1(3) of the Rules of the Supreme Court, whereby in urgent cases the plaintiff may apply for an injunction before the issue of a writ, and in those cases the injunction before the issue of a writ may be granted on terms providing for the issue of the writ and such other terms as the court thinks fit. These amendments will enable a corresponding practice to be followed where the proceedings are to be commenced abroad. This will, for example, enable the High Court to grant an interim injunction quia timet of the kind suggested by the noble Viscount on the Second Reading of this Bill; for instance, where a lady in this country wishes, as a matter of urgency, to obtain an injunction against someone domiciled in another contracting state to restrain him from molesting her.

The amendments will also cover, and this is an additional advantage of them, the issue of, for example, a Mareva injunction—which I am prepared to explain, but I imagine, as I look around me, that those who wish to know what a Mareva injunction is will already do so and that those who do not already do so will not wish to know—to restrain the disposal of a defendant's assets in this country, which could be available to satisfy a judgment of the court in which the proceedings were to be brought, if the High Court considered that there was an imminent danger of their disposal. The amendments cover any case in which proceedings "are to be" commenced in another contracting state. However, it is expected that the power to grant relief will be made subject to Rules of Court on the lines of Order 29, Rule 1(3).

The third amendment relates to Clause 23(2) which allows the power to grant interim relief to be extended to cases where proceedings are commenced otherwise than in a contracting state. The amendment will secure that (consistent with subsection (1)) the power may be extended also to proceedings which are to be commenced there. Amendments for the same purpose are also being moved to Clauses 24 and 25, but these, happily, relate to Scotland and my noble and learned friend will move them after this. I repeat in this context the assurance which I gave to the noble Viscount in resisting his previous amendment, that I will cause these amendments to be examined afresh to see whether there is or is not the gap which he believes to exist and which at the moment I do not think exists, owing to the terms of Article 5(3) of the Convention. If the gap is found, or if a better method of dealing with the matter is found, I will return happily to the matter at Report. In the meantime, this is the best I can do to meet the point which the noble Viscount very properly raised on Second Reading. I beg to move.

Viscount Bledisloe

As these amendments go at least part of the way towards solving the problem which I raised at Second Reading, may I say how grateful I am to the noble and learned Lord the Lord Chancellor for giving the matter his attention and for going at least this far to help.

On Question, amendment agreed to.

The Lord Chancellor moved Amendments Nos. 5 and 6:

Page 15, line 10, leave out ("the subject-matter of those proceedings") and insert ("they are or will be proceedings whose subject-matter").

Page 15, line 23, after ("commenced") insert ("or to be commenced").

On Question, amendments agreed to.

Clause 23, as amended, agreed to.

Clause 24 [Provisional and protective measures in Scotland.]:

Lord Mackay of Clashfern moved Amendment No. 7: Page 16, line 17, after ("concluded") insert ("or, in relation to paragraph (c) of that subsection, are to be commenced").

The noble and learned Lord said: As my noble and learned friend has explained, Amendments Nos. 7, 8 and 9 and also Amendments Nos. 10 and 11 are designed to do for Scotland what is being done for England and Wales by the amendments of Clause 23, and accordingly are designed to meet in part the point which the noble Viscount made at Second Reading. I beg to move.

On Question, amendment agreed to.

Lord Mackay of Clashfern moved Amendments Nos. 8 and 9:

Page 16, line 26, leave out ("in relation to") and insert ("in determining whether proceedings have been commenced for the purpose of").

Page 16, line 28, leave out ("in such proceedings").

On Question, amendments agreed to.

Clause 24, as amended, agreed to.

Clause 25 [Application of s.1 of Administration of Justice (Scotland) Act 1972]:

Lord Mackay of Clashfern moved Amendments Nos. 10 and 11:

Page 17, line 6, after ("brought") insert ("or are likely to be brought").

Page 17, line 12, after ("brought") insert ("or were likely to he brought").

On Question, amendments agreed to.

Clause 25, as amended, agreed to.

Clauses 26 to 28 agreed to.

Clause 29 [Overseas judgments given against states, etc. ]:

On Question, Whether Clause 29 shall stand part of the Bill?

Lord Mishcon

On Clause 29 stand part I am raising a matter of some concern, as I understand it, to the City of London. I am basing my comments on this clause upon a memorandum of a working party of the City of London Solicitors' Company.

The State Immunity Act 1978, which adopted as part of English law the restrictive doctrine of sovereign immunity, was much welcomed in the City of London, not least because it brought English law into line with New York law. This meant that New York could no longer have the unfair advantage of submitting that it had a superior system of law for syndicates of banks wishing to enter into a contract to lend money to a sovereign state. May I say, with a depth of professional feeling, that the Act was largely instrumental in stopping a quite serious drift of legal work from London to New York where loans to sovereign states were involved?

Under the State Immunity Act, once English jurisdiction has been established, a state engaged in a commercial transaction—such a transaction is defined in Section 3 of the Act to include a loan or other transaction for the provision of finance—cannot plead immunity from suit as respects proceedings relating to that transaction. Moreover, under Section 13, once judgment has been obtained against a state, whether in the United Kingdom or abroad, it may be enforced against the assets of the state in the United Kingdom which are in use or intended for use for commercial purposes and, subject to the consent of the state, against the other assets in the United Kingdom.

So far as central banks who may be engaged in a commercial transaction are concerned, they are similarly not immune from suit. But their assets enjoy a greater immunity from execution than those of the state because a judgment obtained against a central bank, whether in the United Kingdom or abroad, cannot be enforced against any of its assets in the United Kingdom without its consent.

There is a strong feeling among those whose legal advice is sought by the City's institutions that any legislation which might appear to move backwards from the restrictive doctrine of sovereign immunity to the absolute doctrine of sovereign immunity should be strongly resisted, on the grounds that under the restrictive doctrine, which is that upheld in the majority of developed countries, it is now acknowledged internationally that states which enter into commercial transactions should be liable to suit in the same way as individuals or corporations.

It is well known that states are more and more involved in commercial transactions. The vast majority of countries borrow foreign currencies in the international market place. Some oil-rich states are lenders to other states as well as being borrowers, while in relation to loans to sovereign borrowers some, but by no means all, lending institutions regard the execution of a judgment as being of less importance than the obtaining of the judgment itself.

Generally speaking, lenders are not prepared to advance money unless they have a reasonable likelihood of being able to enforce judgment, wherever obtained—and I repeat the words "wherever obtained"—with speed and certainty in the country where the borrower's assets are to he found at the time of default. In a high proportion of international loans nowadays, particularly those where sovereign borrowers or their state organisations arc concerned, the assets of the borrower consist of bank deposits placed in the leading financial centres, and a significant proportion of those deposits is likely to be found in London.

Whenever a loan agreement governed by English law is made between a syndicate of banks and a sovereign state, the English lawyer is required as a condition precedent to the first borrowing under the agreement to deliver an opinion to the effect that the agreement can he enforced against the state in the manner which I have described. Almost invariably these contracts will contain a submission by the borrower to the jurisdiction of the English courts and a consent by the borrower to the enforcement of any judgment against any of his assets. In such cases, the lenders know that, by virtue of the State Immunity Act, if the sovereign borrower is in breach of contract they will be able to obtain a judgment against it in the English courts and enforce that judgment or any other judgment obtained abroad against any of the borrower's assets in the United Kingdom.

It is in this respect that many of my professional colleagues are deeply concerned. The provisions of this clause appear to constitute a step backwards towards the absolute doctrine of sovereign immunity. The clause appears to provide, contrary to the provisions of the State Immunity Act, first, that if a judement is obtained against a state in an overseas country it shall not be registered, nor shall a court in the United Kingdom entertain proceedings at common law for the enforcement of that judgment. Secondly, a central bank, which is a separate entity, would only enjoy the immunity to which I have referred in respect of proceedings relating to anything done by it in the exercise of sovereign authority. This presents the English lawyer with the problem that, with Clause 29 in its present form, advice of a qualified nature would have to be given to lenders about enforceability in our courts, and this would normally mean that the transaction would not take place.

To maintain the legal position created by the State Immunity Act, it would seem necessary to amend Clause 29 to provide that immunity granted under Clause 29 will not apply to judgments obtained overseas against a state relating to proceedings of a kind in respect of which, had the proceedings been started in the United Kingdom, the state could not have obtained immunity from suit under the State Immunity Act. It may also be necessary to add some language to make it clear beyond peradventure that Clause 29(1)(c) does not in any way expressly or by implication derogate from the absolute immunity from execution conferred on central banks by Section 14(4) of the State Immunity Act.

I should add that there is already considerable protection against the enforcement in the United Kingdom of judgments which have been improperly obtained overseas. To be enforceable in the United Kingdom a judgment obtained overseas must not have been obtained by fraud, must be final and conclusive, must not be contrary to public policy, and must have been obtained in a foreign court competent to entertain the case and to require the defendant to appear before it in the course of proceedings which do not offend against English views of natural justice. It is difficult to see why this degree of protection for defendants should not be just as appropriate for states acting commercially as it has been over many years for private individuals and corporations.

It could be that from time to time states will complain to the Foreign Office about the enforcement in the United Kingdom of judgments originating overseas from courts which those defendant states believe to have taken jurisdiction in inappropriate circumstances or to have delivered judgment without doing justice in all the circumstances. Surely that is not a good argument for refusing to enforce in those judgments in respect of which jurisdiction was taken entirely properly and in which full justice has been done having regard to the defendant's case.

I have said enough in regard to this Clause 2(1)(c), and I hope that the noble and learned Lord the Lord Chancellor, members of whose office I believe have already had discussions of the most courteous nature with those who are interested in what I have said, will be able to give sufficient assurance as to amendments to be introduced by the Government at a later stage of the Bill to obviate the necessity for others to put down amendments at Report stage.

Lord O'Brien of Lothbury

Amidst a galaxy of noble and learned Lords, I was privileged to raise my small voice in support of the Bill which subsequently became the State Immunity Act 1978. I agree with the noble Lord, Lord Mishcon, that that Act has been a very important up-dating of British law to bring it to accord with the facts of life insofar as the immunity of sovereign states is concerned, to the great benefit of all in the City. I am sure that the noble Lord, Lord Mishcon, would be the first to accept that, important though it has been in preserving the business and the fees of solicitors in the City, it has been even more important in ensuring that the business itself remains in the City, because, when important commercial and financial contracts are concluded, the law by which they are governed tends to determine the place where the business is done. It has certainly been very important indeed to the City that the State Immunity Act should have been passed.

I want to support very strongly the case which has been made most lucidly by the noble Lord, Lord Mishcon for not in the Bill now before us vitiating the improvement of the law made in 1978. It would be very sad if, having done good a few years ago, we should now undo that good to the detriment of many types of business, both financial and commercial, of great size and importance to the City of London. Therefore, I should like to support very strongly the points made by the noble Lord, Lord Mishcon.

Lord Wilberforce

I would just like to add my support to the observations which have fallen from the noble Lord, Lord Mishcon. There are important commercial interests involved in this clause which were fully discussed when the State Immunity Act 1978 was before this House. At that time the Government showed themselves to be very receptive indeed to the important City and banking interests which were involved, and the Act was substantially amended in order to meet the representations made by those concerned in those interests. I feel sure that the noble and learned Lord the Lord Chancellor will be no less sympathetic to the same series of points which arise on this Bill.

The Lord Chancellor

I am grateful to all three noble Lords who have raised this point. As they rightly say, my own department has been fully seized with this argument from a fairly early stage. The clause which we are discussing, Clause 29, results from the relaxation in recent years of the rules concerning state immunity. May I at once, wearing for a moment my legal headgear, say that I have always been an enthusiastic "restrictivite" as regards the doctrine of state immunity in relation to commercial transactions. In the law of the United Kingdom as it stands at the moment, these rules are now embodied in the State Immunity Act 1978, but other states have different rules and their courts may assume jurisdiction in proceedings against states in cases in which our courts would have granted immunity. We need to be sure that this country does not have to enforce judgments given against foreign states in cases in which they may feel aggrieved about the foreign proceedings.

As I have said, representations have recently been made to my department to the effect that this goal can be achieved without going as far as this clause does in preventing enforcement. The question is currently under consideration between my department and the Foreign and Commonwealth Office. I hope that we shall reach a view about it soon enough to be able to deal with it in this House before we part with the Bill, but I will let both noble Lords who have spoken know what we propose when a view has been formed upon it. I have every sympathy with what they have said, and I hope that by Report stage I shall be in a position to say something about it. At the moment I am not.

Lord Mishcon

I am sure the House is grateful to the noble and learned Lord, the point. I am sure that in his generosity he will give the information not to just two of the noble Lords who have spoken, but all three.

Clause 29 agreed to.

Clauses 30 to 32 agreed to.

Clause 33 [Minor amendments relating to overseas Judgments]:

5.9 p.m.

The Lord Chancellor moved Amendment No. 12: Page 20, line 41, leave out ("of law and tribunals").

The noble and learned Lord said: This is purely a drafting amendment concerning the description of courts whose judgments will be enforceable here under the Foreign Judgments (Reciprocal Enforcement) Act 1933, as amended by Schedule 9 to this Bill. At present, Clause 33(1) refers to judgments of, courts of law and tribunals".

However, Clause 46 provides that in the Act, unless the context otherwise requires, the expression "court" without more includes tribunal, and new Section 11(1) of the 1933 Act as amended by paragraph 5(2) in Schedule 9 makes the same provision. The reference in Clause 33(1) can therefore be safely abbreviated to "courts". In those circumstances, I beg to move.

On Question, amendment agreed to.

Clause 33, as amended, agreed to.

Clauses 34 to 38 agreed to.

Clause 39 [Domicile and seat of corporation or association]:

The Lord Chancellor moved Amendment No. 13: Page 26, line 25, leave out ("is carrying on business") and insert ("has a place of business").

The noble and learned Lord said: My Lords, if I may, I will speak to this and the following amendment in moving this amendment. These amendments make two minor changes to the definition of the domicile of corporations and associations for the purposes of the 1968 Convention and the Act. Clause 39(4) provides that a corporation or association having its seat in the United Kingdom will have its seat in a particular part of the United Kingdom in three cases, the three cases being (a) when it has its registered office or some other official address in that part, (b)when its central management and control is exercised in that part, or (c)it is carrying on business in that part.

A corporation or association which is domiciled in a part of the United Kingdom under (a), (b) or (c) may as a general rule be sued in the courts of that part under Article 2 in Schedule 4. Clause 39(5) has a similar effect for the purposes of channelling domicile to a particular place. This is particularly important for Schedule 7 which in Rule 1 provides that in general persons shall in Scotland be sued in the courts for the place where they are domiciled. These amendments replace the references to "carrying on business" where they occur in subsection (4) (c) and subsection (5) (c) by the words" has a place of business".

The use of the expression "carrying on business" is based mainly on the English practice under which process may be served on a foreign corporation if it carries on business within the jurisdiction. However, for this purpose the business must be carried on from a fixed and definite place and the activity must have been carried on for a sufficient time for it to be characterised as a business. Furthermore, the common law has been largely overtaken by the Companies Act 1948, which in Section 412 provides that where an oversea company which carries on business within the jurisdiction fails to register the name and address of a person authorised to accept service of process a writ may be served on the company at any place of business established by it in Great Britain. The emphasis on the company's place of business is echoed in the Scottish practice, under which a corporation is deemed to be resident in Scotland and subject to the jurisdiction of the Scottish courts if it has a place of business and carries on business within Scotland. The essential criterion appears to be the establishment of a place of business rather than the actual carrying on of a business at that place.

The result is that the existing jurisdiction exercised in each part of the United Kingdom over corporations and associations will be substantially retained if the words "place of business" are substituted for the words "carrying on business" in subsections (4)(c) and 5(c).Furthermore, having a place of business in a country appears more consonant with the notion of a seat than simply carrying on business there. I hope I have made this lucidly plain, and I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 14: Page 26, line 34, leave out ("is carrying on business") and insert ("has a place of business").

On Question, amendment agreed to.

Clause 39, as amended, agreed to.

Clauses 40 to 51 agreed to.

Schedules 1 to 6 agreed to.

Schedule 7 [Rules as to jurisdiction in Scotland]:

Lord Mackay of Clashfern moved Amendment No.15: Page 81, line 16, leave out ("other intellectual property") and insert ("other similar rights required to be deposited or registered".

The noble and learned Lord said: If I may, with the leave of the House, I will explain also Amendments Nos. 16 and 17 at this time. These are drafting amendments which bring the references in Schedule 7 to jurisdiction in matters relating to registration of patents and other similar rights of intellectual property into conformity with those in the convention itself. They make clear that the jurisdiction given by Rule 2(13) of Schedule 7 relates only to those kinds of intellectual property rights which require registration or deposit and not to either copyright or common law rights in industrial property which arise without deposit or registration and in regard to which there seems to be no need for a special rule of jurisdiction. I beg to move.

On Question, amendment agreed to.

Lord Mackay of Clashfern moved Amendment No. 16: Page 82, line 38, leave out ("case concerning") and insert ("proceedings concerning the validity of entries in").

On Question, amendment agreed to.

Lord Mackay of Clashfern moved Amendment No. 17: Page 82, line 38, leave out ("other intellectual property") and insert ("other similar rights required to be deposited or registered").

On Question, amendment agreed to.

Schedule 7, as amended, agreed to.

Schedules 8 to 11 agreed to.

Schedule 12 [Commencement, transitional provisions and savings]:

5.17 p.m.

The Lord Chancellor moved Amendment No. 18:

Page 99, line 6, at end insert—

("Provision Subject matter
section 49(1) and Part I of this Schedule Commencement.
Section 51 Short title.

Provisions coming into force six weeks after Royal Assent

2. The following provisions come into force at the end of the period of six weeks beginning with the day on which this Act is passed:").

The noble and learned Lord said: Perhaps in moving Amendment No. 18, I might speak to Nos. 18, 19 and 21 together. Amendment No. 20 is a slightly different point and I will move that separately.

The purpose of these amendments is to postpone the commencement of the fixed day provisions listed in Schedule 12, Part I, until six weeks after Royal Assent. The amendments are inspired by a proposal made by Lord Mishcon on Second Reading, in which he will remember, and the Committee will recall, he argued that practitioners and others should have a propor opportunity of seeing what the new law is and what are its implications before it comes into effect. There could also be delays in publication. Some of the provisions listed are purely empowering provisions, for instance, Sections 26, 33 and 37, and it is unlikely that these powers would be exercised for some time after Royal Assent; the others, Sections 29, 30, 31 and 32, are unlikely to affect many cases. But I would agree with the noble Lord that there is really no need to bring them into force immediately. I therefore beg to move.

Lord Mishcon

I am most grateful for the gracious way in which the noble and learned Lord referred to this amendment and my own humble participation in it by something I said at Second Reading. Will I be forgiven if I express a plea that this is a matter of general application, unless there be special circumstances; namely, that legislation should commence after a reasonable period from Royal Assent, for the very reasons that I tried to give at Second Reading and with which I will not weary your Lordships by repetition?

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 19: Page 99, leave out lines 33 and 34.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 20: Page 99, leave out lines 39 to 41 in column 2 and insert ("Repeals consequential on sections 30 and 32.").

The noble and learned Lord said: As I said, this is a slightly different point. I can describe it, I think, accurately as a purely drafting amendment. Lines 39 to 41 on page 99 in column 2 describe the repeal of Section 4(3) (b) of the Foreign Judgments (Reciprocal Enforcement) Act 1933 concerning registration of foreign judgments given in breach of an agreement for the settlement of disputes. They should also describe the repeal of the last part of Section 4(2) (a) (i) of that Act concerning the effect of appearance abroad to contest the jurisdiction. The former repeal is consequential on Clause 30; the latter is consequential on Clause 32. The amendment substitutes an entry which describes both repeals by reference to these clauses. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 21: Page 99, leave out line 45.

On Question, amendment agreed to.

Lord Mackay of Clashfern moved Amendment No. 22:

Page 100, line 39, at end insert—

("Section 19 and Schedule 7

Section 19 and Schedule 7 shall not apply to any proceedings begun before the commencement of that section.".)

The noble and learned Lord said: I beg to move Amendment No. 22. This amendment is designed to make clear that the changes in the rules of jurisdiction of the Scottish courts brought about by Clause 19 and Schedule 7 have effect only in relation to proceedings begun after the clause and schedule are brought into force. The present rules will continue to apply to proceedings commenced before that time. I beg to move.

On Question, amendment agreed to.

Schedule 12, as amended, agreed to.

Remaining schedule agreed to.

House resumed: Bill reported with the amendments.