Aviator LLC & Ors v Stribe Oü & Ors [2026] EWHC 1216 (Ch)

[2026] EWHC 1216 (Ch)Case No IL-2024-000151
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
Venue Rolls Building, Fetter LaneDate 22 May 2026
London, EC4A 1NL
Before
MICHAEL TAPPIN KC(sitting as a Deputy Judge of the High Court)
Between
AVIATOR LLCClaimantsAVIATOR STUDIO LIMITED (formerly AVIGROUP LIMITED)ClaimantAVIATOR STUDIO HOLDING LIMITEDClaimant
Philip Roberts KC, Sam O’Leary and Edward Cronan (instructed by Allen Overy Shearman Sterling LLP) for Claimants / Fifth and Sixth PartiesBenet Brandreth KC and Christopher Hall (instructed by Bird & Bird LLP) for DefendantHearing Hearing dates: 5-6 May 2026Hearing (with further written submissions on 15 May 2026)
Approved JudgmentI direct that no official shorthand note shall be taken of this judgment and that copies of the version as handed down may be treated as authentic.This judgment was handed down at 2.00 pm on 22 May 2026 by circulation to the parties’ representatives by email and release to The National Archives.

The Deputy Judge:

[1]This is my judgment on applications made at a CMC in these proceedings. By way of introduction, I gratefully adopt the parties’ agreed case summary:
“1. Each of the Claimants and Fifth and Sixth Parties accept, for the purposes of these proceedings, that they are jointly and severally responsible for the acts or threatened acts complained of by the Defendant (although they deny that any of those acts or threatened acts are unlawful). It is therefore in the main unnecessary to distinguish between them for the purposes of this summary, and they are referred to collectively as “the Claimants”. 2. The case concerns ‘crash games’. A crash game is an online gambling game where players place bets on the outcome of a rapidly increasing multiplier. The goal is to cash out before the multiplier ‘crashes’ down, which can happen at any random moment. The longer the player waits, the higher the potential reward. However, if the player waits too long and the game ‘crashes’ the player will lose their bet. 3. In January 2019, a crash game came to be operated in Georgia by a company related to the Claimants under the following logo, referred to in these proceedings as the “Aviator Image”: 4. The software for the game was created by the Defendant. The Aviator Image was created, the Claimants allege, at the behest of another company related to the Claimants. 5. In June 2019, a third-party design agency, Bambuk Design Studio, produced the following artworks, which the Claimants allege are infringing copies of the Aviator Image: 6. From December 2019, the Defendant authorised distribution of its own ‘Spribe Crash Game’ outside of Georgia, including in the UK from February 2020, using the Spribe Aviator Image, Aeroplane Device and the following sign which the Claimants allege also infringes the Aviator Image: The Claims 7. The Claimants assert subsistence and ownership of copyright in the Aviator Image. That is disputed. 8. The Claimants contend that the Spribe Aviator Image and Aeroplane Device were copied from the Aviator Image. The Defendant contends that they were independently designed. 9. The First Claimant and the Defendant were parties to related proceedings in Georgia, which the Defendant appealed to the Supreme Court of Georgia, which handed down a ruling on 20 May 2025. The Claimants say that issue estoppels arise from the Georgian proceedings and that these preclude the re-litigation of some or all of the issues arising on subsistence, ownership, and infringement of copyright in the Aviator Image and Aeroplane Device by the Spribe Aviator Image and Spribe Aeroplane Device. The Defendant disputes this. 10. The Claimants contend that operation of the Spribe Aviator Crash Game in the UK amounts to infringement of the UK copyright in the Aviator Image. That is disputed. 11. The Claimants also pursue infringement of the copyright in the Aviator Image relating to other countries, in particular other signatory countries to the Berne Convention. The Defendant has accepted the English Court’s jurisdiction over that claim. However, there is a dispute between the parties as to the territorial scope of the claim and the operation of the presumption of similarity regarding foreign law. 12. The Defendant has registered UK trade marks covering the Spribe Aviator Image and Aeroplane Device. The Claimants contend that those trade marks are invalid because their use would amount to copyright infringement, and because they were applied for in bad faith. Counterclaims 13. The Defendant / Part 20 Claimant counterclaims for trade mark infringement and passing off in respect of the Part 20 Defendants’ potential launch of their own Aviator-branded crash game in the UK (the “Aviator Studio Crash Game”). The passing off claim relies on alleged goodwill in the Aviator name, the Spribe Aviator Image and Spribe Aeroplane Device, and also the gameplay mechanics of the Spribe Crash Game. On the basis of these claims the Defendant obtained an interim injunction restraining the First Claimant from launching in the UK pending trial. 14. By way of defence to the claim in passing off the Part 20 Defendants rely on the doctrine of ex turpi causa, alleging that the Defendant / Part 20 Claimant is not entitled to rely on such goodwill as it has established in the UK, on the basis that the underlying trade was conducted in (i) flagrant infringement of copyright, and (ii) without the appropriate licence from the UK Gambling Commission. 15. The Defendant / Part 20 Claimant also has its own counterclaim for copyright infringement in respect of certain in-game graphics in the Aviator Studio Crash Game and certain text on the Part 20 Defendants’ website. These counterclaims are resisted by the Part 20 Defendants.”
[2]I shall refer to the Claimants / Part 20 Defendants and the Fifth and Sixth Parties collectively as “Aviator” (unless it is necessary to distinguish between them) and to the Defendant / Part 20 Claimant as “Spribe”.[3]Paragraph 9 of the agreed case summary refers to proceedings in Georgia (the nation rather than the US state). The First Claimant’s claim against Spribe in those proceedings was for declarations of invalidity of certain Georgian registered trade marks incorporating the Spribe Aviator Image. Aviator says (and Spribe disputes) that the decisions in those proceedings give rise to issue estoppels which preclude the relitigation in these proceedings of some or all of the issues of subsistence, ownership and infringement of copyright.[4]Importantly, the decisions in the Georgian proceedings are said by Aviator to give rise not just to issue estoppels in respect of its claim for infringement of UK copyright, but also in respect of its claims in these proceedings for infringement of copyright in other Berne Convention countries.[5]Aviator issued an application to be heard at the CMC for the determination of a preliminary issue, namely:
“Whether the Court’s determination of the preclusive effect, if any, of the Georgian Judgments in these proceedings, including in relation to claims governed by foreign law, is governed by English law as the lex fori.”
Alternatively, it sought summary judgment on that issue, though Mr O’Leary (who made the submissions for Aviator on this application) did not press that way of dealing with the matter.[6]By the time of the hearing, Aviator had reformulated the order which it sought. It sought a determination that:
“The doctrine of issue estoppel is a matter for the laws of the forum in which the claim proceeds, being English law, and the parties are not therefore required to prove any matters of foreign law regarding foreign practice of issue estoppel. The contrary allegation at paragraph 43I(b)(iv) of the Defence and Counterclaim is struck out.”
[7]Mr Brandreth KC, for Spribe, was content for me to decide the point of law in dispute between the parties as a preliminary issue. I am satisfied that it would be right and just to do so. The issue raises a pure point of law, the answer to which will have major consequences for the conduct and shape of the case.[8]I am not convinced that either of the ways in which the point has been formulated by Aviator is entirely accurate. In particular, the reformulated version suffers from the defect that parties are never required to prove matters of foreign law – they may choose not to even if an issue is governed by foreign law. In my view the issue can be best characterised by a slight adaptation of the original formulation:
“Whether the Court’s determination of the preclusive effect, if any, of the Georgian Judgments, in relation to those claims in these proceedings which are governed by foreign law, is governed by English law as the lex fori or by the relevant foreign law.”
[9]The parties agreed that there was no authority which decided, or even directly addressed, this issue.[10]I begin by considering the authorities on the nature of issue estoppel in English law. Diplock LJ explained issue estoppel in Mills v Cooper [1967] 2 QB 459, 468-9, as follows:
“That doctrine, so far as it affects civil proceedings, may be stated thus: a party to civil proceedings is not entitled to make, as against the other party, an assertion, whether of fact or of the legal consequences of facts, the correctness of which is an essential element in his cause of action or defence, if the same assertion was an essential element in his previous cause of action or defence in previous civil proceedings between the same parties or their predecessors in title and was found by a court of competent jurisdiction in such previous civil proceedings to be incorrect, unless further material which is relevant to the correctness or incorrectness of the assertion and could not by reasonable diligence have been adduced by that party in the previous proceedings has since become available to him. Whatever may be said of other rules of law to which the label of “estoppel” is attached, “issue estoppel” is not a rule of evidence. True, subject to the qualification I have stated, it has the effect of preventing the party “estopped” from calling evidence to show that the assertion which is the subject of the “issue estoppel” is incorrect, but that is because the existence of the “issue estoppel” results in there being no issue in the subsequent civil proceedings to which such evidence would be relevant. Issue estoppel is a particular application of the general rule of public policy that there should be finality in litigation.”
[11]In Hulley Enterprises Ltd vRussian Federation [2026] KB 1, Males LJ (with whom Lewison and Zacaroli LJJ agreed) cited that passage and said, at [33]:
“Pausing here, I would note two points. First, Diplock LJ distinguished issue estoppel from “other rules of law to which the label of ‘estoppel’ is attached”
. Second, when issue estoppel applies, that does not mean that there is no issue for the court to decide, but only that the issue estoppel means, as a matter of law, that there is no issue to which evidence contradicting the prior decision would be relevant – although I would add that when the issue estoppel arises from the judgment of a foreign court there will still need to be some evidence, for example to show what the foreign court decided and that its decision was final and conclusive on the issue in question. Issue estoppel is therefore a principle which enables the court to decide the issue in question, not a principle which prevents it from making any decision on the point.”[12]Males LJ continued at [34]-[35]:
“Issue estoppel in English law is an enforceable substantive right, as explained by the Privy Council in Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2003] 1 WLR 1041. The issue in that case was whether a previous arbitration award between the parties had given rise to an issue estoppel and, if so, whether reliance on that issue estoppel was a form of enforcement of the award. The Privy Council held that it was. Lord Hobhouse of Woodborough explained: “15. Their Lordships consider that, on the stated hypothesis [ie that the plea of issue estoppel was sound], the argument of European Re is correct. The Boyd award has conferred upon them a right which is enforceable by later pleading an issue estoppel. It is a species of the enforcement of the rights given by the award just as much as would be a cause of action estoppel. It is true that estoppels can be described as rules of evidence or as rules of public policy to stop the abuse of process by relitigation. But that is to look at how estoppels are given effect to, not at what is the nature of the private law right which the estoppel recognises and protects. For example, a party who has attorned to another is estopped from denying that he holds the relevant goods for that other; the attornment has created a legal relationship and legal rights which the attorning party must recognise. The same applies to where arbitrators have, pursuant to the submission of a dispute to them, decided an issue; that decision then binds the parties and neither party can thereafter dispute that decision.”
To similar effect, issue estoppel was described by Foxton J in PJSC National Bank Trust v Mints [2022] 1 WLR 3099 at para 23(i) as a rule of substantive law applied by the second tribunal as to the legal effect of the determination by the first tribunal.” “15. Their Lordships consider that, on the stated hypothesis [ie that the plea of issue estoppel was sound], the argument of European Re is correct. The Boyd award has conferred upon them a right which is enforceable by later pleading an issue estoppel. It is a species of the enforcement of the rights given by the award just as much as would be a cause of action estoppel. It is true that estoppels can be described as rules of evidence or as rules of public policy to stop the abuse of process by relitigation. But that is to look at how estoppels are given effect to, not at what is the nature of the private law right which the estoppel recognises and protects. For example, a party who has attorned to another is estopped from denying that he holds the relevant goods for that other; the attornment has created a legal relationship and legal rights which the attorning party must recognise. The same applies to where arbitrators have, pursuant to the submission of a dispute to them, decided an issue; that decision then binds the parties and neither party can thereafter dispute that decision.”[13]Issue estoppel was also described as a rule of substantive law by Lord Sumption in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2014] AC 160 at [25].[14]The requirements for an issue estoppel to apply based on a judgment of a foreign court were summarised by Clarke LJ in The Good Challenger [2004] 1 Lloyd’s Rep 67 at [50]:
“The authorities show that in order to establish an issue estoppel four conditions must be satisfied, namely (1) that the judgment must be given by a foreign Court of competent jurisdiction; (2) that the judgment must be final and conclusive and on the merits; (3) that there must be identity of parties; and (4) that there must be identity of subject matter, which means that the issue decided by the foreign court must be the same as that arising in the English proceedings [citations omitted].”
[15]A similar formulation is to be found in the judgment of the Privy Council in Gol Linhas v MatlinPatterson [2023] Bus LR 1305 at [36]:
“In Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 the House of Lords held that issue estoppel can be based on a foreign judgment. To give rise to such an issue estoppel, three requirements must be satisfied [citations omitted]. First, the judgment must be entitled to recognition in accordance with the domestic rules on the recognition of foreign judgments. At common law, these rules require the judgment to be (a) given by a court of a foreign country with jurisdiction to give it and (b) final and conclusive on the merits. Second, the parties in the two actions must be the same. Third, the issue decided by the foreign court must be the same as the issue in the domestic proceedings.”
[16]Accordingly, when considering whether issue estoppel arises from a foreign judgment, it is necessary to consider whether the judgment is one given by a court of competent jurisdiction and is final and conclusive and on the merits. Mr O’Leary pointed out that, as Gol Linhas makes clear, in doing so the English court is applying its private international law rules of recognition of foreign judgments. He submitted that, once that had been done, there was no more work for choice of law rules to do.[17]I do not accept that submission. The finality requirement arises in the form it does if the judgment relied on is one of a foreign court. But that does not mean that there is no more work for choice of law rules to do. If the prior judgment relied on in the present case had been one of an English court (for example, if an English court had previously determined the validity of UK registered trade marks containing the Spribe Aviator Image) it would still be necessary to decide which law to apply to the claims in respect of other Berne Convention states, and in particular whether to apply the English law of issue estoppel to those claims. That does not change because the prior judgment relied on is one of a foreign court.[18]Under the common law, matters or rules of procedure are governed by the lex fori while matters or rules of substance are governed by the lex causae – see generally Dicey, Morris & Collins on the Conflict of Laws, 16th edition, rule 3 and paragraphs 4-002 – 4-005. Mr O’Leary relied on the statement of Lord Reid in the Carl Zeiss case at p.919C that issue estoppel is a matter for the lex fori. However, this was said in the context of addressing an argument about whether the English law of issue estoppel should treat as conclusive something in a foreign judgment which the foreign court itself would not regard as conclusive. Lord Reid was not addressing a choice between the lex fori and the lex causae, a point which does not appear to have been argued. Further, it appears that at the time of Carl Zeiss issue estoppel may have been regarded as a rule of evidence – certainly that is how Lord Guest expressed it at p.933F, an observation from which Mr O’Leary distanced himself (understandably in the light of the subsequent authorities, starting with Mills v Cooper, which explain its substantive nature). Moreover, Lord Reid’s statement can only have been about the position under the common law. In cases which concern non-contractual obligations in civil and commercial matters, such as the present, the common law has been displaced by Regulation (EC) No. 864/2007 (“Rome II”), which is now assimilated law as slightly amended by SI 2019/834.[19]Mr O’Leary also relied on what Foxton J said in the PJSC v Mints case at [23]:
“That analysis assumes that the preclusive effect of a prior determination in a subsequent dispute is a legal incident of rights arising from the original determination, rather than the result of a rule of law applicable by the second tribunal as to the legal effect of that original determination. However, the doctrine of issue estoppel appears to me to depend on a rule of law of the “receiving” tribunal rather than the rights adjudicated on by the “transmitting” tribunal: (i) The traditional justifications of issue estoppel offered by English authorities identify it as a substantive rule of law which gives effect to a general rule of public policy that there should be finality in litigation (eg, Diplock LJ in Mills v Cooper [1967] 2 QB 459, 469; and Lord Wilberforce in The Ampthill Peerage [1977] AC 547, 569). (ii) While the position under foreign law will be relevant to whether the foreign judgment meets the English law requirement of finality, the doctrine of estoppel is part of the law of the forum, not a legal attribute of the foreign judgment (see Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853, 919). (iii) When a foreign arbitration award or judgment is relied upon to establish an issue estoppel in English court proceedings, it is English law which determines, for example, whether the estoppel extends to collateral matters or whether the special circumstances exception is engaged. More pertinently, in the present context, the issue of whether a foreign judgment binds privies of the parties in English proceedings is a matter for English law. At least it was so treated in cases such as Carl Zeiss at pp 928-929, 936-937 and 945-946 and Seven Arts Entertainment Ltd v Content Media Corp plc [2013] EWHC 588 (Ch). The position is not, as Mr Rabinowitz submitted to me, that when looking at foreign judgments or awards, “one has to look at the foreign law and see … how, under that foreign law, it deals with which parties are to be bound and why”.” (i) The traditional justifications of issue estoppel offered by English authorities identify it as a substantive rule of law which gives effect to a general rule of public policy that there should be finality in litigation (eg, Diplock LJ in Mills v Cooper [1967] 2 QB 459, 469; and Lord Wilberforce in The Ampthill Peerage [1977] AC 547, 569). (ii) While the position under foreign law will be relevant to whether the foreign judgment meets the English law requirement of finality, the doctrine of estoppel is part of the law of the forum, not a legal attribute of the foreign judgment (see Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853, 919). (iii) When a foreign arbitration award or judgment is relied upon to establish an issue estoppel in English court proceedings, it is English law which determines, for example, whether the estoppel extends to collateral matters or whether the special circumstances exception is engaged. More pertinently, in the present context, the issue of whether a foreign judgment binds privies of the parties in English proceedings is a matter for English law. At least it was so treated in cases such as Carl Zeiss at pp 928-929, 936-937 and 945-946 and Seven Arts Entertainment Ltd v Content Media Corp plc [2013] EWHC 588 (Ch). The position is not, as Mr Rabinowitz submitted to me, that when looking at foreign judgments or awards, “one has to look at the foreign law and see … how, under that foreign law, it deals with which parties are to be bound and why”.”
[20]Mr O’Leary relied on the fact that Foxton J both acknowledged the substantive nature of issue estoppel and stated that the doctrine of issue estoppel was part of the law of the forum, citing Lord Reid in Carl Zeiss. However, the issue of whether the lex causae should govern any preclusive effect of a previous judgment does not appear to have been the subject of any argument, and there does not appear to have been any discussion of Rome II (or Rome I). Rather, in this paragraph, Foxton J was rejecting a different argument, namely that an arbitration award cannot give rise to an issue estoppel against persons who were not party to the arbitration agreement.[21]The following provisions of Rome II are relevant: Article 1 Scope 1. This Regulation shall apply, in situations involving a conflict of laws, to non-contractual obligations in civil and commercial matters. … 3. This Regulation shall not apply to evidence and procedure, without prejudice to Articles 21 and 22. Article 3 Universal application Any law specified by this Regulation shall be applied whether or not it is the law of the United Kingdom or a part of the United Kingdom. Article 8 Infringement of intellectual property rights 1. The law applicable to a non-contractual obligation arising from infringement of an intellectual property right shall be the law of the country for which protection is claimed. Article 15 Scope of the law applicable The law applicable to non-contractual obligations under this Regulation shall govern in particular:(a) the basis and extent of liability, including the determination of persons who may be held liable for acts performed by them;(b) the grounds for exemption from liability, any limitation of liability and any division of liability; … (h) the manner in which an obligation may be extinguished and rules of prescription and limitation… Article 16 Overriding mandatory provisions Nothing in this Regulation shall restrict the application of the provisions of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the non-contractual obligation. Article 22 Burden of proof 1. The law governing a non-contractual obligation under this Regulation shall apply to the extent that, in matters of non-contractual obligations, it contains rules which raise presumptions of law or determine the burden of proof. Article 26 Public policy of the forum The application of a provision of the law of any country specified by this Regulation may be refused only if such application is manifestly incompatible with the public policy (ordre public) of the forum.[22]Dicey, Morris & Collins explains (at paragraphs 4-008 – 4-009) that Rome II treats a wider range of matters as governed by the lex causae than does the common law. It contains (at paragraphs 34-052 – 34-053) the following commentary on the scope of Article 15 and its interaction with Article 1(3) (footnotes omitted):
“Article 15 of the Rome II Regulation sets out the various issues that will be governed by the law applicable to a non-contractual obligation as determined by Arts 4–14 of the Regulation. It seems clear from the use of the words “in particular” in the preamble that the list in Art.15 of issues governed by the law applicable is intended to be non-exhaustive, so that it is likely that other issues not so identified will also be governed by the applicable law. As the provisions of Art.15 overlap, to a degree, it is suggested that they should be read collectively, rather than individually. In the Explanatory Memorandum accompanying its original proposal, the Commission expressed an intention to confer a “very wide function” on the designated law, in line with the general concern for certainty in the law.… In consequence, subject to limitations imposed by the forum’s overriding mandatory provisions and public policy, a single law, that applicable to the non-contractual obligation, will govern all of the issues to which paragraphs (a) to (h) of Art.15, discussed below, refer. As noted, Art.1(3) of the Regulation excludes from its scope matters of “evidence and procedure”
. In order not to prejudice the scheme of the Regulation, and having regard to the legislative intention to give Art.15 a “very wide function” expressed in non-exhaustive terms, the concepts of “evidence” and “procedure” should be interpreted narrowlywith particular regard to the issues which Art.15 expressly requires to be determined by the law applicable under the Regulation. Article 15 should be given a correspondingly broad interpretation, with the consequence that the common law authorities which address the borderline between matters of substance and procedure can no longer be considered as a reliable guide as to the issues governed by the law applicable under the Regulation.”[23]Mr O’Leary did not suggest that any of that commentary was incorrect, and accepted that it was fair to say that the court should give a broad interpretation to the scope of Articles 4-15 and a narrow interpretation to the concept of evidence and procedure. That concession appears to be correct in the light of the cases cited in the footnotes to that passage, and in particular the judgments of Tipples J in Pandya v Intersalonika General Insurance Co SA [2020] EWHC 273 (QB) at [25]-[31] and Christopher Hancock QC in KMG International NV v Chen [2019] EWHC 2389 (Comm) at [36]. In the latter case Mr Hancock QC adopted as correct the approach suggested by Dicey, Morris & Collins in paragraph 34-036, namely that the Article 1(3) exclusion “should be interpreted narrowly as covering only matters, such as the constitution and powers of courts and the mode of trial, that are an integral and indispensable feature of the forum’s legal framework for resolving disputes, such that they cannot satisfactorily be replaced by corresponding rules of the lex causae.”[24]Further useful guidance as to the approach which should be adopted is to be found in the judgments of the Court of Appeal in Wall v Mutuelle de Poitiers Assurances [2014] 1 WLR 4263, a case in which the claimant had suffered injuries in a road traffic collision in France, and only quantum was in issue. Those judgments addressed two questions. The first was whether Rome II required expert evidence to be given in the manner in which it would be given in France. The defendant argued that it should, because the objective of Rome II was to try to ensure that an English court arrived at the same level of damages as a French court would. That argument was rejected. Longmore LJ said at [15] that it was inevitable that the same facts tried in different countries may result in different outcomes, and that he was unable to accept the starting point that the English court must strive to reach the same result as a French court would, let alone that evidence must be given to the English court in the form of a French style expert report. Jackson LJ agreed – see esp. [42] – and Christopher Clarke LJ agreed with both judgments – see [47]-[48].[25]The second question was whether the applicable law under Rome II included “judicial conventions, practices and guidelines” (including guidelines for the assessment of damages). The defendant contended that it did, and the Court of Appeal agreed. Longmore LJ said at [24]:
“… It seems to me that in the context of a Regulation…intended to have international effect, a narrow view of “law” is inappropriate. If there are guidelines, even if they can be disapplied in an appropriate case, judges will tend to follow them. No doubt one can call this “soft law” rather than “hard law” but it is law nevertheless….”
Jackson LJ said at [34]:
“In my view the defendant’s contention is correct. As Professor Dworkin has eloquently demonstrated, the law comprises both rules and principles. Principles do not dictate results, but they exert influence. The judge arrives at the result in any given case by applying the appropriate rules and taking into account those principles which bear on the problem [citations omitted]. Whether one is talking about civil law or common law, it is unduly restrictive to confine the notion of “law” to black letter rules.”
Christopher Clarke LJ agreed with both judgments – see [49] – and added at [51] that “law” should be “interpreted so as to cover whatever rules, principles, practices and guidance a French court would adopt in making its assessment.”[26]Mr O’Leary sought to suggest that the fact that issue estoppel was a rule of substantive law did not mean that it was a rule of substance rather than procedure for the purposes of Rome II. He said that issue estoppel did not form part of the substantive law of whatever cause of action was before the court (in the present case, the law of copyright), and that it was given effect to procedurally by preventing evidence being adduced on the point when deciding the issue. He categorised issue estoppel as being merely part of the decision making process of the court, something he described as “barely even procedural”. He also relied on the fact that the CJEU has referred to rules of res judicata as being a matter for the national legal order, in accordance with the principle of the procedural autonomy of the Member States – see Case C-40/08 Asturcom Telecomunicaciones SL v Rodriguez Noguiera at [35]-[38].[27]I was not persuaded by any of that. First, many rules of substantive law can be viewed as having procedural consequences, and as part of the decision making process of the court. But the fact that a rule forms part of the decision making process does not mean that it is to be regarded as procedural for the purposes of Rome II, as can be seen from the judgments of the Court of Appeal in Wall. Indeed a rule of law with preclusive effect (such as issue estoppel) has more substantive effect and is more hard-edged than are guidelines for the assessment of damages. The CJEU in Asturcom was not seeking to distinguish between substantive and procedural aspects of the laws of the Member States for the purposes of Rome II.[28]Secondly, Rome II does not say that the law of the foreign country which is to be applied is limited to that which is specific to the cause of action. Article 8 speaks generally about “the law applicable to a non-contractual obligation arising from an infringement of an intellectual property right”. Similarly, Article 15 says that the applicable law shall include, in particular, the basis and extent of liability and the grounds for exemption from liability and the manner in which an obligation may be extinguished. Accordingly, Article 15 covers the rules of law which determine whether a person is liable.[29]In my judgment, a rule of law relating to preclusive effect, which states whether a party is prevented from disputing (or establishing, as the case may be) one or more elements of a cause of action for an infringement of an intellectual property right, is part of the applicable law under Articles 8 and 15. I am not convinced that it is necessary to give Articles 8 and 15 a broad interpretation to achieve that result, but if one does, as Mr O’Leary accepted one should, the answer seems clear.[30]Conversely, I do not regard it as correct to categorise such a rule of law as being a matter of evidence or procedure within Article 1(3), particularly giving that provision a narrow interpretation (as Mr O’Leary accepted one should). The law of issue estoppel comes nowhere near being “an integral and indispensable feature of the forum’s legal framework for resolving disputes, such that they cannot satisfactorily be replaced by corresponding rules of the lex causae”. Further support for this conclusion comes from the express exclusion, by Article 22, of presumptions of law from the scope of Article 1(3). It may not be strictly correct, under English law, to classify issue estoppel as a presumption of law. However, Rome II must be given an autonomous interpretation, and when issue estoppel applies it has much the same effect as an irrebuttable presumption of law, in that it dictates the finding that must be made on an issue.[31]For these reasons, in my judgment the prima facie effect of Articles 1, 3, 8 and 15 is that the court should apply the law of the country for which protection is claimed when deciding whether any preclusive effect arises from a prior judgment.[32]However, when considering my judgment after the hearing, it seemed to me that it was also necessary to consider whether Articles 16 or 26 applied in the present case. The parties had not addressed me on those Articles and I therefore invited the parties to make further written submissions, which they duly did.[33]Article 16 provides that nothing in the Regulation “shall restrict the application of the provisions of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the non-contractual obligation.”Dicey, Morris & Collins notes that Recital (32) makes clear the exceptional nature of this provision and continues, at paragraph 34-084 (footnotes omitted):
“It will be noted that Art.16 does not refer to all rules which cannot be derogated from but only to rules which apply irrespective of the law applicable to the non-contractual obligation.The terminology used here is the same as that in Art.9(1) of the Rome I Regulation, which defines “overriding mandatory provisions” as “provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under this Regulation”.Consistency between the two Regulations[referring to Recital (7) in each] demands that this definition should also be applied within Art.16 of the Rome II Regulation.Consequently, the category of “overriding mandatory provisions” is to be strictly interpreted, requiring not only that the provision of law in question be one which applies to a claim based on a non-contractual obligation regardless of its governing law, but also that it appears, on the basis of a detailed analysis of the wording, general scheme, objectives and the context in which the provision was adopted, that it serves an interest judged to be essential by the State concerned. …”
[34]That approach is supported by the judgment of the CJEU in Case C-149/18 Agostinho da Silva Martins v Dekra Claims Services Portugal SA at [29]-[31]. Further, in support of its commentary Dicey, Morris & Collins cites KMG v Chen at [50], where Mr Hancock QC rejected the proposition that the rule against reflective loss fell within Article 16. His reasons for doing so included:
“(3) It is clear that the fact that the provision cannot be derogated from by agreement is not decisive of the issue, since, as has been pointed out by KMG, Recital (37) to Rome I draws a distinction between provisions which cannot be derogated from by agreement and overriding mandatory provisions. (4) It is also, in my view, insufficient that the application of the rule is not discretionary and is, in that sense, mandatory. The fact that a provision of English law is mandatory in this sense does not establish that it is overriding so as to disapply what would otherwise be the proper law. (5) I also note the provisions of Recital (32) to Rome II, which make it clear that this is an Article which is only to be applied in “exceptional circumstances”
. I do not regard this as an exceptional case or circumstance. (6) Further, the fact that the rule is informed by considerations of policy (as are many rules of law) is insufficient to make it an overriding mandatory rule. (7) Applying the test set out above, (which I accept is the correct test, since it is the test suggested by the Commission in its Explanatory Memorandum) I have concluded that the rule against reflective loss is clearly not a “provision the respectfor which is regarded as crucial by a country for safeguarding its public interests,such as its political, social or economic organisation, to the extent that they areapplicable to any situation falling within their scope, irrespective of the lawotherwise applicable to the contract under this Regulation.” (8) Whilst I do not need to go so far as to say that rules regulating private law claims such as this one cannot come within Article 16, as KMG submitted, it is in my view clear that it is the rules which the country (here England) regards as crucial for safeguarding its interests which are the focus of Article 16.”[35]Having regard to this guidance, in my judgment the law of issue estoppel is not an exceptional case falling within Article 16. While issue estoppel has been expressed as a rule based on the public policy of promoting finality in litigation and avoiding a party being vexed twice on the same matter, it is not universally applicable in proceedings under English law, as it is subject to a special circumstances exception (see Arnold v National Westminster Bank plc [1991] 2 AC 93 and the discussion in Virgin v Zodiac at [20]-[25]) and needs to be pleaded by one of the parties, so cannot be regarded as a mandatory rule. In my judgment it is not a rule the respect for which can be said to be regarded by England & Wales as crucial for safeguarding public interests, nor a rule which serves an interest which is judged to be essential by England & Wales.[36]Article 26 provides that “The application of a provision of the law of any country specified by this Regulation may be refused only if such application is manifestly incompatible with the public policy (ordre public) of the forum”. Dicey, Morris & Collins comments on this provision at paragraph 34-086 as follows (footnotes omitted):
“It is clear from this formulation, as well as from the text of Recital (32), that public policy is only to be invoked in exceptional cases. The content of public policy will depend principally on English law,but it seems inevitable that in the context of the Regulation (as under the Brussels I regime) the courts will seek to police the outer limits of the concept, probably by requiring that application of a provision of law would be “at variance to an unacceptable degree” with the forum’s legal order “inasmuch as it infringes a fundamental principle”.A difference (even a significant difference) between the applicable foreign law and English law will clearly not be sufficient in and of itself to invoke the public policy exception. …”
[37]Again, one of the authorities cited as support for this passage is KMG v Chen. In that case Mr Hancock QC pointed out at [56] that whereas under Article 16 the focus is on the nature of the English rule, under Article 26 the focus is on whether the effect of applying foreign law was manifestly incompatible with English public policy. Having considered the jurisprudence of the CJEU in relation to a similar provision in the Brussels Convention, in particular Case C-7/98 Bamberski v Krombach, he concluded at [57] that the correct test was whether recognition of the foreign law would be “at variance to an unacceptable degree with the legal order of the state in which enforcement is sought inasmuch as it infringes a fundamental principle”. He concluded that allowing a Dutch law claim for reflective loss would not offend against English public policy in that sense, saying:
“The principle against reflective loss is a recognised rule of English substantive law. However, it does not seem to me to be such a fundamental principle that it is to be equated with a fundamental right, such as a right guaranteed by the ECHR.”
[38]Under Article 26, as Mr Hancock QC pointed out, the focus is on whether the rule of foreign law is manifestly incompatible with the public policy of England & Wales. The answer to that question must depend on what the rule of foreign law is. Spribe has pleaded that under Czech law res judicata requires identity of parties, identity of cause of action and identity of subject matter (and the position in France may be similar – see Mad Atelier International BV v Manés [2020] QB 971 at [89]-[103]) and so I shall consider such a case.[39]The English law of issue estoppel is of course one of public policy, designed to promote finality in litigation and to prevent parties being vexed twice. However, I do not regard a law which does not afford preclusive effect in circumstances where an English court would regard there as being an issue estoppel, as being at variance with the English legal order to the extent that it infringes a fundamental right or principle. In England & Wales, the public policy is to include, within the scope of res judicata, issues that have been finally decided between the parties or their privies, as well as causes of action that have been so decided. It has been concluded that that better serves the interests of justice than having no such rule. But that does not mean that it would infringe some fundamental right or principle if there was no such rule. Indeed, the courts have recognised that, as the aim is to work justice rather injustice, there may be special circumstances in which the rule does not apply (see Lord Keith in Arnold at p.109B).[40]It is of course conceivable that some foreign legal systems have rules of preclusive effect which may infringe a fundamental right or principle, and so I need to leave open the possibility that Article 26 could apply in the case of some rules of preclusive effect of foreign legal systems. But subject to that caveat, I answer the question which I posed in paragraph 8 above as follows:
“The Court’s determination of the preclusive effect, if any, of the Georgian Judgments, in relation to those claims in these proceedings which are governed by foreign law, is governed by the relevant foreign law.”
[41]As well as its application for determination of the point of law addressed above, Aviator had an application at the CMC for a trial of various preliminary issues. At the outset of the hearing before me, the parties were agreed that there should be a trial of preliminary issues designed to establish whether issue estoppels arose in these proceedings from the decisions of the Georgian courts. However, by the conclusion of the hearing, it was common ground that the question of whether to direct a trial of those preliminary issues should be adjourned until after I had handed down this judgment, so that the scope and nature of such a trial could be seen more clearly, and the benefits of ordering one considered properly.[42]However, Mr Roberts KC did press Aviator’s application for a trial of the following preliminary issue:
“Whether the First Claimant is the owner of copyright in the Aviator Copyright Works”
. I refused that application and said that I would give my reasons in this judgment.[43]In considering whether to order a trial of that issue as a preliminary issue I had regard to the guidance given by Neuberger J in Steele v Steele [2001] C.P. Rep. 106 and by David Steel J in McLoughlin v Jones [2002] QB 1312. To my mind the following factors are significant. First, the issue of ownership involves the consideration of a number of agreements, some of which are subject to Georgian law. There would need to be expert evidence of Georgian law and the draft directions envisage evidence of fact being served as well. The issue is therefore not one of law, but one likely to involve disputes of fact. Second, the issue of ownership is merely one of various matters on which Aviator will need to win at trial if it is to succeed on its claims for copyright infringement. Of course, if Aviator were to fail on that issue, those claims would fail, but if it were to succeed on that issue, all the other issues would remain. I can see no reason why ownership should be plucked out from all the other issues and decided in advance. Third, if Aviator is right about there being an issue estoppel in respect of the issue of ownership, then it will not be necessary to have a trial of that issue. It makes no sense to decide ownership now, and incur the costs and use the court resources in doing so, when it may not be necessary to decide it at all.