Commercial Court decides that English claim concerning “L’Atelier de Joël Robuchon” restaurant is not precluded by Paris Commercial Court judgment

29/04/20

MAD Atelier International B.V. v Axel Manès [2020] EWHC 1014 (Comm)

Today, Mr Justice Bryan gave judgment dismissing an application by Alex Manès (“Mr Manès”) to: (1) strike out or summarily dismiss claims made by MAD Atelier International B.V. (“MAD International”) on the grounds that they were an abuse of process because they involved facts which had already been determined by the Paris Commercial Court, or they had no real prospect of success; or (2) to grant a case management stay of MAD International’s claim pending the final determination of its claim in France which was the subject of an outstanding appeal.

Mr Manès was the executive chef at the “L’Atelier de Joël Robuchon” restaurant in Paris (“Paris Restaurant”). In 2019 MAD International issued proceedings in the English Commercial Court against Mr Manès claiming damages for breach of a joint venture Agreement pursuant to an exclusive English jurisdiction clause. MAD International’s claim arose out of a transfer in August 2016 by MAD International of the shares of the company which owned the Paris Restaurant to a company controlled by Mr Manès which MAD International disputed.

Mr Manès applied to dismiss the English claim primarily on the basis that a previous judgment of the Paris Commercial Court, which dismissed MAD International’s claim to set aside the August 2016 share transfer on the ground of fraud, gave rise to an issue estoppel preventing re-litigation of certain facts in the English claim or made the English claim an abuse of process.

Bryan J’s judgment contains a detailed consideration of the law of issue estoppel and abuse of process in relation to foreign judgments, and the power to grant a stay on case management grounds in cases involving exclusive English jurisdiction clauses. Two points of particular importance were addressed by Bryan J.

First, whether, as Mr Manès contended, only the foreign judgment must be final and conclusive, as a matter of foreign law and then English law can be used to determine whether the particular issues that the court decided ought to bind the parties or their privies. After detailed analysis of  the House of Lords’ decisions in Carl Zeiss Stiftung v Rayner & Keeler Ltd (No. 2) and The Sennar (No. 2), Bryan J rejected that argument and accepted MAD International’s submission that the foreign legal system must regard the particular issues relied upon as forming the issue estoppel as having preclusive effect such that the foreign legal system must either have a doctrine of issue estoppel which covers the issues raised, or a doctrine which has precisely the same underlying basis and operation.

Secondly, whether, as Mr Manès contended, in the light of the House of Lords’ decision in Johnson v Gore-Wood, the mere fact that the relevant parties are a subsidiary and controlling shareholder could by itself establish privity of interest for the purposes of issue estoppel. Bryan J rejected that argument and accepted MAD International’s submission that the fact that a party is a 100% shareholder of a company does not, without more, make them the company’s privy. Bryan J reasoned that: (1) the contrary conclusion in Johnson v Gore Wood was a concession and obiter, and its correctness was doubted by Lord Millett in Johnson and by Lord Sumption in Virgin Atlantic Airways v Zodiac Seats UK; and (2) in subsequent cases controller-subsidiary relationships have not been found to be, by themselves, sufficient to establish privity.

The judgment is here.