Flux Belges et Lux

Case C-195/18 B.S. v Prokatura et al held mid-March, is great for the week-end. Serious stuff (excise duties and customs classification), but with a fun twist: does beer under excuse duties and customs regulation require the beverage to be made with malt as an ingredient, or does it also include mixtures of beer with non-alcoholic beverages, as long as it has fermented?  Put differently, may an alcoholic product obtained by fermentation of a wort produced from, inter alia, glucose syrup (yikes! yikes! and yikes again) and a small proportion of malt may be classified as ‘beer made from malt’?

The CJEU touches upon important issues: linguistic interpretation, WCO rules, etc. and finally decides that such a product can come under the ‘beer’ heading only on condition that its objective characteristics and properties correspond to those of beer (adding glucose syrup is not prohibited, other than of course under the only proper standard in this regard which is of course the Rheinheitsgebot (as amended)). In this regard, the court holds, account must be taken more particularly of the organoleptic (meaning ‘involving the use of the sense organs’) characteristics of the product in question, which is an exercise the referring court must undertake. No tasting sessions at Kirchberg therefore.

Have a good week-end.

Geert.

I have of course posted regularly on the issues of unstunned slaughter, freedom of religious expression and animal welfare (search tag ‘shechita’ should pull out the relevant postings). The Belgian Constitutional court, to the expectations I assume of counsel in the case, yesterday referred to the CJEU for preliminary reference (cases 52 and 53/2019).

The subject of the litigation is the Flemish decree banning unstunned slaughter outright (for standing reasons the similar Walloon regime is no longer sub judice). The Belgian court requests the CJEU to clarify its judgment in C-426/16, on which I reported here,

Q1: does Regulation 1099/2009 allow Member States to introduce an outright ban; Q2 in the affirmative, is that compatible with the Charter’s right to religious expression; Q3 in the event of an affirmative answer to Q1: the elephant in the Regulation’s room which I flagged years back: is it not discriminatory to allow Member States to restrict religious slaughter, while simply exempting hunting, fishing and ‘sporting and cultural events’ from the Regulation altogether.

Readers will know my answer to these questions.

Geert.

Absolutely brilliant analysis of the Brexit shambles by KJ Garnett over on EU Perspectives. A poor, poor game of contract bridge.

EU Perspectives

Putin, the old cliché goes, views the international world order as a game of chess where pawns, knights, bishops and queens are played off one against the other until there is only one outright winner: Russia. Putin’s strategy is to align both his and his opponent’s pawns (the mob) with the bishops and knights (the snob) to weaken and topple his rival. His tactic has been to whip his adversary’s pawns into a state of fury through the spread of misinformation, defamation and slander thereby undermining his adversary’s legitimacy and authority. On the face of it both his strategy and his tactic appear to be working. Across the European Union we see the rise of extremism, the victory of populists in democratic elections and the phenomenal rise of an out-raged right-wing media slamming the European project as a wicked “cabal of high-priests”.

Putin has every right to feel smug. He…

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The title of this piece is optimistic. Broadly defined many of the conflicts issues I address touch upon civil procedure of course. Yet I rarely address civil procedure pur sang (see here for an example). C-637/17 Cogeco was held by the European Court of Justice yesterday.

The Court held that the EU (competition law) damages Directive 2014/104 does not apply ratione temporis to the facts at issue.

The Directive includes two recitals on limitation periods:

Recital 36 argues

‘National rules on the beginning, duration, suspension or interruption of limitation periods should not unduly hamper the bringing of actions for damages. This is particularly important in respect of actions that build upon a finding by a competition authority or a review court of an infringement. To that end, it should be possible to bring an action for damages after proceedings by a competition authority, with a view to enforcing national and Union competition law. The limitation period should not begin to run before the infringement ceases and before a claimant knows, or can reasonably be expected to know, the behaviour constituting the infringement, the fact that the infringement caused the claimant harm and the identity of the infringer. Member States should be able to maintain or introduce absolute limitation periods that are of general application, provided that the duration of such absolute limitation periods does not render practically impossible or excessively difficult the exercise of the right to full compensation.’

Recital 49 adds

‘Limitation periods for bringing an action for damages could be such that they prevent injured parties and infringers from having sufficient time to come to an agreement on the compensation to be paid. In order to provide both sides with a genuine opportunity to engage in consensual dispute resolution before bringing proceedings before national courts, limitation periods need to be suspended for the duration of the consensual dispute resolution process.’

Article 10 then foresees expressis verbis

1.   Member States shall, in accordance with this Article, lay down rules applicable to limitation periods for bringing actions for damages. Those rules shall determine when the limitation period begins to run, the duration thereof and the circumstances under which it is interrupted or suspended.

2.   Limitation periods shall not begin to run before the infringement of competition law has ceased and the claimant knows, or can reasonably be expected to know:

(a) of the behaviour and the fact that it constitutes an infringement of competition law;

(b) of the fact that the infringement of competition law caused harm to it; and

(c) the identity of the infringer.

3.   Member States shall ensure that the limitation periods for bringing actions for damages are at least five years.

4.   Member States shall ensure that a limitation period is suspended or, depending on national law, interrupted, if a competition authority takes action for the purpose of the investigation or its proceedings in respect of an infringement of competition law to which the action for damages relates. The suspension shall end at the earliest one year after the infringement decision has become final or after the proceedings are otherwise terminated

Article 11 adds for joint and several liability

‘Member States shall ensure that any limitation period applicable to cases under this paragraph is reasonable and sufficient to allow injured parties to bring such actions.’

and finally Article 18(1) reads

‘Member States shall ensure that the limitation period for bringing an action for damages is suspended for the duration of any consensual dispute resolution process. The suspension of the limitation period shall apply only with regard to those parties that are or that were involved or represented in the consensual dispute resolution.’

Of note in my view is first of all the unavailing nature of much of the recitals quoted above. As the overview shows, the recitals are more or less verbatim repeated in the actual rules; or the other way around: the Articles’ provisions are copy /pasted into the recitals. To that there is not much point.

Further, the minimum period imposed by the Directive (not applicable, as noted, ratione temporis) is five years. (Compare in the mooted amendment of the motor insurance Directive  2009/103: minimum 4 years is being suggested – subject to gold plating). The Court could not evidently read that minimum period as being ius commune. However it did read much of the qualitative requirements of recitals and articles effectively as ius commune using the effective enforcement of EU competition law as an anchor. It held that the Portuguese limitation period of three years, which, first, starts to run from the date on which the injured party was aware of its right to compensation, even if the infringer is not known and, secondly, may not be suspended or interrupted in the course of proceedings before the national competition authority, renders the exercise of the right to full compensation practically impossible or excessively difficult.

I realise it is a bit of a stretch to see this as a move towards a European Ius Commune on limitation periods. Yet it might be a first cautious step.

Geert.

The Court held today in C-60/18 AS Tallinna Vesi and agrees with its AG re the possibility of national criteria, yet unlike Ms Kokott does not see an obligation in the WFD for the Member States to have a proactive vetting and decision procedure. It does not give much specification to its reasoning, other than a reference to the ‘circumstances of the case’. This may refer, but I am speculating, to applicant wanting the authorities generally to sign off on its production method, rather than requesting an opinion on an individual stream.

If my interpretation is right it underscores what I have remarked elsewhere on the regulatory process, for instance in the case of circular economy: in a grey regulatory zone, we need to think of mechanisms to assist industry in embracing environmentally proactive solutions, rather than driving them into incumbent technologies or worse, illegality.

Geert.

Handbook of EU Waste law, 2nd ed. 2015, OUP, 1.166 ff and 1.189 ff.

Case C-129/18 SM v Entry Clearance Officer, UK Visa Section was held last Tuesday in Grand Chamber. It concerns the application of the EU’s main migration Directive, 2004/38 and essentially addresses the fear of the Member States (many of whom appeared before the court, all arguing a rather restrictive interpretation) that the islamic system of Kafala or Kefala hands human traffickers a means to support their trade.

As I flagged in an earlier post, in which I also referred to the case involving SM, kafala is clearly not equivalent to adoption. It is more akin to guardianship or custody in advance of adoption, or in the case of the Middle East, is even used as a form of visa et al sponsorship for migrant workers (hence leading to issues of slavery and the like).

In SM’s case, Mr and Ms M are two French nationals who married in the UK in 2001. They travelled to Algeria in 2009 to be assessed as to their suitability to become guardians of a child under Algerian kafala and were deemed ‘suitable’. SM, who was born in Algeria in June 2010, was abandoned by her biological parents at birth. In October 2011, Mr M returned to the UK where he has a permanent right of residence, for professional reasons. For her part, Ms M remained in Algeria with SM. In May 2012, SM applied for entry clearance for the UK as the adopted child of an EEA national. Her application was refused by the Entry Clearance Officer on the ground that guardianship under Algerian kafala was not recognised as an adoption under UK law and that no application had been made for intercountry adoption.

The Court essentially agrees with the Member States that the case does not fall under directive 2004/38’s heading on ‘direct descendants’ (‘blood’ relatives in e.g. the Dutch version) which the Court interprets (as do the Member States) as both biological and adopted direct descendants. This is a consequence of the qualification by the lex fori itself: unlike adoption, which is prohibited by Algerian law, the placing of a child under kafala does not mean that the child becomes the guardian’s heir. In addition, kafala comes to an end when the child attains the age of majority and may be revoked at the request of the biological parents or the guardian.

Yet the Court also finds that the Member States’ concerns over human trafficking are properly addressed by the Directive’s provisions for ‘other family Members’. Unlike the right to entry for direct descendants, other family members’ visa applications must be processed taking into account an extensive examination of their personal circumstances. At 69: in the case of minors, that assessment must take into consideration, inter alia, the age at which the child was placed under Algerian kafala system, whether the child has lived with its guardians since its placement under that system, the closeness of the personal relationship which has developed between the child and its guardians and the extent to which the child is dependent on its guardians, inasmuch as they assume parental responsibility and legal and financial responsibility for the child.

That the Algerian system of kafala guardian’s assessment clearly does not meet with the 1996 Hague Convention requirements for assessment of prospective adoptive parents and the interests of the child (to which Algeria is not a party but the Member States are) is not material: such assessment must be weighed against the factual elements identified by the Court at 69, see above.

Hague and Kafala at Kirchberg. Not an everyday occurrence.

Geert.

Thank you Thomas Kendra and Thibaud Roujou de Boubée for signalling 16/25484 Cameroon v Projet Pilote Garoubé at the Paris Court of Appeal end of December 2018. The essence of the case is the Court confirming an arbitral award applying OHADA law. OHADA stands for ‘Organisation pour l’harmonisation en Afrique du droit des affaires’ – ie the Organisation for the Harmonization of Corporate Law in Africa.

Thomas and Thibaud analyse excellently – of note for this blog are the issue of non-State law as lex contractus (compare with Rome I), the recognition of same as trumping Cameronese law essentially as overriding mandatory law, and the rejection of the Cameronese argument that its wildlife laws qualify themselves as lois de police /overriding mandatory law and that the lack of recognition of same violates ordre public.

Interesting arbitration /conflicts material.

Geert.

Kokott AG Opined in C-624/17 OM v Tronex end of February (I had flagged the case summarily earlier): whether consumer returns of electrical appliances some of which are no longer usable because defective, and residual stock are to be regarded as waste that may be exported only in accordance with the Waste Shipment Regulation. – Reminiscent of the issues in Shell: in that case in a B2B context.

Tronex’ export consignment that was stopped, consisted of appliances which had been returned by consumers under a product guarantee, on the one hand, and goods which, because of a change to the product range, for example, were or could no longer be sold (normally), on the other. A number of the boxes in which the appliances were packaged carried a notice stating their defects. The glass in some of the glass kettles was damaged. The shipment was to take place without notification or consent in accordance with the Waste Shipment Regulation.

The AG takes a sensible approach which distinguishes between consumer and collector. At 31 ff: The mere fact that objects have been collected for the purpose of reuse does not in itself necessarily support the assumption that they have been discarded. Indeed, it seems sensible, both economically and from the point of view of the efficient use of resources, to make appliances which can no longer be sold on the market for which they were originally intended available on other markets where they may still sell. Particularly in the case of residual stock which is still in its unopened original packaging, therefore, the request for a preliminary reference contains insufficient evidence to support the conclusion that there has been any discarding.

Returned appliances which, on account of serious defects, are no longer usable and can no longer be repaired at reasonable cost, on the other hand, must unquestionably be regarded as waste. Kokott AG suggests waste classification as the default position. At 39: in so far as there are doubts as to the reuse of the goods or substance in question being not a mere possibility but a certainty, without the necessity of using any of the waste recovery processes referred to in the Waste Directive prior to reuse, only the possibility of ‘prompt’ dispelling of the doubt by an inspection of the appliances, can shift the presumption of it being waste.

‘Repair’ is what the AG proposes as the distinctive criterion: at 40: if the inspection shows that the item is still capable of functional use, its status as waste is precluded. The same is true of goods with minor defects which limit functionality only negligibly, meaning that these goods can still be sold without repair, in some cases at a reduced price. At 41: ‘In so far as the inspection identifies defects which need to be repaired before the product is capable of functional use, however, that product constitutes waste, since there is no certainty that the retailer will actually carry out the repair. Whether the repair is less or more expensive cannot be decisive in this regard, since a product that does not work constitutes a burden and its intended use is in doubt.’ The same goes for goods (other than those in the original packaging, per above) which have not been inspected at all.

At 45 ff the AG supports this conclusion with reference to instruction in Annexes to the WEEE Directive. She also suggests that her interpretation, given the criminal law implications, be limited to those instances occurring after the eventual CJEU judgment.

Geert.

(Handbook of) EU Waste law, 2nd ed. 2015, Oxford, OUP, Chapter 1, 1.149 ff.

In [2019] EWHC 466 (Fam) V v M, Williams J refused both an application for a stay on the basis of forum non conveniens of English proceedings in favour of proceedings in India, and an anti-suit injunction. Applicant mother is V and the respondent is the father M. They are engaged in litigation in England and in India in respect of their son. The English limb of the proceedings is the mother’s application for wardship which was issued on or about the 16 October 2018, and which includes within it application for the summary return of the child from India to England.

India is (obviously) neither a Brussels IIa party nor the 1996 Hague child Protection Convention. Brussels IIa contains a forum non-light regime (as Brussels Ia now does, too): see e.g. Child and Family Agency v J.D. Whether more general forum non is excluded following Owusu v Jackson per analogiam, has not reached the CJEU however as Williams J notes at 22 ‘the trend of authority in relation to the ‘Owusu-v-Jackson’ points towards the conclusion that the power to stay proceedings on forum non-conveniens grounds continues to exist in respect of countries which fall outside the scheme of BIIa or the 1996 Hague Child Protection Convention.’

Given that eventually he upholds jurisdiction of the English courts, the point is moot however may be at issue in further cases.

At 48 ff the various criteria for forum non were considered:

i) The burden is upon the applicant to establish that a stay of the English proceedings is appropriate.

ii) The applicant must show not only that England is not the natural or appropriate forum but also that the other country is clearly the more appropriate forum.

iii) In assessing the appropriateness of each forum, the court must discern the forum with which the case has the more real and substantial connection in terms of convenience, expense and availability of witnesses. In evaluating this limb the following will be relevant;

a) The desirability of deciding questions as to a child’s future upbringing in the state of his habitual residence and the child’s and parties’ connections with the competing forums in particular the jurisdictional foundation

b) The relative ability of each forum to determine the issues including the availability of investigating and reporting systems. In practice, judges will be reluctant to assume that facilities for a fair trial are not available in the court of another jurisdiction but this may have to give way to the evidence in any particular case.

c) The convenience and expense to the parties of attending and participating in the hearing and availability of witnesses.

d) The availability of legal representation.

e) Any earlier agreement as to where disputes should be litigated.

f) The stage any proceedings have reached in either jurisdiction and the likely date of the substantive hearing.

g) Principles of international comity, insofar as they are relevant to the particular situation in the case in question. However public interest or public policy considerations not related to the private interests of the parties and the ends of justice in the particular case have no bearing on the decision which the court has to make.

h) The prospects of success of the applications.

iv) If the court were to conclude that the other forum was clearly more appropriate, it should grant a stay unless other more potent factors were to drive the opposite result; and

v) In the exercise to be conducted above the welfare of the child is an important (possibly primary), but not a paramount, consideration.

Conclusion is that on clear balance England is the natural and appropriate forum and India is not clearly the more appropriate forum.

At 50, the anti-suit injunction was considered premature (Williams J suggests that had it been a commercial matter, it may not have been): ‘Assuming that a stay application can be made and that some form of judicial liaison can be commenced to enable this court and the Indian court to work cooperatively to solve the riddle of competing applications in our respective courts, it is in my view wholly premature to grant such an injunction. That situation might fall to be reconsidered if no progress can be made and in particular if the father embarked upon a rear-guard action to play the Indian courts to delay the resolution of matters. However we are far from that position as yet.’

Note the comity considerations here, reflecting on the potential judicial co-operation between India and England, advanced here given the interest of the child (less likely for purely commercial cases, one assumes).

Geert.

Many thanks to Donna Williams for reporting and commenting on 1:18-cv-10798 Snöfrost AB v. Håkansson in the District Court of Massachusetts. Not all my blog posts relate to maverick cases, especially at the week-end perhaps. This one is a standard application of forum non conveniens in the US and a useful reminder of the application of the principle by US courts.

Snöfrost, a Swedish company, filed in the U.S. District Court for the District of Massachusetts against Susanne Håkansson, a Massachusetts resident, seeking to enforce an alleged share purchase agreement (“SPA”). The SPA required Håkansson to purchase shares in a Swedish company (Farstorps Gård AB) for 330 million Swedish Krona. Snöfrost alleged that Håkansson reneged on the deal “at the eleventh hour” by raising regulatory issues as an excuse.

Håkansson’s residence in the jurisdiction would have meant immediate dismissal of FNC under the Owusu rule, had this been a case before a court in the EU.

Jurisdiction dismissed: centre of gravity of the case is Sweden – Donna explains the relevant factors in her post.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.2.1.

Case C-658/17 WB is one of the first in which the annoying new rule on anonymisation at the CJEU kicks in. At issue is the characterisation of notaries as ‘court’ under the EU succession Regulation 650/2012.

Particularly with regard to succession law, notaries in the Member States carry out tasks which can be considered ‘judicial’. In some jurisdictions (especially in the Anglo-Saxon world) a court is involved in transferring the estate from the deceased to those inheriting. This is not the case in most Member States with a so-called ‘Latin’ office of notary. A private international law regulation concerning inheritance can therefore not solely be aimed at courts in the traditional sense of the word. In particular, notaries and registry offices, but also testamentary executors entrusted with judicial authority, need to be integrated.

The rules with regard to jurisdiction and applicable law included in the Regulation have to be complied with by all above-mentioned legal professions, though only to the extent that they exercise judicial functions. The Regulation therefore adopts, in Article 3(2), a functional approach of a ‘court’:

For the purposes of this Regulation, the term ‘court’ means any judicial authority and all other authorities and legal professionals with competence in matters of succession which exercise judicial functions or act pursuant to a delegation of power by a judicial authority or act under the control of a judicial authority, provided that such other authorities and legal professionals offer guarantees with regard to impartiality and the right of all parties to be heard and provided that their decisions under the law of the Member State in which they operate:

(a)     may be made the subject of an appeal to or review by a judicial authority; and

(b)    have a similar force and effect as a decision of a judicial authority on the same matter.

The Member States shall notify the Commission of the other authorities and legal professionals referred to in the first subparagraph in accordance with Article 79.

Outside of the exercise of judicial functions, notaries are not bound by the rules on jurisdiction, and the authentic instruments they issue circulate in accordance with the provisions on authentic instruments rather than ‘judgments’.

In accordance with Article 79 of the Regulation, the Commission (on the basis of notifications by the Member States) has established a list of the authorities and legal professions which need to be considered as ‘courts’ in accordance with this functional determination. This list will also be particularly interesting for internal national use.

However I have always emphasised to Member States compiling their lists, that unlike in the Insolvency Regulation, where the extent of cover of national proceedings is entirely in the hands of the Member States, for the Succession Regulation it is an autonomous EU  definition which drives cover by the Regulation.

Bot AG agrees (Opinion of 28 February; not available in English). whether or not a particular office and /or function is included in the national notification is not determinant. An EU definition of Court kicks in. He refers in particular to his overview in C-484/15 Zulfikarpašić. Reference is also made to Pula Parking. Applied to the case at issue, Polish notaries by virtue of Polish law may only issue the Polish (not: EU) certificate of succession if there is consensus among the parties and no disagreement e.g. re jurisdiction. No judicial functions therefore and the certificate travels as an authentic instrument, not a judgment.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 6, Heading 6.2.1.

I reported on Bot AG’s Opinion in  Case C-579/17 BUAK (Bauarbeiter-Urlaubs- u. Abfertigungskasse v Gradbeništvo Korana d.o.o.) here. He focussed on admissibility viz the preliminary review procedure. He left the questions on ‘civil and commercial’, and the social security exception unanswered, suggesting these are now acte claire. The Court at the end of February did answer all questions. (For completeness sake I already note that for the latter, the CJEU referred to secondary EU law to find the payment not to be one in social security).

First, on the issue of admissibility under Article 267 TFEU. In the absence of discussion by the original court on the applicability of Brussels Ia, by determining whether it is competent to issue the certificate under Article 53 Brussels Ia (replacing exequatur), the court of origin implicitly confirms that the judgment given in default which must be recognised and enforced in another Member State falls within the scope of application of that Regulation: for evidently the issue of the certificate is possible only on that condition. That procedure in those circumstances is judicial in character, with the result that a national court ruling in the context of such a procedure is entitled to refer questions to the Court for a preliminary ruling. (But only in those circumstances: for otherwise the issuing of the certificate becomes a potential anchor for stalling quick enforcement, via preliminary review to Luxembourg).

Next, on the issue of ‘civil and commercial’, some usual suspects are discussed including in particular Pula Parking. flyLAL, and Sapir (but not Fahnenbrock or Kuhn). What needs to be examined, is firstly the legal relationship between the parties to the dispute and secondly the basis and the detailed rules governing the bringing of the action.

As to the former, BUAK may be governed by public law however its calculations of wage supplements and annual leave, the formula for which is determined by decree, are superimposed upon wage negotiations which employers either negotiate entirely freely with employees or agree so on the basis of collective agreements between employers and employees to which employers freely consent. And at 54: ‘in so far as the employer’s obligation to pay the wage supplements is intrinsically linked with the rights, which are of a civil nature, of workers to annual leave pay, …BUAK’s claim and, therefore, an action for payment of that claim, is also of a civil nature.’ (Note that Eurocontrol, not too dissimilar in context (here too the root cause of the debt incurred is one of free will: whether to use certain airspace and airports or not), did lead to a finding of non-civil and commercial matters). I do not find this application straightforward at all; ‘the parties’ are the employer (Korana, a Slovenian company which had posted workers to Austria) and BUAK. Their legal relationship is removed from the contract and /or collective agreements negotiations.

As for the second criterion, the basis and the detailed rules governing the bringing of the action, unlike purely internal situations, in which BUAK may itself issue an execution title in the form of a statement of arrears, with respect to arrears relating to posted workers who do not have their habitual place of work in Austria it must initiate legal proceedings for the payment of unpaid wage supplements. However there is divergence of views between the referring court and Austria and the EC before the CJEU: the former maintains that its hands are tied and that it cannot pursue a de novo review of the application by BUAC; the latter suggest the court seized does carry out a full review of all of the elements of the application. The CJEU at 60 would seem to lean on the side of the referring court but leaves it to take the final decision.

I will turn to this again when I work on the third edition of the handbook this summer yet it is clear that the formula for deciding civil and commercial is still not entirely settled. The First chamber issued Fahnenbrock (Tizzano (Rapporteur), Rodin, Levits, Berger and Biltgen), and Kuhn (Silva de Lapuerta (Rapporteur), Bonichot, Regan, Fernlund and Rodin; the latter the only common denominator in both), which are arguably more like the Lechoritou formula, which in turn applies Eurcontrol: exclusion of certain legal actions and judicial decisions from the scope of Regulation No 1215/2012, by reason either of the legal relationships between the parties to the action or of the subject matter of the action.

The Second chamber (K. Lenaerts, A. Prechal, Toader, Rosas and Ilešič; quite a few conflicts scholars indeed including the President of the CJEU) now focuses on Sapir which was issued by the third Chamber, comprising at the time Toader (Rapporteur), Ilešič, Jarašiūnas, Ó Caoimh,  Fernlund. Toader and Ilešič are the common denominator with current judment in BUAK). Sapir has focus also firstly on the legal relationship between the parties to the dispute, but secondly the basis and the detailed rules governing the bringing of the action (not: the to my knowledge never applied criterion of ‘subject matter’ of the action).

To ponder over the summer.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.1.1.

“Laws are like sausages, it is better not to see them being made” is a quote widely attributed to German statesman Otto von Bismarck. It is not a wise perception. If, like laws,  we want sausages, then it is paramount we see how they are made, starting from the rearing of the animal, via the transport to and processing in abattoirs, through to food processing.

In Case C-497/17, Oeuvre d’assistance aux bêtes d’abattoirs the Court held that the particular methods of slaughter prescribed by religious rites that are carried out without pre-stunning and that are permitted by Article 4(4) of Regulation No 1099/2009 (on which more here) are not tantamount, in terms of ensuring a high level of animal welfare at the time of killing, to slaughter with pre-stunning which is, in principle, required by Article 4(1) of that regulation. No organic label under Council Regulation 834/2007 and Commission implementing Regulation 889/2008 may therefore be attached to said meat.

The AG had opined the matter is outside the scope of harmonisation of the organic labelling rules. The CJEU however essentially employs Regulation 1099/2009 as a conjoined piece of law and holds that organic labelling must not be assigned to meat originating from animals unstunned prior to slaughter.

The Court is wrong.

At 41 the Court itself acknowledges that ‘no provision of Regulation No 834/2007 or Regulation No 889/2008 expressly defines the method or methods for the slaughtering of animals that are most appropriate to minimise animal suffering and, consequently, to give concrete expression to the objective of ensuring a high level of animal welfare’.

At 47, the Court refers to Wahl AG’s statement in para 43 of his opinion, suggesting the AG ‘ stated, in essence, in point 43 of his Opinion, scientific studies have shown that pre-stunning is the technique that compromises animal welfare the least at the time of killing.’

What the AG actually said is ‘In the first place, it seems to me to be accepted that, while every killing is problematic from the viewpoint of animal welfare, the use of pre-stunning methods when animals are slaughtered may, at least in theory, and as a considerable number of scientific studies show, [FN omitted, GAVC] help to minimise that suffering when those methods are used in the proper conditions. that unstunned slaughter, properly carried out, meets with the ethos of organic farming.’ (emphasis added).

The AG in footnote refers to 2 studies in particular (he suggests there are more). Other studies show the exact opposite. Yet the wider relevance of what he opined lies in the ‘slaughter in the books’ admission. ‘In theory at least’ a perfectly carried out pre-slaughter stun minimises pain. That is very much the same with a perfectly carried out shechita or halal incision, particularly where it is carried out with the religiously-inspired stewardship ethos in mind.

In practice, pre-stunning goes horribly wrong in a considerable amount of cases for small and large animals alike. I am not the only one to have witnessed that. And as frequently occurring footage of abattoirs shows, there is little respect for animal welfare in commercial abattoirs, regardless of an eventual stun or not.

Of wider relevance in my view therefore is the problematic enforcement by certification bodies of generally formulated standards  – admittedly not an issue that may be solved by a court case.

Consider Wahl AG’s point made at 45 of his Opinion: ‘the certification ‘halal’ says very little about the slaughtering method actually employed.’ That is exactly the same for pre-stunning. The EU but more particularly its Member States and regions (which given subsidiarity ough to have a big say in this) will not achieve animal welfare if they do not properly address the wider relationship between food professional and animal, between upscale agro-industry and mass meat production.

Finally and evidently, this case is of no consequence to the acceptability of unstunned slaughter from the point of view of expression of freedom of religion.

Geert.

As I discussed with Stephen Gardner in Bloomberg Environment, the CJEU held yesterday in C-399/17 EC v Czech Republic, where the question is whether the Czech Republic has infringed the waste shipments Regulation 1013/2006 by refusing to take back a substance known as TPS-NOLO (or Geobal) that had been shipped to Poland without respecting the requisite formalities of the Waste Shipment Regulation.

Approximately 20 000 tonnes of TPS-NOLO (Geobal) and composed of tar acid, a remnant after refining oil (code 05 01 07* of the European waste catalogue), of carbon dust and of calcium oxide. Poland considered the substance to be hazardous waste classified in Annex IV to the Waste Shipment Regulation (‘Waste tarry residues (excluding asphalt cements) arising from refining, distillation and any pyrolitic treatment of organic materials’).  The Czech citizen responsible for the shipment to Poland presented the standards adopted by the company as well as proof that the substance in question was registered under the REACH Regulation and that it was used as fuel.

Wahl AG had suggested inadmissability, as I discuss here. The Court however disagreed, and on substance dismissed the EC action in five steps summarised very well in its case-summary. Of note in particular with respect to the REACH /WFD relation is that the Court holds that while the EC is right in being sceptical about WFD evasion via REACH (not that straightforward an assumption, given the cumbersome implications of REACH compliance), the Commission needs to bring specific evidence to the table rather than mere speculation.

Not an earth-shattering case yet a relevant one also with a view to circular economy debates, where REACH’ data requirements are an important concern for recyclers.

Geert.

Handbook of EU Waste law, 2nd ed. 2015, OUP, i.a.at para 1.201.

After the French Cour de Cassation in MJI v Apple Sales, the Brussels Court of Appeal in FIFA/UEFA, and the Court at Amsterdam in Kemira, (as well as other courts undoubtedly, too; and I have highlighted more cases on the blog), Ørjan Salvesen Haukaas has now reported an application of CDC in a decision of December 2018 by a Norwegian Court of appeal, LB-2018-136341 Posten /Bring v Volvo. The court evidently applies Lugano (Article 6), not Brussels Ia, yet the provision  is materially identical.

Norwegian and foreign companies in the Posten/Bring group (mail services) had sued companies in the Volvo group for alleged losses incurred when purchasing trucks from Volvo after certain companies in the Volvo group had been fined for participating in a price-fixing cartel. Posten/Bring also sued a Norwegian company in the Volvo group, which had not been fined for participating in the price-fixing cartel.

Borgarting Court of Appeal held that Norwegian courts have jurisdiction pursuant to Article 6(1) Lugano even if the anchor defendant is sued merely to obtain Norwegian jurisdiction. The court solely had to determine whether the claims were so closely connected that there was a risk of irreconcilable judgments, in the absence of any suggested collusion between the anchor defendant and claimants per CDC.

Geert.

(Handbook of) European Private International Law. 2nd ed. 2016, Chapter 2, Heading 2.2.12, Heading 2.2.12.1.

The CJEU held in C-630/17 Milivojević v Raiffeisenbank on 14 February. The case in the main concerns Croatian legislation restricting financial services with Banks other than Croatian ones – a free movement of services issue therefore which the CJEU itself explains in its press release.

Of relevance to the blog is the issue of jurisdiction under the consumer title and Article 24(1)’s exclusive jurisdictional rule.

The Croatian legislation at issue, in the context of disputes concerning credit agreements featuring international elements, allows debtors to bring an action against non-authorised lenders either before the courts of the State on the territory of which those lenders have their registered office, or before the courts of the place where the debtors have their domicile or registered office and restricts jurisdiction to hear actions brought by those creditors against their debtors only to courts of the State on the territory of which those debtors have their domicile, whether the debtors are consumers or professionals.

Croatian law therefore first of all infringes Article 25(4) juncto Article 19 Brussels Ia. Their combined application does not rule out choice of court even between a business and a consumer (subject to limitations which I do not discuss here). It moreover infringes Article 25 (and Article 4) in and of itself for it precludes choice of court even in a B2B context.

Next, may a debtor who has entered into a credit agreement in order to have renovation work carried out in an immovable property which is his domicile with the intention, in particular, of providing tourist accommodation services be regarded as a ‘consumer’ within the meaning of Article 17(1) Brussels Ia? Reference is made ex multi to Schrems, emphasising the difficult balancing exercise of keeping exceptions to Article 4’s actor sequitur forum rei rule within limits, yet at the same time honouring the protective intention of the protected categories.

A person who concludes a contract for a dual purpose, partly for use in his professional activity and partly for private matters, can rely on those provisions only if the link between the contract and the trade or profession of the person concerned was so slight as to be marginal and, therefore, had only a negligible role in the context of the transaction in respect of which the contract was concluded, considered in its entirety (per Schrems following C-464/01Gruber). Whether Ms Milivojević can so be described as a ‘consumer’ is for the national court to ascertain.

Finally, does Article 24(1)’s rule on an action ‘relating to rights in rem in immovable property’, apply to an action for a declaration of the invalidity of a credit agreement and of the notarised deed relating to the creation of a mortgage taken out as a guarantee for the debt arising out of that agreement and for the removal from the land register of the mortgage on a building?

Reference here is made to all the classics, taking Schmidt v Schmidt as the most recent portal to earlier case-law. At 101: with regard to the claims seeking a declaration of the invalidity of the agreement at issue and of the notarised deed related to the creation of a mortgage, these ‘clearly’ (I assume based on the national law at issue) are based on a right in personam which can be claimed only against the defendant.

However at 102: re the request for removal from the land register of the registration of a mortgage, it must be noted that the mortgage, once duly constituted in accordance with the procedural and substantive rules laid down by the relevant national legislation (see indeed my comment above re passerelle of national law), is a right in rem which has effects erga omnes. Such an application does fall within Article 24(1). At 104 the Court again inadvertently or not highlights the potential for a procedural strategy, opening up forum connexitatis hinging unto A24(1) exclusivity: ‘in the light of that exclusive jurisdiction of the court of the Member State in which the immovable property is situated to the request for removal from the land register for the registration of mortgages, that court also has a non-exclusive jurisdiction based on related actions, pursuant to Article 8(4) of Regulation No 1215/2012, to hear claims seeking annulment of the credit agreement and the notarised deed related to the creation of that mortgage, to the extent that these claims are brought against the same defendant and are capable, as is apparent from the material in the file available to the Court, of being joined.’ (idem in Schmidt v Schmidt).

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6, Heading 2.2.8.2.

Thank you alumna and appreciated co-author Jutta Gangsted for flagging Charles Price’s (former learned colleague of mine at Dibb Lupton Alsop) and Sébastien Popijn’s alert on the Belgian Supreme Court’s ruling of 8 February last in C.18.0354.N Happy Flights v Ryanair. Happy Flights are a Belgium-based online claim agency to which disgruntled passengers may assign claims for compensation under Regulation 261/2004.

At issue is the validity of Ryanair’s choice of court in its general terms and conditions, referring consumers to Irish courts. The Brussels Commercial court on 30 May 2018 seemingly first of all did not assess whether the agency may be considered a ‘consumer’ within the terms of the consumer title of Brussels Ia, having been assigned the consumers’ claims. This decision is unreported <enters his usual rant about the lack of proper reporting of Belgian case-law>.

The Supreme Court (at 2, line 47) notes this lack of assessment by the lower court. It does not however complete the analysis sticking religiously to its role to interpret the law only, not the facts. Per CJEU Schrems mutatis mutandis I would suggest an affirmative answer (the agency having been assigned the consumers’ rights): in which case the Article 25 analysis becomes redundant.

The Brussels Commercial court subsequently and again from what one can infer from the Supreme Court’s ruling, discussed the validity of choice of court under Article 25 Brussels Ia, reviewing its formal conditions (formation of consent) yet judging the material validity under the lex fori, Belgian law, not the lex fori prorogati, Irish law. This is a clear violation of A25 juncto recital 20 Brussels Ia. The Supreme Court suggests that the relevant Irish implementation of the unfair consumer terms Directive 93/13 does imply invalidity of the clause (again: if the claim is held to fall under the consumer title, this analysis will become superfluous).

The Court’s judgment unlike the understandably enthusiastic briefing by Happy Flight’s counsel does not quite yet mean that Ryanair’s terms and conditions on this issue have been invalidated. However it is likely they will be upon further assessment on the merits. As I note above first up there will be the issue of assignment rather than the issue of A25.

For your interest, I gave a Twitter tutorial on a related issue (consumer law, lex causae, compulsory referral to arbitration) recently.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.9, Heading 2.2.9.4.

Many thanks to Jeffrey Kleywegt and Robert Van Vugt for re-reporting Stichting Petrobas Compensation Foundation v PetrÓleo Brasilieiro SA – PETROBRAS et al. The case, held in September (judgment in NL and in EN) relates to a Brazilian criminal investigation into alleged bribery schemes within Petrobras, which took place between 2004 and 2014. the Court had to review the jurisdictional issue only at this stage, and confirmed same for much, but not all of the claims.

The Dutch internal bank for Petrobas, Petrobas Global Finance BV and the Dutch subsidiary of Petrobas, Petrobas Oil and Gas BV are the anchor defendants. Jurisdiction against them was easily established of course under Article 4 Brussels Ia.

Issues under discussion, were

Firstly, against the Dutch defendants: Application of the new Article 34 ‘forum non conveniens’ mechanism which I have reported on before re English and Gibraltar courts. At 5.45: defendants request a stay of the proceedings on account of lis pendens, until a final decision has been given in the United States, alternatively Brazil, about claims that are virtually identical to those brought by the Foundation. They additionally argue a stay on case management grounds. However the court finds

with respect to a stay in favour of the US, that

the US courts will not judge on the merits, since there is a class settlement; and that

for the proceedings in which these courts might eventually hold on the merits (particularly in the case of claimants having opted out of the settlement), it is unclear what the further course of these proceedings will be and how long they will continue. For that reason it is also unclear if a judgment in these actions is to be expected at ‘reasonably short notice’: delay of the proceedings is a crucial factor in the Article 34 mechanism.

with respect to a stay in favour of Brasil, that Brazilian courts unlike the Dutch (see below) have ruled and will continue to rule in favour of the case having to go to arbitration, and that such awards might not even be recognisable in The Netherlands (mutatis mutandis, the Anerkennungsprognose of Article 34).

Further, against the non-EU based defendants, this of course takes place under residual Dutch rules, particularly

Firstly Article 7(1)’s anchor defendants mechanism such as it does in Shell. The court here found that exercise of jurisdiction would not be exorbitant, as claimed by Petrobas: most of the claims against the Dutch and non-Dutch defendants are so closely connected as to justify a joint hearing for reasons of efficiency, in order to prevent irreconcilable judgments from being given in the event that the cases were heard and determined separately: a clear echo of course of CJEU authority on Article 8(1). The court also rejects the suggestion that application of the anchor mechanism is abusive.

It considers these issues at 5.11 ff: relevant is inter alia that the Dutch defendants have published incorrect, incomplete, and/or misleading financial information, have on the basis of same during the fraud period issued shares, bonds or securities and in that period have deliberately and wrongly raised expectations among investors. Moreover, at 5:15: Petrobras has itself stated on its website that it has a strategic presence in the Netherlands.

Against two claims ‘involvement’ of the NL-based defendants was not withheld, and jurisdiction denied.

Further, a subsidiary jurisdictional claim for these two rejected claims on the basis of forum necessitatis (article 9 of the Duch CPR) was not withheld: Brazilian authorities are clearly cracking down on fraud and corruption (At 5.25 ff).

Finally  and again for these two remaining claims, are the Netherlands the place where the harmful event occurred (Handlungsort) and /or the place where the damage occurred (Erfolgsort)? Not so, the court held: at 5.22: the Foundation has not stated enough with regard to the involvement of the Dutch defendants in those claims, for the harmful event to be localised in the Netherlands with some sufficient force. As for locus damni and with echos of Universal Music: at 5.24: that the place where the damage has occurred is situated in the Netherlands, cannot be drawn from the mere circumstance that purely financial damage has directly occurred in the Dutch bank accounts of the (allegedly) affected investors – other arguments (see at 5.24) made by the Foundation did not convince.

Finally, an argument was made that the Petrobas arbitration clause contained in its articles of association, rule out recourse to the courts in ordinary. Here, an interesting discussion took place on the relevant language version to be consulted: the Court went for the English one, seeing as this is a text which is intended to be consulted by persons all over the world (at 5.33). The English version of article 58 of the articles of association however is insufficiently clear and specific: there is no designated forum to rule on any disputes covered by the clause. Both under Dutch and Brazilian law, the Court held, giving up the constitutional right of gaining access to the independent national court requires that the clause clearly states that arbitration has been agreed. That clarity is absent: the version consulted by the court read

“Art. 58 -It shall be resolved by means of arbitration [italics added, district court], obeying the rules provided by the Market Arbitration Chamber, the disputes or controversies that involve the Company, its shareholders, the administrators and members of the Fiscal Council, for the purposes of the application of the provision contained in Law n° 6.404, of 1976, in this Articles of Association, in the rules issued by the National Monetary Council, by the Central Bank of Brazil and by the Brazilian
Securities and Exchange Commission, as well as in the other rules applicable to the functioning of the capital market in general, besides the ones contained in the agreements eventually executed by Petrobras with the stock exchange or over-the-counter market entity, accredited by the Brazilian Securities and Exchange Commission, aiming at the adoption of standards of corporate governance established by these entities, and of the respective rules of differentiated practices of corporate governance, as the case may be.”

A very relevant and well argued case – no doubt subject to appeal.

Geert.

(Handbook of) EU private international law, 2nd ed.2016, Chapter 2, almost in its entirety.

Case C‑149/18 Martins v Dekra Claims gave the Court of Justice an opportunity (it held end of January) essentially to confirm its Unamar case-law, specifically with respect to limitation periods.

The Portuguese claimant’s vehicle was damaged in an accident in Spain in August 2015. He issued proceedings in Portugal in November 2016 to recover his uninsured losses. Under Portuguese law, the lex fori, the limitation period is 3 years. Under Spanish law, the lex causae per Rome II, limitation is fixed at 1 year.

The Court first of all re-emphasises the importance of co-ordinated interpretation of Rome I and II, here with respect to the terminology of the two Regulations which in the French version in particular differs with respect to the use of the term ‘lois de police’ (Article 9 Rome I) and ‘dispositions impératives dérogatoires’  (Article 16 Rome II). The lois de police of Rome I (albeit with respect to the Rome Convention 1980) had already been interpreted in Unamar, leading to the first of the two conditions discussed below.

The Court effectively held there is little limit content-wise to the possibility for courts to invoke the lois de police /overriding mandatory law provision of Article 9 Rome II. Despite Article 15 Rome II verbatim mentioning limitation periods as being covered by the lex causae (but see the confusion on that reported in my post on Kik this week), limitation periods foreseen in the lex fori may be given priority.

This is subject to two conditions:

firstly, the national court cannot interpret any odd lex fori provision as being covered by the lois de police exception: here the Court re-emphasises the Rome I /II parallel by making the Unamar test apply to Rome II: at 31: ‘the referring court must find, on the basis of a detailed analysis of the wording, general scheme, objectives and the context in which that provision was adopted, that it is of such importance in the national legal order that it justifies a departure from the applicable law.’ Here, the fact that limitation periods are mentioned in so many words in Article 15, comes into play: at 34: given that express reference, the application of the overriding mandatory law exception ‘would require the identification of particularly important reasons, such as a manifest infringement of the right to an effective remedy and to effective judicial protection arising from the application of the law designated as applicable pursuant to Article 4 of the Rome II Regulation.’

secondly, and of course redundantly but worth re-emphasising: the rule at issue must not have been harmonised by secondary EU law. As Alistair Kinley points out, the Motor Insurance Directive (MID) 2009/103 is currently being amended and a limitation period of minimum 4 years is being suggested – subject even to gold plating. That latter prospect of course opens up all sorts of interesting discussions particularly viz Article 3(4) Rome I.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 3, Heading 3.2.8, Heading 3.2.8.3.

Jonas Poell, Julianne Hughes-Jennett, Peter Hood and Lucja Nowak reported and succinctly reviewed Case No. 7 O 95/15 Jabir and Others v Kik early January – the ‘next week’ promise in my Tweet below turned out a little longer.

Survivors of a fire in a Pakistani textile supplying factory are suing Germany-based KIK as the “main retailer” of the merchandise produced in the Pakistani premises. Jurisdiction evidently is easily established on the basis of Article 4 Brussels Ia.

As Burkhard Hess and Martina Mantovani note here, claimants are attempting to have KIK held liable for not having promoted and undertaken, in practice, the implementation of “adequate safety  measures” in the Pakistani factory (producing clothes), thus breaching an engagement  they undertook in a Code of Conduct applicable to its relationship with its contractual  counterpart.

Prof Hess and Ms Mantovani’s paper ‘Current developments in forum access: Comments on jurisdiction and forum non conveniens European Perspectives on Human Rights Litigation’ incidentally is an excellent stock taking on the issues surrounding mass tort (human rights) litigation.

The Dortmund court held that the case is time-barred under Pakistani law which was the lex causae per Rome II, Regulation 864/2007. Now, I have not had access to the full ruling (lest the 3 page ruling linked above is precisely that – which I am assuming it is not), so a little caveat here, however the court’s discussion of limitation periods is startlingly brief. Article 15 Rome II includes ‘the manner in which an obligation may be extinguished and rules of prescription and limitation’ in the scope of application of the lex causae’. Yet as the development inter alia of relevant English statute shows (discussed ia by Andrew Dickinson in his Rome II book with OUP), there are a multitude of issues surrounding statutes of limitation. One of them being Article 1(3) Rome II’s confirmation that evidence and procedure is not within its scope, another Article 26’s ordre public exception which certainly may have a calling here.

I have reported before on the difficult relationship between A1 and A15 in Spring v MOD and in PJSC Tatneft v Bogolyubov.

The court at Dortmund also rejects the argument that parties’ settlement negotiations before the claims were filed amount to choice of (German) law per Article 14(1). That would have triggered the 3 year German limitation period as opposed to the 2 year Pakistani one. Dr Jungkamp, the chamber president, argues that parties did not have any reflection on the Pakistani (or indeed German) limitation period in mind when they corresponded on the ex gratia out of court settlement, hence excluding the intention (animus contrahendi) required to speak of choice of law. I would suggest that is a bit of a succinct analysis to conclude absence of choice of law. Parties need not be aware of all implications of such choice for it to be validly made.

Appeal is possible and, I would suggest, warranted.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 4, Heading 4.7, Heading 4.8, Chapter 8, Heading 8.3.

Dortmund court found that the claims are time-barred under Pakistani law, which was applicable to the case pursuant to the Rome II Regulation.
Quite a few Rome II issues here. I have a blog post focusing on the conflicts issues forthcoming next week. https://t.co/dkcKLvugoa

— Geert Van Calster (@GAVClaw) January 12, 2019