Flux européens

In re B.C.I Fins. Pty Ltd. (In Liquidation) (thank you Daniel Lowenthal for flagging) illustrates to and fro exercise, hopping between laws, and the use of choice of law rules to establish (or not) jurisdiction. This method is often called the ‘conflicts method’ or ‘looking over the fence’: to establish whether one has jurisdiction a judge has to qualify his /her district as a place of performance of an obligation, or the situs of a property, requires the identification of a lex causae for the underlying obligation, application of which will in turn determine the situs of the obligation, property etc.

As Daniel points out, Bankruptcy Code section 109(a), says that “only a person that resides or has a domicile, a place of business, or property in the United States, or a municipality may be a debtor under this title.” Lane J considers the issue in Heading B and concludes that the Debtors’ Fiduciary Duty Claims against Andrew and Michael Binetter constitute property in the United States to satisfy Section 109(a).

There is no federal conflicts rule that pre-empts.  New York conflict of law rules therefore apply. New York’s “greatest interest test” pointed to Australian substantive law to determine the situs of the fiduciary duties claims: “[t]he Liquidators were appointed by an Australian court, and are governed by Australian law, and Andrew Binetter is an Australian citizen.  Perhaps even more importantly, the Fiduciary Duty Claims arose from acts committed in Australia and exist under Australian law, and any recovery will be distributed to foreign creditors through the Australian proceeding.’

Lane J then applies Australian substantive law eventually to hold on the situs of the fiduciary duty: considering the (competing) Australian law experts, he is most swayed by the point of view that under Australian law ‘not only debts, but also other choses in action, are for legal purposes localised and are situated where they are properly recoverable and are properly recoverable where the debtor resides.’ The Binetters reside in New York.

In summary: New York conflict of law rules look over the fence to locate the situs of a fiduciary debt to be in New York, consequently giving New york courts jurisdiction. A neat illustration of the conflicts method.

Geert.

(Handbook of) EU private international law, Chapter 3, Heading

 

The title of this piece almost reads like an encyclical. C-250/17 Esprito Santo (in full: Virgílio Tarragó da Silveira Massa v Insolvente da Espírito Santo Financial GroupSA – readers will appreciate my suggestion of shortening), held last week, concerns the scope of Article 15 juncto 4(2)(f) of the EU’s Insolvency Regulation 1346/2000 (materially unchanged in Regulation 2015/848).

In many jurisdictions lawsuits pending are subject to vis attractiva concursus: all suits pending or not, relevant to the estate of the insolvent company are centralised within one and the same court. In the context of cross-border insolvency however this would deprive the courts and the law of the Member State other than the State of opening of proceedings, of hearing cq applying to, pending suits.

The Court has now held along the lines what is suggested in the Virgos-Schmit report: only enforcement actions are subject to Article 15. Lawsuits pending which merely aim to establish the merits of a claim without actually exercising it (in the judgment: ‘Substantive proceedings for the recognition of the existence of a debt’), remain subject to the ongoing proceedings in the other Member State.

The judgment evidently has more detail but this is the gist of it. Of note is that yet again, linguistic analysis assists the court in its reasoning.

Geert.

(Handbook of) EU Private International, 2nd ed. 2016, Chapter 5.

 

Scotch Whisky Association
Agriculture
La juridiction de renvoi doit vérifier si un consommateur a directement à l’esprit l’indication géographique enregistrée « Scotch Whisky » en présence d’un produit comparable portant la désignation « Glen » afin de déterminer l’existence d’une « évocation » interdite par le droit de l’Union

Louboutin et Christian Louboutin
Propriété intellectuelle et industrielle
Une marque consistant en une couleur appliquée sur la semelle d’une chaussure ne relève pas de l’interdiction d’enregistrement des formes

Louboutin et Christian Louboutin
Propriété intellectuelle et industrielle
Une marque consistant en une couleur appliquée sur la semelle d’une chaussure ne relève pas de l’interdiction d’enregistrement des formes

When I reported the first salvos in Goldhar v Haaretz I flagged that the follow-up to the case would provide for good comparative conflicts materials. I have summarised the facts in that original article. The Ontario Court of Appeal in majority dismissed Haaretz’ appeal in 2016, 2016 ONCA 515. In Haaretz.com v. Goldhar, 2018 SCC 28, the Canadian Supreme Court has now held in majority for a stay on forum non conveniens grounds. Both the lead opinion, the supporting opinions and the dissents include interesting arguments on forum non conveniens. Many of these, as Stephen Pitel notes, include analysis of the relevance of obstacles in enforcement proceedings.

If ever I were to get round to compiling that published reader on comparative conflicts, this case would certainly feature.

Have a good start to the working-week (lest is started yesterday in which case: bonne continuation).

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.14.5.

Thank you  Elias Neocleous & Co  for reporting Andrew Burness v Saipem SpA, in which the Cypriot Supreme Court confirmed jurisdiction over claims related to Cyprus’ Exclusive Economic Zone (under UNCLOS), and rejected application of forum non conveniens. The claims followed an accident on board the vessel Saipem 1000 in the Cyprus EEZ.

The first issue is one under public international law, which I will leave to others. The second is an interesting application of forum non conveniens. Its application had been suggested for none of the parties are Cypriot nationals, neither were the witnesses, or any of the insurance and other companies involved. One assumes the card played was one of convenience, and costs. However the Supreme Court particularly emphasised that the accident had occurred in the process of prospection or exploitation of Cyprus’s natural resources: that makes the Cypriot courts particularly suited to hearing the case, despite the many foreign elements.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.14.5.`

Scotch Whisky Association
Agriculture
La juridiction de renvoi doit vérifier si un consommateur a directement à l’esprit l’indication géographique enregistrée « Scotch Whisky » en présence d’un produit comparable portant la désignation « Glen » afin de déterminer l’existence d’une « évocation » interdite par le droit de l’Union

Choices, choices. I will continue to follow the GDPR for jurisdictional purposes, including territorial scope. (And I have a paper coming up on conflict of laws issues in the private enforcement of same). But for much of the GDPR enforcement debate, I am handing over to others. Johannes Marosi, for instance, who reviews the CJEU judgment this week in Fansites, over at Verfassungsblog. I reviewed the AG’s Opinion here.

Judgment in Grand Chamber but with small room for cheering.

As Johannes’ post explains, there are many loose ends in the judgment, and little reference to the GDPR (technically correct but from a compliance point of view wanting). (As an aside: have a look at Merlin Gömann’s paper, in CMLREv, on the territorial scope of the GDPR).

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.5.

 

 

[2017] EWHC 3012 (QB) Spring v MDO and Evengelisches Krankenhaus Bielefeld is unreported as far as I can tell (and I have checked repeatedly). Thank you Max Archer for flagging the case and for sending me copy of judgment a few months back. (I am still chipping away at that queue).

In 1997, Claimant was stationed in Germany with the British Army. The Claimant very seriously fractured his right leg and ankle whilst off duty in Germany (the off duty element evidently having an impact – on duty injuries arguably might not have been ‘civil and commercial’). He was then treated at the Second Defendant’s hospital under an established arrangement for the treatment of UK service personnel between the First (the Ministry of Defence) and Second Defendants (the German hospital). Various complications later led to amputation.

The Brussels I Recast Regulation applies for claimant did not introduce the claim against the second defendant until after its entry into force: 18 years in fact after the surgery. This was the result of medical reports not suggesting until after July 2015 that the German hospital’s treatment has been substandard. Rome II ratione temporis does not apply given the timing of the events (alleged wrongful treatment leading to damage).

Yoxall M held that Article 8(1)’s conditions for anchoring /joinder were fulfilled, because of the risk of irreconcilable judgments (at 35). Even if the claim against the First Defendant is a claim based on employer’s liability whereas the claim against the Hospital is based on clinical negligence. Should the proceedings be separate there is a risk of the English and German courts reaching irreconcilable judgments on causation of loss. At 35: ‘It would be expedient for the claims to be heard together – so that all the factual evidence and expert evidence is heard by one court. In this way the real risk of irreconcilable judgments can be avoided.’

With reference to precedent, Master Yoxall emphasised that ‘in considering Article 8(1) and irreconcilable judgments a broad common sense approach is justified rather than an over-sophisticated analysis’ (at 36).

Yoxal M is entirely correct when he states at 37 that Article 8(1) does not include a requirement that the action brought against the different defendants have identical legal bases. For decisions to be regarded as contradictory the divergence must arise in the context of the same situation of law and fact (reference is made to C-98/06 Freeport).

Next however the court considers as a preliminary issue, the limitation period applying between claimant and the German defendant and holds that the Hospital have an arguable case that the claim is statute barred in German law (German expert evidence on the issue being divided). The latter is the lex causae for the material dispute (on  the basis of English residual private international law), extending to limitation periods per Section 1(3) of the Foreign Limitations Period Act 1984 (nota bene partially as a result of the 1980 input by the Law Commission, and not entirely in line with traditional (or indeed US) interpretations of same). This ultmately sinks the joinder.

As a way forward for plaintiff, the Court suggests [2005] EWCA Civ 1436 Masri. In this case the Court of Appeal essentially held that joinder on the basis of Article 8(1) may proceed even if litigation against the England-based defendants are not the same proceedings, but rather take place in separate action. Masri has not been backed up as far as I know, by European precedent: Clarke MR held it on the basis of the spirit of C-189/87 Kalfelis, not its letter. Moreover, how the German limitation periods would then apply is not an obvious issue, either.

An interesting case and I am pleased Max signalled it.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.12.1.

 

France / Parlement
Droit institutionnel
L’avocat général Wathelet propose à la Cour de n’annuler que l’acte par lequel le président du Parlement a constaté à Bruxelles et non à Strasbourg que le budget général de l’Union de 2017 était définitivement adopté

Wirtschaftsakademie Schleswig-Holstein
Rapprochement des législations
L’administrateur d’une page fan sur Facebook est conjointement responsable avec Facebook du traitement des données des visiteurs de sa page

Coman e.a.
Citoyenneté européenne
La notion de « conjoint », au sens des dispositions du droit de l’Union sur la liberté de séjour des citoyens de l’Union et des membres de leur famille, comprend les conjoints de même sexe

France / Parlement
Droit institutionnel
L’avocat général Wathelet propose à la Cour de n’annuler que l’acte par lequel le président du Parlement a constaté à Bruxelles et non à Strasbourg que le budget général de l’Union de 2017 était définitivement adopté

Wirtschaftsakademie Schleswig-Holstein
Rapprochement des législations
L’administrateur d’une page fan sur Facebook est conjointement responsable avec Facebook du traitement des données des visiteurs de sa page

Coman e.a.
Citoyenneté européenne
La notion de « conjoint », au sens des dispositions du droit de l’Union sur la liberté de séjour des citoyens de l’Union et des membres de leur famille, comprend les conjoints de même sexe

I post this item mostly as a point of reference for discussions on mandatory law, employment disputes, and the use of arbitral tribunals to circumvent limitations in domestic litigation.

In FC Black Stars Basel 4A_7/2018, the Swiss Supreme Court held in April that mandatory Swiss law on limited arbitrability of domestic employment disputes, cannot be circumvented by submitting dispute to international arbitration. Schellenberg Witmer have succinct analysis here.

Note in particular 2.3.3:

Vor diesem Hintergrund erscheint es zur Vermeidung von Wertungswidersprüchen folgerichtig, den in Art. 341 OR angeordneten Schutz der sozial schwächeren Partei im Rahmen der Beurteilung der freien Verfügbarkeit nach Art. 354 ZPOinsoweit in das Prozessrecht hinein zu verlängern, als Schiedsvereinbarungen nicht uneingeschränkt zugelassen werden

Geert.

 

I reported earlier on Sulamerica and the need properly and preferably, expressly to provide for choice of law vis-a-vis arbitration agreements, in particular vis-a-vis three elements: lex arbitri, lex curia, lex contractus. In Shagang the High Court added its view on the possible relevance of a fourth factor: the geographical venue of the arbitration, and its impact in particular on the curial law: the law which determines the procedure which is to be followed.

Atlas Power Ltd -v- National Transmission and Despatch Co Ltd  [2018] EWHC 1052 is another good illustration of the relevance (but in practice: rarity) of the proper identification of all four factors.

Bracewell excellently identify the four take away points from Atlas Power:

1. It is the seat of arbitration that determines the curial law of the arbitration, not the governing law of the contract.
2. (To English Courts) the choice of the seat of arbitration is akin to an exclusive jurisdiction clause in favour of the courts of the place designated as the seat of the arbitration having the supervisory role over the arbitration.
3. The English courts can and will use their powers to grant anti-suit injunctions to prevent a party from commencing foreign proceedings in breach of an arbitration agreement.
4. Complex drafting increases the risk of satellite litigation and the accompanying delay and expense.

The core point which Atlas Power illustrates is that specific identification of arbitration venue, curial law, lex contractus and lex arbitri is best done in simple terms. Overcomplication, particularly variance of any of these four points, is a truly bad idea. Specifically: the arbitration clause in the contracts between the parties (text from Bracewell’s overview)

1. Started by providing that the “arbitration shall be conducted in Lahore, Pakistan”.
2. Then stated that if the value of the dispute was above a certain threshold or fell within a certain category, either party could require that the arbitration be conducted in London.
3. Finally, the clause provided that, notwithstanding the previous sentences, either party may require that the arbitration of any dispute be conducted in London, provided that if the dispute did not satisfy the threshold or category requirements set out earlier in the clause the referring party would pay the costs of the arbitration incurred by the other party in excess of the costs that would have been incurred had the arbitration taken place in Pakistan.

 

Various procedural events led to Phillips J essentially having to decide: whether the parties had validly and lawfully chosen London as the seat of the arbitration (answer: yes); and whether, in light of Pakistani law (which was the law governing the contracts), the choice of London as the seat of arbitration did not result in the English courts having exclusive supervisory jurisdiction with the effect that the courts of Pakistan had at least concurrent jurisdiction (answer: no, for this would result in an unsatisfactory situation where more than one jurisdiction could entertain challenges to an award)

Variation of any litigation relevant articles really does open all sorts of cans of worms.

Geert.

 

‘Reading’ Arica Victims v Boliden Mineral (I have a copy of the case, but not yet a link to ECLI or other database; however there’s a good uncommented summary of the judgment here] leaves me frustrated simply for my lack of understanding of Swedish. Luckily Matilda Hellstorm at Lindahl has good review here (including a hyperlink to her earlier posting which alerted me to the case in 2017).

Boliden Mineral exported toxic waste to Chile in the ’80s, prior to either Basel or EU or OECD restraints (or indeed bans) kicking in. A first issue for consideration was determination of lex causae. Rome II does not apply ratione temporis (it only applies to tortious events occurring after its date of entry into force) – residual Swedish private international law applies, which determined lex causae as lex loci damni. The Court found this to include statute of limitation. This would have been 10 years under Swedish law, and a more generous (in Matilda’s report undefined) period under Chilean law. Statute of limitation therefore following lex causae – not lex fori.

Despite this being good for claimants, the case nevertheless failed. The Swedish court found against liability (for the reasons listed in Matilda’s report). (With a small exception seemingly relating to negligence in seeing waste being uncovered). Proof of causality seems to have been the biggest factor in not finding liability.

Leave for appeal has been applied for.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 8.

 

 

Engagement solennel devant la Cour de justice de l’Union européenne de quatre nouveaux membres de la Cour des comptes européenne