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From Ince Gordon Dadds

Easy Rent v. EasyGroup

22.03.2019

Ince Gordon Dadds has successfully represented Easy Rent A Car Limited and George Nesteros (“Easy Rent”) in an appeal concerning the application of Articles 29 and 30 of the Recast Brussels Regulation (“Recast”) to proceedings for trade mark infringement and passing off issued in England by EasyGroup Limited (“EasyGroup”), a month after Easy Rent had commenced proceedings in Cyprus against EasyGroup.

In the High Court, the Judge had dismissed Easy Rent’s application to stay the English proceedings under either Article 29 or Article 30. The Court of Appeal has now unanimously allowed Easy Rent’s appeal and overturned that decision.

Article 29 provides that where proceedings involving the same cause of action and between the same parties are commenced in the courts of different EU member states, the court where proceedings are commenced first in time (or the court “first seised”) has priority and the court of any other member state must stay its proceedings until the jurisdiction of the first court is established and, at that stage, must decline jurisdiction. Article 29 is intended to prevent the same matters being litigated before the courts of different member states and to avoid the risk of conflicting judgments. Article 30 states that where related actions are pending before the courts of different member states, any court other than the court first seised may stay its proceedings. Actions are considered to be related where they are so closely connected that it is expedient to hear and determine them together, thereby avoiding the risk of irreconcilable judgments that could arise out of separate proceedings.

Easy Rent is a Cypriot car rental company. In 2003, EasyGroup and others sued Easy Rent in Cyprus, alleging trade mark infringement and passing off. In 2005, that claim was dismissed pursuant to a settlement agreement between the parties. However, between 2012 and 2016, EasyGroup raised further allegations of infringement of trademarks and other intellectual property rights against Easy Rent. On 24 November 2016, therefore, Easy Rent issued proceedings in Cyprus against EasyGroup and others, seeking among other things declarations that they had no liability for infringement or passing off, as well as an order for enforcement of the 2005 settlement agreement. On 28 December 2016, EasyGroup issued English Court proceedings seeking relief in respect of alleged infringements of UK-registered trademarks and passing off. EasyGroup also sought to have the Cypriot claim set aside and obtained an order, on 22 May 2018, setting aside that claim. That order is under appeal.

The English Appeal Court considered whether the Cypriot Court remained seised of the proceedings in circumstances where there was an order setting aside the claim, but an appeal was pending. This was a novel point on which there appeared to be no CJEU or domestic member state court authority. The Court of Appeal concluded that the requirement in Article 29 for a member state court to stay its proceedings until the jurisdiction of the court first seised was established should be interpreted to include the case where the court first seised has declared that it has no jurisdiction, but an appeal is pending against that decision. Therefore, the Cypriot Court remained seised of the Cypriot proceedings until the appeal against the order of 22 May 2018 was determined.

The Court of Appeal further found that the Cypriot and English proceedings involved the same cause of action for the purposes of Article 29. Both sets of proceedings were concerned with whether Easy Rent were infringing EasyGroup’s intellectual property rights or whether EasyGroup had consented to Easy Rent’s use of the trademarks. In the Cypriot proceedings, Easy Rent asserted that by virtue of the settlement agreement, EasyGroup had consented to their use of the trademarks and to their carrying on their business without being liable for infringement or passing off. In the English proceedings, EasyGroup sought to establish Easy Rent’s liability for infringement and passing off. The Court of Appeal considered that there was real potential for irreconcilable judgments in the English and Cypriot Court proceedings. It concluded that Article 29 applied and the English Court had to decline jurisdiction.

Although it did not strictly need to decide the point, the Court of appeal went on to consider whether it would have exercised its discretion to grant a stay under Article 30 in favour of the Cypriot proceedings. It indicated that, in all the circumstances of this case, the fact that there would be no Cypriot proceedings unless Easy Rent succeeded in their appeal in Cyprus and the fact of the very lengthy delay in any progress in the Cypriot proceedings even if the appeal was allowed, were overwhelming factors against the grant of a stay of the English proceedings.

Easy Rent was represented by David Gore and Sarah Townsend of Ince Gordon Dadds.