Lis Pendens

by Dieter Martiny

1. Notion of lis pendens

Lis pendens (pendency, Litispendenz) concerns the effects of the initiation of civil proceedings in the law of civil procedure and in substantive law. Because proceedings are pending, certain effects occur. After seizing the court there exists a ‘procedural relationship’ (Prozessrechtsverhältnis) between the parties; only after this moment in time may a decision be rendered. At the same time a certain adjustment has to occur, and it has to be ensured that the proceedings will not be frustrated by additional proceedings. In principle, every legal system is confronted with the various problems which then arise. The legal techniques of initiating civil proceedings, particularly the relevant moments in time, are, however, different. Accordingly, particularly in the international context, difficulties arise. Moreover, proceedings in different legal systems have to be coordinated; also granting a foreign seisin or pendency a lis pendens effect is by no means self-evident. Especially in the European judicial arena, according lis pendens effects to a foreign proceeding meets with specific difficulties.

Efforts to harmonize the national rules on lis pendens can already be found in the Draft of a uniform European Civil Procedure Law (Art 2.2.2 concerning action pending or—in French—litispendance). The ALI/UNIDROIT Principles of Transnational Civil Procedure of 2004 also deal with the topic. They determine the decisive moment for lis pendens to be the lodging of the complaint with the court (Principle 10.2). The scope of the proceedings is determined by the claims in the parties’ pleadings, including amendments (Principle 28.1).

2. Lis pendens according to national law of civil procedure

European legal systems generally acknowledge the concept of lis pendens. A later instituted action is barred by prior proceedings. In common law systems, the defence of lis pendens as such is not in the focus of interest. It is not the principle of priority, but a more general approach to the lis alibi pendens doctrine which is applied. According to it, in the case of two parallel proceedings, the court with the weakest connection to the dispute (the forum non conveniens) declines jurisdiction. The chronological order in which proceedings were instituted plays little role in this determination.

The manner in which civil proceedings are initiated varies across the different national rules of procedure. According to the first approach, proceedings begin with the lodging of the claim with the court or, as under German law (§ 270 Code of Civil Procedure), by subsequent service ex officio. In contrast, according to the French system, there is at first an assignation by the huissier, whereas the claim is only later registered by the court (mise au rôle). Similarly, initiation of proceedings in Italy requires service of the statement of claim (citazione) by the plaintiff on the defendant (Art 39(3) Italian Code of Civil Procedure). Despite the fact that the plaintiff uses a bailiff for this purpose, it is nevertheless a private service and not service by the court. English law distinguishes between the formal registration of the claim at the court and then the later service of the claim form on the defendant.

Also with regard to the moment in time a suit is subject to lis pendens, there are differences. One solution is to rely on the moment in time in which the claim is lodged with the court or is registered. Another solution is based on the moment in time in which the defendant receives notice. According to the second approach, a service system, claims assume the status of pending with the service of the statement of claim on the defendant. Thus, pendency starts in Austria and in Germany (§§ 253(1), 261 German Code of Civil Procedure) with due service of the written claim on the defendant (§ 106 German Code of Civil Procedure). This solution is also followed, for example, in Denmark, Greece (Art 221(1)(a) Code of Civil Procedure) and Poland (Art 192 Code of Civil Procedure). Also, according to Arts 61 and 171 Code of Civil Procedure of Luxembourg, a lis pendens effect attaches with service on the defendant. According to the first approach, a lodging system, it is sufficient for the purposes of lis pendens that the lawsuit be registered at the court. This is the case in Finland for example. Under contemporary French case law as well, registration at the court is decisive.

In order to properly limit lis pendens effects, the relevant parties need to be identified. In principle, the same parties (in appropriate instances, their legal successors) must be affected by the proceedings. Moreover, the subject matter of the case (Streitgegenstand) is relevant. The subject matter of the case is defined differently in the varying national systems but is often determined by two elements, eg according to the dominant German view based on the claim made by the plaintiff and the facts submitted in support of it.

Lis pendens has procedural and substantive effects. The procedural effect of lis pendens is to prevent the initiation of proceedings concerning the same subject matter between the same parties before another court (see § 261(3) no 1 German Code of Civil Procedure). Moreover jurisdiction of the court is, once established, no longer affected by later changes, eg relocation of the residence of the defendant, reduction of the claimed sum (see § 261(3) no 2 German Code of Civil Procedure; so-called perpetuatio fori). For concurrent proceedings, priority is decisive. The defence of lis alibi pendens is a legal barrier to be respected ex officio, and examined in the framework of the admissibility of the second action. Lis pendens also has effects in substantive law for accessory claims (particularly interest payable from the beginning of the proceedings), extended liability, limitation or tolling of the running of the period of limitation.

3. Lis pendens in international law of civil procedure

With the goal of avoiding irreconcilable judgments, in the interest of international harmony of decision, but also for a practical coordination of proceedings and for effective legal protection, domestic courts often recognize lis pendens with respect to proceedings pending abroad, the result being that subsequently commenced domestic proceedings are not allowed. This is the case, for example, according to Art 7 Italian Statute on Private International Law and under an unwritten rule in Germany. It is required, however, that future recognition of the expected foreign decision can be presumed.

On the other hand, a foreign judgment may not be given recognition if it failed to respect the lis pendens rules of the domestic court in which recognition and enforcement is subsequently sought. The disregard of pending domestic proceedings by a foreign court is often a separate impediment to recognition in international treaties, eg Art 22(c) Hague Convention on the International Recovery of Child Support of 2007, however not Art 9 Hague Convention on Choice of Court Agreements of 2005.

In the national rules on recognition as well, such an impediment to recognition is regularly laid down. A foreign decision will not be recognized if it is irreconcilable with domestic proceedings between the same parties on the same subject matter that were pending in a domestic court and were instituted prior to the foreign proceedings (eg § 328(1) no 3 German Code of Civil Procedure; Art 64(1)(f) Italian Statute on Private International Law of 1995). In this way the observance of lis pendens is secured. Also in this respect, the prerequisites and limits of the doctrine have to be determined.

4. Lis pendens in European law of international civil procedure

In European law of international civil procedure, the Brussels Convention had already contained a special provision on lis pendens (litispendance), based on the priority principle. This provision has been expanded by Reg 44/2001. Where proceedings involving the same cause of action between the same parties are brought in the courts of different Member States, any court other than the court first seized is required to stay proceedings on its own motion until such time as the jurisdiction of the court first seized is established (Art 27(1) Reg 44/2001). Where the jurisdiction of the court first seized is established, any court other than the court first seized shall decline jurisdiction in favour of that court (Art 27(2)). This is also stated in the Maintenance Regulation (Art 12 Reg 4/2009). The same solution was adopted for matrimonial matters and parental responsibility in Art 19 of the Brussels IIbis Regulation (Reg 2201/2003), whereby here the subject matter of the case is even more broadly formulated. In contrast to national law, a prognosis on the likelihood of recognition in respect of the foreign decision is not required for the evaluation of the lis pendens defence under Art 30 of Reg 44/2001. There is a December 2010 Commission proposal for a reform of Reg 44/ 2001 to ensure a better coordination of legal proceedings before the courts of Member States.

Because the court first seized would have already had to recognize the pendency of the matter in a foreign court, there is no impediment to recognition of foreign judgments in the regulations in this respect. Even if the court first seized disregards the effect of a pending foreign claim incorrectly, this does not allow the subsequent non-recognition of the judgment. Since this regulation of lis pendens can work only if there is a uniform application, the notion of claim has to be interpreted autonomously.

In this respect the ECJ uses a two-tier concept of subject matter of the case, for which it, according to the French wording (‘demandes ayant le même objet et la même cause’), draws a distinction between the proceedings’ ‘cause of action’ and ‘object of the action’. According to this, an identity of the matters of the case can exist even if there is no ‘formal identity’ between the relief sought and the cause of action.

The ‘object of the action’ does not mean the formulated action, but the end the action has in view. The ‘cause of action’ comprises the facts and the rule of law relied on as the basis of the action, whereby the ‘rule of law’ is to be interpreted broadly in the sense of the rule of law relied on at the basis of the action.

Under the ‘heart of the actions’ doctrine of the ECJ, it is sufficient that the actions relate to the same object or, alternatively, the same ends and have the same basis (the facts and rule of law relied on as the basis of the action; ECJ Case C-406/92 – Tatry v Macief Rataj [1994] ECR I-5439). ‘Irreconcilable’ are for example a seller’s claim for the price of goods and a claim for annulment or rescission of the underlying contract. They have the same ‘cause of action’ and relate to the same ‘heart’ of the dispute (ECJ Case 144/86 – Gubisch v Palumbo [1987] ECR 4861). A partial identity also obliges a stay of proceedings according to Art 27(1) Reg 44/2001. Thus proceedings for negative declaratory relief and an action for performance may concern the same cause of action. Therefore, it is possible to take advantage of this by so-called ‘torpedo’ proceedings. Here, in a ‘race of plaintiffs’, an action for a negative declaratory judgment is brought in a notoriously slow court system (often Italy) to bar, with the defence of lis pendens, a threatened action for performance in a quicker court system and thus wreck those proceedings (see ECJ Case C-116/02 – Gasser v MISAT [2003] ECR I-14693). Since the length of the proceedings is not a factor which has to be taken into account, an excessive length of proceedings is irrelevant for the legal consequences of Art 27. Proposals for narrowing this blocking effect and to defuse torpedo proceedings (eg by modification of the concept of the subject matter of the case, sanctions for unfair conduct of proceedings or closer communication of the courts) have not been taken up so far. However, the Commission proposal of December 2010 aims at improving the lis pendens rule by prescribing a time limit for the court first seized to decide on its jurisdiction. In addition, an amendment provides for an exchange of information between courts seized of the same matter.

According to European international law of civil procedure, the obstruction of the second proceedings by the first takes place even if there are no prospects of recognition by the second state for the decision expected in the first proceedings. Article 27 of Reg 44/2001 does not require any prognosis of recognition, but is rather based on the assumption of equivalence of the proceedings. Even if the court seized second is of the opinion that the court seized first lacked jurisdiction, it is not allowed to decide on the merits of the case. The recognition of the effects of the foreign proceedings takes priority over a review of its lawfulness. However, the Commission proposal of December 2010 provides that where the parties have chosen a particular court to resolve their dispute, that court has priority, regardless of whether it is first or second seized. The court chosen in the choice of court agreement is always first to determine whether the agreement is valid or not. Any other court has to stay proceedings until the chosen court has established or declined jurisdiction. The proposal also obliges a court seized with a dispute involving an arbitration agreement to stay proceedings if an arbitral tribunal or a court at the seat of the arbitration is seized. The aim of this modification is to prevent parallel court and arbitration proceedings and to eliminate the incentive for abusive tactics (see ECJ Case C-185/07 – Allianz v West Tankers [2009] ECR I-663).

Article 27 of Reg 44/2001 is mandatory and is not subject to disposition of the parties. It is, however, in their discretion to end the prior proceedings and to exclude the application of Art 27 in this way. Article 27 has to be applied ex officio, even if the principle of ‘party presentation’ must be respected. The party relying on Art 27 in light of a foreign claim has to present its defence of lis pendens in a substantiated manner.

The identity of parties, ie the criterion of ‘the same parties’, is also interpreted autonomously; the parties of the second pending court proceedings must be identical with those of the first proceedings, although the procedural positions may be switched (ECJ Case C-406/92 – Tatry v Macief Rataj [1994] ECR I-5439). This aspect of the inquiry has not led to specific difficulties. The ECJ has, however, also taken the legal position of the parties into account. Identity has been admitted even where there was no strict identity of parties, but their interest in respect of the cause of action of the two proceedings coincided to the extent that a judgment which had been rendered against one of them also had res iudicata effects against the other (ECJ Case C-351/96 – Drouot v CMI [1998] ECR I-3075). This coupling at the subjective boundaries of res iudicata, which sometimes cannot be ascertained without difficulties, could expand the defence of lis pendens even more.

For actions that are not identical but only legally or factually related, Art 28 Reg 44/2001 (connexity of cases) provides for the possibility of a stay of proceedings.

The Commission proposal of 2010 also introduces a discretionary lis pendens rule for disputes which are pending before courts in the EU and third countries. A court of a Member State can exceptionally stay proceedings if a non-EU court was seized first and is expected to decide within a reasonable time and if that decision can be recognized and enforced in the Member State.

5. Time of seisin in European international law of civil procedure

A special problem is the determination of the moment in time of seisin. In view of the different systems of service and concepts of lis pendens between the Member States, Art 30 Reg 44/2001 (in the same sense Art 16 Reg 2201/2003) names different moments in time. However, the provision does not leave the moment of seisin finally to national law; instead a compromise is sought with an eye towards the compatibility of proceedings and the parties’ equality of chances. A court shall be deemed to be seized at the time when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have service effected on the defendant (Art 30 no 1 Reg 44/2001). An action brought in Germany belongs to the category of initiation of civil proceedings covered by Art 30 no 1. The bringing of an action in Austria, Greece, Ireland, Sweden, Finland and Denmark is also to be mentioned here. Though according to English case law proceedings have already generally commenced when process is issued by the court, it is said that under the Brussels Regulation and the Lugano Convention, English courts are only seized upon service on the defendant.

According to the second alternative, where the document has to be served before being lodged with the court, a court is also deemed to be seized at the time when the document is received by the authority responsible for service, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have the document lodged with the court (Art 30 no 2). To this group of states belong France, Belgium, Luxembourg, Italy, The Netherlands, Portugal and Spain. Thus in both cases seisin or, as the case may be, lis pendens has been brought forward to secure the protection of equal chances in different procedural systems.

Literature

Helmut Rüßmann, ‘Die Streitgegenstandslehre und die Rechtsprechung des EuGH’ (1998) 111 Zeitschrift für Zivilprozeß 399; Stefan Homann, ‘Das zuerst angerufene Gericht—Art. 21 EuGVÜ und die Artt. 28, 30 EuGVVO’ [2002] IPRax 502; Hanns Prütting, ‘Vom deutschen zum europäischen Streitgegenstand’ in Festschrift Kostas E Beys (2003) 1273; Frauke Wernecke, Die Einheitlichkeit des europäischen und des nationalen Begriffs vom Streitgegenstand (2003); Julia Eisengraeber, ‘Lis alibi pendens under the Brussels I Regulation—How to minimise “Torpedo Litigation” and other unwanted effects of the “first-come, first-served” rule’. Centre for European Legal Studies. Exeter Papers in European Law No 16, (2004); Mary-Rose McGuire, Verfahrenskoordination und Verjährungsunterbrechung im Europäischen Prozessrecht (2004); Rolf Wagner, ‘Ausländische Rechtshängigkeit in Ehesachen unter besonderer Berücksichtigung der EG-Verordnungen in Brüssel II und Brüssel IIa’ [2004] Familie, Partnerschaft, Recht 286; Reinhold Geimer, ‘Lis pendens in der Europäischen Union: einige Bemerkungen zum Brüssel I und II-System’ in Festschrift Hans Jürgen Sonnenberger (2004) 357; Alice Nieroba, Die europäische Rechtshängigkeit nach der EuGVVO (Verordnung (EG) No. 44/2001) an der Schnittstelle zum nationalen Zivilprozessrecht (2006); Michael Bogdan, ‘The Brussels/Lugano Lis Pendens rule and the “Italian Torpedo”’ in Procedural Law (2007) 89; Martin Gebauer, ‘Lis pendens, negative declaratory-judgment actions and the first-in-time principle’ in Conflict of Laws in a Globalized World (2007) 89; Ingemar Carl, Einstweiliger Rechtsschutz bei Torpedoklagen (2007); Campbell McLachlan, Lis pendens in international litigation (2009) = (2008) 336 Recueil des cours 199; Martin Illmer, ‘Brussels I and Arbitration Revisited—The European Commission’s Proposal COM(2010) 748 final,’ 75 (2011) RabelsZ 645.