This CEPEJ report, published on 22nd October 2020, contains data on the functioning of the judicial systems of 45 European States and 3 Observer States (Morocco, Israel and Kazakhstan). The findings are the following:
“Budget
– In 2018, European States spent on average more than 1 billion Euros for their judicial systems, equal to 72 € per inhabitant (8 € more than in 2016) and 0,33% of GDP. On average, member States allocated 65% of judicial system budget to courts, 24% to prosecution services and 11% to legal aid. Switzerland and Monaco are the countries that spend the most significant amount per inhabitant (220 € and 197 €), while Montenegro and Bosnia and Herzegovina dedicate to judicial system the highest percentage of their GDP (0.88% and 0.72%).
– Countries with a higher GDP per capita invest more per inhabitant in judicial systems, while less wealthy countries allocate more budget as a percentage of GDP, showing a greater budgetary effort for their judicial systems.
– Between 2010 and 2018, the member States and entities have slightly increased the average budget allocated to the judicial system. In 2018, all States and entities have increased the budget allocated to their judicial systems (+8%). The most significant increase (between 2016 and 2018), equal to 13% on average, has been recorded for courts’ budget and it concerns, in particular, investments in new buildings and computerisation.
– Less wealthy countries invest proportionally more on prosecution services (32% on average), while States and entities with higher GDP per capita spend relatively more in legal aid (19% on average).
– The budget allocated to courts seems to be related not only to the wealth of the country, but also to the number of courts. This may seem logical given that 65% of the court budget is spent on salaries.
– In order to rationalise budgetary resources of courts and, at the same time, reinforce specialisation and expertise, an increasing trend to outsource certain services is confirmed.
– Generally speaking, all the countries have implemented a legal aid system in criminal and other than criminal matters (representation by a lawyer before the court or legal advice), in compliance with the requirements of the European Convention on Human Rights and the case-law of the European Court which advocates an appropriate legal aid system to ensure access to justice for everyone.
– Some countries tend to have a low cost per legal aid case and a high number of cases granted legal aid, while others choose to provide a higher amount for a smaller number of cases.
Professionals
– While the number of professional judges remains globally stable, 21 judges per 100 000 inhabitants on average, significant differences are still noticed between States and entities (from 3.1 in UK-England and Wales to 101.8 in Monaco per 100 000 inhabitants). The latter can be partly explained by the diversity of judicial organisations, use of occasional professional judges and/or lay judges. Variations over the years have not led towards harmonisation.
– The number of prosecutors is tending to increase, on average 12 prosecutors per 100 000 inhabitants (in 2018, the number varies from 2.2 in Ireland to 25.1 in Ukraine).
– 31 Member States of 47 declared that public prosecutors are statutorily independent.
– While the number of prosecutors increased, their workload decreased since 2010 from 4.2 to 3.1 cases per 100 inhabitants.
– The trend towards the feminisation of judges and prosecutors is confirmed but the glass ceiling remains a reality: in 2018, at the level of all instances, there was 46% of men and 54% of women judges but 66 % male court presidents as opposed to 34 % of female court presidents; for the prosecutors : 48% of men and 52% of women but 64% of male and 36 % of female head of public prosecution offices. More and more States and entities seem to be focusing on the topic of specific provisions in favour of
– gender parity in the procedures for the recruitment and promotion of judges and prosecutors. Taking measures to promote gender balance in the higher and highest justice functions should be encouraged.
– The ratio between non-judge staff and professional judges is about 4 in 2018, this figure being quite stable through the years, the minimum being 1 in Luxembourg and the maximum 10 in UK – Northern Ireland.16 European States set up Rechtspfleger.
– Salaries of judges vary widely between States and entities, but also between instances. The changes in salaries in recent years are not uniform and do not lead to harmonisation. The ratio between salaries of judges and national average salary shows significant disparities in Europe: from 0.9/1.6 in Germany (at the beginning /the end of career) to 4.8/31.5 in Ukraine (at the beginning /the end of career).
– Meaningful disparities also persisted in the salaries of prosecutors. The ratio between salaries of prosecutors and national average salary shows significant disparities in Europe: from 0.8 in Ireland and 4.0 in Romania (at the beginning of the career); 1.6 in Germany and 6.4 in Italy (at the end of the career).
– Prosecutors’ salaries are, on average, lower than those of judges.
– The number of lawyers is also continuing to increase in Europe, with an average of 164 lawyers per 100 000 inhabitants, with important disparities between States (in 2018, from 16 per 100 000 inhabitants in Azerbaijan to 488 per 100 000 inhabitants in Luxembourg). This constant increase between 2010 and 2018 (27%) is mainly due to economic growth.
– Recent developments suggest that the topic of gender balance with regard to lawyers is being taken into account by an increasing number of States and entities. Currently, however, European lawyers are still predominantly male.
Courts
– Between 2010 and 2018 there was a reduction in the number of courts in Europe, both in terms of legal entities (-19% on average for the first instance courts of general jurisdiction) and geographical locations (-10 % on average).
– For the same period, we can also notice an increase in the specialization of courts (the average share of specialized courts increased from 21% to 26,7% from 2010 to 2018).
– Small claims were only slightly affected by the above-mentioned developments. Only the average amount of what constitutes a small claim has increased (from 4 029 € in 2016 to 4 836 € in 2018).
Court users
– More and more member States provide specific information to users, both on the judicial system in general and on individual court proceedings.
– States address more and more specific information and arrangements to vulnerable categories of users (the complaints procedures regarding functioning of justice exist in 43 States, implementation of compensation systems (the average amount of compensation is 6 353 € in 2018), user satisfaction surveys, establishment of monitoring mechanisms in respect of violations of the European Convention on Human Rights).
– In order to improve further social responsibility and trust in the judicial system, member States should devote additional resources and staff to improvecommunication with the users of justice.
– The analyses and use of data, gathered through quantitative and qualitative research into the satisfaction of court users, increases the legitimacy of judicial systems and helps court leaders and administrations provide a better and more efficient service of justice.
– The use of information systems to support such activities is crucial. However, it is “interactional justice “- the human touch, the treatment of all involved in judicial proceedings with dignity and respect, that substantially helps to provide just decisions and consequently build trust in justice.
Information and communication technology (ICT)
– ICT has become a constitutive part of justice service provision. States have focused their efforts on court and case management tools, more then on decision support and communication tools. The general ICT index (court and case management, decision support and communication with courts) varies from 1.52 in Cyprus to 9.79 in Latvia.
– European judicial systems are increasingly moving from paper-based procedures to electronic ones. This is true for the activities carried out within the courts, as well as for the communication exchanges between courts and all parties.
– The economic cost of this innovation should be considered with caution as the ICT budget may vary considerably during the development, deployment and maintenance phases.
– Court systems with comparatively higher resources generally tend to invest a higher percentage of the court budget in ICT.
– ICT are an integral component of the judicial systems, which is reflected both in the regulatory and governance choices implemented by the member States.
– Member States and entities have set up various solutions regarding leadership in ICT governance: most States tend to consider both of them equally relevant, with a slight prevalence of the judicial one.
– As basic technologies are now generally fully deployed in member States and entities, this analysis has focused on court and case management tools, decision support tools and tools for communication between courts, professionals and/or court users, showing very high levels of deployment.
– The high levels achieved in the areas of decision support, e-communication and remote proceedings increase the need to monitor the impact of these tools on principles such as fairness, impartiality and judicial independence.
Justice in the context of the Covid-19 crisis
– ICTs have proven to be valuable and even indispensable tools for the continued work of judicial systems during the COVID-19 crisis in Europe.
– In many cases, their use has required not only changes in legislation but also technical improvements, as has been observed in member States and entities.
– Concerns have been expressed about the use of certain ICT tools in court proceedings, but it is still too early to assess their actual impact on the parties’ rights.
– To address these issues, the CEPEJ has adopted on 10 June 2020 a Declaration on lessons learnt and challenges faced by the judiciary during and after the Covid-19 Pandemic.
Efficiency
– The clearance rates give a generally positive balance sheet (stable and close to 100%) and conclusions can be more usefully drawn from the disposition time analysis. Criminal justice is the most effective at all three levels of court (disposition time at first instance: 122 days; second instance: 104 days ; third instance: 114 days) and the second instance courts appear as the most efficient in all areas (disposition time in civil and commercial cases: 141 days; administrative cases: 209 days; criminal cases: 104 days). It should be noted that although the results are unquestionably positive, they have deteriorated over time in several States and entities analysed.
– Conversely, it is at first instance and in the field of administrative law that the courts have proven to be the least efficient. Administrative cases tend to record the highest DT (241 days at 1st instance, 209 days at 2nd instance, 228 days at 3rd instance) with, however, considerable disparities between States and entities.
– Cases concerning asylum seekers and the right to entry and stay for aliens continue to have a strong impact on European jurisdictions. Many States and entities reported productivity problems related to these case types. In 2018, States received 291 443 cases concerning asylum seekers or 8 % fewer than in 2016. 183 920 incoming cases pertaining to the right to entry and stay for aliens represent an increase of 84 %. The highest number of incoming cases concerning asylum seekers was recorded in Germany, 149 593 cases. The second highest inflow is in France which received 58 671 asylum seekers cases and 79 807 right of entry and stay for aliens cases. Italy, then, received 48 891 asylum seekers cases and 2 224 right of entry and stay for aliens cases.
– The share of cases older than two years is available for a limited set of States and entities. Within these, the shares of cases older than two years do not vary over time.
– A number of States and entities have undergone or are currently undergoing significant justice sector reforms which have influenced the performance of their systems. The results of these States and entities need to be monitored cautiously and with an understanding of the context”.
Source: https://rm.coe.int/link-to-the-presentation-note-en/16809fdc75
For further information, see https://www.coe.int/en/web/cepej/special-file-publication-of-the-report-european-judicial-systems-cepej-evaluation-report-2020-evaluation-cycle-2018-data-
Yesterday, 23 October 2020, the Republic of Serbia ratified the HCCH Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance, which will enter into force for Serbia on 1 February 2021.
Source: https://www.hcch.net/en/news-archive/details/?varevent=757
Another day and another application for a stay on the basis of Article 30 Brussels Ia. Lopesan Touristik SA v Apollo European Principal Finance Fund III (Dollar A) L.P. & Ors [2020] EWHC 2642 (Comm) engages a Sale and Purchase Agreement (SPA) between Lopesan as seller and Spanish company Oldavia as buyer, for Lopesan’s interest in the Buenaventura hotel in Spain. The Hotel is owned by Creative Hotel Buenaventura SAU.
Oldavia is a special purpose vehicle through which Apollo, who are private equity interests, acquired the Hotel for c.€93 million. That funding commitment was reflected in the terms of an Equity Commitment Letter (ECL), under which Apollo promised Oldavia, on the terms and conditions set out in the ECL, to provide it with the funding required to complete the SPA, which obligation was expressly made enforceable by Lopesan under the Contracts (Rights of Third Parties) Act 1999.
The SPA is governed by Spanish law and contains an exclusive jurisdiction clause in favour of the Spanish courts. The ECL is governed by English law and contains an exclusive jurisdiction clause in favour of the English courts.
Completion did not take place, and there are disputes between Lopesan and Oldavia as to whether Oldavia was or is obliged to complete under the SPA.
On 12 August 2020, Lopesan commenced proceedings against Oldavia in Madrid seeking specific performance of Oldavia’s obligation to complete under the SPA. Parties agree that those proceedings will not be determined for at least 12 months. On 20 August 2020, Lopesan wrote to Apollo seeking confirmations and undertakings intended to ensure that, if the specific performance claim against Oldavia succeeded, Apollo would provide the funds to Oldavia to allow completion to occur. Apollo disputed that Oldavia was under any obligation to complete, and as a result that it was under any corresponding obligation to put Oldavia in funds to enable it to complete.
On 15 September 2020 Lopesan then issued proceedings seeking to enforce its rights as a third party beneficiary under the ECL by way of an order for specific performance of Apollo’s obligation to put Oldavia in funds. Lopesan also issued an application for a speedy trial of that action to ensure judgment was delivered before 1 January 2021: there is a potential argument that Apollo’s obligations will lapse on 1 January 2021, even if, before that date, Oldavia came under a legal obligation to complete the SPA.
Apollo seek a stay of the proceedings under A30(1) BIa.
At 47 Foxton J refers to the Privatbank /EuroEco discussion which he summarises as ‘whether actions are related for the purposes of A30 only when the actions can in fact be heard and determined together, or whether actions are related where they would be heard and determined together but for some external factor (such as exclusive jurisdiction agreements or subject-matter limits on the jurisdiction of a particular court) which prevents this.’ Effective v theoretical hearing together, in other words. He sides with Privatbank but also accepts, with reference to Privatbank, that a practical inability to achieve an outcome where both cases are heard and determined together will be a factor which weighs against granting a stay as a matter of the discretion which Article 30 grants the judge, and that “absent some strong, countervailing factor, the fact that proceedings cannot be consolidated and heard together will be a compelling reason for refusing a stay”.
Further, and with reference to The Alexandros and to Generali v Pelagic Fisheries, where the factor which prevents the two actions being heard together is an exclusive jurisdiction clause, that of itself will constitute a powerful (although not insuperable) factor against staying proceedings which have been brought in the parties’ chosen jurisdiction pending the determination of proceedings elsewhere. At 50 he holds that this is a factor even when the other proceedings have themselves not been commenced in breach of contract.
At 57 Foxton J points that neither the relatedness of the actions nor that the Spanish court is first seised, are disputed. Relatedness exists given that any issue arising in the English proceedings which concerns the issue of whether Oldavia was obliged to complete the SPA necessarily arises in Spain. He then holds that the degree of relatedness is high and that the Spanish courts have much closer proximity to the subject matter of the case, involving, as it does, issues as to the effect of Covid-19 and the Spanish government’s response to it on a Spanish hotel, and the legal effects of those and other matters on a contract governed by Spanish law. However, at 58, if the English proceedings are stayed, it will not be possible to hear and determine the claims in the English and Spanish proceedings together, given the conflicting exclusive jurisdiction clauses in the ECL and the SPA. The decision (whether on issues of law or fact) in the Spanish proceedings would not be binding in the English proceedings, although if Lopesan fails in the Spanish proceedings, that will in practice be determinative of the English proceedings. Findings of law in the Spanish proceedings will also have a strong evidential value in the English proceedings.
Nevertheless, the significance of the English jurisdiction clause and the practical impossibility to hear the claims together in the Spanish courts, make him decide at 60 ff against a stay. His judgment displays the characteristic support of the English courts and English law for party autonomy: parties have deliberately structured the transaction so that claims under the ECL would be heard in a different jurisdiction to claims under the SPA. Consider his reasoning at 61:
That choice having been made, no doubt for good commercial reasons, and the events which have transpired being a scenario which must have been squarely within the parties’ contemplation, it would take a very strong case to justify staying proceedings brought as of right here pending the outcome of proceedings in another jurisdiction. The closer proximity of the Spanish courts to the dispute, nor its status as the natural forum to determine issues of Spanish law, are not sufficient to justify a stay, both because this must have been obvious to the parties when they put this arrangement in place, and because the parties expressly agreed not to raise any objections to proceedings in England on the ground that proceedings have been brought in an inconvenient forum. I do not suggest that this last factor is determinative or that it precludes an Article 30(1) stay. There is a public, as well as a purely private, interest in avoiding irreconcilable judgments within the Brussels Recast regime. However, the factor that the parties wanted the dispute to be determined in their chosen forum regardless of whether another court might be a more convenient forum is a factor which weighs in the balance against a stay.
A relevant judgment.
Geert.
(Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2, Heading 2.2.14.5. Third edition forthcoming February 2021
I.a. application (dismissed) for a stay under A30(1) Brussels Ia.
Foxton J holding that the proceedings in Spain are related however no risk of irreconcalibility. https://t.co/gAeqYZNeEI
— Geert Van Calster (@GAVClaw) October 8, 2020
On 20 October 2020, the European Parliament adopted a resolution with recommendations to the Commission on a civil liability regime for artificial intelligence. These recommendations include a suggested regulation on liability for the operation of Artificial Intelligence-systems. Article 9 confirms the previous JURI Report (see this blog on 12 May 2020): “Civil liability claims brought in accordance with Article 8(1) shall be subject, in relation to limitation periods as well as the amounts and the extent of compensation, to the laws of the Member State in which the harm or damage occurred”.
Unfortunately, the exact nature of some key provisions such as Article 2, or the relationship between the suggested regulation as a whole and Rome II, remain unclear and different interpretations could usefully be clarified. It remains to be seen whether the European Commission will shed some light on this point when drafting the official proposal for the regulation.
See https://www.europarl.europa.eu/doceo/document/TA-9-2020-0276_EN.pdf
A rather strange ‘amendment’ to the French version of Brussels II ter was published two days ago at the OJEU: Rectificatif au règlement (UE) 2019/1111 du Conseil du 25 juin 2019 relatif à la compétence, la reconnaissance et l’exécution des décisions en matière matrimoniale et en matière de responsabilité parentale, ainsi qu’à l’enlèvement international d’enfants, OJEU L 347, 20.10.2020, p. 52–160 (FR), https://eur-lex.europa.eu/legal-content/FR/TXT/?uri=uriserv%3AOJ.L_.2020.347.01.0052.01.FRA&toc=OJ%3AL%3A2020%3A347%3ATOC
In reality, a new version of the entire Regulation is provided, far from the single amendment the title may suggest. As the readers from this blog will know, a few days ago, a corrigendum to Brussels I bis in some linguistic versions has been published. What’s next and why are the corrections only published now, even if later is better than never?
In Koninklijke Philips NV v Tinno Mobile Technology Corporation & Ors [2020] EWHC 2553 (Ch) Mann J considers the English side of a licence on ‘FRAND’ (fair, reasonable and non-discriminatory) terms. In these English proceedings Philips seek inter alia, a declaration that the terms it has offered are FRAND, or alternatively that FRAND terms be determined. Its injunction claim accepts that the injunction will only come into force if a worldwide FRAND licence is not accepted by TCL, one of the defendants who is seeking the licence. TCL have commenced proceedings in France which, inter alia, seem to seek to have FRAND terms determined. Philips attempted to have those proceedings stayed pursuant to Article 29 Brussels Ia, but that attempt failed, as did an application for a stay under Article 30 BIa. In turn, not surprisingly, TCL seek a stay of the English proceedings, including, crucially, the vacation of a trial date in November which is intended to determine FRAND issues, in favour of its French proceedings pursuant to the same Articles 29 and/or 30 Brussels Ia.
Philips’ claim form says it is for infringement of two of its European patents, corresponding injunction (prohibiting further infringement) and damages or an account of profits, and other ancillary relief.
At 49 in assessing the impact of the French judgment and the scope of its res judicata, Mann J justifiable refers to C-456/11 Gothaer, that it is not just the ‘dispositif’ of a judgment which has res judicata, but also the core reasoning: at 40 of the CJEU judgment: ‘the concept of res judicata under European Union law does not attach only to the operative part of the judgment in question, but also attaches to the ratio decidendi of that judgment, which provides the necessary underpinning for the operative part and is inseparable from it …’
His enquiry of the dispositif and the French judge’s reasoning as well as, to a certain extent, the submissions of the parties, leads Mann J to conclude that the French judge did not hold that the French court was first seized of FRAND proceedings. Instead, she held that the proceedings in England and the proceedings in France did not (for the purposes of A29) have the same subject matter. That means that the question of first seised became irrelevant.
Mann J then holds himself that the English court was first seized of the FRAND issue and consequently has no power under A30 BIa to stay its proceedings. It was suggested in vain by counsel for the defendants that Articles 29 and 30 are not acte clair on the point of new actions arising in an existing action, given a distinction between the word “proceedings” in Article 29 and “actions” in Article 30 at least in the English version of those Articles.
The jurisdictional challenge was rejected and the relief granted. Geert. (Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2, Heading 2.2.14.5. Third edition forthcoming February 2021. https://twitter.com/GAVClaw/status/1309481362186031105A quick note for archival purposes on the French Supreme Court judgment earlier this month in which it upheld the lower courts’ decision (which had been reversed upon appeal) that European Convention rights do not trump the impossibility under English law, which is the law under which the claimant had been adopted, for the adopted to confirm descent from both the adopted parents and the biological father.
It is important to keep in mind the specific circumstances of the case in which the Supreme Court let the stability of family relations prevail over ECHR rights. The adoption went back to 1966 (the UK birth to 1958). The true identity of the father seemingly had always been known to the applicant. The mother (1963) and the suspected biological father (2011) have passed away, the real issue would seem to be inheritance related.
Geert.
Interesting French supreme court judgment upholding finding under applicable English law that descendance following adoption trumps later attempt to establish blood descendance
Preference for stability of family relations found not to infringe adopted's A8 #ECHR rights @ECHR_CEDH https://t.co/Gtht0d8YgH
— Geert Van Calster (@GAVClaw) October 15, 2020
A corrigendum to Brussels I bis in some linguistic versions has been published yesterday (15 October 2020) in the OJEU (L 338). It relates to the Czech, French and Polish versions of the Regulation. Here is the French version:
« Page 23, article 34, paragraphe 1, point c):
au lieu de: «c) la juridiction de l’État tiers concernée est convaincue que le sursis à statuer est nécessaire pour une bonne administration de la justice.»
lire: «c) la juridiction de l’État membre est convaincue que le sursis à statuer est nécessaire pour une bonne administration de la justice ».
It is an alignment with other linguistic versions.
Case C‑629/19 Sappi Austria Produktions-GmbH & Co. KG and Wasserverband ‘Region Gratkorn-Gratwein’ v Landeshauptmann von Steiermark in which the CJEU held on Wednesday is in my off the cuff view (I did not research it in the recent case-law) the first case where the CJEU specifically mentions the objectives of the circular economy to support its interpretation of the core definition of ‘waste’ in the Waste Framework Directive 2008/98.
Sappi operate a large industrial paper and pulp production plant in Gratkorn (Austria). On that site is also a sewage treatment plant, operated jointly by Sappi and the Wasserverband, which treats waste water from paper and pulp production as well as municipal waste water. During the treatment of that waste water, which is required by national law, the sewage sludge in question in the main proceedings arises. That sludge is therefore made up of both substances from industrial waste water and substances from municipal waste water. Sewage sludge which is produced in the sewage treatment plant is then incinerated in a boiler of Sappi and in a waste incineration plant operated by the Wasserverband, and the steam reclaimed for the purposes of energy recovery is used in the production of paper and pulp. hat authority found that, admittedly, the majority of the sewage sludge used for incineration, namely 97%, originated from a paper production process and that this proportion could be regarded as having ‘by-product’ status within the meaning of Paragraph 2(3a) of the AWG 2002. However, that does not apply to the proportion of sewage sludge arising from municipal waste water treatment. That sewage sludge remains waste. Since there is no de minimis limit for the classification of a substance as ‘waste’, the authority assumed that all the sewage sludge incinerated in the industrial plants of Sappi and of the Wasserverband must be classified as ‘waste’.
The CJEU first of all holds that there is no relevant secondary law which provides the kinds of qualitative criteria for sewage sludge to meet with the objectives of the WFD. If there were such laws, and the sludge meets their requirements, it would be exempt form the WFD. It then reminds the referring court, of course, of the extensive authority on the notion of waste (most recently C-624/17 Tronex) yet is happy to provide the national Court with input into the application in casu.
In principle, the sludge is waste, the Court holds: it is a residue from waste water treatment and it is being discarded.
However, the referring judge suggests that the sludge may meet the requirements of A6(1) WFD as being fully ‘recovered’ before it is used in the incineration process. It is there that the CJEU refers to the circular economy: at 68:
it is particularly relevant that the heat generated during the incineration of the sewage sludge is re-used in a paper and pulp production process and that such a process provides a significant benefit to the environment because of the use of recovered material in order to preserve natural resources and to enable the development of a circular economy.
Per C‑60/18 Tallinna Vesi, the recovery of sewage sludge entails certain risks for the environment and human health, particularly linked to the potential presence of hazardous substances. For the sludge at issue here not to be waste, presupposes that the treatment carried out for the purposes of recovery makes it possible to obtain sewage sludge with a high level of protection of the environment and human health, such as required by the WFD, which is, in particular, free from any dangerous substance. For that purpose, it is necessary to ensure that the sewage sludge in question in the main proceedings is harmless (at 66). The CJEU concludes, at 67
It is for the referring court to determine whether the conditions laid down in Article 6(1) of Directive 2008/98 are already met before the sewage sludge is incinerated. It must in particular be determined, as appropriate, on the basis of a scientific and technical analysis, that the sewage sludge meets the statutory limit values for pollutants and that its incineration does not lead to overall adverse environmental or human health impacts.
There are as yet no EU standards for the full recovery of sewage sludge, hence the ball of end of waste status is once again in the Member States’ court.
Geert.
(Handbook of) EU Waste law, 2nd ed. 2015, Oxford, OUP, Chapter 1, 1.149 ff.
In Selecta Finance UK Ltd, Re [2020] EWHC 2689 (Ch) Johnson J considered the jurisdictional issues for schemes of arrangement in a touch more detail than recently has been the regular method in both convening and sanctioning hearings.
Selecta Finance UK Limited is a most recent addition to the ‘Selecta’ group , having been established only on 13 August 2020. (Selecta is said to be the leading provider of unattended self-service coffee and convenience food in Europe). The Scheme concerns three series of senior secured Notes (“the Existing SSNs“), which have an aggregate principal amount of €1.24 billion plus CHF 250 million. The Existing SSNs were issued originally not by the Company but by Selecta Group BV, its parent company incorporated in the Netherlands. They were issued pursuant to a Trust Deed dated 2 February 2018 , and were originally governed by New York law and subject to a provision for the New York Courts to have exclusive jurisdiction.
With reference to authority, Johnson J accepts that the relevant parties in interest who qualify as the Scheme Creditors are the ultimate beneficial owners of the Existing SSNs. By 14 September 2020, the Existing SSN Holders holding a majority by value of the Existing SSNs had provided their consent to (among others) the following key changes to the terms of the SSNs: i) Amendment of the governing law provisions of the Trust Deed so that the Existing SSNs are governed by English rather than New York law. ii) Amendment of the jurisdiction provisions of the Trust Deed so that the Existing SSNs are subject to the exclusive jurisdiction of the English Court in relation to any proceedings commenced by an obligor of the Existing SSNs, and the non-exclusive jurisdiction of the English Court in relation to other proceedings; iii) Accession of the Company to the Trust Deed as a co-issuer of the Existing SSNs.
At 18 it is said that an expert report on US and New York law confirms that the amendments to the governing law and jurisdiction clauses of the Trust Deed are valid under New York law and would be regarded as effective in any United States court applying that law.
The relevance of that finding for unwilling SSNs beneficiaries, I would argue, is not undisputedly established under Article 10 and Article 3(2) Rome I.
The Company then entered into a Supplemental Trust Deed on 14 September 2020 and thereby became a co-issuer of the Existing SSNs under the Trust Deed. As Johnson J notes at 44: it is only by means of the Supplemental Trust Deed that the Company became co-issuer of the Existing SSNs, and that the governing law and jurisdiction provisions were changed so as to refer to English law and jurisdiction.
It is clear that a jurisdictional link with England & Wales has been established specifically for the purpose of a company taking advantage of the scheme provisions in English law. With reference to Newey J in Re Codere Finance (UK) Ltd [2015] EWHC 3778 (Ch) which I reviewed here, this is held to be ‘good forum shopping’.
Article 25 Brussels Ia jurisdiction is only possible by means of the amendments to the Trust Deed effected via the Supplemental Trust Deed, as I also noted above. As I suggest there, had there been recalcitrant minority Note holders objecting to the change in court and law clause, I think the Scheme would not have been jurisdictionally home and dry on A25 choice of court grounds.
The next classic consideration is under Article 8(1)’s anchor defendant mechanism seeing as jurisdiction against the company is established per Article 4.
At 53 reference is made to Snowden J. who in Van Gansewinkel has suggested that in determining whether A8(1) applies, the Court is required to consider whether the “numbers and size of the scheme creditors domiciled in [the UK]” are “sufficiently large“: the result of that instruction is that applicants tend to point out the (debt) size of the creditors so domiciled, even if in DTEK Newey J held that size and number are irrelevant, ditto in Lecta Paper and Swissport Fuelling.
At 54 comes Johnson J’s obiter, useful finding:
Speaking for myself, I incline to the view that the presence of a single creditor is a necessary, but not of itself a sufficient, condition to the operation of Art. 8. I say that because in terms the power conferred by Art. 8 is engaged where “any one of” a number of defendants is domiciled in England & Wales, but even then the power is to be exercised only in cases where the language of the proviso in Art. 8 is satisfied – i.e., where the claims against the various defendants are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. I did not hear detailed argument on the meaning of this language, and in any event the application before me was uncontested, and so I express my view on it somewhat tentatively; but tentatively it seems to me that the question of expediency posed by the proviso is rather less about the geographical distribution in terms of number and size of the prospective defendants, and is rather more about the expediency in case management terms of connected claims being resolved in one place, even if only one anchor defendant is domiciled there. The argument in this case is that it is expedient for the claims against all EU domiciled Scheme Creditors to be resolved in one place, i.e. in England & Wales, because such claims all relate to the reorganisation of their indebtedness vis-à-vis the Company, and these Courts are best placed to resolve such questions given the separate jurisdiction they exercise over the Company under CA Part 26. Indeed, they may be uniquely placed to do so.
Opposition to the Scheme’s jurisdiction tends to evaporate once it gets to the convening and hearing stage. This is typically because the opposing creditors tend to by that stage be converted to the necessity of restructuring and the unattractiveness of having to pursue debt collection against a corporation in serious financial difficulty. As a result nearly all precedent is first instance only.
Geert.
(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 2, Chapter 5. Third edition forthcoming February 2021.
Scheme of arrangement. Rare more detailed consideration of A8(1) BIA jurisdiction (upheld) by Johnson J.
Conclusions on A25 'good forum shopping' remain shaky in my view given change of choice of court and law provisions from New York to English law and court. https://t.co/yL2edW1tMc
— Geert Van Calster (@GAVClaw) October 14, 2020
As I seem to be in a comparative mood today, thank you Jan Jakob Bornheim for flagging [2020] NZHC 2560 Lange v Lange. The case is further discussed by Jack Wass here – at the time of writing I only have Jack’s review to go on for the actual decision appears to be as yet unpublished.
TTPA 2010 follows the model of the more recent Hague Judgments Convention: recognition and enforcement of a judgment may be refused if it infringes jurisdictional rules detailed in the Act. For the case at issue, s 61(2)(c) of the TTPA is engaged. It requires the court to set aside registration of a judgment if it was “given in a proceeding the subject matter of which was immovable property” located outside Australia.
The determining concern is whether the New Zealand property was “in issue” (the words which Jack uses and which presumably Gault J employed; the Act itself uses ‘proceeding subject matter of which is’; compare with Brussels Ia’s ‘proceedings which have as their object’) in the proceedings. Gault J, citing authority, finds that a judgment setting aside a fraudulent disposition is not rendered unenforceable simply because the debt concerned the sale of New Zealand land. (A further appeal to ordre public was refused; for that to be successful, the result of recognition must, Jack notes, “shock the conscience” of the ordinary New Zealander” (Reeves v OneWorld Challenge LLC [2006] 2 NZLR 184 (CA) at [67].
Obvious comparative pointers with EU conflicts law are Webb v Webb, Weber v Weber, Schmidt v Schmidt, Komu v Komu etc.: readers will know that Article 24(1) Brussels Ia typically involves feuding family members.
Geert.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.6 . Third edition forthcoming February 2021.
A short note for the benefit of comparative contract lawyers who may find some interesting material when looking into the failed LVMH /Tiffany acquisition. That acquisition agreement (see SEC filing here) is subject to the laws of Delaware other than claims against the financiers which are subject to the laws of New York (s.10.5). As readers might be aware, LVMH would seem to argue not that the Pandemic is a Material Adverse Effect which invalidates the merger. Rather, that Tiffany’s handling of its business in the pandemic is a MAE.
Of interesting comparative note therefore is Travelport Ltd & Ors v WEX Inc [2020] EWHC 2670 (Comm) where Cockerill J preliminarily discusses the proper construction of, and burden of proof in relation to, the MAE definition contained in a Share Purchase Agreement (SPA) dated 24 January 2020. The substantive issues will be dealt with before her at a later stage.
Geert.
(Preliminary) findings of comparative relevance to #LVMH #Tiffany merger (which is subject to the laws of Delaware: see https://t.co/uxmBf2XeSY)
Proper construction of, and burden of proof re definition of Material Adverse Effect contained viz #Covid19 in SPA under English law. https://t.co/8l6N42YyTZ
— Geert Van Calster (@GAVClaw) October 12, 2020
The Council has made available today its 8 October 2020 Conclusions “Access to Justice – Seizing the Opportunities of Digitalisation”. There are attached to this post.
council-conclusions-access-to-justice-e28093-digitalisationDownloadIn Case C‑471/18 P in which Tanchev AG Opined last month, Germany is asking the CJEU to set aside judgment in T‑283/15 Esso Raffinage v ECHA by which the General Court annulled entitled a European Chemical Agency (‘ECHA’) letter entitled ‘Statement of Non-Compliance following a Dossier Evaluation Decision under [REACH]’. The letter concerned the outcome of ECHA’s compliance check of Esso Raffinage’s registration dossier for a particular chemical substance. The main thrust of its appeal is that the REACH Regulation does not provide for further examination by ECHA of the conformity of the information submitted with the first compliance check decision, and that this matter falls within the competences of the Member States pursuant to the REACH enforcement provisions. In support of its position, it argues that a registrant must conduct animal testing specified in the Evaluation Decision, and cannot submit adaptations at that stage.
Esso and ECHA find themselves in an unusual alliance with animal rights activists who argue that a registrant must be able to submit adaptations in lieu of performing animal testing specified in a first compliance check decision.
The case mostly concerns the respective competences of Member States and ECHA under Reach, I highlight it here for the AG’s emphasis on the relevance of animal welfare in the Regulation: consideration of animal welfare through the reduction of animal testing is one of the objectives pursued by the REACH Regulation. At 158: ‘Viewed more broadly, as indicated by Esso Raffinage and [NGO], the promotion of animal welfare and alternative methods to animal testing in the REACH Regulation reflects Article 13 TFEU, pursuant to which, in formulating and implementing the European Union’s policies, the European Union and the Member States are to pay full regard to the welfare requirements of animals.’
Animal welfare has come a long way since Michael Rose and I submitted it in CJEU C-1/96 Compassion in World Farming.
Geert.
For those interested in #AnimalWelfare & #REACH
Tanchev AG Opinion yday re allocation of competences between #ECHA and MS in assessing conformity of registration dossiers with #REACH.
Broader implications for the promotion of animal welfare under EU lawhttps://t.co/wxaJIxOfV1
— Geert Van Calster (@GAVClaw) September 25, 2020
The ‘transparency’ or ‘notification’ Directive 2015/1535 (the successor to Directive 98/34) featured twice at the CJEU yesterday. In Case C‑711/19 Admiral Sportwetten, the Court held that a national tax rule that provides for taxation of the operation of betting terminals does not constitute a ‘technical regulation’ that needs to be notified under the Directive. In Case C-514/19 Union des industries de la protection des plantes it held more directly than Kokott AG had opined, that France had validly informed the Commission of the need to take measures intended, in particular, to protect bees by banning the use of 3 active substances of the neonicotinoid family which had been authorised for use under the relevant EU procedure. That procedure is regulated by Directive 1107/2009 on plant protection products.
The complication in the case in essence is a result of the dual procedure for national safeguard measures as a result of the existence of both the PPP and the notification Directive. May a communication of a Member State under the Notification Directive, double as notification of emergency measures under the PPP Directive? The CJEU held it can, provided the notification contains a clear presentation of the evidence showing, first, that those active substances are likely to constitute a serious risk to human or animal health or to the environment and, second, that that risk cannot be controlled without the adoption, as a matter of urgency, of the measures taken by the Member State concerned, and where the Commission failed to ask that Member State whether that communication must be treated as the official provision of information under the regulation.
The Court referred to its findings in C-116/16 Fidenato, that a Member State’s power, provided by an EU act, to adopt emergency measures requires compliance with both the substantive conditions and procedural conditions laid down by that act (a requirement, I would add, which conversely also applies to the European Commission), but adds that a notification to the Commission under Article 71(1) of Regulation 1107/2009 requires only that the Member State concerned ‘officially informs’ that institution, without having to do so in a particular manner.
More generally, the Court emphasises the principle of sound administration imposed upon the EC, which explains its insistence on the EC having proactively to ensure the Member State concerned be aware of its obligations under the EU law concerned or indeed adjacent law. A certain parallel here may be made with the rules of civil procedure which require from those soliciting the courts that they approach the court with clean hands.
The Court in essence, I submit, finds that, the consequences for the Member State concerned in failing to meet the requirements for it to be able to make use of a safeguard provision in secondary law being so great, the conditions imposed on them must be met by a strict due diligence on behalf of the European Commission.
Of note is that the judgment does not entail any finding on the substantive legality of the French ban.
Geert.
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