Flux européens

Irlande / Commission
Aide d'État
Le Tribunal de l’Union européenne annule la décision de la Commission sur des rulings fiscaux irlandais en faveur d’Apple

In Colouroz Investment et al [2020] EWHC 1864 (Ch.), Snowden J at 59 ff considers the classic issues (see ia Lecta Paper) on the jurisdictional issue: no cover under the Insolvency Regulation; cover under Brussels Ia (future Brexit alert: ditto under Lugano) left hanging and assumed arguendo. At 62 Snowden J summarises the position excllently:

‘(T)he court has usually adopted the practice of assuming that Chapter II of the Recast Judgments Regulation applies to schemes of arrangement on the basis that the scheme proposal is to be regarded as a “dispute” concerning the variation of the existing relationship between the company and its creditors under which the company “sues” the scheme creditors as “defendants” seeking an order binding them to the scheme.  If, on the basis of that underlying assumption, the court has jurisdiction over the scheme creditors pursuant to Chapter II of the Recast Judgment Regulation, then there is no need for the Court to determine whether that assumption is correct.

At 64: ‘Credit Agreements and the ICA (Intercreditor Agreement, GAVC) were originally governed by New York law and were subject to the exclusive jurisdiction of the New York Court. However, as a result of the amendments made on 2 June 2020 with the consent of the requisite majority of the lenders under the contractual amendment regime, the governing law and jurisdiction provisions have now been changed to English governing law and English exclusive jurisdiction.’ At 65: expert evidence on NY law suggests amendments made on 2 June 2020 are valid and binding as a matter of New York law.

This to my mind continues to be a fuzy proposition under the Rome I Regulation: change of lex contractus by majority must beg the question on the relevant provisions under Rome I. As far as I am are, this hitherto has not been driven home by anyone at a sanction hearing however it is bound to turn up at some point.

At 66 Snowden J, who gives consent for the sanction hearing, announces that one issue that will have to be discussed there is that if the Schemes are sanctioned, the intention is to have the jurisdiction clauses then changed to asymmetric jurisdiction clauses, detailed in 21-23: lenders will be entitled to bring proceedings against the obligors in any jurisdiction although any proceedings brought by the obligors must be brought in England. At 66 in fine: ‘that question is not for decision at this convening hearing, but should be considered at the sanction hearing.’

That’s a discussion I shall look forward to with interest.

Geert.

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

 

#Restructuring.
Schemes of arrangement. Involves US, UK, contintental EU corporations.
Convening hearing approved.
Contentious issue of future change to assymetric choice of court deferred to the sanction hearing. https://t.co/OU9MqYdVFX

— Geert Van Calster (@GAVClaw) July 13, 2020

 

Hamida Begum v Maran UK [2020] EWHC 1846 (QB) engages exactly the kinds of issues that I have just posted about, in court rather than in concept. On 30th March 2018 Mr Mohammed Khalil Mollah fell to his death whilst working on the demolition of a defunct oil tanker in the Zuma Enterprise Shipyar in Chittagong (now Chattogram), Bangladesh. On 11th April 2019 the deceased’s widow issued proceedings claiming damages for negligence under the UK Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act 1976; alternatively, under Bangladeshi law. The scope of the proceedings has subsequently been broadened inasmuch as draft Amended Particulars of Claim advance a cause of action in restitution: more precisely, unjust enrichment.

Application in the current case is for strike-out and /or summary judgment (denying liability) hence the legal issues are dealt with at prima facie instead of full throttle level. One or two of the decisions deserve full assessment at trial. Trial will indeed follow for the application was dismissed.

The case engages with the exact issues in exchanges I had at the w-e.

Proceedings have not been brought against the owner of the yard and/or the deceased’s employer. Both are Bangladeshi entities. Maran (UK) Ltd,  defendant, is a company registered in the UK and, it is alleged, was both factually and legally responsible for the vessel ending up in Bangladesh where working conditions were known to be highly dangerous.

Focus of the oral argument has been whether claim discloses viable claims in English law on the basis of tort of negligence (answer: yes) and in unjust enrichment (answer: no).

The issue of liability in tort is discussed on the basis of English law, which is most odd for Rome II might suggest Bangladeshi law as the lex causae and Justice Jay himself says so much, but only at 76 ff when he discusses Rome II viz the issue of limitation.

On the tort of neglicence claimant argues under English law, with direct relevance to the current debate on environmental and human rights due diligence, that a duty of care required the defendant to take all reasonable steps to ensure that its negotiated and agreed end of life sale and the consequent disposal of the Vessel for demolition would not and did not endanger human health, damage the environment and/or breach international regulations for the protection of human health and the environment. The EU Ship Recycling Regulation 1257/2013 was suggested as playing a role, which is dismissed by Justice Jay at 24 for the Regulation was not applicable ratione temporis.

At 30, claimant’s case on negligence is summarised:

First, the vessel had reached the end of its operating life and a decision was taken (perforce) to dispose of it. Secondly, end-of-life vessels are difficult to dispose of safely. Aside from the evident difficulties inherent in dismantling a large metal structure, a process replete with potential danger, an oil tanker such as this contains numerous hazardous substances such as asbestos, mercury and radio-active components. Although these were listed for Basel Convention purposes and for the attention of the buyer, and the deceased was not injured as a result of exposure to any hazardous substance, the only reasonable inference is that waste such as asbestos is not disposed of safely in Chattogram. Thirdly, the defendant had a choice as to whether to entrust the vessel to a buyer who would convey it to a yard which was either safe or unsafe. Fourthly, the defendant had control and full autonomy over the sale. Fifthly, the defendant knew in all the circumstances that the vessel would end up on Chattogram beach. Sixthly, the defendant knew that the modus operandi at that location entailed scant regard for human life.

The gist of the argument under tort therefore is a classic Donoghue v Stevenson type case of liability arising from a known source of danger.

At 42 ff Justice Jay discusses what to my mind is of great relevance in particular under Article 7 Rome II, should it be engaged, giving claimant a choice between lex locus delicti commissi and lex locus damni for environmental damage, in particular, the issue of ‘control’. One may be aware from my earlier writings (for an overview see my chapter in the 2019 OUP Handbook of Comparative environmental law) that the determination of the lex causae for that issue of control has not been properly discussed by either the CJEU or national courts. This being a prima facie review, the issue is not settled definitively of course however Justice Jay ends by holding that there is no reason to dismiss the case on this issue first hand. This will therefore go to trial.

 As noted Rome II is only discussed towards the end, when the issue of limitation surfaces (logically, it would have come first). Claimant does not convince the judge that the case is manifestly more closely connected with England than with Bangladesh under A4(3) Rome II. Then follows the discussion whether this might be ‘environmental damage’ under Article 7 Rome II, which Justice J at 83 ff holds preliminary and prima facie, it is. That might be an overly broad construction of A7 Rome II, I believe, which shows too much reliance on the context of the litigation.

At 85 a further issue for debate is trial is announced, namely whether the one-year statute of limitation under Bangladeshi law, should be extended under Article 26 Rome II’s allowance for ordre public (compare Roberts and CJEU C-149/18 Martins v DEKRA – that case concerning lois de police and statutes of limitation. 

Plenty of issues to be discussed thoroughly at trial.

Geert.

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

 

 

I thought I should post briefly, including for archiving purposes, on one or two developments and recommendations viz the draft UN Business and Human Rights Treaty. This also follows exchanges I had at the w-e on the issue.

See Nadia Bernaz here for an introduction and see here for a document portal. The overview of statements made, shows some attention being paid to forum non conveniens, universal jurisdiction, and applicable law – a summary of those comments re applicable law is here at 84. That same document in Annex II contains the list of experts and further in the Annexes, their views on jurisdiction etc. (incl. forum necessitatis) which anyone wishing to write on the subject (that would include me had I not a basket already thrice full) should consult.

Claire Bright at BIICL also posted her views on the applicable law issues last week, including a proposal to exclude renvoi from the applicable law Article.

Things, they are moving. Including in case-law. That will be my next posting.

Geert.

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

 

 

Swissport Fuelling Ltd, Re [2020] EWHC 1499 (Ch) at 59 ff repeats the classic (see Lecta Paper for the status quo), unresolved issue of jurisdiction for schemes of arrangement under under BIa (hence also: Lugano 2007). The case is worth reporting for slightly unusually, the scheme company, UK incorporated, acts as guarantor rather than borrower. Borrowers are mainly incorporated in Luxembourg and Switserland. Under the Credit Agreement, the Borrowers do not have a right of contribution or indemnity against the guarantors, so a claim against them would not ricochet against the UK incorporated Company.

Recognition under New York law is discussed – not yet the issue of recognition under Luxembourgish and Swiss law. That, one imagines, will follow at the sanctioning hearing, which will ordinarly follow the meeting of the scheme creditors which Miles J orders in current judgment.

Geert.

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

Scheme of arrangement. Scheme company is UK incorporated and guarantor, not borrower. Borrowers are in the main Luxembourg and Switserland incorporated.
Hence the classic considerations of recognition and enforcement. https://t.co/dih7ZgXJhp

— Geert Van Calster (@GAVClaw) July 10, 2020

 

I earlier reviewed Sánchez-Bordona AG’ opinion in C‑343/19 Verein für Konsumenteninformation v Volkswagen. I noted then that despite attempts at seeing system in the Opinion, the ever unclearer distinction between direct and indirect aka ‘ricochet’ damage under Article 7(2) Brussels Ia is a Valhalla for reverse engineering.

The AG did not suggest a wild west of connecting factors for indirect damage (please refer to my full post for overview), instead suggesting a Universal Music style requirement of extra factors (over and above the location of damage) to establish jurisdiction. In particular he put forward a minimum contacts rule such as in US conflict of laws: at 75: ‘the defendant’s intention to sell its vehicles in the Member State whose jurisdiction is in issue (and, as far as possible, in certain districts within that State).’

The CJEU’s judgment yesterday was received as giving ‘consumers’ the right to sue Volkswagen in their state of domicile. This however is not quite correct. Firstly, the parties at issue are not ‘consumers’ at least within the meaning of European conflicts law: the suit is one in tort, not contract, let alone one that concerns a consumer contract. Further, the AG was clear and the CJEU arguably held along the same lines, that it is only if the car was purchased by a downstream (third party) buyer and the Volkswagen Dieselgate story broke after that purchase, that the damage may be considered to only then have come into existence, thus creating jurisdiction. See the CJEU at 29 ff:

29. That said, in the main proceedings, it is apparent from the documents before the Court, subject to the assessment of the facts which it is for the referring court to make, that the damage alleged by the VKI takes the form of a loss in value of the vehicles in question stemming from the difference between the price paid by the purchaser for such a vehicle and its actual value owing to the installation of software that manipulates data relating to exhaust gas emissions.

30      Consequently, while those vehicles became defective as soon as that software had been installed, the view must be taken that the damage asserted occurred only when those vehicles were purchased, as they were acquired for a price higher than their actual value.

31      Such damage, which did not exist before the purchase of the vehicle by the final purchaser who considers himself adversely affected, constitutes initial damage within the meaning of the case-law recalled in paragraph 26 of the present judgment, and not an indirect consequence of the harm initially suffered by other persons within the meaning of the case-law cited in paragraph 27 of the present judgment. 

That ‘case-law cited’ is the classic lines of cases on locus damni per A7(2) BIa, with Trans Tibor as its latest expression.

The CJEU does not qualify the damage as purely financial: at 33, citing the EC’s court opinion: ‘the fact that the claim for damages is expressed in euros does not mean that the damage is purely financial.’: the car, a tangible asset, actually suffers a defect, over and above the impact on its value as an asset. Predictability, which is firmly part of the Brussels Ia Regulation’s DNA, the Court holds, is secured seeing as a car manufacturer which ‘engages in unlawful tampering with vehicles sold in other Member States may reasonably expect to be sued in the courts of those States (at 36).

Finally, the Court throws consistency with Rome II in the mix, by holding at 39

Lastly, that interpretation satisfies the requirement of consistency laid down in recital 7 of the Rome II Regulation, in so far as, in accordance with Article 6(1) thereof, the place where the damage occurs in a case involving an act of unfair competition is the place where ‘competitive relations or the collective interests of consumers are, or are likely to be, affected’. An act, such as that at issue in the main proceedings, which, by being likely to affect the collective interests of consumers as a group, constitutes an act of unfair competition (judgment of 28 July 2016, Verein für Konsumenteninformation, C‑191/15, EU:C:2016:612, paragraph 42), may affect those interests in any Member State within the territory of which the defective product is purchased by consumers. Thus, under the Rome II Regulation, the place where the damage occurs is the place in which such a product is purchased (see, by analogy, judgment of 29 July 2019, Tibor-Trans, C‑451/18, EU:C:2019:635, paragraph 35).

The extent to which A6 Rome II applies to acts of unfair competition being litigated by ‘consumers’ (in the non-technical sense of the word), is however not quite clear and in my view certainly not settled by this para in the Court’s judgment.

Finally, on locus delicti commissi as I noted at the time, the AG had not in my view given a complete analysis. The CJEU is silent on it.

Not many will feel much sympathy for Volkswagen facing cluster litigation across the EU given its intention to cheat. However the rejection of a minimum contacts approach under A7(2) will have implications reaching small corporations, too. The Volkswagen ruling will need distinguishing, with intention to defraud the consumer a relevant criterion for distinction given the Court’s finding in para 36. It is to be feared that many national judges will fail to see the need for distinguishing, adding to the ever expanding ripple effect of locus damni following the Court’s epic Bier judgment.

Geert.

Ps reference to the Passat in the title is of course to the VW Passat, named after the Germanic name for one of the Trade winds.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2.7

 

The Court of Justice delivered today its much expected judgment in case C‑343/19 (Verein für Konsumenteninformation v Volkswagen AG), which is about Article 7.2 Brussels I bis:

“Point 2 of Article 7 of Regulation (EU) No 1215/2012 […] must be interpreted as meaning that, where a manufacturer in a Member State has unlawfully equipped its vehicles with software that manipulates data relating to exhaust gas emissions before those vehicles are purchased from a third party in another Member State, the place where the damage occurs is in that latter Member State”.

Source: here

The Court of Justice delivered today its judgment in case C‑199/19 (RL sp. z o.o. v J. M.), which is about the Late Payment Directive. The judgment is currently available in all EU official languages (save Irish), albeit not in English. Here is the French version:

« 1) L’article 2, point 1, de la directive 2011/7/UE […] doit être interprété en ce sens qu’un contrat dont la prestation principale consiste en la remise, à titre onéreux, d’un bien immobilier pour un usage temporaire, tel qu’un contrat de location d’un local professionnel, constitue une transaction commerciale conduisant à une prestation de services, au sens de cette disposition, pourvu que cette transaction soit effectuée entre des entreprises ou entre des entreprises et les pouvoirs publics.

2) Dès lors qu’un contrat à durée déterminée ou indéterminée, stipulant un paiement périodique à des intervalles définis par avance, tel que le loyer mensuel afférent à un contrat de location d’un local professionnel, relève du champ d’application matériel de la directive 2011/7, en tant que transaction commerciale conduisant à une prestation de services contre rémunération, au sens de l’article 2, point 1, de cette directive, l’article 5 de celle-ci doit être interprété en ce sens que, pour qu’un tel contrat puisse faire naître, en cas de paiement non réglé à l’échéance, les droits aux intérêts et à l’indemnisation prévus à l’article 3 et à l’article 6 de ladite directive, il ne doit pas nécessairement être considéré comme constituant un accord sur un échéancier fixant les montants à payer par tranches, au sens de cet article 5 ».

Source : here

Constantin Film Verleih
Rapprochement des législations
Lors d’un téléversement illégal d’un film sur une plateforme en ligne, telle que YouTube, le titulaire peut, en vertu de la directive relative au respect des droits de propriété intellectuelle, réclamer de l’exploitant uniquement l’adresse postale de l’utilisateur concerné, mais non son adresse courriel ou IP ou son numéro de téléphone

Raiffeisen Bank
Rapprochement des législations
Une réglementation nationale peut prévoir un délai de prescription pour l’action en restitution fondée sur une clause abusive dans un contrat conclu entre un professionnel et un consommateur

Verein für Konsumenteninformation
Espace de liberté, sécurité et justice
Un constructeur automobile dont les véhicules illicitement manipulés sont revendus dans d’autres États membres peut être attrait devant les juridictions de ces États

Land Hessen
Principes du droit communautaire
La commission des pétitions du parlement d’un État fédéré d’un État membre est soumise au règlement général sur la protection des données

Banca Transilvania
Rapprochement des législations
Une clause contractuelle n’ayant pas été négociée mais reflétant une règle qui, selon la loi nationale, s’applique entre les parties lorsqu’aucun autre arrangement n’a été convenu à cet égard, ne relève pas du droit de l’Union relatif aux clauses abusives dans les contrats conclus avec les consommateurs

Naturschutzbund Deutschland - Landesverband Schleswig-Holstein
Environnement et consommateurs
Les personnes morales de droit public peuvent être responsables des dommages environnementaux causés par des activités exercées dans l’intérêt de la collectivité en vertu d’un transfert légal de mission, telles que l’exploitation d’une station de pompage à des fins de drainage de surfaces agricoles

BRF et SHB Comercio e Industria de Alimentos / Commission
SANT
Le Tribunal rejette la demande formée par deux producteurs de viande brésiliens tendant à l’annulation du règlement ayant pour effet d’interdire, pour des motifs de santé publique, l’exportation, vers l’Union, de certains produits d’origine animale en provenance d’établissements appartenant auxdits producteurs

Infineon Technologies / Commission
Concurrence
Le Tribunal ordonne la réduction de près de 6 millions d’euros du montant de l’amende infligée à Infineon pour sa participation à une entente sur le marché des puces pour cartes qui passe de 82 784 000 à 76 871 600 euros

VQ / BCE
Politique économique
Le Tribunal rend ses quatre premiers arrêts portant sur des décisions de la Banque centrale européenne (BCE) infligeant des sanctions pécuniaires au titre de la surveillance prudentielle des établissements de crédit

Mr Villiers reacted to Villiers v Villiers [2020] UKSC 30 with a letter in the FT yesterday, set against the general background of ‘divorce tourism’ said to have been encouraged by the Supreme Court ruling last week. Ms Villiers now lives in England however the majority of the marriage was spent in Scotland which is also where divorce proceedings were issued.

Sales J for the majority summarises the legislative background at 8:

The national legislation governing jurisdiction in cross-border cases is primarily contained in the Civil Jurisdiction and Judgments Act 1982 (“the CJJA 1982”). That Act gave effect in domestic law to the [1968] Brussels Convention… [which] was amended on the association of Denmark, Ireland and the United Kingdom in 1978. It was replaced as the principal instrument governing jurisdiction in cross-border cases between member states of the European Union by [Brussels I] which in large part replicated the provisions of the Brussels Convention. The CJJA 1982 was amended to refer to and give effect in domestic law to the Brussels Regulation. The Brussels Regulation has been replaced by [Brussels Ia].

The Brussels Convention did not apply to issues of the status of natural persons, including marriage, nor to rights in property arising out of a matrimonial relationship (article 1(1)), but it did apply in respect of claims for maintenance. This was later carved out and titled into a separate Regulation, the Maintenance Regulation 4/2009. The UK until Brexit day chose to apply the Regulation intra-State, too, i.e. between the constituent parts of the Kingdom. 

Lord Sales posits that all in all, the application of the jurisdictional rules is ‘straightforward’ (at 25) however his needing 32 paras to set out the test somewhat belies that statement, as does Lord Wilson’s and Lady Hale’s lengthy dissent at 93 ff. (and Lady Black’s at

There is no forum non conveniens rule in the Maintenance Regulation. The CJEU held so in C-468/18 R v P and Lord Sales refers to that judgment.

The only viable route to a stay of the jurisdiction in principle of the English courts, the place of habitual residence of Mrs Villiers, the maintenance creditor, is via the ‘related actions’ gateway of A13 of the Regulation. Are the husband’s divorce proceeding in Scotland a “related action” for the purposes of A13? And, pursuant to that provision, should the English court decline jurisdiction in respect of the wife’s maintenance claim? At 45 Sales LJ holds that to be related actions, they must refer

‘primarily to maintenance claims of the kind to which the special regime in the Regulation applies. If the position were otherwise, and the word “actions” meant legal proceedings of any kind whatever, that would undermine the fundamental object of the Maintenance Regulation that a maintenance creditor has the right to choose in which jurisdiction to claim maintenance. On such a reading, there would be a substantial risk that this object of the Maintenance Regulation would be undermined by the commencement of proceedings by the maintenance debtor according to the jurisdictional provisions of instruments other than the Maintenance Regulation, laid down in pursuance of entirely different jurisdictional policies than that reflected in the Maintenance Regulation.’

At 48 he adds obiter (for the husband’s suit in Scotland here concerned the divorce and the divorce only) that contra to the likely position in Moore v Moore [2007] EWCA Civ 361, even a maintenance debtor’s claim for distribution of family property with an impact on maintenance, cannot be a related action for the purposes of A13: for it would hand the debtor a torpedo against the creditor’s Regulation-protected choice.

It is on the issue of related actions that Lord Wilson and Lady Hale disagree at 147 ff., with Lord Wilson adding an arguably stinging postscript at 172 ff. At 162 Lord Wilson refers to A13(2) as ‘the dog. The reference to “irreconcilable judgments” is no more than the tail.’ A wide interpretation therefore of A13 (Lady Black, consenting with Sales, at 85 puts more emphasis in the irreconcilability of the judgments).

A most interesting to and fro of arguments and one which post Brexit will be recommended reading for the continuing application of the Maintenance Regulation in the EU.

Geert.

 

Maintenance regulation Brussels II, applied intra-State (UK) by incorporation by that Member State.
Application of lis alibi pendens. Non-existence of forum non conveniens. Distinction with matrimonial Regulation. https://t.co/AllsUqm05Q

— Geert Van Calster (@GAVClaw) July 1, 2020

 

In [2020] EWHC 1626 (TCC) Engie Fabricom, O’Farrell J essentially had to hold whether the primary activity at an energy from waste plant is power generation or waste treatment. The classification of waste to energy – W2E as either waste recovery (see Waste Framework Directive Recovery Annex, R1 ‘used principally as a fuel or other means to generate energy’) or waste disposal is a classic in EU waste law, with specific implications for shipments permits. It also of course has an impact on a Member State’s waste targets and renewable energy targets. Aside from the Waste Framework Directive, the Industrial Emissions Directive 2010/75 is also involved – although oddly no CJEU authority is mentioned in the judgment.

In the case at issue an interesting extra element is that the plant at issue received funding via the European Regional Development Fund ERDF (at 145) however ERDF funding was for the generation of electricity from the biodegradable part of waste based on advanced fluidised bed gasification technology, which at the time of the application was expected to be 84.65% of the fuel. However, subsequently the plant changed to use refuse derived fuel or RDF without any waste wood which reduced the biodegradable percentage of the waste to 50%.

At 149 Justice O’Farrell concludes that the primary activity at the Energy Works Hull facility is power generation, for the reasons listed there. Of particular relevance is her comment that ‘the plant was not developed or intended to be operated in furtherance of any particular waste or energy policy, although it was consistent with both policy initiatives.’

There is an interesting expert evidence issue to the case, as Gordon Exall discusses here. I am suspecting one or two of the issues involved could be chewed over upon appeal, with reference to CJEU case-law.

Geert.

Handbook of EU Waste law, OUP, second ed, 2015.

Refuse-derived fuel – RDF.
Whether the primary activity at an energy from waste plant is power generation or waste treatment.
Held: in casu: power generation.
Considers ia EU waste framework Directive and ERDF funding.
Impacts ia VAT and adjudication process. https://t.co/2FskpGblDj

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

The European Parliament (JURI Committee) has released a draft opinion with recommendations to the Commission on the Establishment of an EU Mechanism on Democracy, the Rule of Law and Fundamental Rights (PE652.513v01-00). You can read it here