Flux Belges et Lux

In [2019] EWHC 1391 (QB) Percival v Moto Novu LLC Murray J considers the ins and outs of Article 38 Brussels Ia.

The dispute arose out of an aborted property transaction in Italy. Mr Teruzzi and Ms Puthod are husband and wife. La Fattoria was a “pass-through” company incorporated under Italian law and owned by Mr Teruzzi and Ms Puthod through which the property at the centre of the dispute was temporarily owned. It has since been dissolved.

By an Assignment of Rights of Judgment dated 28 March 2011 (but signed by the parties on 29 June 2011) and governed by the laws of the Commonwealth of Massachusetts (“the 2011 Assignment”), Mr Teruzzi assigned to the respondent, Motu Novu LLC (“Motu Novu”), a Delaware limited liability company, all of his right, title and interest in the Tribunal Judgment and the CA Milan Judgment. There is a dispute between the parties as to whether the 2011 Assignment was also effective to transfer the right, title and interest of Ms Puthod and La Fattoria in those judgments or, if not, whether that fact is relevant to the effectiveness of the registration.

At 8: Title III (the recognition and enforcement Title) involves two stages: i) under Article 39 of the Regulation, a first stage involving only the applicant, who must be an “interested party” and who applies ex parte to the relevant “court or competent authority” listed in Annex II to the Regulation to obtain an order for registration of the foreign judgment in order to permit enforcement locally; and ii) under Article 43 of the Regulation, a second stage, inter partes, during which the respondent (the judgment debtor) has the opportunity to raise certain limited objections by lodging an “appeal” (under English CPR rules this would be an application to set aside the order).

Under Article 44 of the Regulation, the order made on appeal under Article 43 is subject to a single further appeal on a point of law.

At 11: The ex parte stage of the registration process is governed by Articles 38 to 42 of the Regulation. The inter partes stage is governed by Articles 43 to 47. The remainder of section 2 of chapter III of the Regulation, Articles 48 to 52, deals with miscellaneous points that do not arise in this case, other than in relation to Article 48 (undue delay).

The process is further described in detail in the judgment. This is most helpful. Unless one has done one of these oneself, in all Member States the actual procedure is often shrouded in various levels of fog.

Of longer term authority interest is the discussion of the mistake made at an earlier stage, to register all 3 Italian judgments even though under Italian law only one of them was actually enforceable. At 44 Murray J in my view justifiably excuses this error: there is nothing ‘in the Regulation, or otherwise, (that) limits an applicant’s registration of a foreign judgment to the proportion to which he is entitled. I have seen no authority for that proposition.’

What is also of note is the concept of ‘interested party’. At 45:

The term “interested party” is not defined in the Regulation, but a person who is the assignee of a named judgment creditor, even where there are other named judgment creditors, is clearly an interested party. It seems to me fundamentally incompatible with the deliberately limited and mechanical nature of the registration process under chapter III of the Regulation that the registering court or competent authority should be required to enquire into the nature and extent of an applicant’s interest in a judgment, beyond what is necessary to establish prima facie that the applicant is an interested party.

I believe this is right. That the proceedings leading to the Italian Judgment were served on the Original Claimants on 17 January 2011, pre-dating the 2011 Assignment by over two months has therefore become irrelevant (at 48).

Intricate detail of Title III is not often litigated. This judgment is noteworthy.

Geert.

(Handbook of) EU private international law 2nd ed. 2016, Chapter 2, Heading 2.2.16.

 

Not all of [2019] EWHC 1579 (Fam) RJ v Tigipko is easily understood. Detail is kept private and proceedings were conducted in camera for evident reasons. The case concerns an earlier order to return a child from the Ukraine, which was followed up by an unsuccessful appeal to the Ukrainian courts to recognise this order under the 1996 Hague convention. Application in England now is to beef up the return order.

What is of interest to the blog is the consideration of action against the maternal grandfather. From the little detail in the judgment one can infer that he is complicit in the parental kidnapping. What exactly is being asked from him is not made clear however it is not quite like an anti-suit but rather (at 21) ‘a mandatory injunction requiring a party to commence and act in a foreign suit in a certain way, which is an order.’ Here, at 20, Mostyn J would seem to be minded to apply CJEU C-159/02 Turner v Grovit to Hague Convention States.

That, I would suggest, is a bold move not supported by either authority or spirit of EU law. Full argument on it will be heard later.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.1.

In [2019] EWHC 960 (Ch) New Look Secured Issuer and New Look Ltd, Smith J at H applies the standing rules on jurisdiction over the scheme and other companies which I also signalled in Algeco and Apcoa (with further reference in the latter post). Against the scheme companies jurisdiction is straightforward: they are England incorporated.  Against the scheme creditors, English courts apply the jurisdictional test viz the Brussels I Recast (‘a’) Regulation arguendo: if it were to apply (which the English Courts have taken no definitive stance on), would an English court have jurisdiction? Yes, it is held: under Article 8 (anchor defendants). (Often Article 25 is used as argument, too).

At 48 Smith J signals the ‘intensity’ issue: ‘In some cases it has been suggested that it may not be enough to identify a single creditor domiciled in the United Kingdom, and that the court should consider whether the number and size of creditors in the UK are sufficiently large: see Re Van Gansewinkel Groep, [2015] EWHC 2151 (Ch) at [51]); Global Garden Products at [25]; Re Noble Group Ltd [2018] EWHC 3092 (Ch) at [114] to [116].’ Smith J is minded towards the first, more liberal approach: at 49. He refers to the liberal anchoring approach in competition cases, both stand-alone (think Media Saturn) and follow-on (think Posten /Bring v Volvo, with relevant links there).

At 51 he also discusses the ‘substantial effects’ test and classifies it under ‘jurisdiction’:

‘As well as showing a sufficient jurisdictional connection with England, it is also necessary to show that the Schemes, if approved, will be likely to have a substantial effect in any foreign jurisdictions involved in or engaged by the Schemes. This is because the court will generally not make any order which has no substantial effect and, before the court will sanction a scheme, it will need to be satisfied that the scheme will achieve its purpose: Sompo Japan Insurance Inc v Transfercom Ltd, [2007] EWHC 146 (Ch); Re Rodenstock GmbH, [2011] EWHC 1104 (Ch) at [73]-[77]; Re Magyar Telecom BV, [2013] EWHC 3800 (Ch) at [16].’ 

This is not quite kosher I believe. If, even arguendo, jurisdiction is established under Brussels Ia, then no ‘substantial effects’ test must apply at the jurisdictional stage. Certainly not vis-a-vis the scheme companies. Against the scheme creditors, one may perhaps classify it is a means to test the ‘abuse’ prohibition in Article 8(1)’s anchor mechanism.

A useful reminder of the principles. And some doubt re the substantial effects test.

Geert.

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

 

A late flag following my much earlier Tweet on [2019] EWHC 325 (Comm) Pipia v BGEO. Moulder J had to consider, as I put it in the tweet, a combination of conflict of laws and EU external relations law. Under CPR 25.12 security for costs must not be sought against parties covered by Brussels Ia or the Lugano Convention. The issue is whether the EU-Georgia association agreement is tantamount to those Conventions.

Article 21 headed “Legal cooperation” specifically refers to the Hague Convention and states that: “1. The Parties agree to develop judicial cooperation in civil and commercial matters as regards the negotiation, ratification and implementation of multilateral conventions on civil judicial cooperation and, in particular, the conventions of the Hague Conference on Private International Law in the field of international legal cooperation and litigation as well as the protection of children.” Article 21 merely refers to “developing judicial cooperation” as regards the ratification and implementation of the Hague Convention. The stated aims of the Association Agreement are set out in broad terms in Article 1. They include: “(f) to enhance cooperation in the area of freedom, security and justice with the aim of reinforcing the rule of law and the respect for human rights and fundamental freedoms”.

The Association Agreement does not therefore provide for the enforcement of judgments either on a bilateral basis or through the Hague Convention. At 10 Moulder J therefore does not accept that there is any basis on which the Association Agreement can be interpreted as falling within the express terms of CPR 25.13 (2)(a)(ii). (re: residence in BRU1a /Lugano State).

Neither in her view can the general non-discrimination requirement of the Agreement be read to have an impact on the issue.

Geert.

 

Nice combination of external relations law and PIL.
[2019] EWHC 325 (Comm) Pipia v BGEO.
CPR rules, security for costs. May not be sought against Brussels Ia or Lugano parties. Whether EU-Georgia association agreements qualifies as tantamount (answer: no)https://t.co/nfncju3jet

— Geert Van Calster (@GAVClaw) March 11, 2019

In [2019] EWHC 1359 (Comm) National Union of Mineworkers v Organisation Internationale de l’energie et des mines defendant is French-domiciled and represented by its chair, Arthur Scargill. That’s right, many of us whether Brits or not will remember him from the 1970s and 1980 mine strikes.

Of more immediate relevance for the blog is the discussion at 19 ff on jurisdiction and applicable law.

Defendant is an international body to which a number of trade unions are affiliated. Those unions operate in different countries but all represent workers engaged in the fields of mining and/or energy supply. The name the Defendant uses in English is the International Energy and Mineworkers’ Organisation (“the IEMO”) and it is the successor to the International Mineworkers’ Organisation (“the IMO”) following a merger in 1994.

The proceedings relate to the parties’ respective rights in relation to sums recovered by the Defendant from Mr. Roger Windsor in August 2012 after prolonged legal proceedings in the French Republic and in England. Those proceedings were undertaken in the name of the Defendant but funded in part by the Claimant. There is a shortfall between the sums recovered and the amounts of the principal debt and the legal costs of the proceedings. The parties are in dispute as to the distribution of the sums recovered from Mr. Windsor; as to which should bear any shortfall between the sums recovered and the costs incurred in the proceedings; and as to the amounts which each has paid by way of costs in those proceedings.

The underlying indebtedness which resulted in recovery being made against Mr. Windsor derived from a loan of £29,500 which the Claimant made to him in 1984. He was then the Claimant’s Chief Executive Officer and the loan was made by way of assistance with house purchase following the relocation of the Claimant’s headquarters from London to Sheffield in 1983. There was a repayment of that loan in November 1984 but it is common ground that to the extent that there was such a repayment it came from funds which had been lent to Mr. Windsor. In 1986 the right to recover payment from Mr. Windsor (either of the original loan or of the subsequent loan) was assigned to the IMO.

Claimant argues the courts of England and Wales have jurisdiction by reason of Articles 7(1) and 25(1)(b) Brussels Ia (by virtue of an agreement made in 1990), and that in any event defendant is to be treated as having accepted that the court has jurisdiction to try this matter (an Article 26 ‘prorogation’, ‘submission’ or ‘voluntary appearance’ in other words).

Eyre J at 24 agrees that submission has taken place: CPR rules (Pt11) provide the details the procedure to be followed by a defendant contesting jurisdiction. Defendant did make an application to the court within 14 days of filing the acknowledgement of service, as requested by CPR 11. However, it expressly accepted that the application was to be regarded as relating to the questions of limitation and of the effect of the Release Agreement. In its application it made extensive reference to Brussels Ia but did so in that context. In particular that material was put forward in support of the contention that the claim was statute-barred either by reference to the Limitation Act 1980 or by reference to the French limitation provisions. There was in other words no wider or more fundamental challenge to the court’s jurisdiction and the realisation probably in hindsight that jurisdiction may not be that straightforward, cannot impact on that original application.

Had there not been submission, interesting discussions could have ensued I suspect on the place of performance of the agreement (unless clear choice of court had been made), England as a forum contractus, and I for one shall be using the case in my classes as a good illustration of the ‘conflicts method’ (looking over the fence)

Attention then turns to the issue of applicable law for the time-barred argument: at 26: ‘Defendant also argued that the proceedings were to be regarded as subject to French law and in particular the French limitation provisions which impose a time limit of three years for claims. The Defendant made reference to the Civil Jurisdiction and Judgments Act 1982 and the Foreign Limitation Periods Act 1984. The contention was that French law was applicable because the judgments against Mr. Windsor were obtained in France and then registered in England and Wales. That argument was misconceived. Such an argument might have relevance if the issue were one of the enforcement of the judgments against Mr. Windsor though I make no finding on that question. The current proceedings are not concerned with the enforcement of the judgments against Mr. Windsor but with the distribution of the sums which have been received by the Defendant as a result of the litigation against Mr. Windsor. It follows that the provisions to which the Defendant made reference can have no relevance to the current proceedings. The Defendant made passing reference to the fact that it is domiciled in France but this was not the principal basis of the contention that French law was applicable and without more it would not cause the parties’ dealings to be governed by French law. In those circumstances the parties’ rights and liabilities are to be determined by reference to the law of England and Wales and any questions of limitation are governed by the Limitation Act 1980.‘

I am not privy to the submissions on applicable law, but I am assuming that there must have been some discussion of the impact of the 1980 Rome Convention. Not the Rome I Regulation which would not have applied ratione temporis. That Regulation like Rome II has not altogether straightforward provisions (as I have noted on other occasions) on procedure being covered by the lex contractus. Whether Eyre J classifies the limitation issue as being covered by English law per lex fori or alternatively as lex causae (lex contractus of the 1990 agreement) is not clear.

Back in the 80s I would have never dreamed of bumping into Mr Scargill again in the context of an interesting conflict of laws issue.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 1, Heading 1.3.1, Chapter 2, Heading 2.2.7.

 

 

 

 

The Brussels Court of Appeal held early May in a lengthy and scholarly judgment that it sees no ground in either public international law, or European law, for jurisdiction of the Belgian courts against Facebook Ireland and Facebook Inc (Palo Alto, California). I reported on the litigation inter alia here. I believe the Court is right, as readers of the blog know from my earlier postings.

Belgium’s Data Protection Authority (DPA) does not signal the rejection of jurisdiction against FB Ireland and FB Inc in its press release, however even its 3 page extract from the 121 page judgment clearly shows it (first bullet-point).

The questions which the Court of Appeal has sent up to Luxembourg concern Facebook Belgium only. The Court in the full judgment does not qualify FB Belgium’s activities as data processing. However it has very specific questions on the existence and extent of powers for DPAs other than the leading authority under the GDPR, including the question whether there is any relevance to the fact that action has started prior to the entry into force of the GDPR (25 May 2018). The Court is minded to interpret the one-stop shop principle extensively however it has doubt given the CJEU’s judgment in Fanpages. 

Crucial and so far, I believe, fairly unreported. (My delay explained by the possibility for use as an essay exam question – which eventually I have not).

Geert.

(Handbook of) EU private international law, 2nd ed.2016, chapter 2, Heading 2.2.8.2.5.

I have waited a little while to discuss (I had tweeted it earlier)  [2019] EWHC 1028 (QB) Bonnie Lackey v Mallorca Mega Resorts. It is a good case for an exam essay question and that is what I used it for this morning (albeit in simplified form, focusing on the consumer title).

Defendant is domiciled in Spain, and is hereafter referred to as ‘the Hotel’. Claimant was one of a group of friends who went on holiday to Magaluf in Mallorca, Spain. The booking was made in May 2017 by Ms Donna Bond, who was one of the party and a friend of Bonnie Lackey. The Agency’s Booking Conditions stated

‘references to “you” and “your” include the first named person on the booking and all persons on whose behalf a booking is made …’.

Section A, applicable to all bookings stated:

“By making a booking, you agree on behalf of all persons detailed on the booking that you have read these terms and conditions and agree to be bound by them”.

In my exam question I have left the agency out of the factual matrix. Its presence is immaterial for the case for the agency acts, well, as an agent: contract is between clients and the hotel direct.

The group were staying at the site owned and operated by the Hotel. It is agreed between parties that the Agency’s and Hotel’s marketing meets with the Pammer Alpenhof criteria, in other words that they direct their activity at England. Claimant, Ms Lackey, who is domiciled in England, was seriously injured in the ‘wave’ pool and is now tetraplegic. Damages application is for £9 million given the high cost of care for the now 41 year old claimant.

A first discussion concerned the insurance section (not part of the exam essay)(15 ff). Generali (of Spain) were the hotel’s insurers and had already accepted jurisdiction for the English courts. Their liability though was capped at an absolute max of 0.45 Million Euros – far off the claim. Claimant’s hope was that Article 13(3) Brussels Ia as Clyde point out, might be used for a claim anchored unto Generali. Here, the High Court followed the authority of Hoteles Pinero Canarias SL v Keefe [2015] EWCA Civ 598, see references to EU law there. That case went up to the Supreme Court and thence to the CJEU where it was taken off the roll following settlement. In any event, following Keefe, Davison M in Bonnie Lackey held that jurisdiction was conferred on the English courts by Articles 11 and 13 BIa, (contained in Section 3) which permit a claim here against the insurer and the joinder of the hotel to that claim. Master Davison rejected suggestions for the need of a CJEU reference among others because he also upheld jurisdiction under the consumer title. The essential question here was whether there is a need for complete identity between the consumer referred to in Article 17(1) and the consumer referred to in Article 18(1) BIa.

Davison M suggests there need not, referring in particular to the Regulation’s aims to protect the weaker party, and to rule out as much as possible the risk of irreconcilable judgments.

Defendant’s reference to Schrems was considered immaterial. At 39: ‘Plainly, the consumer bringing the claim must be a beneficiary of the consumer contract or at least within its ambit. That does not mean that she personally must have concluded it. To borrow again from the judgment of Gloster LJ in Keefe, there would be no linguistic or purposive justification for such a restrictive interpretation.’ I am not sure I agree, not at any rate without proper discussion of ‘within its ambit’. The CJEU’s case-law on the protected categories does evidently aim to protect weaker categories and interpretation of same must serve that purpose. However the CJEU at the same time also emphasises the fact that these sections are an exception to the general rule and therefore must not be applied too widely, either.

Master Davison cuts short too extensive a discussion of the ‘ambit’ issue, by referring to the General Terms and Conditions – GTCS: the consumer who booked, accepted these GTCS ‘on behalf of all persons detailed in the booking’. At 40: ‘The hotel deployed no evidence of any kind to displace the effect of these terms, (which, I would add, are standard terms to be expected in a contract of this kind). A person who contracts through an agent has still “concluded” a contact. Thus, all argument about the need for complete identity between the consumer referred to in Article 17.1 and the consumer referred to in Article 18.1 is redundant. In each case it was the claimant, Ms Lackey.’ Whether counsel should have made more noise about this issue I do not know, however I would have expected discussion here of the general respect the Regulation has for privity of contract (which I discuss repeatedly on the blog).

I do not think this case will settle the matter. Its outcome evidently is positive (particularly considering that for Ms Lackey it will really not be straightforward to attend trial in Spain). However its legal reasoning cuts a few corners.

I would expect my students to discuss the need for effective protection of consumers ‘v’ the exceptional character of the section; and privity of contract which the CJEU flags on several occasions. Each with proper case-law references.

Geert.

In [2019] EWCA Civ 830 the Court of Appeal has dismissed the appeal against Yukos v Merinson which I reviewed here – review which readers may need to appreciate the judgment. Three issues were considered by Gross LJ at the Court of Appeal:

1. Are the Damages Claims and/or the Annulment Claims “matters relating to [an] individual contract of employment” within the meaning of Article 20(1)?>>>Salter DJ’s answer at the High Court was YES. I suggested in my review that that finding should not have been made without considering the lex causae of the employment contract: Rome I in my view should have been engaged here. Both Salter DJ and Gross LJ (at 27 ff) were persuaded however by the highly material nexus between the annulment claims – whether considered together with or separately form the damages claims (Gross LJ distinguished Aspen Underwriting in the process).

2. If so, is the Settlement Agreement “an agreement .. entered into after the dispute has arisen” within the meaning of Article 23(1)?>>>Salter DJ’s answer was negative, on the basis of extensive reference to the Jenard Report and Convention and Regulation scholarship. Gross LJ agrees – I continue to find that conclusion unconvincing.

3. Further, is the English court, in any event, precluded from entertaining the Annulment Claims by Chapter IV of the Recast Judgments Regulation? >>>Here the Court of Appeal made the High Court’s reasoning its own, much more succinctly than its entertaining of the other questions.

Plenty to discuss here for the 3rd ed of the Handbook.

Geert.

 

 

Bobek AG Opined early May (excuse posting delay) in Case C-347/18 Salvoni v Fiermonte. The referring court enquires whether the court of origin tasked with issuing the Article 53 Certificate (issued with a view to enabling swift recognition and enforcement) may, of its own motion, seek to ascertain whether the judgment whose enforcement is sought was issued in breach of the rules on jurisdiction over consumer contracts, so that it may, where appropriate, inform the consumer of any such breach and enable her to consider the possibility of opposing enforcement of the judgment in the Member State addressed.

A related issue therefore to the CJEU judgment in Weil last week.

Mr Alessandro Salvoni, a lawyer based in Milan, asked the Tribunale di Milano (District Court, Milan) to issue Ms Anna Maria Fiermonte (who resides in Hamburg) with a payment order for an amount owed to him as consideration for the professional services rendered by him in connection with legal proceedings concerning a will. Payment order was granted, no challenge was made by Ms Fiermonte (at 24 the AG emphasises that evidently, the court needs to check whether proper service was made). Mr Salvoni then requested the same court to issue the Article 53 Certificate with respect to that order. However this time the same court (with the AG at 22 one can assume that composition was different) proprio motu (and belatedly: see at 15) classified the relationship as B2C under the relevant provisions of Brussels Ia. Ms Fiermonte should have been sued in Hamburg.

Bobek AG courteously calls the court’s initiative ingenious and well-intended (at 29) but has no choice but to conclude that the Regulation simply has no tool for the Court somehow to mitigate let alone correct its earlier mistake. In a gesture effectively of public service (at 34; this rescues something useful from the otherwise fairly futile exercise; I doubt the CJEU will do something similar), the AG then rephrases the question into a more general one, which is detached from the specific course of action apparently contemplated by the national court: Is a national court, when issuing the Article 53 Certificate, entitled (or even obliged), under EU law, to ascertain whether the judicial decision that is to be certified was issued in breach of the rules on jurisdiction over consumer contracts?

At 44 ff the AG delightfully side-steps the chicken and hen issue of the C-54/96 Dorsch criteria (is an A53 court a ‘court’ entitled to preliminary review under Article 267 TFEU) and eventually concludes that there is no room for the A53 Court to assess the application of the consumer title. At 54: ‘

The interpretation of [A53] proposed by the referring court cannot easily be reconciled with the above considerations [speed; simplicity: GAVC]. In particular, that interpretation would in effect back-pedal on one of the main features of the new system introduced by Regulation No 1215/2012. Indeed, the checks that were previously made in the Member State addressed when issuing the exequatur would not be eliminated, but merely shifted to the certification stage carried out in the Member State of origin. That reading of the provision would thus run against the logic and spirit of Regulation No 1215/2012.’

At 81 and 82 the likely outcome of course is pointed at by the AG: Article 45(1)(e)(i) and Article 46 BIa grant consumers a special ground of refusal of recognition and enforcement in cases where the judgment in question conflicts with the jurisdictional rules for the protected categories. This ground has now been handed Ms Fiermonte on a plate – leaving the Milan courts with red cheeks.

Geert.

(Handbook of) European private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2, Heading 2.2.16.

 

Case C-18/18 Eva Glawischnig-Piesczek v Facebook as I noted in my short first review of the case, revolves around Article 15 of the E-Commerce Directive. Does Article 15 prohibit the imposition on a hosting provider (Facebook, in this case) of an obligation to remove not only notified illegal content, but also identical and similar content, at a national or worldwide level?

Szpunar AG kicks off with a memorable Erica Albright quote from The Social Network:  The internet’s not written in pencil, [Mark], it’s written in ink’. 

His Opinion to a large degree concerns statutory interpretation on filtering content, which Daphne Keller has already reviewed succinctly here and which is not the focus of this blog. The jurisdictional issues are what interest me more: the territorial scope of any removal obligation.

Firstly, Szpunar AG matter of factly confirms my reading, against that of most others’, of his Opinion in C-505/17 Google: at 79:

‘in my Opinion in that case I did not exclude the possibility that there might be situations in which the interest of the Union requires the application of the provisions of that directive beyond the territory of the European Union.’

Injunctions (ordering removal) are necessarily based on substantive considerations of national law (in the absence of EU harmonisation of defamation law); which law applies is subject to national, residual conflicts rules (in the absence of EU harmonisation at the applicable law, level, too): at 78. Consequently, a Court’s finding of illegality (because of its defamatory nature) of information posted may well have been different had the case been heard by a court in another Member State. What is however harmonised at the EU level, is the jurisdiction for the civil and commercial damage following from defamation: see e-Date, in particular its centre of interests rule which leads to an all-encompassing, universal’ jurisdiction for the damages resulting from the defamation.

Separate from that is the consideration of the territorial extent of the removal obligation. Here, the AG kicks off his analysis at 88 ff by clearly laying out the limits of existing EU harmonisation: the GDPR and data protection Directive harmonise issues of personal data /privacy: not what claimant relies on. Directive 2000/31 does not regulate the territorial effects of injunctions addressed to information society service providers. Next, it is difficult, in the absence of regulation by the Union with respect to harm to private life and personality rights, to justify the territorial effects of an injunction by relying on the protection of fundamental rights guaranteed in Articles 1, 7 and 8 of the Charter: the scope of the Charter follows the scope of EU law and not vice versa. In the present case, as regards its substance, the applicant’s action is not based on EU law. Finally, Brussels Ia does not regulate the extra-EU effects of injunctions.

For the sake of completeness, the AG does offer at 94 ff ‘a few additional observations’ as regards the removal of information disseminated worldwide via a social network platform. At 96 he refers to the CJEU’s judgment in Bolagsupplysningen which might implicitly have acknowledged universal jurisdiction, to conclude at 100 (references omitted)

the court of a Member State may, in theory, adjudicate on the removal worldwide of information disseminated via the internet. However, owing to the differences between, on the one hand, national laws and, on the other, the protection of the private life and personality rights provided for in those laws, and in order to respect the widely recognised fundamental rights, such a court must, rather, adopt an approach of self-limitation. Therefore, in the interest of international comity…, that court should, as far as possible, limit the extraterritorial effects of its junctions concerning harm to private life and personality rights. The implementation of a removal obligation should not go beyond what is necessary to achieve the protection of the injured person. Thus, instead of removing the content, that court might, in an appropriate case, order that access to that information be disabled with the help of geo-blocking.

There are very sound and extensive references to scholarship in the footnotes to the Opinion, including papers on the public /private international law divide and the shifting nature of same (the Brussels Court of Appeal recently in the Facebook case justifiably found jurisdictional grounds in neither public nor private international law, to discipline Facebook Ireland and Facebook Inc for its datr-cookies placed on Belgian users of FB).

I find the AG’s Opinion convincing and complete even in its conciseness. One can analyse the jurisdictional issues until the comes come home. However, in reality reasons of personal indemnification may argue in specific circumstances for universal jurisdiction and ditto reach of injunctive relief. However these bump both into the substantial trade-off which needs to be made between different fundamental rights (interest in having freedom removed v freedom of information), and good old principles of comitas gentium aka comity. That is not unlike the US judicial approach in similar issues.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2, Heading 2.2.8.2.5.

The CJEU this morning held (without AG Opinion) in C-361/18 Ágnes Weil v Géza Gulácsi.

Overall context is that Brussels Ia does not apply to ‘the status or legal capacity of natural persons, rights in property arising out of a matrimonial relationship, wills and succession’.

Ms Weil and Mr Gulácsi were unregistered partners. Mr Gulácsi was ordered by Hungarian court order to pay Ms Weil approximately EUR 2 060, together with interest for late payment, by virtue of the settlement of rights in property arising out of their de facto (unregistered) non-martial partnership. Ms Weil later applied to the same court to have it issue the Article 53 certificate which would facilitate her enforcement in the UK (where Mr Gulácsi lives and has a regular income). Questions raised, were

‘(1)      Is Article 53 of Regulation … No 1215/2012 to be interpreted as meaning that, if requested by one of the parties, the court of the Member State that delivered the decision must issue the certificate relating to the decision automatically, without examining if [the case] falls within the scope of Regulation … No 1215/2012?

(2)      If the answer to the first question is in the negative, is Article 1(2)(a) of Regulation … No 1215/2012 to be interpreted as meaning that a repayment action between members of an unregistered non-marital [de facto] partnership falls within the scope of the rights in property arising out of a relationship deemed … to have comparable (legal) effects to marriage?’

The  Court answers the first question in the negative: at the recognition and enforcement stage, things must go very swift indeed. The mutual trust required of courts must be backed up by proper consideration of the Regulation by the courts of the Member State of initial adjudication: at 33:

‘the need to ensure the swift enforcement of judgments, while preserving the legal certainty on which the mutual trust in the administration of justice in the European Union is based, justifies, in particular in a situation such as that of the main proceedings — where the court which gave the judgment to be enforced did not adjudicate, when giving that judgment, on whether [Brussels I and Ia] was applicable — that the court hearing the application for the certificate ascertains, at that stage, whether the dispute falls within that regulation.’

It adds at 35 that

the enforcement procedure, under Regulation No 44/2001, precludes, like enforcement under Regulation No 1215/2012, any subsequent review on the part of a court of the Member State addressed of whether the action giving rise to the judgment for which enforcement is sought falls within the scope of Regulation No 44/2001, the grounds for challenging the declaration that a judgment is enforceable being exhaustively laid down by that regulation.

This I find interesting for unless I missed it, there has not yet been a CJEU decision holding this much and as I discuss on pp 191-192 of the Handbook, there is scholarly discussion on same.

With respect to the matrimonial property exception, the CJEU after of course emphasising the need for a restrictive interpretation of the exceptions, acknowledges that Brussels Ia has extended this but only to relationships deemed comparable to marriage (at 44). Unregistered partnerships do not qualify.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.1.2, Heading 2.2.16.1.2 .

Bobek AG opined end of May in C-198/18 CeDe Group v KAN. I am posting a touch late for well, readers will know I have not been fiddling my thumbs. The Opinion concerns the lex causae for set-off in accordance with the (2000) Insolvency Regulation – provisions for which have not materially changed in the current version of the EIR (Regulation 2015/848). At stake are Articles 4 cq 6 and 7 cq 9 in the two versions of the Insolvency Regulation.

The liquidator of PPUB Janson sp.j. (‘PPUB’), a Polish company the subject of insolvency proceedings in Poland, lodged before the Swedish courts an application against CeDe Group AB (‘CeDe’), a Swedish company, claiming payment for goods delivered under a pre-existing contract between PPUB and CeDe, which is governed by Swedish law. In the course of those proceedings, CeDe claimed a set-off in respect of a larger debt owed to it by PPUB. The liquidator had previously refused that set-off within the framework of the Polish insolvency proceedings. During the course of the procedure before the Swedish courts, PPUB’s liquidator assigned the claim against CeDe to another company, KAN sp. z o.o. (‘KAN’), which subsequently became insolvent. However, KAN’s liquidator refused to take over the claim at issue, with the result that KAN (in insolvency) is now party to the litigation

The Supreme Court, Sweden) doubts the law applicable to such a set-off claim. Before the referring court, KAN claimed that the set-off claim should be heard under Polish law, whereas CeDe submitted that that issue should be examined under Swedish law. Both of course reverse-engineered their arguments to support opposing views.

The Advocate General in trademark lucid style navigates the facts and issues (not helped by the little detail seemingly given by the referring court). Complication is of course that the general Gleichlauf rule of the EIR is repeatedly tempered by ad hoc regimes for specific claims or claimants. Like the Commission, Bobek AK focuses on the Regulation’s stated aim (recital 26 of the 2000 EIR; recital 70  in the 2015 EIR) of having the set-off regime fulfill its role as a guarantee for international commercial transactions: at 74: ‘adopting an approach focused on the concrete outcomes produced by the respective applicable laws in conflict in a given case, the test to be applied must zero in on the specific solution that would be arrived at by the law applicable to the main claim’.

An Opinion very much soaked in commercial reality.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.7.

I shall be spending a few weeks as a distinguished (yes, me!) visiting scholar at University of Macau in September. As part of my commitments there I shall be joining

• Professor Paulo Canelas de Castro (University of Macau)
• Professor Qin Tianbao (Wuhan University)
• Professor Ben Boer (Wuhan University)
• Professor Alexander Zahar (Wuhan University)
• Professor Benoit Mayer (The Chinese University of Hong Kong)

in the committee for a workshop on the writing of academic articles in the environmental law area. That’s quite a committee if you ask me.

We shall be assisting around twelve early-career environmental law scholars to publish an original research article on environmental law in English in an international top-tier journal.

At this moment we are looking in particular for a number of scholars based outside PRC to join the excellent Chinese candidates. All info is here. Deadline is tight: initial short abstract and CV are due Friday next, 7 June.

Geert.

 

[2019] EWCA Civ 768 BNP Paribas v Trattamento Rifiuti Metropolitani Spa engages the issue of apparently competing jurisdiction clauses under Article 25 Brussels Ia. The appeal against Knowles J’s findings at the High Court was dismissed.

The issue raised on the appeal is whether the judge was correct to conclude that the claims for declaratory relief sought in the Claim fall within an English jurisdiction clause  (EJC) contained in a swap transaction between the parties and not within an Italian jurisdiction clause (IJC) contained in a financing agreement (an ISDA Master Agreement) between them – further facts are best read in the judgment.

At 44 ff Hamblen LJ first considers two preliminary issues: (i) the relevance of Italian law and (ii) the relevant “dispute” or “disputes”. On (i), expert Italian opinion was considered however rejected essentially as being overkill: Where the applicable law of the contract is foreign law, questions of interpretation are governed by the applicable law. In such a case the role of the expert is not to give evidence as to what the contract means. The role is “to prove the rules of construction of the foreign law, and it is then for the court to interpret the contract in accordance with those rules” (authority cited: Lord Collins in Vizcaya Partners Ltd v Picord [2016] UKPC 5) and ‘The task of the English court is merely to inform itself of any relevant different principles of construction there might be in the foreign law and, armed with such information, look at both jurisdiction clauses and decide whether the English claim falls within the English clause. That should be a comparatively straightforward exercise.” (Longmore LJ in Savona). At 54: ‘The primary rule is Article 1362 of the Italian Civil Code, under which the literal meaning of the words must be considered. It is only if that meaning is not clear that one goes on to consider later Articles, although they may be used as a cross check.’ ‘[A]lthough the Italian jurisdiction clause was governed by Italian law, the judge was entitled to approach the task of interpreting the EJC and the IJC by reference to English law relating to the interpretation of such provisions, concentrating on the meaning of the words used in their relevant context’: at 55.

On the ‘relevant dispute’, at 56: ‘The interpretation of the scope of a jurisdiction clause falls to be considered at the time that jurisdiction agreement is made, at which time there will be no “dispute” unless, which is not this case, it is an ad hoc agreement relating to existing disputes.’ At 59: ‘Where proceedings are commenced in this country in reliance on an English jurisdiction clause and a jurisdictional challenge is raised, the issue of whether the clause may be so relied upon is to be answered by reference to the claim in relation to which those proceedings have been issued.’ At 61: ‘The answer to this question cannot change by reason of subsequent events, such as a defence raised or a subsequent set of proceedings, like the Italian Claim.’ (Follows reference to CJEU C-214/89 Powell Duffryn Plc v M Petereit).

Applied to the case at issue and having established that English law (of contractual interpretation and the ordinary meaning of the words) applies, Hamblen LJ summarises authority as follows (at 68; authority omitted)):

(1) Where the parties’ overall contractual arrangements contain two competing jurisdiction clauses, the starting point is that a jurisdiction clause in one contract was probably not intended to capture disputes more naturally seen as arising under a related contract.

(2) A broad, purposive and commercially-minded approach is to be followed.

(3) Where the jurisdiction clauses are part of a series of agreements they should be interpreted in the light of the transaction as a whole, taking into account the overall scheme of the agreements and reading sentences and phrases in the context of that overall scheme.

(4) It is recognised that sensible business people are unlikely to intend that similar claims should be the subject of inconsistent jurisdiction clauses.

(5) The starting presumption will therefore be that competing jurisdiction clauses are to be interpreted on the basis that each deals exclusively with its own subject matter and they are not overlapping, provided the language and surrounding circumstances so allow.

(6) The language and surrounding circumstances may, however, make it clear that a dispute falls within the ambit of both clauses. In that event the result may be that either clause can apply rather than one clause to the exclusion of the other.

At 69 ff this leads in casu to a finding of fairly clear distinct application in light of the clear contractual set-up between parties. At 77 this is supplemented by a straightforward finding of which relationship is relevant for which choice of court clause. Like the High Court, the Court of Appeal concluded that the two jurisdiction clauses governed different relationships and did not materially overlap.

At 112 Longmore LJ adds that the Court’s interpretation ‘accords with the objects of the Regulation of: (i) allowing the claimant easily to identify the court before which he may bring an action and the defendant reasonably to foresee the court before which he may be sued; and (ii) enabling the court seised to be able readily to decide whether it has jurisdiction, without having to consider the substance of the case.’

Geert.

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

(Apologies for the odd formatting in this post: I tried to debug this but failed. I am not wasting too much time trying, for I assume most of you do not visit the blog to enjoy its design qualities). In [2019] EWCA Civ 805 Airbus v Generali et al CJEU authority in West Tankers clearly echoes. I had hoped to review the case much sooner after my Tweet reporting it a few days after the judgment came out. That delay does have the advantage that Clyde & Co in the meantime have analysis to which I am happy to refer.

The claimant in this action and the respondent to the appeal, Airbus, claims declarations (1) that it is not liable to the defendant insurers for losses incurred in relation to an incident which occurred on 29 September 2013 in which an aircraft which it had manufactured sustained damage when landing in Rome and (2) that proceedings commenced against it by the defendants in Italy have been commenced contrary to the terms of an English exclusive jurisdiction clause. The clause in question is contained in an Airframe Warranties Agreement dated 8 July 2010 (“the Warranties Agreement”) concluded between (among others) Airbus and the defendants’ insured, the Italian airline company Alitalia. The issue on this appeal is whether the English court has jurisdiction over these claims by virtue of the jurisdiction clause. Moulder J held that it does and the defendant insurers (henceforth “the appellants”) now appeal.

Appellants contend, in outline, that the jurisdiction clause is of limited scope and does not extend to Airbus’s claims in this action, that the claim for a negative declaration falls within an arbitration clause in a different agreement, a Purchase Agreement dated 31 October 2005 which provides for ICC arbitration in Geneva, and that their own proceedings in Italy under articles of the Italian Civil Code are not within the scope of either clause. They say in addition that they cannot be in breach of an exclusive jurisdiction clause to which, as insurers, they were never parties and that, regardless of the true construction of the clause, there is no basis on which the English court can make a declaration against them (essentially, per Turner v Grovit and West Tankers).

Males LJ at 49: The standard of proof to be applied in determining whether the English court has jurisdiction under Article 25 of the Brussels Recast Regulation is that of a good arguable case. Kaifer Aislimentos was discussed as relevant authority. However, at 52: ‘sometimes it will be sensible, when a question of law arises on an application to challenge jurisdiction, for the court to decide it rather than merely deciding whether it is sufficiently arguable.’  Discussion of the contractual construction of the choice of court clause then follows at 62 ff and concludes in favour of a wide application in casu.

At 77 ff: The question whether the appellants’ claim in Italy falls within the scope of the English jurisdiction clause. Males LJ notes correctly that this depends on the nature of the claim brought in Italy, not on the defences which may be or have in fact been raised by Alitalia. At 82 he fairly swiftly concludes that even though the Italian claim is for breach of non-contractual obligations under articles of the Italian Civil Code, it is sufficiently connected to the Warranties Agreement to be within the scope of the exclusive jurisdiction clause. At 83 therefore: the commencement and pursuit of the Italian proceedings was contrary to the terms of that clause and that the English court has jurisdiction to determine that claim.

That then brings us to the discussion of what the English courts might potentially do to assist the party relying on the choice of court clause – given the unavailability of anti-suit per West Tankers. Noteworthy is that the new lis alibi pendens rule protecting choice of court following Brussels Ia, seemingly was not deployed or discussed in the Italian proceedings – at any rate there is no reference to any such discussion in the Court of Appeal judgment (other than perhaps at 84 which seems to suggest that amendment of claims brought the issue to the surface and this may not yet have been the case at the time of the discussion of the Italian proceedings).

A statement by the English courts finding infringement of the clause, would not just have an impact on cost rulings but would also ground a delictual claim. At 97 Males LJ settles the discussion whether such a declaration might be possible: ‘I can see no valid basis on which West Tankers can be distinguished. If it is held that commencement of the Italian proceedings by Alitalia would have been a breach of the jurisdiction clause in the Warranties Agreement, it follows that their commencement by the appellant insurers is a breach of an equivalent obligation in equity which Airbus is entitled to enforce and that the English court has jurisdiction to grant a declaration to say so.’

Interesting and highly relevant authority.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Heading 2.2.2.10.2.,  Heading 2.2.9, Heading 2.2.9.4.`

 

I have reported before on the innovation principle, the industry efforts behind it and the European Commission response to same. I have linked our initial paper as well as media and other reports in an earlier posting. The most comprehensive overview of the genesis of the principle is included here.

One of the comments I made in that earlier post is that Commissioner Moedas has emphasised verbatim that the innovation principle is not binding EU law: ‘“I think we have some misunderstanding here … The Horizon Europe proposal does not in any way establish the innovation principle or incorporate it into EU law. It is referred to in the recitals but it is not something that is [in] the proposal,” he said.

At the end of the original Ghostbusters movie, a giant Marshmallow Man appears as a result of the main ghost’s conjuring up himself as the physical manifestation of the first thought popping up into the mind of the lead characters’ mind (further info here). The road to turning the imagination of the innovation principle into reality is currently equally continuing with no less than a Commission-ordered Consultation Report, from the Centre for European Policy Studies, on the evaluation of the innovation principle: see the Directorate-General’s invitation letter and the questionnaire.

Both documents reached me via a little Berlaymont bird. I have anonymised individuals mentioned in the documents and I have also changed the order of questions in the questionnaire just in case individual copies were drafted to facilitate the coveted ‘confidentiality’ – contents of the questionnaire have stayed the same. The questionnaire is meant for ‘selected stakeholders’ who are instructed not to ‘share, quote or cite it’.

The principle even if it does exist certainly does not do so in EU law – as confirmed by the Commissioner. Yet it is his DG which has instructed CEPS to carry out the study, confidentially: not exactly a driving principle of the Better Regulation Agenda to which the documents purport to answer.

The invite states that ‘the overall aim of this evaluation is to describe the status quo and prepare recommendations for future action in accordance with the better regulation guidelines. These recommendations will serve to apply the Innovation Principle in a way which helps the achievement of EU policy objectives and is consistent with identified stakeholder needs.’

The text pays lip service to the general interest which ‘innovation’ is meant to serve, yet also repeatedly emphasises that existing regulatory hurdles to ‘innovation’ ought to be classified and potentially removed; that the EC may take the necessary steps to initiate this; and nowhere does it question the very existence of the principle.

It is noteworthy in this respect that Horizon Europe, Europe’s next flagship research and development program, refers drastically less to responsibly research and innovation -RRI than did its predecessor. Parliament did not halt references to the innovation principle in its recitals.

I would like to emphasise again that with my co-authors of the paper, I am not an unshakable opponent of the introduction of an innovation principle. Provided the discussion on it is done in the appropriate institutions and at the very least in the public domain. A confidential survey confirms the reactionary character which this principle so far represents on the EU scene.

Geert.

 

My review of Kokott AG’s Opinion C-25/18 Brian Andrew Kerr v Pavlo Postnov and Natalia Postnova (Kerr v Postnov(a)) discussed, as did the AG, the application of Brussels I Recast’s Articles 24(1) and (2) exclusive jurisdictional rules, cq the application of Article 7(1) jurisdictional rules on contracts, and applicable law consequences of same. The Court ruled on 8 May.

Coming to the first issue: Article 24(1)  – this is not properly answered by the Court.

I signalled the potential for engineering even in Article 24 cases: particularly here, the prospect of adding an enforcement claim to an otherwise contractual action. At 37-38 the Court deals most succinctly with this issue: ‘in so far as the action which gave rise to the dispute in the main proceedings does not fall within the scope of any of those actions, but is based on the rights of the association of property owners to payment of contributions relating to the maintenance of the communal areas of a building, that action must not be regarded as relating to a contract for a right in rem in immovable property, within the meaning of Article 4(1)(c) of Regulation No 593/2008.’: ‘in so far as’ – ‘dans la mesure où’: the Court would seem to dodge the issues here which the AG did discuss, in particular vis-a-vis the enforcement accessory: that discussion I feel is not over.

Note also the straight parallel which the Court makes between lex contractus under Rome I and Article 24. 

The discussion of Article 24(2) does lead to a clear conclusion: the forum societatis is not engaged, neither therefore is the lex societatis exception in Rome I. The Court follows the AG here, with specific reference to the Lagarde report (at 33-34).

As for Article 7(1) forum contractus: at 27 usual authority going back to Handte assists the Court in its conclusion that ‘even if membership of an association of property owners is prescribed by law, the fact remains that the detailed arrangements for management of the communal areas of the building concerned are, as the case may be, governed by contract and the association is joined through voluntary acquisition of an apartment together with ownership shares of the communal areas of the property, so that an obligation of the co-owners towards the association of owners, such as that at issue in the main proceedings, must be regarded as a legal obligation freely consented to’ (at 27). At 28: ‘the fact that that obligation results exclusively from that act of purchase or derives from that act in conjunction with a decision adopted by the general assembly of the association of the owners of property in that building has no effect on the application of Article 7(1)(a)’.

At 39-40 the Court then swiftly comes to the conclusion of ‘services’ under Article 4(1)(c) Rome I, without much ado at all. The AG had opined that the non-uniform nature of the contributions leads to non-application of the service rule of Article 7(1)b and therefore a resurrection of the classic Tessili formula: the CJEU itself went for the acte clair route.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.6, 2.2.11.1

 

In January 2017 I reported that Ms Kiobel, following failure to convince the USSC of jurisdiction under the Alien Tort Statute, subsequently initiated proceedings in the Dutch courts to try and sue Shell over the case. (Evidently unrelated to the pursuit of Shell in The Netherlands on environmental grounds – a case which is still pending upon appeal).

The court in first instance at the Hague on 1 May accepted jurisdiction against

• both the mother holding. That was not at all under discussion: this is done via Article 4 Brussels Ia’s domicile rule. Use of Article 33 /34’s forum non conveniens-light mechanism was not suggested;
• two English-incorporated Shell daughters using Article 8(1) of the Brussels I a Regulation; and
• the Nigerian daughter company. Against the Nigerian daughter company, jurisdiction needs to be anchored unto the Dutch mother holding using Article 7 of the Dutch CPR, which is a near carbon copy of Article 8(1) Brussels Ia, whose CJEU authority is followed by Dutch courts in the interpretation of the Dutch residual rule.

Coming so soon after the UKSC in Vedanta the Dutch case has received quite a bit of attention. After first not considering an English translation (not surprisingly; these are the Dutch courts, not a World Service), the clerks have now announced that there will be one, coming up some time soon.

Readers of the blog will expect me to hold the judgment against a clear jurisdictional and conflict of laws lens – in doing so, I fear I have to be a little bit less optimistic than media soundbites following the case.

Jurisdictional issues were in the end dealt with fairly summarily. Most attention went to issues of evidence and discovery, as well as a first review of the substance of the case.

Of note is:

• At 4.3: acceptance by all parties of of Nigerian law as the lex causae; if need be, choice of law by all parties for Nigerian law as the lex causae. Rome II is not applicable ratione temporis. The case has this in common with the Milieudefensie case against Shell. This being a civil law jurisdiction, ius novit curia applies. The court has taken into account parties’ submissions on Nigerian law yet has also conducted its own research. Foreign law is ‘law’ in the civil law; not ‘fact’ as in the common law.
• Claimants suggest that in the events in Ogoniland Shell acted as one organisation and treated the issue as one engaging the Shell concern as a whole (4.7 in fine);
• Claimants purposedly do not wish their claim to be qualified as one engaging piercing of the corporate veil; duty of care; shareholders responsibility; or tort of negligence. Rather, as one engaging the Shell concern directly in a suit on infringement of human rights included in the African Charter on Human and Peoples Rights (ACHPR) and the Nigerian constitution. Tort is only suggested as an alternative should the court not follow the arguments on the basis of human rights (4.8).
• At 4.12 the Court accepts the horizontal direct effect of human rights under Nigerian law, referring for that finding to Nigerian case-law. At 4.19 the Court notes the absence of statutes of limitation for human rights violations under Nigerian law: thus qualifying this as an issue of substance (lex causae), not procedure (lex fori). It revisits the statute of limitation issue at 4.47 ff (holding that under Nigerian law the suits can still be brought).
• At 4.26 the court applies A8(1) BIa and A7 Dutch CPR in globo, given the same lines of interpretation, and finds succinctly that all conditions (Kalfelis; Roche Nederland; The Tatry) are met. It remarks at 4.26 in fine that given the same situation of law and fact, it was predictable for all parties that they might end up being sued in any of their corporate siblings’ domicile.
• At 4.27 the court discussed summary dismissal. As seen in Vedanta, despite Owusu European courts are within their rights to reject the case in summary judgment if there is no ‘real issue’ to be tried against the anchor defendant. However this only applies against non-EU based defendants. Application of Article 8(1) does not allow such summary dismissal for EU-based defendants (see also C-103/05 Reisch Montage). The Hague court reviews summary dismissal only vis-a-vis the Nigerian defendant but finds succinctly that the suit is not prima facie without merit. There is a serious issue to be tried.
• At 4.28 interestingly the Court rejects relevance of the High Court and the Court of Appeal‘s dismissal of jurisdiction in Okpabi, arguing that these courts employed ‘English law’. This underscores the argument I have made elsewhere, that there is a serious blank in the discussion on lex causae for the duty of care or, depending on the case, the piercing issue. The Dutch court here notes without hesitation that the English courts apply lex fori to that test, and so therefore, I am assuming, should they (meaning Dutch law in their case)?
• At 4.29 it looks as if the Court considers some kind of reflexive argument which defendants seem to have made. Namely that the Dutch courts should respect the exclusive jurisdictional head under the Fundamental Rights (Enforcement Procedure) – FREP Rules, for the Federal High Court in cases involving alleged infringement of human rights. However the Dutch court considers this a mere internal jurisdictional distribution rule, which does not hinder the Dutch courts in their assessment of the claims. There is no written or unwritten rule in Dutch private international law which suggests such deference to a Nigerian civil procedure rule.

Importantly, a great deal of attention at 4.30 ff  goes to the debate on the use of documents obtained in US discovery, in the Dutch proceedings. A fair amount of these had to be returned following a confidentiality agreement in the US proceedings. Claimants make recourse to Article 6 ECHR to regain access for use in the Dutch proceedings however the Dutch court curtails much of that. Civil law discovery rules are notoriously more claimant friendly than those of the common law (a comment also made by Marsh CM in Glaxo v Sandoz. It leads to Shell not having to turn over quite a large part of the documents claimants had hoped to use.

At 4.58 ff the Court then turns to the substance of the case for case management reasons, with a view to determining which parts of the claim may be made subject to further proof. It holds in a way which I imagine must have been very disappointing for claimants. Only limited claims (of the Nigerian daughter’s involvement in the bribing of witnesses) will be allowed to continue.

The court held that claims of controlling meddling in the Nigerian court proceedings were not proven with sufficient force for these claims to continue – instead it held that Shell’s policy of silent diplomacy, in line with its business policies, had been consistently carried out.

All in all I would suggest claimants have scored clear points on jurisdiction, minor points on discovery and a disappointing outcome for them on substance. Albeit that the witness bribe leg may still lead to a finding of human rights infringement.

Geert.

(Handbook of) European private international law, second ed. 2016, Chapter 8, Headings 8.3.1.1., 8.3.2.

I tweeted it earlier yet was asked to put a review up on the blog (which also suits my archiving purposes) of ECLI:NL:GHAMS:2019:192 X v Y (I know that does not help much) at the Amsterdam Court of Appeal, 29 January 2019. The case came to me courtesy of Freshields who have review here.

The case illustrates some of the issues involving online alternative dispute resolution, including those manned by artificial intelligence (albeit the latter was not directly at stake here).

Using an online trading platform, X provided three loans to Y, all in bitcoins at an interest rate of 5% per month. To borrow these bitcoins, Y had to agree on the conditions of the online bitcoin-trading platform applicable to the loans. These conditions included the following dispute resolution mechanism clause:

If you fail to pay principal and/or interest on the date on which the loan falls due, you will be considered in default of the Registration Agreement… Should your loan become 90 days past due (“Defaulted”) the loan will be sent to Dhami Law Firm (“Arbitrator”), an independent, international arbitration firm whose awards are recognized internationally under The United Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

I understand that in the event that I want to appear in the arbitration by email to contest the potential issuance of an award in favor of the lenders, I must send a written request to support@btcjam.com and pay a $ 99.00 fee. Such request must be within 7 calendar days from the date of the Notice of Default. The Arbitrator’s decision shall be final and legally binding. In the event that the Arbitrator issues an award in favor of the investor, an investor may enforce that judgment in a court of competent jurisdiction.

The conditions further contained the following arbitration clause:

All claims and disputes arising under or relating to this agreement are to be settled by binding arbitration in the state of California or another location mutually agreeable to the parties. An award of arbitration may be confirmed in a court of competent jurisdiction.

Default ensued, as did ADR, and Y sought enforcement in The Netherlands. The Courts have now refused proprio motu (Y had signalled he had no objection), for the following reasons summarised by Freshfields: First, the court took issue with the circumstance that – in its view – online arbitral proceedings automatically become pending after 90 days. Second, a defendant wishing to defend itself in these arbitral proceedings had been required to write an email within seven days from receiving a notice of default. Third, the arbitral tribunal had failed to inform Y that a dispute was pending against him or of the legal grounds of the action.

At 3.5 is it is clear that the principle of audi alteram partem is the main stumbling block for the Dutch Courts. Ordre public violated. A clear flashpoint for ADR, including of the algorithmic variety.

Geert.

 

 

In [2019] EWHC 1095 (Ch) Media Saturn Holding v Toshiba et al, Barling J is concerned with stand-alone damages suits following the European Commission decision in COMP/39437 – TV and Monitor Tubes. None of the Defendants was an addressee of the Decision (some of their parent companies were). The claims are, therefore, “standalone” rather than “follow-on” actions, and the Decision is not binding on the court so far as the claims against the Defendants are concerned, as it would have been had the Defendants been addressees. Nevertheless, Claimants place considerable reliance upon the evidential effect of the Decision.

Claims are strike out and summary judgment application, intertwined with challenges to jurisdiction. These essentially relate to there being no arguable claim against the “anchor” defendants, particularly Toshiba Information Systems UK ltd – TIS.

At 114: Claimants refute the suggestion that the claim has been brought against TIS on a speculative basis in the hope that something may turn up on disclosure and/or simply to provide an anchor defendant for jurisdictional purposes. They point to the Commission’s finding, at Recital 595, that the cartel was implemented in the EEA through sales of cartelised CPTs that had been integrated into the finished products.

The substantive law issue of implementation of the cartel therefore is brought in not just to argue (or refute) summary dismissal, but also to shore (or reject) the jurisdictional claim under Article 8(1) Brussels 1a.

Barling J establishes as common ground (at 90) that ‘as a matter of law an entity can infringe Article 101(1) TFEU and Article 53 EEA if it participates in relevant cartel activity, in the sense of being a party to an agreement or concerted practice which falls within that Article, or if it knowingly implements a cartel to which it may not have been a party in that sense. [counsel for defendants] submitted that there is no arguable case that TIS had the requisite knowledge. However, what is sufficient knowledge for this purpose is not common ground’.

At 300 ff the most recent CJEU authority is discussed: C-724/17 Vantaan kaupunki v Skanska of March 2019.

This leads to a relevant discussion on ‘implementation’ of the cartel, which mutatis mutandis is also relevant to Article 7(2) (locus delicti commissi). At 117-118:

‘TIS [similar arguments are discussed viz other defendants, GAVC] was involved in activities which were important to the operation of the cartel from the Toshiba perspective. These included the manufacture of CTVs using the cartelised product acquired from an associated company which itself was one of the established cartelists, and the onward sale of the transformed product. TIS also had direct commercial dealings with the Claimants relating to bonuses on sales of, inter alia, the transformed products. In my judgment there is an arguable case that those activities amounted to the actus reus of participation in and/or implementation of the cartel. The available material is sufficient to preclude the summary disposal of that issue.’ 

At 139 ff much CJEU and national authority is discussed, viz a variety of the defendants, on the issue of ‘implementation’ for summary dismissal on substantive grounds, a discussion which then at 259 ff is applied to the jurisdiction issue. Reference is made to Brownlie v Four Seasons, to C-103/05 Reisch Montage and of course to C-352/13 CDC. At 273 Barling J distinguishes excellently in my view between predictability as part of the DNA of CJEU Brussels Ia case-law on the one hand, and its treatment (and rejection) as a stand-alone criterion on the other hand:

‘[argument of counsel] is in danger of treating the statement of the CJEU in Reisch Montage as adding a free-standing and distinct criterion of foreseeability to the preconditions of application expressly set out in Article 8(1). If that criterion were to be applied generally, and without reference to those express pre-conditions, there would be a risk of the EU law principle of legal certainty being compromised, instead of respected as Reisch Montage expressly requires. That case states that the special rule in Article 8(1) must be interpreted so as to ensure legal certainty. The special rule’s express precondition is that “the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments…” Therefore, by virtue of Reisch Montage, it is those words that must be interpreted strictly so as to respect legal certainty and thereby ensure foreseeability. In other words, foreseeability is inextricably linked to the closeness of the connection between the two sets of claims, and the criterion will be satisfied if a sufficiently close connection of the kind described in Article 8(1) exists.’

And at 276

‘It is correct that the anchor defendants were not addressees of the Decision and that there were no UK addressees. However, there is no reason why this should be significant. Article 8(1) is capable of applying in a competition claim regardless of whether a Commission infringement decision exists. What matters is that there is a claim that the anchor defendant is guilty of an infringement, and that the case against the non-anchor defendant is sufficiently “closely connected” to that claim within the meaning and for the purposes of Article 8(1). The fact that neither entity is an addressee of a Commission decision (if there is one) and that neither is the subject of any other regulatory process or civil claim relating to the cartel, is, if not immaterial, then of marginal relevance.’

For all anchor defendants the conclusion is that there is an arguable claim that they participated in and/or knowingly implemented the cartel. That strongly militates against the sole purpose of the (two sets of) proceedings being to oust the jurisdiction of the other EU courts. No abuse has occurred.

At 316 a final postscript is added suggesting summarily that the Supreme Court’s Vedanta might have an impact on the ‘abuse’ issue. The judgment concerned inter alia an alleged abuse of EU law in the context of the predecessor provision to Article 8(1). The Court gave consideration to the test for the “sole purpose” issue. At 317: Barling J: ‘I can see no basis on which my conclusions in that regard are affected by this decision.’

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.12.1.