AG Rantos delivered on 23 February 2021 his opinion in case C‑603/20 PPU (SS v MCP), which is about Article 10 Brussels II bis:
“Article 10 of Council Regulation (EC) No 2201/2003 of 27 November 2003 […] must be interpreted as meaning that the courts of the Member State in which a child was habitually resident immediately before his or her wrongful removal or retention retain their jurisdiction to rule on parental responsibility in respect of that child, for an unlimited period of time, in the case where that child is abducted to a non-Member State, including where the child acquires his or her habitual residence in that non-Member State”.
AG Bobek delivered on 23 February 2021 his opinion in case C‑800/19 (Mittelbayerischer Verlag KG v SM), which is about Article 7(2) Brussels I bis:
“Article 7(2) of Regulation (EU) No 1215/2012 […] must be interpreted as meaning that the establishment of the jurisdiction based on the centre of interests does not require that the allegedly harmful online content names a particular person.
However, in order to establish jurisdiction pursuant to Article 7(2) of that regulation, a national court must verify that there is a close connection between that court and the action at issue, thus ensuring the sound administration of justice. In the particular context of online publications, the national court must ensure that, in view of the nature, content, and the scope of the specific online material, assessed and interpreted in its proper context, there is a reasonable degree of foreseeability of the potential forum in terms of the place where the damage resulting from such material may occur”.
Motacus Constructions Ltd v Paolo Castelli SpA [2021] EWHC 356 (TCC) to my knowledge is the first case post-Brexit that shows how a jurisdictional discussion that might have been settled swiftly under Brussels Ia, leads to a lot more chewing over under 2005 Hague Convention (on choice of court) principles. It may not be ‘important‘ in terms of its impact on authority (this is a first instance judgment; and it may be overly enthusiastic in engaging with the issues) yet it nevertheless is a good illustration of what was left behind.
The Private International Law (Implementation of Agreements) Act 2020 has given the 2005 Convention force of law in the UK.
The ‘Governing Law & Dispute Resolution’ clause (clause 19) of a contract between contractor and subcontractor re a London hotel provided ‘This Agreement shall be governed by and construed in accordance with the laws of Italy’ and for all disputes to ‘submitted to the exclusive jurisdiction of the Courts of Paris, France’. A payment issue ensued and the contractor started classic English construction sector adjudication proceedings despite the aforementioned clause: the Housing Grants, Construction and Regeneration Act 1996 is overriding mandatory law /loi de police /loi d’application immédiate in England and Wales [3]. To address cash flow problems in the construction industry, and the shortcomings of the traditional litigation process in serving the needs of the construction industry, Parliament decided there should be a short-form process of adjudication producing binding, and readily enforceable, decisions [25].
The UK has not made a reservation under Hague 2005 viz contracts in the construction sector [18] (compare the EU’s reservation viz insurance contracts).
Sub-contractor actively took part, yet declined to make the necessary payment which the adjudicator’s decision had instructed. Adjudication enforcement proceedings were started on 12 January 2021. Sub-contractor challenged the enforcement proceedings, arguing the proceedings could only be commenced in Paris under the choice of court.
Claimant’s case is that the High Court should accept jurisdiction and enforce the adjudicator’s decision, notwithstanding the exclusive jurisdiction clause, in light of the provisions in either A6(c) or A7 Hague 2005. It submits that it would be manifestly contrary to the public policy enshrined in the 1996 Act, or alternatively it would be manifestly unjust, to refuse to enforce an otherwise enforceable adjudicator’s decision in reliance on clause 19 of the contract. In any event, it is argued, the enforcement of an adjudicator’s decision is the enforcement of an interim measure of protection. It falls outside the scope of Hague 2005 and so the defendant cannot rely on its provisions.
A6(c) Hague 2005 provides that a court of a contracting state (in this case the UK) other than that of the chosen court (in this case Paris, France), “… shall suspend or dismiss proceedings to which an exclusive choice of court agreement applies unless – (c) giving effect to the agreement would lead to a manifest injustice or would be manifestly contrary to the public policy of the State of the court seised.
A7 provides that: “Interim measures of protection are not governed by [the Hague] Convention. [That] Convention neither requires nor precludes the grant, refusal or termination of interim measures of protection by a court of a Contracting State and does not affect whether or not a party may request or a court should grant, refuse or terminate such measures.”
Spiliada, Fiona Trust, The Eleftharia etc. are all discussed in what looks like a bonfire of the CJEU authorities. The impact of Italian law as lex contractus, for the construction of the choice of court clause (under BIa this would have to be French law) is also signalled, but not entertained for this is an application for summary judgment in which, in the absence of proof of Italian law, its contents are presumed to be the same as English law [51].
Hodge J at 54 declines the suggestion of A6(c) ordre public. ‘Manifest’ requires a high burden of proof, no reservation has been made and there is no good reason why the parties should not be held to the bargain that they freely made when they incorporated clause 19 into their construction contract.
At 56 ff however claimant’s arguments on interim measures having been carved out, does lead to success: it is held that an application for summary judgment to enforce an adjudicator’s decision is an interim measure of protection within A7 Hague 2005. ‘The concept extends to any decision that is not a final and conclusive decision on the substantive merits of the case…The function of the adjudicator’s decision is to protect the position of the successful party on an interim basis pending the final resolution of the parties’ dispute through the normal court processes (or by arbitration).’ [57] The summary judgment application before the High Court has that same DNA: ‘What is before this court is not the underlying dispute between these parties but whether an interim procedure and remedy have been followed and granted.’
Interesting. Geert.
And so it has started
Whether choice of EN Court ousted by Paris exclusive jurisdiction clause – Housing Grants, Construction, Regeneration Act 1996
Held: A7 2005 Hague Convention @HCCH_TheHague engaged, interim measures exception
BIa assessment would have been much more succinct https://t.co/FctAia7bqF
— Geert Van Calster (@GAVClaw) February 22, 2021
Premier Cruises Ltd v DLA Piper Rus Ltd & Anor [2021] EWHC 151 (Comm) is a textbook case for the relationship between arbitration and the Brussels Ia regulation, as well as relevance of lex arbitri on what is within the scope of an arbitration agreement.
Claimant is Premier Cruises Limited (“PCL”), a company originally domiciled in the British Virgin Islands and now domiciled in the Seychelles, which owns or operates two vessels. Defendants are entities within the DLA Piper Group of legal practices. The First Defendant is DLA Piper Rus Limited (“DLA Russia”), an English company with operations in Russia. The Second Defendant is DLA Piper UK LLP (“DLA UK”), an English LLP. On 29 January 2020 (within the scope of Brussels Ia, therefore, at least as against DLA UK), PCL commenced proceedings against DLA in the Commercial Court claiming damages in contract and/or in tort for professional negligence.
DLA Russia argues the claim is within the scope of its arbitration agreement included in the engagement letter (International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation). DLA UK accepted it was not included in that agreement and applied for a case-management stay.
PCL argue its action against DLA Russia is in respect of advice allegedly given and work allegedly carried out by DLA Russia prior to 26 May 2015 when the Engagement Letter came into force.
At 52, Edward J identified Russian law as both lex contractus and lex arbitri, and held at 138 after hearing the Russian law experts, that upon contractual construction, PCL’s claim was not included in the clause for it was not meant to apply retroactively.
At 147 ff he agreed with PCL that a case-management stay for the claim against DLA UK is not possible given, with reference to Recital 12 BIa, that the arbitration exception is not engaged: ‘The claim made against DLA UK in this action is not one in respect of which PCL and DLA UK have entered into an arbitration agreement [161]; Arbitration is not the principal focus of the English proceedings against DLA UK; the essential subject matter of the claim made against DLA UK does not concern arbitration; and the relief sought in the proceedings is not ancillary to or an integral part of any arbitration process [163] (reference is made to The Prestige].
The claim being within BIa, Owusu rules out a case management stay. The judge should have outright rejected the additional suggestion ([158 juncto [164]) of a temporary stay being within the Owusu confines.
Geert.
EU Private International Law, 3rd ed. 2021, Heading 2.2.3.4, para 2.110 ff.
Application for stay in favour of #arbitration proceedings dismissed.
Viz the Rus party, on basis of Russian law principles of construction applicable to arbitration agreements.
Viz the UK party given CJEU Owusu, in casu not displaced by Brussels Ia arbitration exemption. https://t.co/JzqRyVQ6Px
— Geert Van Calster (@GAVClaw) February 9, 2021
“From 15 to 17 February 2021, the Experts’ Group on Parentage / Surrogacy met for the eighth time. […] The Experts’ Group discussed what the focus of its work should be at its next meeting(s) in order to prepare its final report to CGAP on the feasibility of a possible future general private international law instrument on legal parentage (the Convention) and the feasibility of a separate possible future protocol with private international law rules on legal parentage established as a result of an international surrogacy arrangement (the Protocol).
The Experts’ Group will recommend that its current mandate until 2022 be extended by one year, in order to continue intersessional work and convene several short online meetings and at least one in-person meeting, before submitting its final report on the feasibility of the Convention and the Protocol to CGAP in 2023”.
A report has been drafted, albeit it contains no information on the substance of the work.
Source: https://www.hcch.net/en/news-archive/details/?varevent=790
The HCCH Experts’ Group on International Transfer of Maintenance Funds met last week via videoconference. The Expert Group discussed topics such as the move away from cheques, the covering of costs related to the transfer of funds (with a view to their abolition), the implementation of bundled payments to reduce costs of transfers, etc. A résumé of these discussions may be found in the Aide-mémoire, available at https://assets.hcch.net/docs/abad87fe-7177-4dce-8393-cf32d240cc0d.pdf
Source: https://www.hcch.net/en/news-archive/details/?varevent=789
Those who combine my excitement of having professor McCorquodale contribute to the blog, with his enthusiasm at the end of his post, may find themselves in a perennial game of complimentary renvoi.
Robert, who represented interveners CORE in Okpabi v Shell (one-line summary in live tweeting here), signals the jurisdictional take-aways. The wider due diligence context of the case is considered by Ekaterina Aristova and Carlos Lopez here, Lucas Roorda signals ia the merits bar following the jurisdictional findings and Andrew Dickinson expressed his hope of an end to excessively lengthy jurisdictional proceedings here.
Okpabi v Shell: Judges’ Approach to Jurisdictional Issues is Crucial
In Okpabi v Shell [2021] UKSC 3, Nigerian farmers brought a claim against Shell’s parent company (RDS) and its Nigerian subsidiary (SPDC) for environmental and human rights impacts of oil pollution. The claim had been struck out at the initial state on the basis of lack of jurisdiction in relation to the actions of SPDC, and this decision had been upheld by the Court of Appeal.
The Supreme Court unanimously swept aside these decisions. It held that when considering issues of the court’s jurisdiction over such a claim, a court must start from the basis that the alleged facts of the claim are true and from there determine if the claim has a real prospect of success. The defendant should not bring evidence of its own to dispute the alleged facts unless the facts are demonstrably untrue or unsupportable, as otherwise it risks showing that there is an issue to be tried. If a judge engages with the evidence and makes findings on it in a summary judgment, the more likely it is that the decision to strike out will be overturned. Further, the Court considered that there was a danger of a court determining issues which arise in parent/subsidiary cases without sufficient disclosure of material documents in the hands of the defendants. Both courts below had acted incorrectly and conducted a “mini-trial”, and so the appeal by the claimants was successful.
The Court affirmed Vedanta that parent companies can have a duty of care towards those affected by a subsidiary’s actions, and that the Caparo test was inapplicable to these types of cases. The Court also clarified the scope of the duty of care by making clear that control is not determinative, it is the level of management involvement by the parent which is crucial. A parent company’s group-wide policies and standards were relevant in this respect. The Court, unfortunately, did not refer in its decision to any comparative law cases or international developments, even though these had been drawn to its attention.
This decision embeds the position that parent companies can have a duty of care towards those affected by a subsidiary’s actions, and that de facto management is a factor to consider. It examined the legal process by which courts consider these jurisdictional issues and made it much harder for a judge to strike out a case at the jurisdictional stage unless the facts on which the claim is based are demonstrably untrue or unsupportable. This could enable quicker proceedings towards the merits in these types of cases.
—Robert McCorquodale – it is my honour to contribute to this excellent blog.
Zacaroli J this morning held in Gategroup Guarantee Ltd, Re [2021] EWHC 304 (Ch) on whether ‘part 26A’ English restructuring ‘Plans’ (see my review of ia Deep Ocean) are within the scope of the Lugano Convention’s insolvency exception (Lugano rather than Brussels Ia was engaged).
He held they are, leading to neutralisation of an exclusive choice of court agreement in the relevant bonds, and making the courts of England and Wales have jurisdiction despite this choice of court.
Oddly Kaupthing was not referred to. Neither was Enasarco.
The judge relied unconvincingly in my view on the dovetail discussion (most recently discussed by me viz Alpine Bau) under the Brussels IA Recast and the EU Insolvency Regulation (‘EIA’)- neither of course applicable to the UK anymore, as indeed is the case for the Lugano Convention.
All in all this is a case in which the reasoning has a potentially long term impact. The claim form in this case was issued on 30 December 2020. As such, by reason of Regulation 92(1), (2)(d) and (3) of the Civil Jurisdiction and Judgment (Amendment) (EU Exit) Regulations 2019, the Lugano Convention continues to apply.
The Plan Company was incorporated on 8 December 2020 as a wholly owned subsidiary of gategroup Holding AG (the ‘Parent’, a company incorporated in Switzerland. At [55] , if Lugano applies to applications under Part 26A, then the Plan Company accepts that by reason of A23(1) Lugano and the exclusive jurisdiction clause in favour of the courts of Zurich in the Bonds, this court has no jurisdiction. That acceptance is made notwithstanding that the Deed Poll contains a non-exclusive jurisdiction clause in favour of the courts of England. The Plan Company acknowledges that since the purpose of the Plan is to effect amendments to the terms of the Bonds, the exclusive jurisdiction clause in the Bonds is engaged.
The usual modus operandi of assuming application of Brussels Ia arguendo (see viz schemes of arrangement most recently KCA Deutag and viz Plans Deep Ocean and Virgin) did not fly here for as noted the Plan Company accepts that the exclusive jurisdiction clause in favour of the Zurich courts is a complete bar to this court assuming jurisdiction if the Lugano Convention applies (in the preceding cases the point need not be decided, since jurisdiction under BIa could be established arguendo as in none of them was there adversarial argument on the point).
At 70 Justice Zacaroli introduces effectively an amicus curiae by Kirkland & Ellis, opposing the view that the insolvency exception applies.
At 73 ff a first point is considered: Part 26A Plans have not been notified under the EIA Annex. This refers to the so-called dovetailing between Brussels Ia, Lugano and the EIR. The suggestion is that if a procedure is not listed in Annex A EIR, it is conclusively not an insolvency proceeding and “that is the end of the matter” because the dovetailing principle leads inexorably to the conclusion that it falls within the Recast (‘and thus within the Lugano Convention’ [73]). At 82 the judge incidentally is under the impression that the older, heavier procedure of amendment by (EP and Council) Regulation applies – which it no longer does since the EIR 2015.
I have since long submitted that there is no such dovetail. It is also clear that there cannot be identity of interpretation between the Lugano Convention’s insolvency exception and the Brussels regime given that non-EU Lugano States are not part of the EIR. The judge confirms as much at 81 and at 91 ff and, in a first approach, revisits the principles of modified universalism and the origin of the insolvency exception in particular in the Jenard report. He holds at 103 that the ratio behind the insolvency exception in the Rapport Jenard is the same as the ratio behind Plans, hence that the exception applies.
In a second (presumably subsidiary) approach, the judge queries whether proceedings under Part 26A comply with the abstract requirements for an ‘insolvency’ procedure under of A1(1) EIR and finds at 133 that they do. I am really not convinced by the relevance of that analysis. He includes at 134 ff an argument that the Dutch ‘WHOA’ (Wet homologatie onderhands akkoord) proceedings are to be included in Annex A. Again I am not convinced that serves much purpose. Member States populate the Annex and a Member State proposal for inclusion is not checked against A1(1) EIR.
Conclusion on the jurisdictional issue at 137: ‘proceedings under Part 26A are within the bankruptcy exclusion in the Lugano Convention. This court accordingly has jurisdiction notwithstanding the exclusive jurisdiction clause in the Bonds.’
A most relevant judgment, on which the issues are not at all clear. Expect appeal lest the restructuring timing has made this nugatory – settling these issues would most certainly be welcome.
Geert.
EU private international law, 3rd ed. 2021, paras 2.73 ff (2.81 ff in particular) and 5.35 ff.
Important first instance decision on whether a restructuring plan is an insolvency proceeding for the purposes of the Lugano Convention.
Held that it is, with confusing analysis of the EU Insolvency Regulation.
Held Lugano does not apply, E&W courts have jurisdiction. https://t.co/XqZ0J6IIIH
— Geert Van Calster (@GAVClaw) February 17, 2021
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