KNOWLEDGE

Territorial Effect of Interim Orders in Scotland

Morton Fraser_Richard McMeeken
Author
Richard McMeeken
Partner & Solicitor Advocate
PUBLISHED:
19 August 2021
Audience:
Business
category:
Article

 

On 25 May 2021, Lord Clark granted interim interdict against the supermarket Lidl preventing it from passing off its own brand "Hampstead gin" as the well-known brand "Hendrick's gin" owned by the pursuer, William Grant & Sons Irish Brands Limited.

One part of the judgment which was of particular interest (and more general application) was paragraph 29 where Lord Clark deals (briefly) with the pursuer's request that the orders granted by the Court of Session should have extra-territorial effect - in this case in England & Wales as well as Scotland. Lord Clark simply says that "It would not be appropriate for this court to grant an order which applied outside this jurisdiction, that is to the rest of the United Kingdom. The approach to interim orders in England and Wales are different".

On 20 July 2021, the First Division of the Inner House gave a judgment in the appeal against the interim orders, upholding Lord Clark's decision to grant interim interdict. However, it dealt at some length with a cross-appeal lodged by the pursuer in relation to the territorial effect of the interim interdict.

The court started by pointing out that the issue of jurisdiction in infringement proceedings is determined by the provisions of the Civil Jurisdiction & Judgments Act 1982. In terms of the 1982 Act, jurisdiction can be created in two ways. First, if the defender is domiciled within the relevant jurisdiction (which in the case of a company means "having a place of business" in Scotland). Secondly, and separately, if the infringement is said to take place in Scotland. Accordingly, the Scottish courts have jurisdiction over an infringement wherever it occurs if the defender in domiciled in Scotland; and will have jurisdiction if there is an infringement in Scotland, regardless of where the defender is domiciled. The court explained that it would not have jurisdiction if both the defender was domiciled outwith Scotland and the infringement happened outwith Scotland. The English courts would normally decline jurisdiction in that case as well.

However, where one of these jurisdiction criteria applies, the English courts will commonly grant injunctions against activities outside England, including in Scotland (Lucasfilm v Ainsworth [2012] 1 AC 208 per Lord Walker at para 109). In this case, as Lidl are domiciled in Scotland and England & Wales, the pursuer has a choice where to raise action. They can sue in either jurisdiction and it would make no sense for them to raise separate actions in each. To do so, as the court explains, would be a waste of judicial time and resources. If there were parallel proceedings in one or other jurisdiction then, depending on which action was raised first, the court would tend to await the outcome of those that were first raised. In these circumstances and others the defenders could plead forum non conveniens. In such cases, the level of infringing activity in each jurisdiction would be a relevant (albeit not decisive) factor but that issue did not arise (and was not plead) in this case.

Accordingly, while keeping the interim orders in place, the First Division recalled the part of it which restricted it to Scotland. The order will have UK wide effect. This judgment has important implications both for infringement proceedings and for other areas of law where a party is domiciled in Scotland or carrying out a delict or wrongful act within the jurisdiction. It is now clear (if it was not before from cases such as Lord Nimmo-Smith's judgment in Speechworks v Speechworks International [2000] ETMR 982) that interim orders granted in Scotland can have effect in other parts of the UK. It is a welcome clarification of the law by the Inner House.

Disclaimer

The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Morton Fraser LLP accepts no responsibility for the content of any third party website to which this webpage refers.  Morton Fraser LLP is authorised and regulated by the Financial Conduct Authority.