HomeInsightsCourt of Appeal finds that parallel proceedings for libel issued in both Norway and England in relation to a tweet did not share the same cause of action for the purposes of Article 27 of the Lugano Convention 2007

Article by

The claimant, Dr Craig Wright, was a computer scientist interested in cryptocurrencies, such as Bitcoin. He was an Australian national, who had lived in the UK since December 2015. Dr Wright claimed on his website to be the creator of Bitcoin under the pseudonym Satoshi Nakamoto. He also claimed to have been the author of an academic paper published online under the name Satoshi Nakamoto describing the manner in which the electronic cash system operated.

In March 2019, the defendant, Marcus Granath, a Norwegian national, posted the following tweet from his Twitter account @Hodlonaut:

“The forensics to CSW’s first attempt to fraudulently ‘prove’ he is Satoshi. Enabled by @gavinandresen. Never forget. #CraigWrightIsAFraud”.

Mr Granath’s Twitter account was said to have had approximately 8,000 followers, of whom about 560 were in the UK. Dr Wright’s solicitors subsequently sent a letter of claim to the @Hodlonaut account complaining of libel in relation Mr Granath’s Tweet. Mr Granath then deleted the @Hodlonaut account.

In May 2019, Mr Granath issued proceedings in Norway seeking a declaration of non-liability for libel.

In June 2019, Dr Wright issued proceedings in the English courts seeking damages for libel and an injunction restraining any further publication of the libel.

Mr Granath applied to the English court asking it to decline jurisdiction pursuant to Article 27 of the Lugano Convention on the grounds that the Norwegian court was first seised and that the Norwegian claim and the English claim involved the same cause of action. The English court allowed Mr Granath’s application. Dr Wright appealed the decision. The two issues were: (i) whether the two sets of proceedings had the same cause of action for the purposes of Article 27; and (ii) if so, whether Article 27 was applicable in this case.

Lord Justice Popplewell gave the leading judgment, but Lord Justice Moylan and Lord Justice Singh dissented in relation to his findings on issue (i). Singh LJ agreed with Moylan LJ on issue (i) who held that the appeal in this respect should be allowed.

Moylan LJ held that the two sets of proceedings did not have the same cause of action because, whilst they might have the same object (i.e. determination of liability for the Tweet and for damages or a declaration of no liability), they did not have the same cause. Moylan LJ said that Article 27 sets out a simple test, which did not require any extensive enquiry. All the court had to determine was whether the proceedings had the same cause of action and the same object.

Referring to the leading authorities, in particular Case C-406/92 Owners of cargo lately laden on board the Ship TATRY v Owners of the Ship MACIEJ RATAJ [1999] QB 515 and Case C-144/86 Gubisch Maschinenfabrik KG v Palumbo [1982] ECR 4861, Moylan LJ said that the “cause of action” comprised the facts and the rule of law relied on as the basis of the action. The “object of the action” meant the end the action had in view. Therefore, the facts and the rule of law relied on had to be the same as between the two sets of proceedings. The fact that they might share common issues was not sufficient to engage Article 27. Further, the claims had to be “mirror images” of each other and simply making a broad comparison between the two cases was not sufficient. Claims that were “mirror images” of each other would necessarily be legally irreconcilable under Article 27.

In this case, the causes of action were not “mirror images of one another, and thus legally irreconcilable”. It was not correct to say that they had the same cause of action simply because they were both claims to determine whether there was liability for publishing the tweet in question. That this might be the question at the heart of the two actions, established at most, that they had the same object, not that they had the same cause.

Further, Moylan LJ said, the judge at first instance had been wrong when he said: “it is the potential for irreconcilable judgments which is key”, as the potential for irreconcilable judgments did not answer the question of whether the proceedings involved the same case of action. Irreconcilability was merely a helpful tool.

Moylan LJ also found that the judge at first instance was wrong to say that the correct approach was to determine “whether there is a significant or substantial degree of commonality or overlap between the two sets of claims”, and that all that was necessary was that there was “a substantial and important area of common dispute”. The judge adopted this approach because he considered that an “important relevant factor albeit not decisive is the clear potential for conflicting decisions”. In Moylan LJ’s view, deciding whether the causes of action were the same determined whether conflicting judgments would be irreconcilable, not the other way around.

In this case, the Norwegian claim included a claim that the allegations were made negligently, which did not form part of the English claim. Therefore, Moylan LJ concluded the two cases did not mirror each other and Article 27 did not apply.

As for issue (ii), the Justices were unanimous that the ground of appeal should be rejected. Issue (ii) involved the question raised by Mr Wright as to whether Article 27 applied to “mosaic” claims, i.e. claims brought simultaneously by a claimant in defamation proceedings in different jurisdictions at the same time.

Popplewell LJ said that in Case C-68/93 Shevill v Presse Alliance SA [1995] 2 AC 18, which involved a claim for libel in a newspaper article published in France but distributed also in England and Wales, it was determined that the “mosaic” claim option, i.e. a multiple forum choice, was available to defamation claimants under Article 5(3) of the Convention. Popplewell LJ said that such multiple forum choice arguably involved a tension between Articles 27 and 28 of the Convention, but that was not an issue in this case because both claims were “global” claims. The options for global claims under Article 5(3) were single forum choices for the resolution of the entire dispute between the parties. In that respect, defamation claims were no different from any other claims in tort or delict for which Article 5(3) provided a range of jurisdictional options (place of domicile; place where harmful event occurs; and place where damage is directly suffered). Further, there was no authority to suggest that Article 27 was inapplicable to such claims, and no sound reason for restricting its applicability. On the contrary, the avoidance of parallel proceedings and risk of irreconcilable judgments, which Article 27 was designed to avoid, dictated that it should apply.

Popplewell LJ rejected the argument that a claim for negative declaratory relief, such as the Norwegian claim, would be abusive of EU law if it deprived the claimant of its right to elect where it brought proceedings and the remedies that would be available under Article 5(3). Popplewell J said that negative declaratory relief claims were entirely legitimate and, in any tort claim in which Article 5(3) conferred a choice of jurisdiction on the claimant for a global claim, the choice was equally conferred on a defendant by way of a negative declaratory relief claim; in each case the option was circumscribed by the mechanism in Article 27 of who started first. That was not an abuse of the regime established by the Convention, but rather its implementation, he said.

Accordingly, the first ground of appeal was allowed and the second ground was dismissed. (Craig Wright v Magnus Granath [2021] EWCA Civ 28 (15 January 2021) — to read the judgment in full, click here).