CL-2024-000540 - [2025] EWHC 1262 (Comm)

Overview: paras.[1]-[4]

The Facts: paras.[5]-[20]

German law: paras.[21]-[23]

Legal principles: paras.[24]-[26]

The Available Forum Issue: paras.[27]-[38]

The More Appropriate Forum Issue: paras.[39]-[64]

Conclusion on FNC: paras.[65]-[66]

Case Management Stay: paras.[67]-[70]

Overview

The Claimant (“Nova”) is incorporated in Luxembourg. Nova issued this claim on 23 September 2024 against the Defendant (“GFL”), a company incorporated in England and Wales. Nova’s claim against GFL is made in debt and damages under a guarantee (“the Parent Guarantee”) alleged to have been given by GFL to Nova in respect of the debts of its subsidiary, Gravity Fitness (Leipzig) Limited (“Gravity Leipzig”). This company was also incorporated in England and Wales but it has now been dissolved. By Application Notice dated 11 November 2024 (“the Application”), GFL seeks a stay of this claim under CPR 11(6)(d) on forum non conveniens (“FNC”) grounds. GFL contends that the Halle Regional Court in Germany is an available forum which is clearly or distinctly more appropriate. After the proceedings before me were issued, GFL issued its own claim in that Court against Nova, although the claim has not yet been served on Nova in Luxembourg. Although not mentioned in the Application Notice, GFL also seeks a case management stay of the claim pending resolution of this German claim, in the event its FNC application does not succeed. When I use the term “Parent Guarantee” below it is merely a convenient way to refer to the signed version of Annex 9.6 and without prejudice to GFL’s case that this was not a valid or binding instrument under German law.

Nova served the Claim Form on GFL in England (as of right) on 30 September 2024. This is therefore a ‘service in’ case. At the start of the hearing, the two principal questions for my decision were: (i) whether GFL has discharged the burden of showing that Germany is an available forum; and (ii) whether GFL has discharged the burden of satisfying the court that Germany is clearly or distinctly more appropriate than the English court. I will call these "the Available Forum Issue" and "the More Appropriate Forum Issue" issues, respectively. They are reflected in Rule 41(2) of Dicey, Morris & Collins, The Conflict of Laws (16^th ed. 2025) (“Dicey”).

Aside from the issue of the costs of arguing this point, the Available Forum Issue fell away at the start of the hearing because Mr John Kimbell KC, Leading Counsel for GFL, offered an undertaking by GFL (reduced at my request to a written form during the short adjournment) to take all necessary steps in accordance with Article 26 of the Brussels Recast Regulation No. 1215/2012 (“the Brussels Regulation”) to unconditionally submit to the jurisdiction of any court in Germany in which Nova chooses to bring the claim it has asserted in the proceedings before me. I will call this “the Undertaking”. A suggestion of such a form of undertaking first appeared in Mr Kimbell KC’s skeleton argument served on Friday 9 May 2025, and it had not until that time been mentioned, or offered to Nova, by those instructing him. That said, it is now common ground that the available forum requirement has been met: Dicey at §12.031. However, both parties addressed this point in some detail and I was asked by Mr Kimbell KC and Mr Robins KC, Leading Counsel for Nova, to address it because it may be relevant to costs issues. I will consider the Available Forum issue, albeit briefly, in Section IV.

The substantial dispute between the parties was in relation to the More Appropriate Forum Issue. It is common ground that German law governs all the relevant issues between the parties. The point most forcefully advanced by Mr Kimbell KC was that the relevant German law, as it applies in this case, is complex. In short, GFL’s case is that under German law concerning suretyship, the Parent Guarantee is invalid, alternatively that it can be avoided under the doctrine of unilateral mistake. Mr Robins KC relied strongly on the fact that Nova has sued GFL in the place of its domicile, England and Wales, and that factor has, on the basis of recent case law, become a powerful and weighty factor in the balance in its favour. Mr Robins KC also argued that although it is common ground that German law applies, the English Court is well able to receive evidence of, and apply German law. This is however merely an overview of the main arguments, and Counsel relied in the normal way on a number of other connecting factors in support of their arguments as to whether England or Germany was the more appropriate forum.

My narrative in this section is based on what I understood to be agreed by Counsel for the purposes of the Application and, in particular, for the purpose of identifying and characterising the issues in dispute. I have also taken the dates from Mr Kimbell KC’s very helpful chronology.

GFL is an English company. Its registered office address is in Wakefield in West Yorkshire. Its directors are English. Two of its directors are Mr Paul Harvey Jenkinson (“Mr Jenkinson”) (also the CEO) and Mr Michael Harrison (“Mr Harrison”), and they are both based in Yorkshire. GFL’s parent company is also an English company. GFL was originally founded in 2014 as a trampoline park business but has broadened its activities to include go-karting tracks, mini-golf and arcade games in the UK and elsewhere.

During 2019, GFL incorporated an English subsidiary company, Gravity Leipzig (Mr Jenkinson and Mr Harrison also became directors of this company). The plan was for Gravity Leipzig as a SPV to lease premises in Leipzig and to either itself (or through franchising arrangements) run a trampoline park in Leipzig, Germany. Nova owns a shopping centre in Leipzig (the “Shopping Centre”). In or around September 2019, Nova agreed in principle to lease a large unit at the Shopping Centre to Gravity Leipzig. Heads of Terms dated 25 September 2019 were agreed between Nova and GFL before Gravity Leipzig was incorporated.

From the outset, Nova made clear that GFL would have to provide a guarantee of the proposed subsidiary SPV’s obligations. So, the Heads of Terms recorded: “The Parent Company will provide a Parent Guarantee for 4 years from the date of the Lease”. Nova and GFL each retained German lawyers to draw up their agreement. Nova instructed Wencke Bäsler (“Ms Bäsler”) of Greenberg Traurig Germany LLP, and GFL instructed Dr Klaus Jankowski of SKW Scharwz (“Dr Jankowski”). Ms Bäsler and Dr Jankowski are fluent in English, and the emails I was taken to show that they generally communicated with each other in English (in particular when copying the emails to their respective clients from whom they took instructions). They also however communicated from time to time in German. They have each provided a number of witness statements in relation to the Application.

Pradera Limited (“Pradera”) is an international retail property investment fund and asset management business which was involved in the transaction. Barry Cox (“Mr Cox”) of Pradera, who liaised with GFL on behalf of Nova, explained to Ms Bäsler and Dr Jankowski on 20 February 2020: “To reiterate, the intention is to review and negotiate the commercial terms in English…”.

Ms Bäsler and Dr Jankowski drew up the lease (“the Lease”), which expressly required Gravity Leipzig to provide a guarantee from GFL. So, Clause 9.6 of Lease was in the following terms:

“In addition, the Tenant shall procure that Gravity Fitness Limited, Colorado Way, Castleford, England WF10 4TA, Company number 08880970 (‘Parent’), which is the sole ultimate shareholder of the Tenant, provides a guarantee (Bürgschaft) limited in time for the first 7 years of the Fixed Lease Term of the lease according to the sample attached as Annex 9.6 according to which the Parent shall be liable for all obligations of the Tenant under the Lease Agreement”.

The Lease is expressly governed by German law. Ms Bäsler and Dr Jankowski also drew up the form of the Parent Guarantee, which was to be annexed to the Lease, as Annex 9.6. By 29 July 2020 this was in its final approved form (as Dr Jankowski confirmed to Ms Bäsler in an email of that date). The Parent Guarantee is expressly governed by German law but it does not include any jurisdiction clause (whether exclusive or non-exclusive).

On 26 August 2020, Ms Bäsler sent the electronic execution copy of the Lease to Dr Jankowski. She explained in her email that she was also sending (among other things) the final version of Annex 9.6 (the Parent Guarantee). She copied her email to various individuals including Mr Jenkinson and Mr Cox.

On 27 August 2020, Ms Bäsler told Dr Jankowski that her firm had prepared hard copy execution versions. Dr Jankowski asked for the hard copies to be sent to the home address of Mr Jenkinson in Pocklington, East Yorkshire. Again the email exchanges were copied to various people including Mr Jenkinson and Mr Cox. Ms Bäsler complied with Dr Jankowski’s request and, in due course, the hard copies arrived at Mr Jenkinson’s home in England.

Mr Jenkinson and Mr Harrison signed the Lease. They also signed the Parent Guarantee in Annex 9.6 of the Lease. Mr Jenkinson sent the signed documents to Nova. Annex 9.6 provided (insofar as presently material) as follows: