Flux européens

PJSC Tatneft v Bogolyubov & Ors [2020] EWHC 2437 (Comm) is another example of a case where privilege is firmly considered to be subject to lex fori, like in the New York courts but unlike the approach of the Dutch courts. Moulder J did discuss the extent to which the rule applies to foreign unregistered, in-house lawyers. However she does this purely from the English point of view and without any consideration of either Rome I or Rome II. That is not very satisfactory in my view. As I have signalled before, one can discuss whether privilege is covered by the evidence and procedure exception in the Rome Regulations, however it must be discussed and cannot be just brushed under the carpet.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 3, Chapter 4.

(3rd ed forthcoming February 2021).

 

État luxembourgeois (Droit de recours contre une demande d’information en matière fiscale)
DFON
Le droit à un recours effectif garanti par la charte des droits fondamentaux de l’Union européenne impose de permettre aux personnes qui sont détentrices d’informations dont l’administration nationale demande la communication, dans le cadre d’une procédure de coopération entre États membres, de former un recours direct contre cette demande. En revanche, les États membres peuvent priver d’une telle voie de recours direct le contribuable visé par l’enquête fiscale et les tiers concernés par les informations en cause, dès lors qu’il existe d’autres voies de recours permettant à ces derniers d’obtenir un contrôle incident de ladite demande

Jobcenter Krefeld
Libre circulation des personnes
Un ancien travailleur migrant et ses enfants bénéficiant d’un droit de séjour au titre de la scolarisation des enfants ne peuvent pas être automatiquement exclus de prestations sociales de base prévues par le droit national au motif que ce travailleur est tombé au chômage

Commission / Hongrie (Enseignement supérieur)
Liberté d'établissement
Les conditions introduites par la Hongrie pour permettre aux établissements d’enseignement supérieur étrangers d’exercer leurs activités sur son territoire sont incompatibles avec le droit de l’Union

Bank Refah Kargaran / Conseil
Droit institutionnel
La Cour confirme l’arrêt du Tribunal ayant rejeté la demande de Bank Refah Kargaran d’indemnisation pour les préjudices subis du fait des mesures restrictives adoptées à son égard

La Quadrature du Net e.a.
Rapprochement des législations
La Cour de justice confirme que le droit de l’Union s’oppose à une réglementation nationale imposant à un fournisseur de services de communications électroniques, à des fins de lutte contre les infractions en général ou de sauvegarde de la sécurité nationale, la transmission ou la conservation généralisée et indifférenciée de données relatives au trafic et à la localisation

Casino, Guichard-Perrachon et AMC / Commission
Concurrence
Le Tribunal annule partiellement des décisions d’inspection de la Commission faisant suite à des soupçons de pratiques anticoncurrentielles par plusieurs entreprises françaises du secteur de la distribution

Thank you Irene Pietropaoli for alerting me to the European Parliament’s draft proposal for a mandatory human rights due diligence Directive. The official title proposed is a Directive on Corporate Due Diligence and Corporate  Accountability). Parliament also proposes insertions in both Brussels Ia and Rome II. For the related issues see a study I co-authored on the Belgian context, with links to developments in many jurisdictions.

I do not in this post go into all issues and challenges relating to such legislation, focusing instead on a first, preliminary analysis of the conflicts elements of the proposal.

A first issue of note in the newly proposed Directive is the definitional one.  The proposal’s full title as noted uses ‘corporate due diligence and corporate accountability’. However in its substantive provisions it uses ‘duty to respect human rights, the environment and good governance’ and it defines each (but then with the denoter ‘risk’) in Article 3. For human rights risks and for governance risks these definitions link to a non-exhaustive list of international instruments while for the environment no such list is provided.

The proposed Directive points out the existence of sectoral EU due diligence legislation e.g. re timber products and precious metals, and suggests ‘(i)n case of insurmountable incompatibility, the sector-specific legislation shall apply.’ This is an odd way to formulate lex specialis, if alone for the use of the qualifier ‘insurmountable’. One assumes the judge seized will eventually be the arbitrator of insurmountability however from a compliance point of view this is far from ideal.

As for the proposed amendment to Brussels Ia, this would take the form of a forum necessitatis as follows:

Article 26a
Regarding business-related civil claims on human rights violations within the value chain of a company domiciled in the Union or operating in the Union within the scope of Directive xxx/xxxx on Corporate Due Diligence and Corporate Accountability, where no court of a Member State has jurisdiction under this Regulation, the  courts of a Member State may, on an exceptional basis, hear the case if the right to a fair trial or the right to access to justice so requires, in particular: (a) if proceedings cannot reasonably be brought or conducted or would be impossible in a third State with which the dispute is closely related; or (b) if a judgment given on the claim in a third State would not be entitled to recognition and enforcement in the Member State of the court seised under the law of that State and such recognition and enforcement is necessary to ensure that the rights of the claimant are satisfied; and the dispute has a sufficient connection with the Member State of the court seised.

This proposal is a direct copy paste (with only the reference to the newly proposed Directive added) of the European Commission’s proposed forum necessitatis rule (proposed Article 26) at the time Brussels I was amended to Brussels Ia (COM (2010) 748). I discussed the difficulty of such a forum provision eg here (for other related posts use the search string ‘necessitatis’). The application of such a rule also provokes the kinds of difficulty one sees with A33-34 BIa (including the implications of an Anerkennungsprognose).

Coming to the proposed insertion into Rome II, this text reads

Article 6a
Business-related human rights claims
In the context of business-related civil claims for human rights violations within the value chain of an undertaking domiciled in a Member State of the Union or operating in the Union within the scope of Directive xxx/xxxx on Corporate Due Diligence and Corporate Accountability, the law applicable to a non-contractual obligation arising out of the damage sustained shall be the law determined pursuant to Article 4(1), unless the person seeking  compensation for damage chooses to base his or her claim on the law of the country in which the event giving rise to the  damage occurred or on the law of the country in which the parent company has its domicile or, where it does not have a domicile in a Member State, the law of the country where it operates.

I called this a choice between lex locus damni; locus delicti commissi; locus incorporationis; locus activitatis. Many of the associated points of enquiry of such a proposal are currently discussed in Begum v Maran (I should add I have been instructed in that case).

A first obvious issue is that the proposed Article 6a only applies to the human rights violations covered by the newly envisaged Directive. It does not cover the environmental rights. These presumably will continue to be covered by Rome II’s Article 7 for  environmental damage. This will require a delineation between environmental damage that is not also a human rights issue, and those that are both. Neither does the proposed rule apply to the ‘good governance’ elements of the Directive. These presumably will continue to be covered by the general rule of A4 Rome II, with scope for exception per A4(3).

My earlier description of the choice as including ‘locus incorporationis’ is not entirely correct, at least not if the ‘domicile’ criterion is the one of Brussels Ia. A corporation’s domicile is not necessarily that of its state of incorporation and indeed Brussels Ia’s definition of corporate domicile may lead to more than one such domicile. Does the intended rule imply claimant can chose among any of those potential domiciles?

Locus delicti commissi in cases of corporate due diligence (with the alleged impact having taken place abroad) in my view rarely is the same as locus damni, instead referring here to the place where the proper diligence ought to have taken place, such as at the jurisdictional level in CJEU C-147/12 OFAB, and for Rome II Arica Victims. This therefore will often co-incide with the locus incorporationis.

Adding ‘locus activitis’ as I called it or as the proposal does, the law of the country where the parent company operates, clearly will need refining. One presumes the intention is for that law to be one of the Member States (much like the proposed Directive includes in its scope ‘limited liability undertakings governed by the law of a non-Member State and not established in the territory of the Union when they operate in the internal market selling goods or providing services’). Therefore it would be be best to replace ‘country where it operates’ with ‘Member State’ where it operates. However clearly a non-EU domiciled corporation may operate in many Member States, thereby presumably again expanding the list of potential leges causae to pick from. Moreover, the very concept of ‘parent’ company is not defined in the proposal.

In short, the European Parliament with this initiative clearly hopes to gain ground quickly on the debate. As is often the case in such instances, the tent pegs have not yet been quite properly staked.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.

(3rd ed forthcoming February 2020).

 

 

 

Yesterday (30 September 2020), Belgium ratified the Hague Convention of 13 January 2000 on the International Protection of Adults, which will enter into force for Belgium on 1 January 2021.

Source:

here

A (Publicité et vente de médicaments en ligne)
Liberté d'établissement
Un État membre de destination d’un service de vente en ligne de médicaments non soumis à prescription médicale ne peut interdire à des pharmacies établies dans d’autres États membres vendant ces médicaments de recourir au référencement payant dans des moteurs de recherche et des comparateurs de prix

Groupe Lactalis
Rapprochement des législations
La réglementation de l’Union harmonisant l’indication obligatoire du pays d’origine ou du lieu de provenance des denrées alimentaires et, notamment, du lait ne fait pas obstacle à l’adoption de mesures nationales imposant certaines mentions complémentaires d’origine ou de provenance

I flagged [2020] EWHC 2191 (Ch) Virgin Atlantic (the plan in the meantime has been sanctioned in [2020] EWHC 2376 (Ch)) in an update of my earlier post on the Colouroz Investment Scheme of Arrangement.

Restructuring practitioners have been justifiably excited by this new addition to England’s regulatory competition in restructuring tourism.

In my many posts on Schemes of Arrangements (see in particular Apcoa with the many references to later cases in that post; and Lecta Paper), I have summarised the modus operandi: no firm decision on jurisdiction under Brussels Ia is made (it is by no means certain but scheme creditors have so far not taken much of a swipe seeing as they tend to accept the attraction of the debtor company continuing as  a going concern following the use of an English scheme). If at least one of the creditors is domiciled in England, it is considered sued and a defendant per Article 4 Brussels Ia. Other, non-England domiciled creditors are then pulled into English jurisdiction using the one anchor defendant per Article 8(1). Trower J extends that assumption to Restructuring Plans at 58 ff:

1. 1. 1. It is now well-established that an application for sanction of a Part 26 scheme is a civil or commercial matter and the reasoning seems to me to apply with equal force to a Part 26A restructuring plan. However, it has never been completely determined whether the rule laid down in Article 4(1) of the Regulation, that any person domiciled in an EU member state must (subject to any applicable exception) be sued in the courts of that member state, also applies to a Part 26 scheme, although the matter has been referred to and debated in a number of cases.

1. 1. 1. In the present case, I shall adopt the usual practice of assuming without deciding that Chapter II and, therefore, Article 4 of the Recast Judgments Regulation applies to these proceedings on the basis that Plan Creditors are being sued by the company and that they are defendants, or to be treated as defendants, to the application to sanction the scheme. If, on the basis of that assumption, the court has jurisdiction because one of the exceptions to Article 4 applies, then there is no need to determine whether the assumption is correct and I will not do so.

1. 1. 1. In the present case, the Company relies on the exception provided for by Article 8 of the Recast Judgments Regulation. By Article 8, a defendant who is domiciled outside a member state may be sued in that member state provided that another defendant in the same action is domiciled there and provided that it is expedient to hear the claims against both together to avoid risk of irreconcilable judgments resulting in separate proceedings. The consequence of this is that if sufficient scheme creditors are domiciled in England then Article 8(1) confers jurisdiction on the English court to sanction a scheme affecting the rights of creditors domiciled elsewhere in the EU, so long as it is expedient to do so, which it normally will be (see, for example, Re DTEK Finance Plc [2017] BCC 165 and [2016] EWHC 3563 (Ch) at the convening and sanctioning stages).

1. 1. and concluding at 61
      1. In the present case, the evidence is that at least one Plan Creditor from each class is domiciled in the jurisdiction. Perhaps most importantly, so far as in terms of Trade Plan Creditors, it is 90 out of 168. In my view, this is amply sufficient to ensure that the requirements of Article 8 are satisfied.’

Article 25 BIa jurisdiction is obiter dismissed at 62 for not all creditors have credit arrangements subject to English choice of court.

Restructuring Plans do have features which differ from Schemes of Arrangement and some of those do trigger different considerations at the recognition and enforcement level than have hitherto been the case for Schemes.

Geert.

(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 2, Chapter 5. Note: 3rd of the Handbook is forthcoming (February 2021).

report-on-the-establishment-of-an-eu-mechanism-on-democracy-the-rule-of-law-and-fundamental-rightsDownload

The Committee on Civil Liberties, Justice and Home Affairs of the European Parliament has released today its report on the establishment of an EU Mechanism on Democracy, the Rule of Law and Fundamental Rights (A9-0170/2020). The rapporteur is Michal Šimečka.

It is attached to this post.

In Marriott v Fresson & Ors [2020] EWHC 2515 (Comm) at issue in the jurisdictional challenge is whether Articles 24(2) or (3) Brussels Ia are engaged in litigation essentially seeking to uphold commitments included in two contracts expressly governed by English law and with an exclusive jurisdiction clause in favour of the courts of England. The goal of the agreements being the transfer of shares in Spanish-domiciled corporation (PEV), the question is whether they ‘have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or the validity of the decisions of their organs’ (A24(2)) alternatively ‘have as their object the validity of entries in public registers’ (A24(3)).

Toledano DJ referred ia to Koza, Zavarco, and C-144/10 BVG and held that the principal object of the proceedings is the enforcement of shareholder agreements.

Even the defendants, in their jurisdictional challenge, do not suggest that the proceedings directly call into question the validity of any specific decision of PEV organs. Rather, they contend that the proceedings are principally concerned with a claim to the legal ownership of shares in PEV which impacts upon the composition of the shareholders of PEV and prospectively therefore upon the validity of decisions of the shareholders as an organ of that company.

That was a bit optimistic for Brussels Ia’s exclusive jurisdictional rules quite clearly do not aim at claims whose eventual effect might engage the heads of jurisdiction listed in them. The distinction however is not always easy to make. Claimants may creatively formulate their claims so as they do not fall within A24 (a tactic used particularly in A24(4) intellectual property rights cases, hence requiring the judge to decide what the true object of the proceedings might be; see e.g. Chugai v UCB).

Marriott v Fresson clearly differs from Ferrexpo, which is discussed in the judgment, where validity of the resolutions of the company’s general meeting of shareholders was the direct and specifically formulated claim engaged Article 24 which was applied reflexively.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6, Heading 2.2.6.5.

Challenge to jurisdiction on the basis of Articles 24(2) and (3) Brussels Ia. Fails. Principal object of the proceedings held to be the enforcement of shareholder agreements. https://t.co/479ryb3lV5

— Geert Van Calster (@GAVClaw) September 25, 2020

Yesterday (28 September 2020), the United Kingdom “deposited its instrument of accession to the HCCH Convention of 30 June 2005 on Choice of Court Agreements […] and its instrument of ratification to the HCCH Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance”. The United Kingdom is currently bound by these conventions “by virtue of the approval of the European Union. These new instruments of accession and ratification ensure continuity in the application of these Conventions after the conclusion of the transition period following the withdrawal of the United Kingdom from the EU. Both Conventions will continue to be applicable to and in the United Kingdom until 31 December 2020, in accordance with the Withdrawal Agreement. The 2005 Choice of Court Convention and 2007 Child Support Convention will then enter into force for the United Kingdom on 1 January 2021”.

Source: here

Hessischer Rundfunk
Politique économique
Selon l’avocat général Pitruzzella, le droit de l’Union prévoit, en principe, une obligation d’accepter des espèces en euros pour le règlement des créances de sommes d’argent

Installation du Parquet européen

Generalbundesanwalt beim Bundesgerichtshof (Principe de spécialité)
Espace de liberté, sécurité et justice
Une mesure restrictive de liberté prise contre une personne visée par un premier mandat d’arrêt européen (MAE) sur la base de faits antérieurs et différents de ceux qui ont justifié sa remise en exécution d’un second MAE n’est pas contraire au droit de l’Union si cette personne a quitté volontairement l’État membre d’émission du premier MAE

The International Commercial Chamber of the Court of Appeal of Paris (France) delivered a few days ago (15 September 2020) a decision (RG 19/09518) on abrupt termination of established commercial relationships.

The summary: “In this liability case based on the abrupt termination of established commercial relationships, the ICCP-CA found admissible the action brought against the French subsidiary of the Asus group, alongside its Singaporean subsidiary, which had signed a partnership agreement with Sodexpo for the distribution of ASUS branded products in the French overseas departments and territories, in view of its interference in the establishment, execution and development of the said partnership, which created the appearance of a legitimate belief that the two Asus companies were partners in the commercial relationship (§§ 17 – 26). 

The ICCP-CA found the French and Singaporean subsidiaries of the Asus group liable of the abrupt termination of the commercial relationship. It ruled that the relationship was well established and that it had lasted for 25 months, among others in view of the development of the partnership between 2014 and 2016 and the granting of an exclusivity right at the end of 2016, suggesting a continuity of business flow for 2017 (§§ 30-37). The ICCP-CA held that the abruptness of the termination was characterized by the failure to give sufficient notice. It considered that in view of the 25-month duration of the commercial relationship, the constantly growing business volume (representing 40% of Sodexpo’s sales in 2016), the brand’s reputation and positioning in the global market, as well as the loss of a market that Sodexpo contributed to create in the French overseas departments and territories and the difficulty for the company to develop new business, the notification of termination should have been given 6 months in advance, rather than 7 days. 

The ICCP-CA has set the compensation for the abruptness of the termination on the basis of the loss of gross margin on the discounts granted by the Asus companies within the framework of their partnership with Sodexpo, specifying that the loss could not be calculated by reference to the margin earned by Sodexpo on its sales with wholesalers, third parties to the relationship, but only on the loss of the advantage resulting from the partnership with Asus (§§ 46-51). The ICCP-CA held that the abruptness of the termination also gave rise to a distinct harm affecting the image and commercial credibility of Sodexpo, taking into account the reputation of the Asus brand and the development of its distribution in the French overseas departments and territories.

The ICCP-CA furthermore rejected Sodexpo’s claim for compensation for the misappropriation of know-how in the absence of any proof establishing both wrongful acts committed by the Asus companies and a distinct loss resulting from the abruptness of the termination (§§ 54). It also rejected Sodexpo’s claim for reimbursement of unsold stock because of the lack of proof of an impossibility of selling it (§§ 57)”.

The decision is attached to this post.

15 sept 2020 CCIP- CA RG 1909518Download

The Explanatory Report on the HCCH Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters has been approved yesterday. You can find it attached .

HCCH Judgments Convention – Explanatory ReportDownload