14/12/2009 - High Court refuses Judgments Regulation stay of Lonsdale trade mark action

(1) The Trademark Licensing Company Ltd. (2) Lonsdale Sports Ltd. v. Leofelis SA [2009] EWHC 3285 (Ch)

On 11 December 2009 Sir William Blackburne handed down judgment refusing the defendant's application for a stay of English proceedings in favour of Italian proceedings.  The English proceedings were brought by Lonsdale, an English company which was the licensor of trade marks relating to the Lonsdale brand, against Leofelis, a Swiss company, pursuant to an English exclusive jurisdiction clause contained in an agreement licensing Leofelis to use the Lonsdale trade marks throughout Europe except the UK and Ireland. The Italian Court was first seised with proceedings brought by an Italian company, Leeside Srl, against the claimants and the defendant to the English action.

Leofelis applied for a stay of the English proceedings in favour of the Italian proceedings pursuant to article 22 of the Lugano Convention on the grounds that the English and Italian actions were related and that the English Court should exercise its discretion to stay its proceedings in favour of the Italian Court as the court first seised.  The High Court rejected the application for a stay for three reasons.  First, the Court held that it was article 28 of the Judgments Regulation that applied, and not article 22 of the Lugano Convention, because the issue before the court concerned a stay as between proceedings in two courts which were Member States bound by the Judgments Regulation and the domicile of Leofelis in a Lugano Convention state was irrelevant to that issue.  Secondly, the actions, although connected, were not sufficiently closely connected, nor was any risk of irreconcilable judgments sufficiently great to make them "related actions" within the meaning of article 28 of the Judgments Regulation.  Thirdly, the discretion on the facts of the instant case clearly favoured the refusal of a stay. 

When setting out the correct approach to the Court's discretion to stay proceedings under article 28 of the Judgments Regulation, the Court approved the guidance as to the relevant factors given by Advocate Generral Lenz in Owens Bank v. Bracco [1994] QB 509 (ECJ), save that Sir William Blackburne agreed with Rix J in Centro Int'l Handelsbank v. Morgan Grenfell [1997] CLC 870 that it was doubtful that there was any general presumption in favor of a stay referred to by the Advocate General.