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The case

In a recent decision published October 30th, 2020 (ordinanza 24110/2020) the Italian Supreme Court has applied two provisions of the Brussels Ia Regulation, namely art. 8 n. 1, and art. 7 n. 2, in a context of multiple actions for fraud started by the Italian investors against a number of defendants. The first being a UK based bank for alleged breaches of its duties of control over financial experts who collected money from investors. The others being a UK based financial company and a financial expert who were supposed to invest the collected money by way of establishing trust. As emerges from the order of the Supreme Court, all investments collected in Italy were spent in gambling houses in Italy.

Proceedings were collectively started in Italy against all defendants, who challenged the Italian jurisdiction before the court of first instance, which thus requested the Supreme Court to settle the issue.

Last known domicile of one of the defendants

Following a logical order, the Italian Supreme Court seeks to determine in the first place if one of the defendants is domiciled in Italy. In this regard, the solution of the Court is interesting in that it focuses on the last known domicile of the financial expert, whose actual whereabouts have become unknown. According to the Court, the simple fact that current domicile of the party is unknown, and that consequently service of documents has followed domestic rules for unknown residents, is per se not sufficient to argue that that person is no longer domiciled in Italy. To some extent, even though this decision is not clearly mentioned in the order of the Italian Supreme Court, this conclusion seems consistent with the ratio expressed by the Court of Justice of the European Union in Hypotecní banka a.s. v Lindner (case C-327/10), where it was argued that defendants with unknown domicile are domiciled at their last known domicile for the purpose of the Brussels I(a) Regulation (see para. 42 ff).

Art. 8 n. 1 Brussels Ia Regulation

Having established that Italian jurisdiction exists under art. 4 Brussels Ia Regulation at least in respect to one of the defendants (i.e. the financial expert cooperating with the British financial company who should have been appointed as trustee for the management of the investments), the Italian Supreme Court turns to the analysis of Italian jurisdiction over the UK investment company and the UK Bank under art. 8 n. 1 Brussels Ia Regulation.

The Supreme Court concedes that the special head of jurisdiction is subject to a restrictive interpretation and should not be applied when the different proceedings have different petitum and causa petendi, or where there is no subordination between the actions with no risk of incompatible judgments – the mere ‘inconsistency’ between decisions being insufficient to trigger art. 8 n. 1 Brussels Ia Regulation and derogate from art. 4.

In the case at hand, however, even though the action against the UK bank was contractual in nature for alleged violation of its control duties, and non-contractual in nature against the other parties, the Italian Supreme Court notes how the non-contractual liability of those who have collected the money to unlawfully spend it in gambling houses in Italy is strictly interconnected and intertwined with the contractual conduct of the bank – as proper ex ante controls by this subject might have avoided the investment in favor of companies who had unclear bank operations incompatible with investment activities. Moreover, damaged parties have started proceedings seeking damages collectively against all parties for solidary liability – in the Court’s eye, this renders it fundamental to unitarily address all conducts even though these are grounded on different titles. Again, a solution that appears to be consistent with the case law of the Court of Justice of the European Union (Freeport plc v Olle Arnoldsson, case C-98/06, para. 41).

For these reasons, the Italian Supreme Court argues that the Italian jurisdiction extends from that of the Italian domiciled also to both the British investment company and the British bank.

Art. 7 n. 2 Brussels Ia Regulation

The Italian Supreme Court also addresses the existence of the Italian jurisdiction under art. 7 n. 2 Brussels Ia Regulation. The Court does not however determine at this stage local competence – referring the issue to the court of first instance.

The case deals in concreto with damages following investment frauds – in this sense the only ‘damage’ for the purposes of the provision at hand is financial in nature. The Italian Supreme Court quotes the decision of the European Court of Justice in Volkswagen AG (Verein für Konsumenteninformation v Volkswagen AG, case C-343/19) to support the idea that the place of financial loss might ground the existence of Italian international jurisdiction, as in Italy the investors transferred their sums (thus lost their money).

The Supreme Court additionally argues that the ‘conduct’ can be localized in Italy as well – thus Italian jurisdiction follows. In Italy the sums were allegedly fraudulently collected from investors, and in Italy such sums were allegedly fraudulently used in Italian gambling houses (contrary to contractual indications). With a brief passage, the Court gives a strong value to this specific head of jurisdiction, the place of the ‘harmful conduct’, as it can be used by the plaintiffs to ground their actions superseding uncertainties that could follow the application of art. 8 n. 1 Brussels Ia.

Arbitration community lacked a comprehensive guide in English to move through the multiple and multifaceted connections between arbitration and the Italian legal system: International Arbitration in Italy fills in this gap, addressing both international commercial and investment arbitration.

The book deeply depicts said connections, raising interpretative problems and providing solutions with the view to building a coherent system against the backdrop of the author’s thought about the phenomenon of the arbitration taken as a whole.

This approach qualifies the entire analysis elaborated on in 12 Chapters, which start with the focus on what international arbitration is and what its grounds are, then moving on how arbitration “dialogues” with the different sources of Italian law, and what the principles for the right interpretation of this law are.

The book proceeds on “traditional” topics pertaining to a handbook of international commercial arbitration (the interplay between arbitration and national courts, the arbitration agreement, the arbitral tribunal, the arbitral proceedings, the provisional measures, the law applicable to the merits, the costs of arbitration, the different awards, related challenges, recognition and enforcement) with a closing attention to investment arbitration.

International Arbitration in Italy also includes three useful appendices which gather the main provisions of Italian law on arbitration (1), the rules of arbitration of the Milan Chamber of Arbitration (2) and the list of the Bilateral Investment Treaties in force for Italy (3).

Given its well-balanced theoretical and practical approach, the book will stimulate the scientific debate while helping practitioners to handle even the trickiest cases featuring interactions between international arbitration and Italian law.

Many good wishes for the Holiday Season and the New Year from the Editors of the EAPIL blog!

Blogging will be light in the coming days, but we plan to gradually resume our usual publishing pace on 7 January.

The critical point in Monday’s judgment in  ING Bank N.V. & Anor v Banco Santander S.A. [2020] EWHC 3561 (Comm), an application for lack of jurisdiction, is whether this is a case about claims which a syndicate of eight lenders, including ING, had against Marme Inversiones 2007 S.L.U (“Marme”) under a loan agreement and related swap agreements (together “the Marme Agreements”) which were entered into between the lenders and Marme in September 2008, or whether it is about the effect of the ongoing liquidation of Marme in Spain on those claims. The Defendant Applicant says the latter, the Claimant Respondents say the former.

Of note is that on 2 January 2020, Sorlinda, whose agreements are at issue, merged into Santander. As a consequence of the merger, Santander assumed all of Sorlinda’s rights and liabilities.

At 4 Cockerill J summarises ‘the field of battle’ (at 4) as follows:

Santander contends that the court should refuse to exercise jurisdiction or order a stay because:

i) The claim falls within the EU Insolvency Regulation on insolvency proceedings (the “Insolvency Regulation”) and is excluded from the scope of the recast Regulation (EU) No. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the “Brussels Regulation”) pursuant to Article 1(2)(b) of the Brussels Regulation.

ii) Even if the Claim does not fall within the exception under Article 1(2)(b), ING cannot rely upon Article 25 of the Brussels Regulation.

iii) As a matter of Spanish law, ING has not established that Sorlinda became liable to ING for Marme’s liabilities.

iv) There are in any event grounds for the Court to refuse to exercise its jurisdiction and/or to order a stay.

ING contends that:

i) The bankruptcy/winding up exclusion in Article 1(2)(b) of the Brussels Regulation does not apply. The Claim is between two solvent entities in relation to contractual payment obligations under the Marme Agreements, and has no effect on Marme or any of its other creditors. The Claim does not derive directly from Marme’s winding up nor is it closely connected with that winding up.

ii) The question of whether or not Santander is bound by the Marme Agreements is a question of English law having appropriate regard to the effect of the relevant “assumption” of Marme’s obligations by Sorlinda (now Santander) as a matter of Spanish law.

iii) There is (at least) a good arguable case that as a consequence of the “assumption” Santander has a direct liability to ING under the Marme Agreements which are subject to the exclusive jurisdiction of the English courts.

iv) There are no grounds for the Court to refuse to exercise its jurisdiction and/or to order a stay. (GAVC underlining)

She holds that the jurisdictional challenge succeeds on the A25 BIa point, and also on the Insolvency Regulation point. The other grounds (assumption in Spanish Law and case management stay) would have failed.

Arguments in essence concern Brussels Ia’s insolvency exception. Per CJEU Gourdain, an action is related to bankruptcy only if it derives directly from the bankruptcy and is closely linked to proceedings for realising the assets or judicial supervision. Valach and F-Tex is CJEU authority also discussed.

In general, it is the closeness of the link between a court action and the insolvency proceedings that is decisive for the purposes of deciding whether the insolvency exclusion is applicable (CJEU German Graphics). In the absence of substantive EU insolvency law, the CJEU does not push an autonomous interpretation of the concept and defers largely to national insolvency law.

Whether the action is within the scope of BIa therefore requires examination of the national laws at issue, and that is done at length (featuring ia prof Virgós,  whose expert report clearly impressed Mrs Justice Cockerill).

Core of the decision on the insolvency exception, is at 197:

..the nature of the claim is one which is defined by something which took place in the liquidation, and the dispute effectively cannot be expressed without reference to the conduct of the liquidation. Although there is no challenge to the validity of the liquidator’s actions, the proceedings do necessarily require a consideration of the ambit of those powers and the ambit of actions done as part of those powers. The question of to what extent Sorlinda assumed the relevant liability can only be answered by looking at the deal which was struck in the context of the Liquidation Plan (governed by Spanish insolvency law) and the statutory insolvency framework.

The claim is not covered by BIa. English courts do not have jurisdiction over it.

Article 25 BIa is discussed first in fact, at 113 ff. However I would have thought (although Cockerill J suggest quite the reverse) that the A25 arguments must be obiter, with the insolvency exception findings logically coming first. This may be at issue when this judgment is appealed and /or referred to later.

On A25, ING must demonstrate a good arguable case either as to succession to choice of court, or as to specific consent. It was clear that the latter was not established hence discussion focused on novation /succession.  Authority discussed was of course Refcomp, Coreck Maritime, Tilly Russ etc.

This section of the judgment does not have the same clarity as the discussion on insolvency. Much reference is made to the relevance of either Spanish or English law on the issue of privity of choice of court, however this seems to be mostly done with reference to those laws being potential lex contractus (of the underlying contract). Even if the issue is not completely dealt with autonomously by EU law (which is arguable; and would have ended reference to any national laws), discussion of national law arguably should be to lex fori prorogati per the new rule in Brussels Ia (even a putative lex fori prorogati). At any rate, no succession or novation is established.

Something to clear out in my head over the end of year break.

This was most probably my last posting for the year.

Merry Christmas, everyone, and Guten Rutsch. Be safe, and remember this nice thought.

Geert.

European Private International Law, 3rd ed., 2021, Heading 2.2.3.1 (2.73 ff) and Heading 2.2.10.7 (2.355 ff).

Jurisdiction.
Bankruptcy/winding up (#insolvency) exclusion, A1(2)(b) BIa.
Whether it is triggered. Whether if it is not, A25 BIa applies. https://t.co/PbU6pCL9hM

— Geert Van Calster (@GAVClaw) December 22, 2020

Elie Lenglart, a lecturer at the University Paris II Panthéon-Assas, gave an online conference on La théorie générale des conflits de lois à l’épreuve de l’individualisme (Individualism and General Choice of Law Theory) on 1 December 2020.

This is the topic of his doctoral thesis, which received the first prize of the French Committee of Private International Law earlier this year.

The English abstract of the work reads:

Individualism is one the characteristic features of modern legal theories. The emergence of individualism has so profoundly altered the meaning of the judicial phenomenon that it may be considered as the decisive factor in the evolution from a classical to a modern conception of the Law. This evolution is the product of a substantial mutation of our vision of the world, inextricably linked to a change of philosophical paradigm. The analysis of this evolution is essential not only to the understanding of the meaning of the Individualism doctrine but also to apprehend its main repercussions. International private Law has also been influenced by this evolution. The Conflict of Laws doctrine is necessarily based on a specific conception of the Law itself. Thus, the emergence of the individualistic approach of the Law undoubtedly has decisive consequences on this field: the methods used to solve conflicts of laws have evolved while the goals have been substantially altered. The Conflict of Laws doctrine is now structured toward the sole analysis of individual interests. This new feature is radically opposed to the balance that characterized the classical approach of Conflict of Laws. In order to reveal the extent of the implications of the Individualism on this field, a study of the concept within the Conflict of Laws doctrine is necessary.

The table of contents of the thesis is available here.

A video of the conference (in French) can be accessed here.

In Owen v Galgey & Ors [2020] EWHC 3546 (QB), Linden J yesterday dealt with the application of Rome II’s common habitual residence exception to A4(1) lex loci damni rule, and with the general escape clause of A4(3).

These cases often involve tragic accidents and injuries and the sec conflict of laws analysis below in no way of course mean any disrespect to claimant and his loved ones.

Claimant is a British citizen who is domiciled and habitually resident in England. He brings a claim for damages for personal injury sustained by him as result of an accident in France (3 April 2018), when he fell into an empty swimming pool which was undergoing works at a villa in France, a holiday home owned by the First Defendant, whose wife is the Second Defendant. They are also British citizens who are domiciled and habitually resident in England, Third Defendant is a company domiciled in France, and the public liability insurer of the First and Second Defendants. Fourth Defendant is a contractor which was carrying out renovation works on the swimming pool at the time of the accident. Fifth Defendant is the public liability insurer of the Fourth Defendant. Fourth and Fifth Defendants are both companies which are domiciled in France.

That French law applies to the claims against Fourth and Fifth Defendant is undisputed. There is however a dispute as to the applicable law in relation to his claims against the First to Third Defendants. These Defendants contend that, by operation of A4(2) Rome II, English law applies because the Claimant and the First and Second Defendants are habitually resident in England. Claimant contends that French law applies by operation of A4(3) Rome II: the ‘manifestly more closely connected’ rule.

Textual argument suggest that on the basis of the text of Recital 18 and A4(2) itself, A4(2) only applies to two party cases and does not apply in multi-party cases. Linden J at 29 notes that this would also correspond with the narrow reading required of A4(2). However he follows of course the authority of Marshall, which I approved of at the time (if only because, if multi-party claims were outside the scope of A42(), it would suffice for either claimant artificially to add a defendant to the claim, or for a defendant similarly to manoeuvre in a second defendant, for A4(2) to become inoperable). A4(2) also applies if more than one party is involved.

On A4(3), then, Marshall, too, is authority and Winrow v Hemphill another rare case that seriously engaged with the issue. In the latter case, Slade J held that the balance was in favour of not applying the escape clause, particularly in view of the period of time of habitual residence in Germany, and subsequent continuing residence in that country (inter alia for follow-up treatment). In the former, Dingemans J did reach a conclusion of applying A4(3) hence lex causae being French law on the grounds I discuss in my post on the case. Here, Linden J discusses the various factors at issue in Winrow v Hemphill and in Marhsall and reaches a conclusion of French law:

In my view it is clear that the tort/delict in the present case is manifestly more closely connected with France. France is where the centre of gravity of the situation is located and the preponderance of factors clearly points to this conclusion. This conclusion also accords with the legitimate expectations of the parties.

The reasons for that are essentially listed at (75  ff)

The tort/delict occurred in France, as I have noted. This is also where the injury or direct damage occurred. The dispute centres on a property in France and it concerns structural features of that property and how the First, Second and Fourth Defendants dealt with works on a swimming pool there. Although these defendants deny that there was fault on the part of any of them, the First and Second Defendants say that the Fourth Defendant was responsible if the pool presented a danger and the Fourth Defendant says that they were. The allegations of contributory negligence/fault also centre on the Claimant’s conduct whilst at the Villa in France.

The First and Second Defendants also had a significant and long-standing connection to France, the accident occurred on their property and the works were carried out by a French company pursuant to a contract with them which is governed by French law. Their insurer, the Third Defendant, is a French company and they are insured under a contract which is governed by French law. The contract was to insure a property in France albeit one which, I accept, applied to claims under English and French law. It is also common ground that the claim against the Fourth Defendant, and therefore against the Fifth Defendant, also a French company, is entirely governed by French law and will require the court to decide whether the Fourth Defendant or, at least by implication, the First and Second Defendants were “custodians” of the property for the purposes of French law.

Whilst it cannot be said at this stage that, by analogy with Marshall, the accident was entirely caused by the Fourth Defendant in particular, the situation in relation to the swimming pool which is said to have been the cause of the accident was firmly rooted in France and it resulted from works which were being carried out by the Fourth Defendant as a result of it being contracted to do so by the First and Second Defendants. The liability of the First and Second Defendants, if any, will be affected by how they dealt with that situation, including by evidence about their dealings with the Fourth Defendant. That situation had no significant connections with England other than the nationality and habitual place of residence of the First and Second Defendants.

The core counterarguments which were dismissed, are (78 ff)

I take the point that the Claimant and the First and Second Defendants were habitually resident in England at the relevant time, that there was a pre-existing relationship between them, and that the Claimant and his family came to be at the Villa as a result of an agreement which was made in England. But, applying an objective test (see Chitty on Contract Volume 1 at paragraph 2-171 in particular), I am not satisfied that this agreement, on the information available at this stage, was contractual in nature. Part of the difficulty in relation to this aspect of the First to Third Defendants’ argument is that there is very little information before the court as to what precisely happened. Looking at the agreed facts in the context of the statements of case and the other materials which I have been shown, however, it appears that the agreement resulted from a casual conversation between social acquaintances in the context of mutual favours having been done in the past. It was informal in nature and it appears that the Claimant offered to do the work as a favour and the First and Second Defendant invited him and his family to the Villa to return that favour.

If I had found that there was a contract, I would also likely have found that it was governed by French law. Although it was entered into in England between British parties, it related entirely to a property in France. Performance of the contract on both sides could only be effected at a particular property in France and was very strongly connected to France in that it involved work on a villa there and a family holiday there. This and the other features of the case would have led me to conclude that [A4(3) Rome I] indicated that there was a manifestly closer connection between the contract and France, although I acknowledge that there is a degree of circularity in this approach. ….

Mr Doherty understandably emphasised that, even if there was no contract with the Claimant, the relationship and the agreement which led to the Claimant and his family being in France were based and made in England. I was also initially attracted by his argument that in effect the Claimant’s complaint is about the way in which the First and Second Defendants fulfilled their side of that agreement. But that is not the claim which he makes, and, in any event, their performance of the agreement was in the form of allowing the Claimant and his family to occupy a villa in France. Nor is this a case in which, for example, the injury occurred whilst the Claimant was carrying out work on the Villa and potential tortious and contractual duties (if the relationship was contractual) therefore arose directly out of the relationship between the parties.

To my mind the tort/delict in this case is much more closely connected to the state of the swimming pool which, as I have said, was part of a property in France and resulted from the French law contract between the First and Second Defendants and the Fourth Defendant. If any of the Defendants is liable, that liability will be closely connected with this contract. This point, taken in combination with the other points to which I have referred, in my view clearly outweighs the existence of any contract with the Claimant relating to the Villa, even if I had found there to be a contractual relationship and even if it was governed by English law.

Similarly, although I have taken into account the nationality and habitual place of residence of the Claimant and the First and Second Defendants, these do not seem to me to alter the conclusion to which I have come. I have also taken into account the fact that the consequences of the accident have to a significant extent been suffered by the Claimant whilst he was in England, but in my view the other factors to which I have referred clearly outweigh this consideration.

Of particular note for future direction on Rome II, is the discussion on existing pre-contractual relations.

This is of course a fact-specific and to a certain extent, discretionary assessment. I also agree there is no limit to the kinds and amount of factors which a judge may take into account when applying the A4(3) exception.

I am minded to disagree with the conclusion reached here, however.  The judge’s assessment is one that echoes a proper law of the tort approach, starting from scratch. But that is not what A4(3) is about: it does not start from scratch; it starts from the clearly stated rule of A4(2), which requires a lot of heavy lifting to be dislodged. The arguments pro upholding the A4(2) presumption listed in 78ff in my view give the finding for sustaining its consequence and hence English law as lex causae, strong foundations indeed which I believe, respectfully of course, the judge did not show enough deference to.

Geert.

European Private International Law, 3rd ed. 2021, Heading 4.5.

Article 4(2) and (3) Rome II Regulation, applicable law for tort. https://t.co/cYGtr7m0jx

— Geert Van Calster (@GAVClaw) December 21, 2020

Marta Pertegás (Maastricht University) has posted The 2019 Judgments Convention: the Road Ahead on SSRN.

The abstract reads:

In The Hague and far beyond, the conclusion of the Convention on the Recognition and Enforcement of Judgments in Civil and Commercial Matters (hereafter, “the Hague Judgments Convention”) in July 2019 was welcomed with a long deep sigh of satisfaction. The successful conclusion of this Convention under the auspices of the Hague Conference on Private International Law (hereafter, “the HCCH”) undoubtedly marks a crucial milestone in the area of international dispute settlement in civil and commercial matters. In this contribution, the author describes the circumstances leading up to the conclusion of the Hague Judgments Convention, as well as the Convention´s most salient features. The author also recommends some actions for the Convention to become truly effective. Indeed, the “road ahead” towards an operational international standard of practical relevance is the next challenge for the private international law global community.

Today, the English High Court in Owen v Galgey [2020] EHWC 3546 (QB) delivered a thorough and interesting decision on Article 4(3) of Rome II Regulation, which is the general escape clause for Rome II. For a complete reading of the decision see here

The European Commission on 3 December presented the European Democracy Action Plan. The Press Release explains that: “Standing up to challenges to our democratic systems from rising extremism and perceived distance between people and politicians, the Action Plan sets out measures to promote free and fair elections, strengthen media freedom and counter disinformation.”

With regard to the aim of strengthening media freedom, the Commission “will propose in 2021 a recommendation on the safety of journalists, drawing particular attention to threats against women journalists, and an initiative to curb the abusive use of lawsuits against public participation (SLAPPs).”

The Commission is seeking to establish an Expert Group against Strategic Lawsuits Against Public Participation (SLAPP). The Call defines SLAPP as “groundless or exaggerated lawsuits, initiated by state organs, business corporations or powerful individuals against weaker parties who express, on a matter of public interest, criticism or communicate messages which are uncomfortable to the litigants.”

The Call further explains: “Whilst most SLAPP appear to be national lawsuits, they can be made more complex, thus more costly to defend, when they are deliberately brought in another jurisdiction and enforced across borders, or when they exploit other aspects of national procedural and private international law. Most SLAPP suits are based on defamation claims, but there are cases based on other grounds, including data protection, blasphemy, tax laws, copyright, trade secret breaches, and similar concepts.”

Interested persons can find the call in the Register of Commission Expert Groups.

When I flagged the Dutch SC reference to the CJEU in C‑709/19 Vereniging van Effectenbezitters, asking for clarification of the Universal Music case-law on purely economic damage, I signalled the specificities of this case:  the case concerns a class action, not that of an individual shareholder; no prospectus was specifically addressed at Dutch investors, who instead feel they received incomplete and misleading information that was made public through press releases, websites and public statements by directors; finally the Dutch Supreme Court questions the CJEU on an e-Date accessibility type jurisdictional basis.

BP plc, defendant, is domiciled in the UK.

Sanchez-Bordona AG Opined last Thursday (apologies I did not make the Twitter-promised Friday review). He kicks off  his Opinion with calling into question the very premise of the Universal Music case-law: at 24

the fact that the applicant’s account is located in that Member State is a relevant consideration in any non-contractual action for damage suffered by investments as a result of defective information, even when supplemented by other factors. While noting that the Court of Justice has inclined towards that view, in my opinion it is an open question.

That is a bold proposition not borne out by either CJEU or national case-law. Arguably better formulated is the position at 28 that the interest of the location of the bank account ‘should not be overstated’.

At 32 ff the AG repeats his call (joining a list of AG’s) to abandon the Bier Handlungsort Erfolgort distinction which he also expressed in his Opinion in Volkswagen. He emphasises again that in cases like these, the procedural decision on jurisdiction requires the judge too intensive an engagement with the substance of the case, consequently (at 36) ‘the very nature of the criterion may well create uncertainty among legal practitioners and encourage procedural delaying tactics, as well as divergent interpretations in Member States and further requests to the Court of Justice for preliminary rulings.’

At 37 (and with reference to national case-law) follows a repeat of the call to ‘ruling out the place where the investment account is located’. However the AG himself then acknowledges that call is likely to fall on deaf CJEU ears (at 39):

having regard to the wording of the questions referred, I shall answer them in accordance with their own premisses, that is to say, in the light of the existing case-law of the Court of Justice

hence he continues the Opinion taking Universal Music and its descendants into account:

at 46: ‘the fact that the financial damage took place in an investment account located in the Netherlands cannot be accepted as a ‘sufficient connecting factor for the international jurisdiction’ of the courts of that State.’ – I agree.

Again with reference to his Opinion in Volkswagen, and using the initial justification of the CJEU in Bier to put forward locus damni, the AG at 49-50 reiterates that

the ‘specific circumstances’ relevant to attributing jurisdiction are those which demonstrate the proximity between the action and the jurisdiction, and the foreseeability of that jurisdiction, .. Those circumstances must include: factors that facilitate the sound administration of justice and the smooth operation of proceedings; and factors that may have helped the parties to determine where they should institute proceedings or where they might be sued as a result of their actions.

He then rejects, for reasons succinctly explained in the Opinion, as being relevant: BP’s settlement with other shareholders; the status as consumer of some of the shareholders; BP’s information about its shares.

He concludes on this point at 60 ff that there simply is not a locus damni that meets with A7(2) Brussels Ia’s conditions. He refers as he did in Volkswagen pro inspiratio to the CJEU’s similar holding viz A7(1) forum contractus in C-56/00 Besix:  that we are dealing with an obligation which ‘is not capable of being identified with a specific place or linked to a court which would be particularly suited to hear and determine the dispute relating to that obligation’.

Finally the AG deals with the question whether the nature of the action brought by VEB (the fact that it is a collective action) and the fact that it is purely an action for a declaratory judgment, should have an impact. The referring court fears that extending the CJEU rule of CDC, that the transfer of claims by each original creditor to the applicant does not affect the determination of the court having jurisdiction under Article 7(2), would make collective action ineffective.

The AG points out first of all that following ia Folien Fischer, the courts of the Member State in which either the causal event took place or the harm occurred or may occur may lawfully accept jurisdiction by virtue of A7(2) in actions in which specific damages have not (yet) been sought.

He then suggests at 79 that he sees ‘no difficulty in applying [A7(2)] to declaratory actions such as that brought by VEB, in advance of subsequent actions for damages which may be brought only by the individual injured parties, whose identity and residence are unknown at the time of the (first) action.’ Here I do not quite follow. The questions asked by VEB are not merely provisional in an A35 sense (indeed that Article is not discussed). VEB are asking the court to hold

that the courts in the Netherlands have international jurisdiction to hear the claims for compensation brought by the BP shareholders; that the rechtbank Amsterdam (District Court, Amsterdam) has territorial jurisdiction to hear those claims; that BP acted unlawfully towards its shareholders inasmuch as it made incorrect, incomplete and misleading statements about: (i) its safety and maintenance programmes prior to the oil spill on 20 April 2010; or (ii) the extent of the oil spill; or (iii) the role and responsibility of BP in regard to the oil spill; that, had it not been for the unlawful conduct on the part of BP, the purchase or sale of BP shares by the BP shareholders would have been effected at a more favourable market price, or not at all; that there is a conditio sine qua non link between BP’s unlawful conduct and the loss suffered by the BP shareholders due to the fall in the share price in the period between 16 January 2007 and 25 June 2010.

Surely these kinds of questions can only be entertained by court that has A7(2) jurisdiction which, the AG had just opined, is highly unlikely (although the referring court will have the last word on that).  That he sees ‘no difficulty in applying [A7(2)] to declaratory actions such as that brought by VEB’ either then contradicts what he just advised (unlikely) or reinforces it cynically (as in ‘no difficulty in applying it, meaning there is no such jurisdiction’) – also perhaps unlikely. Am I missing something?

Finally at 95 the AG (not further discussing Qs 3 and 4) concurs with Bobek AG in Schrems: on the issue of assignment, it is not up to the CJEU to write the law.

Most relevant.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.459.

Among flurry of #CJEU documents on this Super Thursday is SÁNCHEZ-BORDONA AG's Opinion in Vereniging van Effectenbezitters: location, for jurisdictional purposes, of purely financial damage, application of the Universal Music criteriahttps://t.co/xUwiMNYZFA
I shall review 2mrw.

— Geert Van Calster (@GAVClaw) December 17, 2020

This is a guest post by Katažyna Bogdzevič (Mikša), an associate professor of the Institute of International and European Union Law at the Law School of Mykolas Romeris University in Vilnius, Lithuania and an advisor to the Lithuanian Ministry of Justice. 

The CJEU’s judgement in the case of E.E. case (C-80/19) has already attracted scholars’ attention and it is not surprising (for posts on this blog see: here and here). For the first time, the CJEU had an opportunity to elaborate on the Succession Regulation with respect to so many important matters: the cross-border nature of the succession case, the notion of court, the scope of jurisdictional rules and authentic instruments and, finally, the choice of applicable law. The outcome of the case at the Supreme Court of Lithuania, after CJEU judgement, is presented below.

A deceased person was a Lithuanian national who married a German national and moved to Germany in 2013. The same year she made a will before a notary in Kaunas (Lithuania) and designated her son E.E. as the only heir. She passed away in 2017, and her son approached the notary in Kaunas to open the succession and issue a national succession certificate. However, his request was rejected, as the notary had no jurisdiction in accordance with the Succession Regulation. E.E. have appealed this decision to the court.

Lithuania did not notify the Commission pursuant to Article 79 of the Succession Regulation of the other authorities and other legal professionals (except for the courts), which exercise judicial functions or act pursuant to a delegation of power by a judicial authority or act under the control of a judicial authority. However, the CJEU ruled already in the WB case (C-658/17) that failure by a Member State to notify the Commission of the exercise of judicial functions by notaries, as required under that provision, is not decisive for their classification as a court. As a result, in the absence of a clear answer whether Lithuanian notaries are courts, they applied jurisdiction rules provided by the Succession Regulation for the purpose of issuing national succession certificates.

The Supreme Court of Lithuania, while dealing with cassation appeal, referred a preliminary questions to the CJEU regarding the cross-border nature of the case, the notion of the court and the legal nature of the national succession certificate issued by the Lithuanian notaries, both in case they can be considered courts and in case they cannot.

After the CJEU ruling, there are no doubts that the case at stake is of a cross-border character. Hence, this issue is left outside of this comment. The most interesting part is regarding the functions of the notaries and assessment of whether they exercise judicial powers or act pursuant to delegation of power by a judicial authority or act under the control of a judicial authority.  The CJEU reminded that Lithuanian notaries are not courts, unless they act pursuant to a delegation of power by a judicial authority or act under the control of a judicial authority. The CJEU did not use this opportunity to elaborate on these premises but left it for the national court to decide.

On 4 November 2020, the Supreme Court of Lithuania ruled in the resolution (No e3K-3-422-378/2020) that Lithuanian notaries are not courts within the meaning of the Succession Regulation.

The Supreme Court started its analysis by recalling Article 3(2) Succession Regulation. The further considerations were based mainly on the Law on Notaries. Article 1 of this law grants notaries with rights to legally establish uncontested rights and legal facts of natural and legal persons to ensure the protection of these persons and the state’s legitimate interests. A notary is required to act with greater diligence and caution and is obliged to comply with the law strictly and to refuse to perform notarial acts if they infringe the law or do not comply with it. Such an understanding of a notary’s functions presupposes that the notary does not solve disputes between the parties, does not establish disputable circumstances, and, in case of doubts or disagreements about the rights or legal facts of persons, shall refuse to certify such rights or facts.  A notary may certify certain rights or facts only if there are no doubts about their content and legality.

Pursuant to Article 26(1)(2) Law on Notaries, which defines notarial acts performed by notaries, notaries shall issue (national) succession certificates. The Supreme Court, in its previous case-law, provided that the facts contained in notarized documents are established and cannot be proved otherwise until these documents (or parts thereof) are declared invalid following the procedure established by law (Article 26(2) Law on Notaries).

In case of a dispute between the heirs in a succession case, such dispute shall be settled in a court in accordance with the rules established in Article 12 of the Law on Courts, which stipulate that the Supreme Court of Lithuania, regional and district courts are courts of general jurisdiction. Since Lithuanian notaries are not granted the right to rule on the issues which gave rise to the dispute between the parties and the right to establish facts which are not clear and obvious or to decide on the disputed facts, the Supreme Court concluded that the issuance of a national succession certificate does not imply the performance of judicial functions. Therefore, if the notaries are not considered courts within the meaning of the Succession Regulation, they are not bound by its jurisdictional rules. The Supreme Court pointed out that in order to establish a uniform solution in cross-border inheritance cases, the legislator could enact a provision obliging Lithuanian notaries to follow the rules of jurisdiction established in the Succession Regulation. However, in their absence, notaries in Lithuania must follow national law rules in cross-border succession cases.

The Supreme Court concluded that in the present case, having established that the succession was of a cross-border nature, a notary in Lithuania is competent to issue a national succession certificate without the need of analyzing jurisdictional rules of the Succession Regulation. To the contrary, in the event of a dispute, the court’s jurisdiction shall be determined based on the provisions of the Succession Regulation.

In his Opinion delivered last Thursday, AG Campos Sánchez-Bordona presents his take on determination of the place where the damage occurred (‘Erfolgsort’) under Article 7(2) of the Brussels I bis Regulation in the context of a collective action for declaration of liability in connection with investments in securities. The Opinion provides further clarification in relation to the case law established by the Court of Justice in the cases Kolassa, Universal Music International Holding and Löber.

An oil and gas company established in United Kingdom, whose ordinary shares are listed on the stock exchanges in that State and in Germany, leases an oil rig in the Gulf of Mexico. In 2010, an explosion occurs on this oil rig, causing serious environmental damage.

Before the courts in the Netherlands, an association established in this Member State brings a collective action for a declaratory judgment against the oil and gas company on behalf of all persons who bought, held or sold the ordinary shares through an investment account in the Netherlands. It argues that the oil and gas company acted unlawfully towards its shareholders inasmuch as it made incorrect, incomplete and misleading statements about the circumstances pertaining to, inter alia, the aforementioned explosion resulting in an oil spill.

The first instance court considers that it lacks jurisdiction to rule on the action in question. The second instance court upholds this decision.

The association lodges an appeal in cassation with the Supreme Court of the Netherlands, which refers questions to the Court of Justice for a preliminary ruling.

It is worth noting at the outset that the Opinion of 17 December 2020 does not address all the questions referred to the Court. As it states at its point 17, the Opinion elaborates only on two first questions of the Supreme Court of the Netherlands, relating to, firstly, the determination of the place where the damage occurred in the context of the action in the main proceedings and, secondly, the potential impact of the collective nature of that action on such determination.

As a consequence, the third and fourth questions on international and internal territorial jurisdiction to hear subsequent individual claims of the investors are not covered by the Opinion.

In relation to the first question, the Opinion explains, in essence, that the location of the investment account (in which the fall in the value of the shares of a company listed on stock exchanges has been reflected/’recorded’) in a Member State is not sufficient to confer on the courts of this Member State jurisdiction to rule on the action in matters of non-contractual liability in connection with investments in securities. It then goes on to analyse whether other circumstances, combined with the location of the investment account, could justify a different outcome.

Ultimately, it concludes at point 96:

[For the purposes of Article 7(2) of the Brussels I bis Regulation] it is not a sufficient connecting factor for attributing international jurisdiction to the courts of a Member State that a fall in the value of the shares of a company listed on stock exchanges in other Member States is recorded in investment accounts located in that Member State or in investment accounts of a bank or investment firm established in that Member State, where the damage is the result of decisions taken by investors on the basis of allegedly incorrect, incomplete and misleading information distributed globally by the listed company;

the existence of a settlement between the defendant company and some shareholders in a third State which has not been offered to the applicants in the main proceedings and the fact that some applicants are consumers are [also] not relevant specific circumstances for the purposes of attributing international jurisdiction pursuant to Article 7(2) of [the Brussels I bis Regulation]. Nor is the fact that the relevant information was distributed worldwide by the defendant company.

Here, it is worth noting that, at points 68 to 71, the Opinion discusses the question whether it is always necessary to ensure the applicant the option of bringing an action in a place where damage is said to have occurred. It does not seem to be the case, as the Opinion explains it.

Concerning the second question, the Opinion contends that the exercise of a collective action in accordance with national rules of procedure by an association representing the interests of the holders of the securities who suffered the damage does not alter the interpretation of Article 7(2) of the Brussels I bis Regulation presented for the purposes of the first question.

The Opinion can be consulted here.

It has been widely supported in legal scholarship that arbitral awards issued by the Basketball Arbitral Tribunal may be recognized and declared enforceable by virtue of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. A recent judgment rendered by the Thessaloniki Court of first Instance examined a pertinent application, and granted recognition and enforcement of the BAT award in Greece.

THE PROCEEDINGS IN GENEVA

The Greek Player V.K. and his Agency, S. Enterprise Ltd., filed a claim against the Greek Club A. B.C. 2003 for outstanding salaries, bonuses, agent fees, declaratory relief and interest. The Claimant submitted that the Respondent breached the contractual relationship by failing to pay several salary instalments as well as the agent fees. The Respondent did not participate in the proceedings. The claim was partially upheld by the Arbitrator. The Tribunal ordered the Club to pay a series of amounts and costs to the applicants.

THE PROCEEDINGS IN THESSALONIKI

Less than a month later, the award creditors filed an application for the recognition and enforcement of the BAT award before the Thessaloniki 1st Instance Court. For this purpose, they submitted a true copy of the award and the arbitration agreement, both duly translated in Greek.

The Club countered with a number of defences:

• It was not summoned to the BAT proceedings, which resulted in its default of appearance.
• After the application in Greece, the parties signed a private agreement, following which the player agreed to downsize his claim to the sum of 85.000 Euros, and both applicants agreed to be paid by instalments.
• The Club had already paid the amount of 51.000 Euros, which should not be declared enforceable.
• By seeking recognition of the BAT award before the court, the applicants violated the private agreement, where it was agreed that both parties would refrain from any legal action during its implementation.
• It was also agreed that the player would apply for discontinuance, and in the event of payment default, the applicants were obliged to send the Club a notice in written, which however was omitted.

THE JUDGMENT OF THE THESSALONIKI COURT

• The court saw no violation of the audience rights of the Club: the latter was duly and timely served with the application and the summons to appear in the proceedings, as evidenced by the documents submitted to the court.
• By signing the private agreement, the court saw a tacit acceptance of the BAT award by the Club.
• The court dismissed the Club’s request to deny the enforceability of the amount already paid. It underlined that this would mean a revision on the merits. Apart from the above, the court continued, the Club is not deprived of its right to request partial stay of execution in the enforcement stage.
• For the same grounds the court refrained from the examination of the particulars of the agreement, considering that the allegations of the Club against the applicants are out of the scope of the exequatur proceedings.
• With respect to the grounds of refusal, the court dismissed the public policy defence raised by the Club in regards to the costs of the arbitration proceedings: The total amount of 12.500 Euros is not excessive, given the subject matter of the dispute (140.000 Euros).

SHORT COMMENT

The judgment of the Greek court is a positive sign for the free circulation of BAT awards in national jurisdictions. The losing party failed to prove any grounds of refusal. The last bastion is now the application for a stay of execution. However, a re-examination on the merits is strictly forbidden in this stage; the Club’s only hope is to trace potential flaws in the enforcement proceedings.

Finally, free circulation is also guaranteed for CAS rulings, as evidenced by a judgment issued by the same court nearly seven years ago.

Carmen Otero García-Castrillón, Complutense University of Madrid, has kindly provided us with her thoughts on personal data protection and international trade regulation. An extended version of this post will appear as a contribution to the results of the Spanish Research Project lead by E. Rodríguez Pineau and E. Torralba Mendiola “Protección transfronteriza de la transmisión de datos personales a la luz del nuevo Reglamento europeo: problemas prácticos de aplicación” (PGC2018-096456-B-I00).

The regulatory scenario

1. In digital commerce times, it seems self-evident that personal data protection and international trade in goods and services are intrinsically connected. Within this internet related environment personal data can be accessed, retrieved, processed and stored in a number of different countries. In this context, the legal certainty for economic actors, and even the materialisation or continuation of commercial transactions requires taking into consideration both, the international jurisdiction and the applicable law issues on the one hand, and the international trade regulations covering these commercial transactions on the other hand.

Too much personal data protection can excessively restrict international trade, especially in countries with less developed economies for which the internet is considered an essential sustainable development tool. Little protection can prejudice individual fundamental rights and consumers’ trust, negatively affecting international trade also. Hence, some kind of balance is needed between the international personal data flux and the protection of these particular data. It must be acknowledged that, summarising, whilst in a number of States personal data and their protection are fundamental rights (expressly in art. 8 CFREU, and as a part of the right to private and family life in art. 8 ECHR), in others, though placed in the individual’s privacy sphere (in the light of art. 12 UDHR), it is basically associated to consumer’s rights.

2. The only general international treaty specifically dealing with personal data protection is the Convention 108 + of the Council of Europe, for the protection of individuals with regard to the processing of personal data. The Convention defines personal data as any information relating to an identified or identifiable individual (art. 2.a) without an express and formal recognition of its fundamental right character. The Convention, whose raison d’etre was justified for need to avoid that the personal data protection controls interfere with the free international flow of information (Explanatory Report, para. 9), “should not be interpreted as a means to erect non-tariff barriers to international trade” (Explanatory Report, para. 25). Its rules recognise the individual’s rights to receive information on the obtaining and the treatment of their data, to be consulted and oppose that treatment, to get the data rectified or eliminated and to count, for all this, with the support of a supervisory authority and judicial and non-judicial mechanisms (arts. 8, 9 and 12). On the basis of these common standards, member States agree not to prohibit or subject to special authorisations the personal data flows as long as the transfer does not imply a serious risk of circumventing them (art. 14). Moreover, the agreed rules can be exempted when it is a “necessary and proportionate” measure “in a democratic society” to protect individual rights and “the rights and fundamental freedoms of others”, particularly “freedom of expression” (art. 11). Presently, 55 States are parties to this Convention, including the EU but not the US, that have an observer status.

Along these lines, together with other Recommendations, the OECD produced a set of Guidelines Governing the Protection of Privacy and Transborder Flows of Personal Data (11.7.2013; revising the 1980 version). After establishing general principles of action as minimum standards, it was concluded that the international jurisdiction and the applicable law issues could not be addressed “at that stage” provided the “discussion of different strategies and proposed principles”, the “advent of such rapid changes in technology, and given the non-binding nature of the Guidelines” (Explanatory Memorandum, pp. 63-64).

On another side, the World Trade Organisation (WTO) administers different Agreements multilaterally liberalising international trade in goods and services that count with its own dispute settlement mechanism. In addition, States and, of course, the EU and the US, follow the trade bilateralism trend in which data protection and privacy has begun to be incorporated. Recently, this issue has also been incorporated into the WTO multilateral trade negotiations on e-commerce.

CJEU Schrems’ cases

3. Last 16 July, in Schrems II (C-311/18), the CJEU declared the invalidity of the Commission Decision 2016/1250 on the adequacy of the protection provided by the Privacy Shield EU–US, aimed at allowing the personal data transfer to this country according to the EU requirements, then established by Directive 95/46 and, from 25 May 2018, by the Regulation 2016/679 (GDPR). On the contrary, Commission Decision 2010/87 (2016/2297 version) on the authorisation of those transfers through contractual clauses compromising data controllers established in third countries is considered to be in conformity with EU law.

In a nutshell, in order to avoid personal data flows to “data heavens” countries, transfers from the EU to third States are only allowed when there are guarantees of compliance with what the EU considers to be an adequate protective standard. The foreign standard is considered to be adequate if it shows to be substantially equivalent to the EU’s one, as interpreted in the light of the EUCFR (Schrems II paras. 94 and 105). To this end, there are two major options. One is obtaining an express Commission adequacy statement (after analysing foreign law or reaching an agreement with the foreign country; art. 45 GDPR). The other is resorting to approved model clauses to be incorporated in contracts with personal data importers, as long as effective legal remedies for data subjects are available (art. 46.1 and 2.c GDPR). According to the Commission, this second option is the most commonly used (COM/2020/264 final, p. 15).

4. In Schrems II the CJEU confirms that, contrary to the Privacy Shield Decision, the US data protection regime is not equivalent to EU’s one because it allows public authorities to access and use those data without being subject to the proportionality principle (para. 183; at least in some surveillance programs) and, moreover, without recognising data owners their possibility to act judicially against them (para. 187). It never rains but what it pours since, in 2015, a similar reasoning led to the same conclusion in Schrems I (C-362/14, 5.6.15) on the Safe Harbour Decision (2000/520), preceding the Privacy Shield one. Along these lines, another preliminary question on the Privacy Shield Decision is pending in the case La cuadrature du net, where, differing from Schrems II, its compatibility with the CFREU is expressly questioned (T-738/16). In this realm, it seems relevant noting that the CJEU has recently resolved the Privacy International case, where, the non-discriminated capture of personal data and its access by national intelligence and security agencies for security reasons, has been considered contrary to the CFREU unless it is done exceptionally, in extraordinary cases and in a limited way (C-623/17, para. 72). Given the nature of the issue at hand, a similar Decision could be expected in the La cuadrature du net case; providing additional reasons on the nullity of the Privacy Shield Decision, since it would also contravene the CFREU. Moreover, all this could eventually have a cascading effect on the Commission’s adequacy Decisions regarding other third States (Switzerland, Canada, Argentina, Guernsey, Isle of Man, Jersey, Faeroe Islands, Andorra, Israel, Uruguay, New Zealand and Japan).

5. As to the contractual clauses, beyond confirming the Commission analysis on their adequacy in this case, the CJEU states that it is necessary to evaluate the data access possibilities for the transferred country public authorities according to that country national law (para. 134). At the end of the day, EU Data Protection authorities have to control the risks of those authorities’ actions not conforming with EU standards, as much as the capability of the contractual parties to comply with the contractual clause as such. If the risk exists, the transfers have to be prohibited or suspended (para.135).

6. The EU personal data protection norms are imperative and apply territorially (art. 3 GDPR; Guidelines 3/18 EDPB version 2.1, 7.1.2020 and CJEU C-240/14, Weltimmo). Therefore, data “imports” are not regulated and the “exports” are subject to the condition of being done to a country where they receive EU equivalent protection. In the light of CJEU case law, the measures to watch over the preservation of the EU standard are profoundly protective, as could be expected provided the fundamental rights character of personal data protection in the EU (nonetheless, many transfers have already taken place under a Decision now declared to be void).

Hence, once a third country legislation allows its public authorities to access to personal data -even for public or national security interests- without reaching the EU safeguards level, EU Decisions on the adequacy of data transfers to those countries would be contrary to EU law. In similar terms, and despite the recent EDPB Recommendations (01 and 02/20, 10.11.2020), one may wonder how the contracts including those authorised clauses could scape the prohibition since, whatever the efforts the importing parties may do to adapt to the EU requirements (as Microsoft has recently announced regarding transfers to the US; 19.11.2020), they cannot (it is not in their hands) modify nor fully avoid the application of the corresponding national legislation in its own territory.

As a result, the companies aiming to do business in or with the EU, do not only have to adapt to the GRDP, but not to export data and treat and store them in the EU (local facilities). This entails that, beyond the declared personal data international transferability (de-localisation), de facto, it seems almost inevitable to “localise” them in the EU to ensure their protection. To illustrate the confusion created for operators (that have started to see cases been filed against them), it seems enough to point to the EDPB initial reaction that, whilst implementing the Strategy for EU institutions to comply with “Schrems II” Ruling, “strongly encourages … to avoid transfers of personal data towards the United States for new processing operations or new contracts with service providers” (Press Release 29.10.2020).

Personal data localisation and international trade regulation

7. There is a number of national systems that, one way or another, require personal data (in general or in especially sensitive areas) localisation. These kinds of measures clearly constitute trade barriers hampering, particularly, international services’ trade. Their international conformity relies on the international commitments that, in this case, are to be found in the WTO Agreements as much as in the bilateral trade agreements if existing. The study of this conformity merits attention.

8. From the EU perspective, as an initial general approach it must be acknowledged that, within the WTO, the EU has acquired a number of commitments including specific compromises in trans-border trade services in the data process, telecommunication and (with many singularities) financial sectors. Beyond the possibility of resorting to the allowed exceptions, the “localisation” requirement could eventually be infringing these compromises (particularly, arts. XVI and/or XVII GATS).

Regarding EU bilateral trade agreements, some of the already existing ones and others under negotiation include personal data protection rules, basically in the e-commerce chapters (sometimes also including trade in services and investment). Together with the general free trade endeavour, the agreements recognise the importance of adopting and maintaining measures conforming to the parties’ respective laws on personal data protection without agreeing any substantive standard (i.e. Japan, Singapore). At most, parties agree to maintain a dialog and exchange information and experiences (i.e. Canada; in the financial services area expressly states that personal data transfers have to be in conformity with the law of the State of origin). For the time being, only the Australian and New Zealand negotiating texts expressly recognise the fundamental character of privacy and data protection along with the freedom of the parties to adopt protective measures (international transfers included) with the only obligation to inform each other.

Concluding remarks

9. As the GDPR acknowledges “(F)lows of personal data to and from countries outside the Union and international organisations are necessary for the expansion of international trade and international cooperation. The increase in such flows has raised new challenges and concerns with regard to the protection of personal data.” (Recital 101). In facing this challenge, Schrems II confirms the unilaterally asserted extraterritoriality of EU personal data protection standards that, beyond its hard and fully realistic enforcement for operators abroad, constitute a trade barrier that could be eventually infringing its WTO Agreements’ compromises. Hence, in a digitalised and globally intercommunicated world, the EU personal data protection standards contribute to feeding the debate on trade protectionism. While both the EU and the US try to expand their respective protective models through bilateral trade agreements, multilaterally -among other initiatives involving States and stakeholders, without forgetting the role of technology (privacy by design)- it will be very interesting to see how the on-going WTO negotiations on e-commerce cover privacy and personal data protection in international trade data flows.

AG Hogan delivered yesterday his opinion in case C‑896/19 (Repubblika v Il-Prim Ministru, joined party: WY), which is about judicial independence, the procedure for the appointment of judges and the power of the Prime Minister as well as the involvement of a judicial appointments committee. Should this opinion be endorsed by the Court of Justice, and taking into account other cases, the Court is slowing but surely putting EU Law at the heart of the MS judiciary’s organisational rules.

Opinion: “(1) The second subparagraph of Article 19(1) TEU, read in the light of Article 47 of the Charter of Fundamental Rights of the European Union, is applicable when a national court is assessing the validity of a procedure for the appointment of judges such as that provided for by the Constitution of Malta.

(2) Article 19(1) TEU, interpreted in the light of Article 47 of the Charter of Fundamental Rights, does not preclude national constitutional provisions under which the executive power or one of its members, such as the Prime Minister, plays a role in the process of the appointment of members of the judiciary. While Article 19(1) TEU, interpreted in the light of Article 47 of the Charter, is not ex ante prescriptive either in terms of the particular conditions of appointment or the nature of the particular guarantees enjoyed by judges of the Member States, it does nonetheless require as a minimum that such judges enjoy guarantees of independence. What matters for the purposes of Article 19 TEU, is that judges must be free from any relationship of subordination or hierarchical control by either the executive or the legislature. Judges must enjoy financial autonomy from the executive and the legislature, so that their salaries are not impaired (otherwise than by generally applicable taxation or generally applicable and proportionate salary reduction measures) during their term of office. It is also important that they enjoy sufficient protection against removal from office, save for just cause and their disciplinary regime must include the necessary guarantees in order to prevent any risk of its being used as a system of political control of the content of judicial decisions.

(3) The procedure for the appointment of judges cannot be called into question under Article 19(1) TEU, interpreted in the light of Article 47 of the Charter of Fundamental Rights, in support of claims introduced before the date of the forthcoming judgment”.

Source: http://curia.europa.eu/juris/document/document.jsf?text=&docid=235729&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=19345372

The Administrative Cooperation Working Group on the Hague Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance met this week (14 to 17 December 2020). An aide-mémoire summarising the outcomes of the meeting has been released by the HCCH. It is available at https://assets.hcch.net/docs/ef04cdf2-2a19-4edb-bc73-2009ef9000a4.pdf.

David Dyzenhaus (University of Toronto Law and Philosophy) has posted Not an Isolated, Exceptional, and Indeed Contradictory Branch of Jurisprudence on SSRN.

The abstract reads:

Private international law [PrIL] got—and gets—virtually no attention in general philosophy of law, by which I mean Anglo-American philosophy of law since World War II with its debates about the nature of law, of legal authority and obligation, and the relationship between law and morality; principally, the Hart/Fuller debate and the Hart/Dworkin debate. I argue that PrIL can illuminate these debates. My argument works by excavating the ‘deep juridical structure’ of the House of Lords decision in Oppenheimer v. Cattermole (1976) through the lens of an article by the great PrIL scholar, F.A. Mann, which changed the course of the case. In particular, I contrast Lord Cross’s dictum that a Nazi nationality-stripping decree of 1941 constituted ‘so grave an infringement of human rights that the courts of this country ought to refuse to recognize it as law at all’ with Lord Pearson’s dictum that an individual would lose his nationality ‘however wicked’ the government and ‘however unjust and discriminatory and unfair’ the law, as long as that government had ‘been holding and exercising full and exclusive sovereign power’ and had ‘been recognized throughout by our government as the government of that country’. I show that Cross’s conclusion presupposes a Kelsenian juridical structure and Pearson’s a Hartian one. Since only the former is properly juridical and can make sense of the idea of judicial duty in PrIL, it is to be preferred.

Written by Orji Agwu Uka, Senior Associate at Africa Law Practice (ALP)*

This is the fifth and final online symposium on Private International Law in Nigeria initially announced on this blog. It was published today on Afronomicslaw.org. The first  introductory symposium was published here by Chukwuma Samuel Adesina Okoli and Richard Frimpong Oppong, the second symposium was published by Anthony Kennedy, the third symposium was published by Richard Mike Mlambe, and the fourth symposium was published by Dr Abubakri Yekini.

For too long, law students in Nigerian universities have largely considered Private International Law [or Conflict of Laws as it is more commonly known in Nigeria] as an esoteric subject. Most students avoid it because of the adverse effect they think it is sure to have on their cumulative grade points average and the seeming lack of practical benefit of the subject to their future law practices. They do not know any better. Nigerian legal practitioners have had to provide legal advice and represent clients before trial and appellate courts as well as arbitral tribunals on disputes involving private international law questions within the context of Nigerian law. Those pieces of advice and legal representations would have benefitted greatly from a comprehensive private international law treatise. On their part, Nigerian courts have had to meander through the maze of interpreting questions of private international law without the benefit of the direction that high quality academic works [available in some other subject areas] provide. I am gratified to announce that finally, a Daniel is come to judgment.

Since Nigeria’s return to civilian rule in 1999, there have been significant increase in cross border trade, international business transactions and foreign investments in Nigeria. Successive Nigerian governments across all tiers have made the attraction of foreign investments a cardinal part of their economic policies and have accordingly made deliberate efforts and committed abundant resources to attract foreign investments into Nigeria.[1]This accords with the preponderance of opinion to the effect that, with the right economic policies, FDI inflow into developing economies can be a major catalyst for economic development.[2] With these activities however, have come the resultant need for increased attention to the body of laws in Nigeria that regulate transactions with multi-jurisdictional elements.

In a recent article, I called for increased study of private international law in Africa and the establishment of a harmonised private international legal regime especially in the context of the Agreement establishing the African Continental Free Trade Area (AfCFTA) which came into force on 30 May 2019.[3] I argued that the economic integration and the concomitant growth in international relationships that are sure to result from these integration efforts will undoubtedly lead to a rise in cross border disputes, which call for resolution using the instrumentality of private international law. That call, especially in the case of Nigeria, was significantly handicapped by the absence of a treatise length textbook on the subject.

Interestingly, I had, in that article, borrowed heavily from the writings of Professor Richard Frimpong Oppong, a renowned private international law expert in Africa, and Dr Chukwuma Samuel Okoli, a Postdoctoral Researcher at T. M. C. Asser Institute in the Hague and a prolific writer in the field of private international law in Nigeria. Writing on the importance of a private international law system that responds to the interests of Africa, Dr Okoli observed that with growing international trade with Africa comes an inevitable rise in disputes among contracting parties conducting trade on the continent.[4]According to him, when these disputes arise, questions such as what courts have jurisdiction, what law(s) should apply, and whether a foreign judgment will be recognised and enforced by the courts of African States, will need to be resolved for international trade to run smoothly.[5]

On his part, Professor Oppong, argued that a well-developed and harmonised private international law regime is an indispensable element in any economic community and can play a significant role in addressing issues such as the promotion of international trade and investment, immigration, regional economic integration, globalisation and legal pluralism.[6] It is altogether fitting that these two will join forces to produce the first treatise length textbook on private international law in Nigeria and it is against the foregoing backdrop that I wholeheartedly welcome the product of their collaboration – Private International Law in Nigeria.[7]

The book examines Nigerian law rules, principles, and doctrines for the resolution of disputes with cross-border components. The authors begin by tackling the elephant in the room which is to provide a helpful explanation of the conceptual and preliminary issues which constitute the most intricate aspects of private international law. The concepts addressed are Characterisation; Substance and Procedure; and of course, Renvoi which the authors wittingly recall has been described in the past as a subject loved by academics, hated by students and ignored by lawyers and judges. There is also a special treatment of the concept of domicile which is one of the cardinal concepts in the field of English private international law and by necessary implication that of Nigeria, and which is one of the fundamental connecting factors that indicate the law or jurisdiction that governs a dispute particularly in matters related to jurisdiction, family law, property law, and other issues affecting the legal rights and privileges of parties.

The book expertly navigates the topic of jurisdiction, a cardinal concept under Nigerian adjectival law, but which in some cases is weaponised and has now acquired exaggerated notoriety to the extent that it now constitutes a cog in the wheel of the smooth and timely determination of cases in Nigeria. To avoid the monster that jurisdiction as a concept has developed into, the book carefully focuses on a consideration of jurisdiction in actions in personam. The authors consider the rules for determining jurisdiction in actions in personam and the extent to which judges in Nigeria have succeeded or mostly failed in appreciating or applying jurisdictional rule son actions in personam especially by misapplying rules designed for international litigation in the context of interstate disputes in the unique federal system practiced in Nigeria.

The result of the authors’ analyses of Nigerian appellate courts’ cases bordering on the jurisdiction of Nigerian courts in actions in personam arising from causes of action which accrue outside the territorial jurisdiction of the courts is particularly eye-opening. The authors divide the failure of Nigerian courts in this regard into three scenarios to wit: cases where Nigerian courts reach the right decision but wrongly apply choice of venue rules to arrive at that decision; cases where Nigerian courts wrongly apply choice of venue rules and reach the wrong decision; and cases where Nigerian courts simply conflate the choice of venue provisions in the rules of the respective courts in Nigeria with the rules of private international law applicable in actions in personam in Nigeria. The reasoning of the courts in the cases treated leaves a lot to be desired and call for a dispassionate soul searching.

Private International Law in Nigeria lucidly addresses the historical controversies surrounding the requirement for leave to issue and serve a court process out of jurisdiction both in the case of interstate (domestic) disputes and in international disputes strictly so called. The book highlights the delicate balance between the Sheriffs and Civil Process Act and the various rules of court. For good measure, the authors clearly explain what the Nigerian Supreme Court got wrong in the infamous M. V. Arabella case [which the court has now thankfully moved away from].[8] In that case the Supreme Court set aside a writ of summons that was issued in the Federal High Court Lagos and served on a defendant resident in Abuja, Federal Capital Territory without the leave of court. The court relied on Order 10 rule 14 of the Federal High Court (Civil Procedure) Rules 1976[9] and discountenanced the contention of the appellant that the Federal High Court is one court and no leave of court is required to issue and serve a court process in one judicial division of the court (i.e. in one State) for service in another State. The authors however rightly highlight the reluctance of the Supreme Court to explicitly overrule cases that were obviously wrong, a trend that has been on the rise in the last two decades; and which is the subject of another day’s discussion.

What I would consider as an ambitious aspect of the book, however, is the authors’ categorical position regarding the non-binding effect of the obiter dicta of some Supreme Court decisions. For instance, while discussing a recent decision of the Nigerian Supreme Court,[10]the authors stated that the obiter dictum of Aka’ahs JSC is not binding on lower courts in Nigeria and should not be followed.[11]While this undoubtedly represents the correct position of the law in principle, it is however of doubtful practical effect given the peculiarity of the diminishing line between rationes decidendi and obiter dicta under the Nigerian version of the doctrine of stare decisis as well the attitude of Nigerian courts to decisions of higher courts.

Special consideration is also given to such procedural law concepts as ‘forum selection clauses’, ‘forum non conveniens’, ‘lis alibi pendens’ and ‘limitations on jurisdiction’ as well as the substantive law topics of Contract, Torts, Foreign Currency Obligations, Bills of Exchange, Marriage, Matrimonial Causes and Administration of Estates. Very crucially too, the book does not fail to address the critical topics of enforcement of foreign judgments and international arbitral awards, while the last two chapters, grouped under a part entitled, ‘International Civil Procedure’ are dedicated to the consideration of the procedural rules applicable in international civil disputes including domestic remedies affecting foreign proceedings, international judicial assistance in the service of legal processes and taking of evidence. Nigerian lawyers with cross border practices will find these two chapters particularly helpful. One topic that is however given a less than adequate treatment is the topic of adoption. To be fair, adoption law and procedure in Nigeria is largely covered in opacity but a more comprehensive treatment of the subject in this book would have finally afforded practitioners the long-needed reference point.

On the whole, the book draws on over five hundred Nigerian cases including [thankfully] contemporary judicial decisions touching on the subject of private international law, relevant legislations and academic writings while exploring, where necessary, comparative perspectives from other jurisdictions.

This book is without doubt, one of the most impactful legal textbooks in Nigeria in at least twenty five years. It is a refreshing addition to the legal libraries across Nigeria and beyond. Judges at all levels of courts in Nigeria, legal practitioners, arbitrators and lawmakers alike as well as law teachers, researchers and students, will find Private International Law in Nigeria a highly resourceful and practical guide that fills an intellectual void in a long neglected but increasingly critical field of law. It is a long overdue contribution to the field of private international law in particular, and to legal scholarship in Nigeria as a whole.

*Orji Agwu Uka is a Senior Associate at a top Commercial Law Firm in Lagos, Nigeria. He holds an LLM from King’s College London and an LLB from Abia State University, Uturu Nigeria.

[1]Akinlo Enisan, ‘Determinants of Foreign Direct Investment in Nigeria: A Markov Regime-Switching Approach’ (2018) RIC 21.

[2] Organisation for Economic Cooperation and Development, Foreign Direct Investment for Development: Maximising Benefits, Minimising Costs (OECD 2002) 3.

[3]Orji Uka, ‘Cross Border Dispute Resolution under AfCFTA: A Call for the Establishment of a Pan-African Harmonised Private International Legal Regime to Actualise Agenda 2063’ (2020) ALP available at http://alp.company/resources/business-advisory/cross-border-dispute-resolution-under-afcfta-call-establishment-pan last accessed on 11 November 2020.

[4]Chukwuma Okoli, ‘Private International Law in Africa: Comparative Lessons’ available at http://conflictoflaws.net/2019/private–international–law–in–africa–comparative–lessons/.

[5]Chukwuma Okoli, (n. 4) above.

[6] Richard Frimpong Oppong, ‘Private International Law and the African Economic Community: A Plea for Greater Attention’ The International and Comparative Law Quarterly, Vol. 55, No. 4 (Oct., 2006), Cambridge University Press pp.911-928 available at https://www.jstor.org/stable/4092623.

[7]Chukwuma Samuel Adesina Okoli and Richard Frimpong Oppong, Private International Law in Nigeria Hart Publishing: Oxford, 2020.

[8]Owners of M. V. Arabella v Nigeria Agricultural Insurance Corporation (2008) 11 NWLR (Pt. 1097) 182.

[9]For similar reasons, the Court of Appeal in Nestle (Nig) Plc v. Owners of M. V. MSC Agata(2014) 1 NWLR (Pt. 1388) 270 at pp. 288-290 set aside writ while relying on Order 6 rule 12(1) of the Federal High Court (Civil Procedure) Rules 2000.

[10]Social Democratic Party v Bieman unreported decision of the Supreme Court in Appeal No. SC/341/2019 43.

[11]Chukwuma Okoli and Richard Oppong, (n. 7) above at p. 73.

AG Campos Sanchez-Bordona delivered today his opinion in case C‑709/19 (Vereniging van Effectenbezitters v BP plc), which is about Article 7.2 Brussels I bis in the case of a purely financial damage.

Context: “1. An association of securities holders has brought an action for damages before the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) over the fall in the value of their shares in a company established in the United Kingdom, following an oil spill at the company’s operations in the Gulf of Mexico.

2. In the context of those proceedings, the court needs to obtain an interpretation of Article 7(2) of Regulation (EU) No 1215/2012. As the claim is for purely financial damage, the court has difficulty in deciding on its jurisdiction in the light of previous decisions of the Court of Justice, particularly the judgments in Kolassa, Universal and Löber”.

Opinion: “1. Article 7(2) of Regulation (EU) No 1215/2012 […] must be interpreted as meaning that:

(a) it is not a sufficient connecting factor for attributing international jurisdiction to the courts of a Member State that a fall in the value of the shares of a company listed on stock exchanges in other Member States is recorded in investment accounts located in that Member State or in investment accounts of a bank or investment firm established in that Member State, where the damage is the result of decisions taken by investors on the basis of allegedly incorrect, incomplete and misleading information distributed globally by the listed company;

(b) the existence of a settlement between the defendant company and some shareholders in a third State which has not been offered to the applicants in the main proceedings and the fact that some applicants are consumers are not relevant specific circumstances for the purposes of attributing international jurisdiction pursuant to Article 7(2) of Regulation No 1215/2012. Nor is the fact that the relevant information was distributed worldwide by the defendant company.

2. The exercise of a collective action in accordance with national rules of procedure by an association representing the interests of the holders of the securities who suffered the damage does not alter the interpretation of Article 7(2) of Regulation No 1215/2012”.

Source: http://curia.europa.eu/juris/document/document.jsf;jsessionid=74FA8D126E0AFC56C07B928CDA7887E4?text=&docid=235726&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=19345184

by Tamás Szabados, ELTE Eötvös Loránd Universität Budapest

In disputes related to stolen or illegally exported cultural property, conflict of laws provisions often play a significant role due to the absence of universally accepted substantive private law rules. This has been analysed in a recent post shared on this blog.

In most private international laws, cultural goods are treated in the same way as any other object, and accordingly the law applicable to issues of property law is determined in accordance with the lex rei sitae principle. If cultural goods are stolen or illegally exported from a country and brought to another state, where a good faith buyer acquires ownership over the goods, the application of the lex rei sitae principle often results in the recognition of the title of the bona fide purchaser over that of the original owner. In order to promote the restitution of stolen and illegally exported cultural property, several authors argued that the lex rei sitae principle should be replaced by other connecting factors.

In the legal literature, much effort has been made to find a more suitable connecting factor. The application of the lex originis principle was widely proposed as an alternative. Nevertheless, the lex originis principle also has some flaws. Sometimes it may be difficult or impossible the geographical or cultural origin of the cultural goods. The place from which the cultural goods were stolen is not necessarily demonstrate a closer connection to the case than the lex rei sitae if the goods are only temporarily located on the territory of the state concerned.

It seems that there is a discernible trend in private international law codifications to address specifically stolen and illegally exported cultural property. They are typically based on a combination of the lex rei sitae and the lex originis principles and provide room for the parties’ autonomy. Such legislation has been enacted, among others, in Belgium (Belgian Private International Law Act, articles 90 and 92) and Hungary (Hungarian Private International Law Act, articles 46-47). It is also noteworthy that in a study the European Parliament also examined the possibility of the adoption of distinct conflict of laws rules for cultural goods and proposed a similar solution.

This current legislative trend is analysed in a recent article written by Tamás Szabados that has been published in the International Journal of Cultural Property. The author poses the question whether the recent private international law codifications have found the Holy Grail of the conflict of laws of cultural property.

The article is available through the website of the International Journal of Cultural Property here.