Flux Belges et Lux

Many thanks to Filbert Lam for alerting me to Menon CJ’s most exquisite 2018 speech on cross-border insolvency law. His honour’s talk addresses forum shopping (including for cram down reasons), the Model Law, a most enlightening comparison between international commercial arbitration (particularly: the New York Convention’s role) and insolvency, and of course modified universalism (on which see also this recent post by Bob Wessels, with ia analysis of the EU position). A delightfully sharp observation of key elements of international insolvency practice and policy.

Geert.

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

[2018] EWHC 3506 (QB) Kalma v African Minerals et al was held by the High Court on 19 December 2018. It essentially entails vicarious liability of UK-incorpored companies (jurisdiction firmly settled therefore) for human rights abuses committed by Sierra Leone police (SLP), who ensured security at the defendants’ mine. All claims were held to have failed. The judgment is lengthy and very factual, please refer to same.

Matrix have brief analysis here, critical reception of the judgment is inter alia here. The case does not raise the kind of jurisdictional or applicable law issues which trigger interest of this blog (such as yesterday’s post on Nevsun Resources). Nevertheless discussion of the factual involvement of the companies with SLP activities, required to establish vicarious liability, has echoes of the discussion on the level of oversight required for mother companies to be held liable for subsidiaries’ actions (such as e.g, in Apartheid or in various CSR cases making their way through UK courts).

Of additional note:

• Turner J’s discussion at 61 ff headed ‘keeping things in proportion’: the difficulty of a judge;s task, particularly at 63: ‘I make no complaint about the volume of written material which has been provided for my assistance. I have read all of it carefully. Both sides have been extremely well served by the industry and thoroughness of their respective legal teams. Inevitably, however, and for the sake of proportionality, I have had to leave a very considerable number of these points on the cutting room floor. This does not mean that I have failed to consider them or that I have discarded them as being entirely redundant but merely that the inclusion of their analysis or resolution in an already lengthy judgment would not have a material impact on the determination of the central issues.’ Less can be more.
• At 84: irrelevance of CSR discussions: ‘Both sides were very enthusiastic about the idea of setting the parameters of their evidence and submissions to cover broad issues concerning the general level of social responsibility displayed by the defendant – upon which topic they predictably entertained very different views. This, however, I have not permitted. The consequences of the exploration of such issues would have been entirely disproportionate, in terms both of time and costs, to the limited value of resolving them. For the same reason, I do not propose to adjudicate upon the rights and wrongs of the community and employment disputes which lay behind the incidents to which they gave rise.’

Geert.

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

Plenty of goings-on in the Corporate Social Responsibility /mass torts category, as regular readers of the blog and /or my Twitter-feed will know. Thank you Jutta Brunnée for alerting us to Nevsun Resources v Gize Ybeyo et al, currently making its way through the Canadian Supreme Court. Thank you also Cory Wanless for pointing out the core of the issue: Nevsun are not contesting jurisdiction (its existence is secure; much like in the EU context) e.g. on forum non conveniens grounds. Rather, the Supreme Court is asked whether there should be a new tort of breach of international law, and whether the “act of state” doctrine prevents adjudication.

The first question undoubtedly will lead to a discussion of similar issues raised in Kiobel, where they were not discussed by the USSC, and in Jesner Bank, where the USCC refused to be the dealmaker on public international law. The second issue is likely to imply consideration of the very foreign poicy considerations which featured heavily in circuit considerations prior to Kiobel.

Geert.

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

Thank you Christopher Burkett for alerting me to Heller v. Uber Technologies Inc., 2019 ONCA 1.  The case is reminiscent of California’s Senate Bill 1241 (review here) and of an article that I co-authored with Jutta Gangsted [‘Protected parties in European and American conflict of laws: a comparative analysis of individual employment contracts]. The starting point of the California, the EU rules, and the Canadian judgment is the same: employees cannot be considered to really consent to either choice of law or choice of court /dispute resolution hence any clause doing same will be subject to mandatory limitations.

Here, an arbitration clause requiring arbitration in the Netherlands of disputes between drivers and Uber was held to be invalid and unenforceable, because it deprives an employee of the benefit of making a complaint to the Ministry of Labour under relevant Ontarian law.

Of note is that the judgment applies assuming the contract is one of employment – which remains to be determined under Ontarian law. Of note is also that the Court of appeal rejected Uber’s position that the validity is an issue for the arbitrator to determine because it is an issue going to the jurisdiction of the arbitrator. Uber invoked the “competence-competence” /kompetenz kompetenz principle in support of its position.

Geert.

(Handbook of) European Private international law, 2nd ed. 2016. Chapter 2, Heading 2.2.8.3, Chapter 3, Heading 3.2.5.

On Thursday the Advocate-General will opine in C-136/17 G.C. e.a. and  C-507/17 Google (FR) – on which I reported ia here. The issue is, in the main, the territorial scope of EU data protection laws.

X v Google LLC at the Tribunal de grande instance de Paris on 14 November 2018 is a good warm-up, forwarded to me (for which many thanks) by Jef Ausloos (I have copy for those interested). The case concerns an article in Le Monde linking a French resident, active in international hotel management, to a Moroccan enquiry into pedophilia. The court’s review of the facts suggests an unsubstantiated link between X and the case – yet the damage to claimant’s reputation evidently is done nevertheless. Claimant requests delinking not just for searches performed in France on all Google extensions, but rather for all searches performed globally.

The court first of all observes that for searches performed in France, delisting of many of the identified urls has already happened – and orders on the basis of French law (which it applies, it suggests, per the GDPR) Google LLC to carry out delisting for the others in as far as searches are carried out from French territory. X’s privacy is given priority over freedom of expression and Google LLC’s US domicile is not mentioned as being relevant (no verbatim discussion of same is recorded in the judgment. X’s French nationality and domicile however, are, hence presumably it is the infamous Article 14  Code Civil which is at play here). Google’s argument that the as listed urls link to articles in languages other than French and relating to facts taking place outside of France is dismissed as irrelevant.

Claimant however had requested global delisting, regardless of the user’s geographical location. That, the court holds, is a request it cannot grant. Its refusal is justified in one sentence only: a global delisting order would be disproportionate in the case of a French national and resident, simply because his employment record is international:

‘une telle mesure apparaît ici disproportionnée, s’agissant d’un résident français, le seul caractère international de ces démarches d’emploi ne pouvant justifier d’une telle restriction, qui conduirait in fine à soumettre le réseau internet à une injonction de portée globale.’ 

The judgment therefore does not tackle the conceptual issues surrounding jurisdiction (which the Belgian courts, for instance, have been tempted into in the Facebook case), neither does it rule out global injunctions in cases which have more than just a fleeting international element.

Happy 2019.

Geert.

An ethics-related posting seems apprioprate as last before ‘the’ season.

The relevant European expert group seeks feedback on draft ethics guidelines for trustworthy artificial intelligence.

Chapter I deals with ensuring AI’s ethical purpose, by setting out the fundamental rights, principles and values that it should comply with.
From those principles, Chapter II derives guidance on the realisation of Trustworthy AI, tackling both ethical purpose and technical robustness. This is done by listing the requirements for Trustworthy AI and offering an overview of technical and non-technical methods that can be used for its implementation.
Chapter III subsequently operationalises the requirements by providing a concrete but nonexhaustive assessment list for Trustworthy AI. This list is then adapted to specific use cases.

Of particular note at p.12-13 are the implications for the long term use of AI, on which the expert group did not reach consensus. Given that autonomous AI systems in particular have raised popular concern, most of which predicted in the longer term, it is clear that this section could prove particularly sticky as well as interesting.

For me the draft is a neat warm-up for when the group’s co-ordinator, Nathalie Smuha, returns to Leuven in spring to focus on her PhD research with me on the very topic.

Geert.

Facts in [2018] EWHC 2321 (Ch.) Caribonum Pension Trustee v Pelikan are summarised by Anthony Garon here. A suggestion of abuse of process /Fraus was rejected by Clark M. Of interest to the blog is the suggested reason for abuse: Pelikan AG argued that the claim was an abuse of process because a relevant guarantee would not be enforceable in Switzerland and that there were insufficient non-Swiss assets to satisfy the claim.

At 40 however Master Clark holds that the ability of a defendant to satisfy a judgement is not a pre-requisite to a claimant obtaining a judgement. Claimant’s counsel convincingly submitted that it was pursuing the claim for the simple and appropriate purpose of securing payment of the sums due under a holding structure-related Guarantee; and that that was not an abuse of process.

Geert.

[2018] UKPC 3 Almazeedi v Penner at the Privy Council was recently brought to my attention by Christopher Grout. The case concerns a challenge to the independence of a judge sitting in the Financial Services Division of the Grand Court of the Cayman Islands.

Judge in the present case was Cresswell J, former judge of the High Court of England and Wales from 1991 to 2007. Following his retirement from that position, he became in 2009 an additional judge of the Financial Services Division of the Grand Court, sitting ad hoc from time to time as required. The Division consisted of the Chief Justice and two other full-time judges, together with three additional judges sitting part-time, one of whom was Cresswell J. From a time late in 2011, he also became a Supplementary Judge of the Civil and Commercial Court, Qatar Financial Centre (although he was not in the end instructed or renumerated there).

Cresswell J was the judge assigned with the conduct of a winding-up petition and associated applications and thereafter with the winding-up of BTU Power Company (“BTU”). The entire economic interest in BTU was held by its preference shareholders who were in the main Qatari interests with strong state connections, and to a minor extent Dubai Islamic Bank. The present case involves a challenge to all aspects of Cresswell J’s activity. The challenge is made having regard to Cresswell J’s position as a judge in Qatar and to the involvement in the proceedings before him of these Qatari interests and of Qatari personalities representing or interested in them.

No suggestion of actual bias at any time in either court was ever made. The question relates rather to whether the fair-minded and informed observer would discount the risk of unconscious bias. The Privy Council held such observer would not so discount: at 34: ‘with some reluctance, [we have] come to the conclusion that the Court of Appeal was right to regard it as inappropriate for the judge to sit without disclosure of his position in Qatar as regards the period after 26 June 2013 and that this represented a flaw in his apparent independence’.

Note the dissenting opinion by Lord Sumption at 36 ff, who notes ‘Sir Peter Cresswell is not alleged to have done anything which could raise doubts about his independence. The case against him rests entirely on the notion that he might be influenced, possibly unconsciously, by the hypothetical possibility of action being taken against him in Qatar as a result of any decision in the Cayman Islands which was contrary to the Qatari Government’s interests. Hypothetical possibilities may of course found a case of apparent bias, but since there are few limits to the possibilities that can be hypothetically envisaged, there must be some substance to them.’

‘The notional fair-minded and informed observer whose presumed reaction is the benchmark for apparent bias, has only to be satisfied that there is a real risk of bias. But where he reaches this conclusion, he does so with care, after ensuring that he has informed himself of all the relevant facts. He is not satisfied with a look-sniff impression. He is not credulous or naïve. But neither is he hyper-suspicious or apt to envisage the worst possible outcome.’

I believe Lord Sumption’s approach is the better one. Yet it was not carried hence in international commercial courts the standards have become very exacting indeed.

Geert.

Kraft Foods v Bega Cheese [2018] FCA 549 was signalled to me by Michael Mitchell back in early May – now seems a good opportunity briefly to report on it. The Federal Court of Australia issued an anti-arbitration injunction to restrain a multinational food conglomerate from pursuing arbitration in New York. Kraft had pursued litigation in Australia which not only sought to restrain the respondent from certain radio and television advertising, but also sought final relief including damages.

Parties had agreed to mediate and arbitrate under the dispute resolution provisions of a Master Agreement for licensing of IP. Bega had acquired certain rights from Mondelez (a company in the Kraft group), including certain trademark rights that Kraft had licensed to Mondelez pursuant to the Master Agreement.

Of interest to the blog is the myriad number of issues that led the Court to issue the injunction, among others the fact that what was sought included interim relief, the position of which when it comes to enforcement is not entirely clear in the New York Convention. Throw intellectual property, mediation as well as arbitration, common law doctrine principles such as the Aldi rule in the mix, and the jurisdictional soup becomes quite attractive as well as complex. Precisely why intellectual property is hotly debated in the Hague Judgments project and likely to be excluded from it.

That latter brings me to the second part of the blog title: the HCCH have issued a Revised Draft Explanatory Report, and a document on the possible exclusion of anti-trust matters from the Convention as reflected in Article 2(1)(p) of the 2018 draft Convention. Both signal the continuing difficulty of the roll-out of the Hague Process, as well as continued intent to let the train roll into its end destination; although one wonders how many wagons will have been left behind en route.

Geert.

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

A short post effectively to deposit relevant documentation on the issue of privacy and private international law – which I frequently report on on the blog (e.g. use tag ‘rtbf’, or ‘internet’, or ‘privacy’, ‘Facebook’, or ‘Google’; see i.a. my recent posts re Facebook, Google , Schrems, etc.

Max Planck Luxembourg have the interim report on the International Law Association’s draft guidelines on jurisdiction and applicable law re privacy on their website, featuring many of the cases I have reported on over the years.

Happy reading.

Geert.

Marcus Teo has excellent analysis of Shanghai Turbo Enterprises Ltd v Liu Ming [2018] SGHC 172. The issue is well-known in contract law as such and takes one or two special forms in conflicts: what is the fate of a contract as a whole, and /or of contractual clauses individually, when part of a clause is defective.

In the case at issue, the relevant contractual clause read

“This Agreement shall be governed by the laws of Singapore/or People’s Republic of China and each of the parties hereto submits to the non-exclusive jurisdiction of the Courts of Singapore/or People’s Republic of China.”

As far as the choice of court part of this clause is concerned, non-exclusive choice of court comes with strings attached, depending on the laws of the States concerned: under the editorship of Mary Keyes, Michiel Poesen and I have contributed to an extensive comparative volume on same wich is forthcoming. However for choice of law one need not look at the specific laws of a State to appreciate that this clause thus formulated is simply a lame duck. No clear choice of law is made at all. The pragmatic solution is to ignore the useless clause and determine the proper law of the contract in the absence of a valid expression of parties’ autonomy. Yet conceptually an argument can, and has been made that to do so ignores the very high relevance of the lex contractus in the very contract formation – a conceptual quagmire which in EU law is addressed by Rome I’s ‘bootstrap’ principle.

In the case at issue, the High Court follows a pro-validation approach (favor contractus): the invalidity of the choice of law clause does not affect the formation of the main contract. A commercially sensible solution which Marcus analysis critically in excellent detail.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 3, Heading 3.2.7.

Thank you Jelle Flo for alerting us to the succinct Belgian Supreme Court ruling of 21 November 2018. A judge had published a scholarly piece on an issue of law, in tempore non suspecto, expressing a point of view which the Advocate General at the Court (here effectively acting as an amicus curiae) in a later specific case, agrees with.

The judiciary does publish regularly-ish. As do solicitors and barristers. For those of us who teach as well as practice, this at most leads to interesting times when opposing counsel or the bench points out a scholarly piece seemingly expressing a different point of view than our submissions; ordinarily, things are distinguishable…

For the judiciary, the Supreme Court sees no issue as long as the piece meets with scientific standards: ‘Le fait qu’un juge ait adopté un point de vue sur une question juridique dans une publication scientifique n’implique pas qu’il ne dispose plus de l’impartialité requise pour connaître d’un litige abordant ce sujet, pourvu qu’il ait développé sa pensée dans le respect des règles de la science du droit.’

The Court does not express guidance on what such standard might be – peer review perhaps comes to mind.

Geert.

In Case C-579/17 BUAK (Bauarbeiter-Urlaubs- u. Abfertigungskasse v Gradbeništvo Korana d.o.o.) Bot AG opined end October – the English version is not yet (if ever) available. The case was formulated by the referring court as one on the scope of application of the Recast – in particular the social security exception, and the ‘civil and commercial’ charachter. However the AG suggests this is a question which the referring court by now ought to be able to answer itself, given the extensive case-law of the Court. Instead, the question is turned into one on admissibility, namely whether BUAK, a quango in the social security arena (here: the Construction Workers’ Leave and Severance Pay Fund requiring from a Slovenian company additional wages resulting from rules on posted workers) qualifies as a ‘court’ within the meaning of Article 53 of the Regulation.

This proviso now reads ‘The court of origin shall, at the request of any interested party, issue the certificate using the form set out in Annex I.’ The equivalent provision in Brussels I (Article 54) read ‘The court or competent authority of a Member State where a judgment was given shall issue, at the request of any interested party, a certificate using the standard form in Annex V to this Regulation.’ – emphasis added.

The Advocate General suggests that where issues relevant to Brussels I Recast (particularly: whether the issue falls at all within its scope) have not yet been discussed prior to the authority being asked to complete the Brussels I Recast form, such authority ought to be able to issue preliminary review requests to the CJEU. However (at 54) such authority qualifying as such (where it is a different authority from the court having taken the decision), ought to be exceptional: the whole point of the enforcement Title of the Regulation being speed and swiftness.

All in all an interesting turn of events.

Geert.

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

Thank you Ali Malek QC who acts for claimants (and who as I have noted, is a busy and efficient bee in international litigation land) for alerting me to a further episode of Kazakhstan v BNYM. This current jurisdictional challenge is part of a long-running saga relating to the enforcement of a Swedish arbitration award dated 19 December 2013 in favour of the “Stati parties”, the Second to Fifth Defendants, and against the Second Claimant, the Republic of Kazakhstan (“RoK”).

Many of the issues are ex-Brussels I Recast and /or Lugano Convention yet I report on them anyway for they reveal interesting issues on the relationship between foreign courts relevant to attachment (and enforcement generally), and courts with jurisdiction on the merits.

In [2017] EWHC 3512 (Comm) National Bank of Kazakhstan v Bank of New York Mellon (BNYM) which I reviewed here, Popplewell J had dismissed claims essentially designed to establish that BNYM is not obliged or entitled to freeze assets of the National Fund by reason of Belgian and Dutch court attachment orders.

Teare J has now held a few weeks back – helpfully in [2018] EWHC 3282 (Comm) also summarising the many proceedings which the blog has not always reported on. Trigger for this latest instalment of proceedings is claimants having sought to challenge a Belgian conservatory attachment before an “Attachment Judge” of the Belgian court. The Attachment Judge upheld the attachment order in a judgment dated 25 May 2018.

RoK seeks a declaration that the debts or assets held by BNYM(London) and said to be subject to the attachment order are in fact held by BNYM(L) solely for the National Bank of Kazakhstan (“NBK”), the First Claimant. They therefore submit that the attachment order has no subject-matter, because there are no assets to attach. The Claimants contend that this question was referred to this court by the Belgian court.

A provision of Belgian law cited by the Attachment Judge, article 1456(2) of the Belgian Judicial Code, provides as follows: “If the third-party debtor disputes the debt claimed by the creditor, the case is brought before the competent trial judge or, as the case may be, the case is referred to the competent trial judge by the enforcement court.” Further proceedings are now pending in Belgium, in which the Stati parties seek to convert the ‘conservatory’ attachment order into an ‘executory’ attachment order. In those proceedings, the Stati parties have raised a number of arguments in support of their contention that the GCA assets are properly held for RoK (rather than merely NBK). These include Belgian-law arguments relating (inter alia) to piercing of legal personality, sham trusts, and “abuse of law”.

The crucial consideration discussed by Teare J in current proceeding is that the Stati parties submit that there is no “serious issue to be tried” (hence no jurisdiction) as between the Claimants and the Second to Fourth Defendants, (i.a.) because “the declarations sought […] will not affect the Belgian Court’s decision” since that Court “faces a number of Belgian law arguments unrelated to the GCA with regard to the ROK debt question”.

There was a dispute between Belgian law experts as to precisely what had been remitted by the Attachment Judge to the High Court and it is worth repeating each assertion in full: at 28-29

‘The evidence of Mr Brijs (the Stati parties’ Belgian law expert [GAVC fellow Leuven Class of 1993] ) is that “a pure question of English contractual law will not resolve the core dispute” because “a Belgian enforcement court would still have to evaluate – amongst other things – the arguments raised by the Stati parties under Belgian attachment law” such as piercing legal personality, sham trusts, and abuse of law. Further, “the Belgian Enforcement court did not decide the arguments – not because the judge “envisaged” that these arguments should be resolved by an English Court or because the Belgian Enforcement Court found that it could not decide them (when in fact it can) – but solely because the Belgian Enforcement Court considered that it did not need to decide them… It is difficult to conceive why an English court should decide on e.g. matters that concern Belgian public policy, or on the question whether there is a sham trust structure to the prejudice of the creditors and what the sanction/effect thereof is on the Belgian attachment.”

The evidence of Mr Nuyts (the Claimants’ Belgian law expert [GAVC colleague and learned friend extraordinaire ) is that “[t]here is nothing in the Belgian judgment to show that the Belgian Court envisaged the English court deciding only some of the issues, and not the arguments raised by the Stati parties such as piercing of legal personality, sham trust, and abuse of law. These arguments had been raised at length by the Stati parties in written submissions in the Belgian proceedings, and the Belgian Court has distinctly decided not to address any of these arguments, leaving them to be decided by the English Court… The Belgian Judgment holds in general that the “challenge” relating to “the debt of the third party” must be referred to the English court… [and] that it is for the English court to decide in general “whether or not a debt exists from BNYM towards Kazakhstan”.”

It is Mr Nuyts’ evidence that convinced Tear J. At 31 ‘In this case, however [GAVC despite Meester Brijs’ correct statement that there are circumstances in which the enforcement court is competent to decide on the merits], the enforcement court has clearly decided that the English court is the competent court to decide the merits.’ At 35 the relevant passages of the Belgian Court are copied:

“The seized-debtor is entitled to challenge the declaration from the garnishee before the attachment judge. However, this challenge relates to the debt of the third party and must be referred to that trial court in the proceedings on the merits, under article 1456, 2nd para. BJC. The competent trial court is, as stated by Kazakhstan itself, the English court who must apply its own national substantive law. […] Both requests relate to the subject-matter of the attachment, notably whether or not a debt exists from BNYM towards Kazakhstan. Kazakhstan disputes the existence of such debt. The attachment judge cannot and may not settle such dispute, but only the judge on the merits. The judge on the merits is, as already mentioned above, the English court who must apply its own national law.”

That finding on the scope of referral to the English courts, also plays a role in the assessment of abuse: at 46: ‘I do not consider that it is an abuse of process for the Claimants to raise in these proceedings issues not argued before Popplewell J or the Court of Appeal in the earlier English proceedings. First, those proceedings served a different purpose, namely, the determination of BNYM(L)’s contractual entitlement to freeze the GCA assets and in particular the scope of clause 16(i). Second, it appears that the Claimants did in fact seek to raise the wider issue, or something like it, before Popplewell J. but were not permitted to because the Stati parties were not before the court. Third, it would be odd, to say the least, for this court to hold that these proceedings were an abuse of process in circumstances where the issues raised by the proceedings had been referred to it by the Belgian court. It cannot, I think, be in the public interest to frustrate the order of the Belgian court. On the contrary, comity and the public interest point to these proceedings serving a legitimate and proper purpose.’

Finally, a cursory look a the forum conveniens issue is warranted: at 58-61:

1. Mr Sprange, for the Stati parties, submitted that “England is not a proper forum for a claim against the Second to Fourth Defendants, where that claim seeks (on the Claimants’ case) to conclusively determine issues of the validity of a Belgian executory attachment, which are properly the subject of Belgian attachment law for a Belgian attachment judge to decide”.
2. Mr Malek, for the Claimants, submitted that the real dispute is not about “the validity of a Belgian executory attachment”, but rather “whether there is an obligation owed by BNYM London to RoK capable of forming the subject-matter of a Belgian attachment.” Further, he submitted that the effect of the Belgian Attachment Judge’s decision was to determine that England was the appropriate forum. Mr Malek relied upon this decision as giving rise to “an estoppel of a particular, autonomous, EU kind”; in the alternative, he submitted that it was a strong factor to be weighed in the analysis of the appropriate forum. Finally, Mr Malek submitted that the only realistic alternative to the jurisdiction of the English court would be the Belgian court, and that “the Belgian court is materially worse placed than this Court because it would be investigating matters by reference to an English-law governed contract, the GCA (so far as issues of Kazakh law, or facts in relation to the relationship between NBK and RoK, are concerned, the Belgian court enjoys no advantage over this Court).”
3. I am unable to accept Mr. Sprange’s submission. This court will not be asked to determine the validity of the conservatory attachment order made in Belgium. Rather, it will be asked to determine what, if any, assets constitute the subject-matter of that order. The Belgian Attachment Judge plainly considered that a dispute concerning the content of the attachment – which, on its terms, constitutes only such assets (if any) as are held by BNYM(L) for RoK under the GCA – is a question for this court.
4. The fact that the Belgian court has referred the dispute to this court is a cogent reason, indeed a compelling reason, for concluding that this court is a proper forum for determining the dispute. It would not be in accordance with comity to send the dispute back to Belgium. There is no need to consider Mr. Malek’s further submissions.

I quite like Ali Malek QC’s idea of “an estoppel of a particular, autonomous, EU kind”; linked to considerations of mutual trust, one assumes.

Finally, one of the defendants is based in Gribraltar and against it, (now) Article 8(2) Brussels I Recast applies, re third party proceedings. There is little to none CJEU authority. At 68 ‘I consider that the wording of article [8](2) is wide enough to encompass a situation in which a person is a proper party to a dispute between other parties to which he has a “close connection”, so long as that dispute has not been “instituted solely with the object of removing him from the jurisdiction of the court which would be competent in his case” and at 69 ‘This is a case in which “the efficacious conduct of proceedings” demands the presence of Terra Raf in this jurisdiction. I therefore find the requirements of article [8](2) to be satisfied.’

Teare J’s findings on this point also mean he need not consider (now) Article 7(5)’s jurisdiction for activities arising our of branch activity on which as I noted, I also have my doubts.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.11, Heading 2.2.14.

Glaxo Welcome v Sandoz et al  [2018] EWHC 3229 (Ch),  puts the spotlight on an important part of international forum shopping, namely discovery /disclosure, in particular collateral use of document obtained in one jurisdiction, in litigation in another. What is fundamentally at stake is that the launch of proceedings in a discovery friendly jurisdiction, may be simply employed as a jack for obtaining evidence to be used in a discovery-heavy jurisdiction.

Claimants apply for an order permitting the second claimant to use certain documents disclosed by some of the defendants (“the Sandoz Defendants”) in the claim in the English courts, in a claim in Belgium between the second claimant and Sandoz NV (“Sandoz Belgium”). The two claims are part of global litigation between members of the GlaxoSmithKline and Sandoz groups of companies. In Europe there are claims in several jurisdictions including England and Wales, The Republic of Ireland, Germany, The Netherlands and Belgium. The disclosure exercise between the claimants and the Sandoz Defendants has been very substantial. It involved the Sandoz Defendants reviewing 406,300 documents using 50 legally qualified reviewers. This led to the subsequent disclosure of slightly in excess of 75,000 documents to the claimants.

As Marsh CM notes at 11, ‘There is a marked contrast in the manner in which litigation is conducted in England and Wales on the one hand and Belgium (and most other Civil law countries) on the other hand. In England and Wales, the ability to obtain disclosure that is adverse to the other party’s claim is an important feature of litigation. However, the evidence provided in connection with the application shows that disclosure is only available in a very limited form in Belgium. One of the issues to be determined is whether disclosure obtained in this jurisdiction should be made available to a party that is engaged in litigation in a jurisdiction where disclosure, if not unknown, is very limited in scope.’

He is of course spot on: obtaining relevant documentation from the other party is not easily done in Belgium (and elsewhere) and often needs to be deduced from final filings of submissions or indeed at the hearing stage.

Relevant authority is discussed at 22 ff., and is really quite relevant: the discussion shows among others great consideration of rule of law concerns, mutual trust between EU Member States and Council of Europe parties, and the relevance of applicable law in the assessment (at 22(5): ‘The Belgian Claim proceeds under harmonised EU law as set out in the Trade Mark Directive. It follows that the English court is in a better position to consider initial relevance of the documents to the issues in the Belgian Claim than would be the case were the claim to be one brought under domestic Belgian law’).’

Final conclusion is in favour of collateral use of a substantial amount of documents. It is worth copying Marsh CM’s reasons in full: at 60:

(1)    The parties to this claim, and associated companies, are engaged in litigation on a very wide scale in many jurisdictions. They are part of very substantial businesses with equal resources. There is no suggestion that the application is oppressive.

(2)    Although the legal basis for this claim and the Belgian Claim are markedly different, there are similarities between some of the issues that are engaged.

(3)    The claimants have been able to satisfy the court that the majority of the documents they seek to use are likely to be relevant to the Belgian Claim. The interests of justice would therefore militate in favour of the claimants having an opportunity to obtain advice about their use in the Belgian Claim.

(4)    Use of the documents to enable the second claimant to consider whether, having obtained advice, a claim against additional parties should be pursued is, to my mind, more compelling than use of documents in connection with the Belgian Claim. There are no risks of adversely affecting the existing proceedings. The court should be slow to stand in the way of a party who wishes to obtain advice about pursuing a lawful course of action.

(5)    There is now an agreed procedure for the orderly progress of the appeal in Brussels with the second claimant filing an additional brief followed by Sandoz Belgium. The disruption, if any, by the introduction of additional documents has been minimised.

(6)    The number of documents the claimants seek to use is relatively small. Those that may be used in the Belgian Claim are not disproportionate in volume to what is at stake in those proceedings. There is no real danger that the Belgian Claim will be overwhelmed with additional documents even if all of them are deployed and Sandoz Belgium considers it is necessary to file additional documents to counter documents having been ‘cherry picked’ by the claimants.

(7)    The difference of approach between litigation in England and Belgium is a factor, but one of limited weight. There is no suggestion that the use of documents obtained in disclosure is an abuse of this court’s process. The risk of the Belgian Court’s process being subverted by the introduction of disclosure documents is marginal, particularly bearing in mind the involvement of the Belgian lawyers and the procedure that has been agreed.

(8)    I accept Mr Hickman’s submission in relation to the documents exhibited to Morris 7. The documents that are exhibited were extensively discussed in the witness statement which was read by the Deputy Judge. Although the claimants do not make an application for a declaration that they are permitted to use those documents as of right, the documents have been legitimately deployed for the purposes of an application heard in open court (subject only to the pro tem confidentiality order).

(9)    It is not open to the Sandoz Defendants to say, and they have not submitted, that if the order permitting use of the documents is made, their position in the Belgian Claim is prejudiced, in the sense that the likelihood of them successfully prosecuting the claim and/or defending the counterclaim is reduced. The interests of justice require that material which is likely to be relevant should be permitted for proper purposes. A reduction in their prospects of success is an immaterial consideration in their favour and, if anything, it weighs in the balance in favour of the claimant.

Geert.

I have review of Shell at the CJEU here, and final judgment in Rotterdam here. Next Thursday the hearing takes places in C-624/17 Tronex which echoes many of the issues in Shell. When, if at all, is the definition of waste triggered in a reverse logistics chain: with a focus on the relationships between the various professional parties in the chain (that the consumer is not handling waste when returning a product in these circumstances is now fairly established).

Questions referred are below.

Geert.

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

Question 1

1.    (a) Is a retailer which sends back an object returned by a consumer, or an object in its product range that has become redundant, to its supplier (namely the importer, wholesaler, distributor, producer or anyone else from whom it has obtained the object) pursuant to the agreement between the retailer and its supplier to be regarded as a holder which discards the object, within the meaning of Article 3.1 of the Framework Directive? 1

(b) Would the answer to Question 1.(1) be different if the object is one which has an easily repairable fault or defect?

(c) Would the answer to Question 1.(1) be different if the object is one which has a fault or defect of such extent or severity that it is, as a result, no longer suitable or usable for its original purpose?

Question 2

2.    (a) Is a retailer or supplier which sells on an object returned by a consumer, or an object in its product range which has become redundant, to a buyer (of residual consignments) to be regarded as a holder which discards the object, within the meaning of Article 3.1 of the Framework Directive?

(b) Is the answer to Question 2.(1) affected by the amount of the purchase price to be paid by the buyer to the retailer or supplier?

(c) Would the answer to Question 2.(1) be different if the object is one which has an easily repairable fault or defect?

(d) Would the answer to Question 2.(1) be different if the object is one which has a fault or defect of such extent or severity that it is, as a result, no longer suitable or usable for its original purpose?

Question 3

3.    (a) Is the buyer which sells on to a (foreign) third party a large consignment of goods bought from retailers and suppliers and returned by consumers, and/or goods that have become redundant, to be regarded as a holder which discards a consignment of goods, within the meaning of Article 3.1 of the Framework Directive?

(b) Is the answer to Question 3.(1) affected by the amount of the purchase price to be paid by the third party to the buyer?

(c) Would the answer to Question 3.(1) be different if the consignment of goods also contains some goods which have an easily repairable fault or defect?

(d) Would the answer to Question 3.(1) be different if the consignment of goods also contains some goods which have a fault or defect of such extent or severity that the object in question is no longer, as a result, suitable or usable for its original purpose?

(e) Is the answer to Questions 3.(3) or 3.(4) affected by the percentage of the whole consignment of the goods sold on to the third party that is made up of defective goods? If so, what percentage is the tipping point?

In [2018] EWHC 3259 (Comm) Griffin v Varouxakis, Males J gives an obiter masterclass in the (ir)relevance of indirect damage for the establishment of jurisdiction.

Objections to jurisdiction where formally dismissed on the basis that they were made late according to the relevant CPR rules. Yet Males J went on to discuss at length and obiter whether, if such objection had been made timely, it would have been successful. He suggest it would partially have been successful, for those parts of the claim based on indirect damage, and directed against a Greece domiciled defendant.

(Of immediate note is the contrast with Four Seasons v Brownlie: here indirect damage was not immediately dismissed as a jurisdictional trigger however in that case jurisdiction was to be assessed on the basis of residual English rules; Brussels I did not apply).

Claimant insurance company (“Griffin”) contends that as a result of the defendant’s conduct it has lost the right to claim general average contributions which were payable and would have been paid in London, so that the damage it has suffered was suffered in the London jurisdiction. The defendant disputes this analysis, contending that the damage in question was suffered either in the place where the underlying contract was broken or alternatively in Guernsey where Griffin is domiciled and where it would ultimately have received any general average payments. Alternatively he contends that Griffin’s claim is a “matter relating to insurance” within the meaning of Section 3 of Chapter II of the Regulation so that, in accordance with Article 14, he can only be sued in the courts of Greece where he is domiciled.

The Court reviews relevant case-law on Article 7(2) and applies it to two separate claims (particulars of which are in para 28 and para 29): for one of them only, direct damage would have been suffered in England; for the other, in Oman.

Finally at 92 ff and equally obiter Males J concludes that the litigation is not a “matter relating to insurance” within the meaning of Section 3 of Chapter II of the Recast Brussels Regulation. At 96: ‘Not all claims brought by a claimant who happens to be an insurer comprise matters relating to insurance.’ at 98: ‘neither of Griffin’s claims are matters relating to insurance. The fact that Griffin is an insurer forms part of the background to the claim and explains why the harm which Griffin has suffered is the loss of an ability to enforce a subrogated right (although insurers are not the only people who sometimes have the benefit of rights of subrogation), but that is all. In all other respects the nexus between the claim in tort and the policy is tenuous. Determination of the claim requires no consideration of the terms of the policy, which was scarcely looked at during the hearing.’ This latter suggestion goes along the Granarolo etc. judgments on the distinction between contract and tort.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2 Heading 2.2.11.2, Chapter 4, Heading 4.4 .

Case C-60/18 AS Tallinna Vesi could have been, as Advocate General Kokott noted yesterday, about much more. In particular about the exact scope of the Waste Framework Directive’s exclusion for sewage sludge and the relation between the WFD, the waste water Directive and the sewage sludge Directive. However the referring court at least for the time being sees no issue there (the AG’s comments may trigger the applicant into making it an issue, one imagines) and the AG therefore does not entertain it.

Instead the case focusses on whether waste may no longer be regarded as such only if and after it has been recovered as a product which complies with the general standards laid down as being applicable to it? And on whether, alternatively, a waste holder be permitted to request that the competent authorities decide, on a case-by-case basis and irrespective of whether any product standards are in place, whether waste is no longer to be regarded as such.

Ms Kokott emphasises the wide margin of discretion which the Member States have in implementing the Directive. End of waste criteria at the national level (in the absence of EU criteria) may not always be warranted particularly in the context of sewage sludge which is often hazardous. However precisely that need for ad hoc assessment should be mirrored by the existence of a procedure for waste operators to apply ad hoc for clarification on end of waste status.

Geert.

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

GDPR (General Data Protection Regulation) aficionados will have already seen the draft guidelines published by the EDPB – the European data protection board – on the territorial scope of the Regulation.

Of particular interest to conflicts lawyers is the Heading on the application of the ‘targeting’ criterion of GDPR’s Article 3(2). There are clear overlaps here between Brussels I, Rome I, and the GDPR and indeed the EDPB refers to relevant case-law in the ‘directed at’ criterion in Brussels and Rome.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.3, Heading 2.2.8.2.5.

Thank you MPI’s Veerle Van Den Eeckhout for pointing out a highly relevant reference to the CJEU by the Dutch Supreme Court /Hoge Raad. The link between the posted workers Directive and conflict of laws is clear, as I have also explained here. The most interesting part of the reference for conflicts lawyers, ae the questions relating to ‘cabotage’, particularly where a driver carries out work in a country where (s)he is not habitually employed (international trade lawyers will recognise the issue from i.a. NAFTA).

One to keep an eye on.

Geert.

(Handbook of) EU Private International Law, 2nd ed 2016, Chapter 3, Heading 3.2.5.