Flux européens

Altun e.a.
Sécurité sociale des travailleurs migrants
Selon l’avocat général Saugmandsgaard Øe, une juridiction nationale peut, en cas de fraude, laisser inappliqué le certificat de sécurité sociale des travailleurs détachés dans l’Union européenne

Espadas Recio
SOPO
Le système utilisé en Espagne pour déterminer la base de calcul de la durée de la prestation de chômage des travailleurs à temps partiel vertical est contraire au droit de l’Union

Maio Marques da Rosa
SOPO
Le repos hebdomadaire des travailleurs ne doit pas nécessairement être accordé le jour suivant six jours de travail consécutifs

I was asked yesterday (interview in Dutch) for my thoughts on the Belgian Government’s plans for a Brussels International Business Court. Here goes, in bullet-points format, a slightly extended and more technical version of those preliminary thoughts:

• Three and more’s a crowd. The Belgian move of course is not the first and neither will it be the last. Even pre-Brexit, Member States (and even individual cities within Member States; see Michiel Poesen recently on Frankfort) were vying for the title of preferred place for litigation.
• Brexit evidently may be a game-changer. I have flagged repeatedly that post-Brexit and assuming there will be no deal which would roll-over the UK’s engagement with EU civil procedure law, UK courts will become a lot less attractive. This is due to the more cumbersome recognition and enforcement regime that will be the result of decoupling from Brussels I. The same incidentally does not apply to arbitration. Pre and post Brexit, deal or not, free movement of arbitral awards is subject to the New York Convention.
• Attractiveness as a centre of litigation and legal services is part of regulatory competition. Being known as a place of legal know-how and expedited litigation brings prestige as well as attractive billable hours to the law firms of one’s country.
• Crucially, in an attempt to prise litigation away from London in particular, the use of English in proceedings is always the eye-catcher for the media. However in reality the language of proceedings is to my experience not the defining issue in client’s forum shopping strategies. Know-how of the bench; speed of proceedings; transparency of case-law; and of course ease of recognition and enforcement, are much more so. The Belgian proposal acknowledges as much by touting in particular the ‘collegiality’ and ‘expertise’ of the pool of (domestic and foreign) commercial law experts that will populate the court.
• Unwittingly perhaps but without a doubt, the proposal in flagging the benefits of the BIBC, also highlights the well-known disadvantages of the Belgian courts in ordinary: tardiness of proceedings (the ‘Belgian’ torpedo) in particular. However also very much so, intransparency (as I have repeatedly signalled: access to Belgian case law continues to be highly problematic) and lack of collegiality among the bench: being a judge is a lonely professional existence in Belgium. Professional secrecy rules, practicalities (lack of proper office space), and the aforementioned reporting issues work against Belgian jurisprudence presenting itself as coherent.
• At a technical level, the proposal emphasises repeatedly that the BIBC will be a court. Not an arbitral tribunal. The difference lies particularly in the easy or enforcement. The draft Bill loudly talks the talk in this respect. But does it walk the walk? What a ‘court’ means within the context of EU civil procedure law is of course the prerogative of that EU law: not of the Member States. (I refer to recent blog posts on same). Extensive reference to UNCITRAL’s Model Law on international commercial arbitration is a strange prop to use in the draft, if the idea is to take one’s attention away from arbitration. The BIBC will only take cases in the event of prorogation (choice of court or submission). The pool of judges will mostly be taken from part-timers, not benchers. Most importantly, in my mind: Article 43 of the draft instructs the BIBC, with respect to choice of law, to respect parties’ choice of governing law, and, in the absence of such law, ‘to apply the law determined by the conflict of laws rules which it considers applicable’. This is a copy /paste from Article 28(2) of the Model Law. In footnote the Act suggests that by omitting the third para of said Law (‘The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorized it to do so’), the Bill emphasises the nature of the BIBC as court. It does not. Courts are simply subject to Rome I and II when it comes to applicable law. They do not just ‘consider a law applicable’.

Much to chew on. My analysis is based on a draft Bill which a little bird sent me. This is probably not the final say on the BIBC. (On an aside: @BIBC is already taken. I can think of one or two Twitter Handles which the BE government may want to snap up before someone else does).

Geert.

 

Readers may have noticed a surge in blog posts during the month of October. Indeed when I scheduled last night’s release I noticed I had effectively posted every working day (and some week-end days, too) in the past month. This is testimony to an exciting amount of developments in the areas on which I report, particularly in conflict of laws.

I cannot promise you’ll be treated to a post every day for November, too. Neither however will I trick you into having to wait too long for reporting on the many interesting cases I have in the queue.

Happy Halloween.

Geert.

In [2017] NIQB 81 Townsend v Google Inc. & Anor the Northern Ireland High Court refused service our of jurisdiction in relation to a request for Google (UK and Inc.) to de-list a number of urls relating to reports on sexual and other criminal offences committed by plaintiff.

Plaintiff seeks an injunction inter alia requiring the defendants and each of them to withdraw and remove personal data relating to the plaintiff, making reference to or tending to reveal sexual offences committed by the plaintiff while a child, from their data processing and indexing systems and to prevent access to such personal data in the future. The Court references ia Vidal-Hall and Google Spain. I will leave readers to digest the ruling largely for themselves for there is a lot in there: consideration of Article 8 ECHR; Directive 95/46; aforementioned precedent; tort law etc.

Of particular note is Stephens J’s finding at 61 that ‘(t)here is a clear public interest in open justice. There is a clear right to freedom of expression. In such circumstances the processing was not unwarranted and that there is no triable issue in relation to any allegation that Google Inc. has not satisfied this condition.’

A judgment to add to the growing pile of internet, jurisdiction and balancing of interests in privacy considerations.

Geert.

 

 

In Fernandes v. Wal-Mart Canada  2017 MBCA 96 the Court of Appeal of Manitoba offers great material for comparative conflict of laws. I will leave the Canadian analysis to the experts, in particular Chloe Snider who alerted me to the case. Suffice to say here that the gist of the ruling is that where a corporation carries on business in the territory (here: Wal MArt operating stores), this suffices to establish jurisdiction (here: re an employment issue): no ‘real and substantive connection’ test needs to be separately established. (Cue comparative litigation: compare with ‘domicile’ and extended notions of domicile in EU conflicts law).

The action was eventually still stayed on forum non conveniens grounds in favour of Ontario (extra cue for comparative review here: for this was so held despite the fact that the Ontario limitation period had probably expired).

Geert.

 

Aspen Underwriting v Kairos Shipping et al [2017] EWHC 1904 illustrates the splintering of claims which may well occur when plaintiff chooses to ignore Brussels I’s core jurisdictional rule of domicile of the defendant. Evidently such splintering often is the strategic intention of a plaintiff and even if it does inconvenience them, having part of the claims settled by one court rather than another may still be its overall preference. The case however also highlights important crossed wires between the common law and EU law on the qualification of ‘tort’, and the relation between Rome II and Brussels I (Recast).

The vessel ATLANTIK CONFIDENCE  sank in the Gulf of Aden in 2013. It had earlier been held in a limitation Action commenced by her Owners, the First Defendant, that the Vessel was deliberately sunk by the master and chief engineer at the request of Mr. Agaoglu, the alter ego of the Owners. In the current action the Hull Underwriters of the Vessel, who paid out on the hull and machinery policy (“the Policy”) in August 2013 but who now consider, on further investigation, that the Vessel was deliberately cast away by her Owners, claim recovery of the insurance proceeds which were paid to Owners and the Vessel’s mortgagees, Credit Europe Bank NV, the Third Defendant (“the Bank”).

The Bank is domiciled in the Netherlands. and maintains that under the Brussels Regulation this court has no jurisdiction to hear and determine the claim against the Bank. It must be sued in the courts of the Netherlands where it is domiciled. The Hull Underwriters maintain that this court has such jurisdiction for three reasons. First, it is said that Bank is bound by a Settlement Agreement which confers exclusive jurisdiction on this court. Second, it is said that the Bank is bound by the exclusive jurisdiction clause in the Policy. Third, it is said that the claims brought against the Bank are matters which relate to tort, delict or quasi-delict and the harmful event occurred in England. This is the judgment of the court upon the Bank’s challenge to the jurisdiction.

Teare J rejected the first and second argument on the basis of analysis of the settlement. He then looks into Article 7(2) Brussels I Recast. The insurance heading of the Regulation does not apply as the relations concern those between two professional parties (at 72 the High Court refers to C-347/08 Voralberger; the CJEU confirmed later in C-521/14 Sovag).

Whether the claim of misrepresentation leading to the settlement, is one in tort or one in contract depends on how closely one finds it to be connected to the contract at issue (the Settlement). Plaintiff suggests that where such misrepresentations induce a contract, in this case the Settlement Agreement, the resulting claims are not matters relating to tort within the autonomous meaning of Article 7(2) but are matters relating to a contract within Article 7(1).

Teare J settles on the basis of the following convincing argument, at 76: ‘The court is concerned with a claim between the Hull Underwriters and the Bank. The Hull Underwriters allege that misrepresentations made by the Bank induced the Hull Underwriters to enter into the Settlement Agreement with the Owners. They seek to recover damages suffered by the Hull Underwriters as a result of the Bank’s misrepresentations. Whilst there is a factual connection between the claim and the Settlement Agreement I do not consider that that is enough to make the claim a matter relating to a contract and so within Article 7(1). Where there is a claim against the contracting party and it is alleged that the contract should be rescinded on the grounds of misrepresentations made by that party because such misrepresentations induced the contract it can sensibly be said that the subject-matter of the claim is the contract. But in the case of the claim against the Bank I do not consider that it can be fairly said that the subject-matter of the claim is the Settlement Agreement.‘

Oddly no reference here is made to relevant CJEU precedent including recently Granarolo and Kareda.

Now, the claim for damages based upon misrepresentation can be brought in England so long as the “harmful event” occurred in England (at 79; with reference to Bier /Mines de Potasse split into locus delicti commissi and locus damni). Jurisdiction for the claim based on misrepresentation can be brought fully in England because (at 79) ‘either the damage occurred in England (where Norton Rose Fulbright signed the Settlement Agreement and/or where the $22m. was paid to Willis’ bank account in London) or the event giving rise to the damage occurred in London (being the place where the misrepresentations were made and/or the place where the Hull Underwriters were induced).’

At 78 the High Court highlights the difficulty of the qualification viz conflict of laws of restitution based on unjust enrichment. The common law has the precedent of the House of Lords in Kleinwort Benson v Glasgow [1999] 1 AC 153.  Teare J summarises ‘In that case Lord Goff, with whom the other members of the court agreed on this point, said that a claim in restitution based upon unjust enrichment does not, save in exceptional circumstance, presuppose a harmful event and so is impossible to reconcile with the words of Article 7(2). He was not deterred from reaching this conclusion by the decision in Kalfelis. The claim for restitution in this case is based upon a mistake; it does not require a harmful event, though there might in fact be one as suggested by [plaintiff]. I consider that I am bound to follow the decision of the House of Lords and to hold that the claim in restitution based upon mistake is not within Article 7(2). It must follow that this court has no jurisdiction over that claim and that if it is to be pursued it must be pursued in the Netherlands where the Bank is domiciled.‘

The claim for unjust enrichment cannot be brought in England. Teare J observes the consequence of the Brussels I Regulation (at 80): ‘On case management grounds it is unsatisfactory to reach the conclusion that the tort claim may be brought in England but that the restitution claim may not be brought in England. However, this is the consequence of the Brussels Regulation as was accepted in Kalfelis. Of course, the entirety of the Hull Underwriters’ case against the Bank could be brought in the Netherlands but in circumstances where the Hull Underwriters’ case against the Owners and Managers is being brought in England that also is not satisfactory. The court cannot however base its jurisdictional decisions when applying the Brussels Regulation on considerations of forum conveniens.’

Of note finally is that Kleinwort Benson was issued post Kalfelis but prior to Rome II, which contains a specific heading on unjust enrichment. Notwithstanding its clear non-contractual nature (‘non-contractual’ being the generic title of Rome II which therefore encompasses more than just torts), it is not generally considered a tort: this continues to create issues in the application of Rome II.

A good case to illustrate the lasting challenges in distinguishing contracts from torts.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.1, Heading 2.2.11.2.

Thank you Ben Zielinski for flagging Bank Leumi (UK) Plc v Screw Conveyor Ltd [2017] CSOH 129. I believe Ben is right in writing that this is the first formal acknowledgement that Scottish judicial authorities have no insolvency business in respect of an English registered company, and the same applies to English courts and Scottish companies,  in spite of the EU’s Insolvency Regulation.

Even if a company carries out its main activities in Scotland, internal UK jurisdictional rules will assign insolvency jurisdiction to the English judicial authorities. That is a result of, as Lord Doherty writes, the Insolvency Regulations designating the ‘Member State the courts of which may open insolvency proceedings’ however ‘territorial jurisdiction within that Member State is established by the Member State’s national law’ (at 9).

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1.

The English Bridge Union
Fiscalité TVA
Le bridge en duplicate ne relève pas de la notion de « sport » au sens de la directive TVA et ne peut donc pas être exonéré en tant que tel

When I reviewed Kokott AG’s Opinion in C-106/16 Polbud, I flagged that Ms Kokott concluded that the freedom of establishment provided for in Articles 49 and 54 TFEU only applies to an operation whereby a company incorporated under the law of one Member State transfers its statutory seat to another Member State with the aim of converting itself into a company governed by the law of the latter Member State, in so far as that company actually establishes itself in the other Member State, or intends to do so, for the purpose of pursuing genuine economic activity there. In other words she proposed a test along the lines suggested by Darmon AG in Daily Mail, but rejected by La Pergola AG in Centros.

The CJEU today held along La Pergola lines. It thus indeed facilitates forum /applicable (lex societatis) shopping for companies. The writing was very clearly on the wall when the Court (in Grand Chamber nota bene) started citing the old chestnuts of Daily Mail, Centros and Inspire Art. That no business is actually being conducted by Polbud in the host Member State is viewed by the court as irrelevant (at 37 ff). In the absence of harmonisation of EU law, the definition of the connecting factor that determines the national law applicable to a company or firm falls, in accordance with Article 54 TFEU, within the powers of each Member State (at 34).

Freedom of establishment is applicable (third question);  that freedom has been restricted (first question); and that restriction (transfer of the registered office of a company incorporated under the law of one Member State to the territory of another Member State, for the purposes of its conversion into a company incorporated under the law of the latter Member State, in accordance with the conditions imposed by the legislation of that Member State, is subject to the liquidation of the first company) is not justifiable (second question).

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 7.

POLBUD - WYKONAWSTWO
Libre prestation des services
Les États membres ne peuvent pas imposer une obligation de liquidation aux sociétés qui souhaitent transférer leur siège statutaire dans un autre État membre

Shiri
Espace de liberté, sécurité et justice
Un demandeur de protection internationale peut se prévaloir, devant une juridiction, de l’expiration du délai prévu pour son renvoi vers un autre État membre

Thank you Peter Smith over at Tamimi for flagging [2017] DIFC ARB 003 Pearl v Kurdistan. Peter summarises as follows:

‘In 2007, Crescent Petroleum, the oldest privately-owned oil and gas company in the Middle East, agreed with Dana Gas, one the leading publicly-listed natural gas companies in the region, to create a joint venture called Pearl Petroleum (together, “the Consortium”). The Consortium entered into an agreement with the Kurdistan Regional Government (“KRG”) for the development of the Khor Mor and Chemchemal petrochemical fields in the Kurdistan region of Iraq. The KRG were and remain engaged in a political dispute with the Federal Government of Iraq, meaning that the Consortium were unable to export gas produced by the developed fields. As a result, the KRG became liable under its contract with the Consortium to pay a minimum guaranteed price, but it failed to make the required payments in full.’

Arbitration in London under LCIA rules ensued. The contract between the Consortium and the KRG was governed by English law and provided explicitly that “the KRG waives on its own behalf and that of [The Kurdistan Region of Iraq] any claim to immunity for itself and its assets”.

Cooke J held that whilst the UAE’s recognition of other states was a matter of foreign policy which the DIFC Courts could not rule on, construing the KRG’s waiver of immunity was a question of law and not public policy. In agreeing to arbitrate, a party agrees that the arbitration shall be effective in determining the rights of the parties (at 26). The waiver of any claim to immunity for itself and its assets must mean waiver of immunity from execution (at 28): any argument on that is blocked by issue estoppel (at 36).

Sovereign immunity therefore was not a trump which could be played at the time of enforcement: whatever immunity there might or might not have been had been contractually signed away.

An interesting and well argued judgment.

Geert.

MP
Espace de liberté, sécurité et justice
Selon l’avocat général Bot, l’inexistence de traitements psychologiques appropriés dans le pays d’origine d’une personne qui y a été torturée par le passé ne suffit pas pour que cette personne puisse revendiquer la protection subsidiaire

B
Citoyenneté européenne
Selon l’avocat général Szpunar, l’acquisition d’un droit de séjour permanent est une condition préalable pour qu’un citoyen de l’Union puisse bénéficier de la protection renforcée contre l’éloignement

In [2017] EWHC 2401 (Comm) Team Y&R v Ghossoub, Laurence Rabinowitz QC discussed a number of issues, most particularly anti-suit in the context of an exclusive jurisdictional clause (anti-suit not granted). He summarised the applications as follows:

‘The first application, brought by the claimants to the anti-suit claim, is for an interim injunction seeking to restrain Mr Ghossoub, the defendant to those proceedings, from pursuing related proceedings commenced by him in Hong Kong against four of those claimants until the trial of the anti-suit claim. The second application, brought by Mr Ghossoub as defendant to the anti-suit claim, seeks to set aside two orders made by the Court related to service on him of the anti-suit claim. The first, made by Phillips J dated 20 May 2015, granted permission to serve the anti-suit claim out of the jurisdiction. The second, made by HHJ Waksman QC sitting as a High Court judge dated 8 September 2016, granted permission to serve the claim form and other documents by an alternative method of service. The third application, brought by Mr Ghossoub as defendant to the defaulting shareholder claim, in effect mirrors his application in the anti-suit claim to set aside the service out and service by an alternative method orders.’

Anti-suit would be aimed at courts ex-EU hence the Brussels I antimony against them (per Gasser, among others) does not apply. Incidentally, I do not think that necessarily needs to exclude any EU /CJEU grip on the substantive issue at all: in the current, Recast Regulation, neither party needs to be domiciled in the EU for choice of court to be made in favour of a court established in the EU. This does create an EU interest in the issue of third-party impact of choice of court, and consequently on the use of anti-suit to support or reject such impact.

Now, at para 78 ff Mr Rabinowitz considers the issue of third parties. Not at issue is whether choice of court is binding upon, or may be invoked by such parties (in EU law considered eg in Refcomp, Profit Sim, Assens Havn, Leventis). Rather, whether an exclusive jurisdiction clause should be understood to oblige a contractual party to bring claims relating to the contract in the chosen forum even if the claim is one against a non-contracting party. This would support the idea of ‘one-stop shopping’ which is prevalent eg in English law albeit mostly vis-a-vis the various litigious relations between two and the same parties.

One can see merit in obliging parties bound by choice of court, to bring all related claims to one and the same court. Except of course, as Mr Rabinowitz points out, third parties are quite likely to be in a position to be able to bring the case before a different court, thus putting the contractual party at a disadvantage; moreover, even if the contractual party does bring the claim to the courts at England, these may not in fact have jurisdiction: in such circumstances, insisting on third-party proceedings to be brought before the English courts becomes silly. (My words, not Mr Rabinowitz’).

Taking these and also the entire contractual context into account, the High Court holds that choice of court in the contract at issue does not extend to claims against non-contracting third parties, and dismisses anti-suit.

Take your time to read the judgment: it gives very good context to what to some might seem like a very awkward starting point.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.9.

 

I reviewed the High Court’s decision in Lungowe here. The Court of Appeal has now confirmed jurisdiction against the non-UK based defendants on largely the same, if slightly more structured and expanded arguments as the High Court.  (Per Owusu, jurisdiction against the UK-based defendant is undeniable; the non-UK defendants need to be joined on the basis of residual English conflicts law).

Ekaterina Aristova has analysis of Simon LJ’s leading judgment here – I am happy to refer. Of particular note is the much more reserved approach of the Court of Appeal on the merits issue of the claim. As I noted in my review of Okpabi v Shell at the High Court, in that case Fraser J looked in serious detail into the issue of merits: not, I believe, justified at the jurisdictional stage. Appeal against Fraser J’s finding will be heard by the Court of Appeal.

Geert.

European private international law, second ed. 2016, Chapter 8, Headings 8.3.1.1., 8.3.2

Yanukovych / Conseil
Relations extérieures
La Cour confirme le gel de fonds de M. Viktor Yanukovych, ancien président de l’Ukraine, et de son fils Oleksandr pour la période allant du 6 mars 2015 au 6 mars 2016

Istanbul Lojistik
Transport
La taxe hongroise sur les véhicules automobiles n’est pas compatible avec l’accord d’association CEE-Turquie