GAVC

[2019] EWHC 3340 (QB) Agbara et al v Shell Nigeria et al (thank you Adeole Yusuf for flagging) illustrates what many a conflict teacher initiates classes with. There is some, but often limited use in obtaining a judgment which subsequently cannot be enforced where the defendant’s funds are. Coppel DJ refused to enter registration of a 2010 Nigerian judgment by which claimants were awarded 15,407,777,246 Naira (approximately £33 million today) in damages in respect of the pollution of land occupied by them following the rupture of a pipeline maintained by Shell in 1969 or 1970.

Brussels Ia does not apply to recognition and enforcement of an ex-EU judgment hence the common law was applied (clearly with due deference to international comity yet the standards of natural justice nevertheless being determined by lex fori, English law). Natural justice was found to have been infringed by the proceedings at issue. This included an impossibility for Shell to cross-examine witnesses and an unusually swift completion of proceedings following the dismissal of a procedural argument made by Shell. Shell’s subsequent bumbling of the appeal via procedural mistake was not found by Coppel DJ to alter the findings of infringement of natural justice.

Obiter the factual mistakes made in the calculation of damages leading to the award and the opaque inclusion of punitive damages were also found to stand in the way of recognition and enforcement.

Geert.

With the festive season approaching, I am happy to give the floor to María Barral Martínez, currently trainee at the chambers of Advocate General Mr Manuel Campos Sánchez-Bordona for her update on Supreme et al v Shape.

On 10 December, the Den Bosch Court of Appeal delivered its judgment on the main proceedings of the Supreme et al. v SHAPE case. The case concerns a contractual dispute between Supreme (a supplier of fuels) and SHAPE (the military headquarters of NATO). Supreme signed several agreements (so-called “BOA agreements”) to supply fuels to SHAPE in the context of a military operation in Afghanistan-ISAF-, mandated by the UNSC. Supreme also signed an escrow agreement with JFCB (Allied Joint Force Command Brunssum, a military headquarters subject to SHAPE´s authority) to cover mutual potential payments after the mission/contract termination. In December 2015, Supreme instituted proceedings in the Netherlands against Shape/JFCB requesting the payment of certain costs. Moreover, Supreme sought, in the context of a second procedure, to levy an interim garnishee order targeting the escrow account in Belgium. The latter proceedings -currently before the Dutch Supreme Court- triggered a reference for a preliminary ruling (case C-186/19 « Supreme Site Services»)  as already commented in an earlier post, related to the Brussels I bis Regulation.

In the judgment on the merits, the Appellate Court addressed the Brussels I bis Regulation as well, albeit briefly. The Appellate Court asked parties whether the reference to the CJEU impacts the proceedings on the merits. Both parties were of the opinion that it was not the case. Moreover, the Court itself considered that since Shape and JFCB only invoked in their defence immunity of jurisdiction the parties had tacitly accepted the Dutch court’s jurisdiction.

In regards to the question of immunity of jurisdiction, the Dutch Appellate Court granted immunity of jurisdiction to Shape and JFCB on the basis of customary international law. It found it was inconclusive that immunity of jurisdiction in respect of Shape and JFCB flows from the provisions of the Protocol on the Status of International Military Headquarters Set up Pursuant to the North Atlantic Treaty (Paris Protocol 1952), or the Agreement on the Status of the North Atlantic Treaty Organisation (Ottawa’s Agreement).

On the role of article 6 ECHR, contrary to what the District Court ruled on the judgment under appeal, the Court of Appeal held that Supreme had a reasonable dispute settlement mechanism available to it to submit its claims. Article 6.1 ECHR therefore would not be breached.  It argued that the judge must perform a case by case analysis in order to determine whether the international organisation offers reasonable alternative means to protect the rights enshrined under article 6.1 ECHR, and if needed set aside the immunity of jurisdiction of the international organisation. The Court concluded that the Release of Funds Working Group, which was agreed by the parties to settle any possible contractual differences, can be considered, under Dutch law, as a reasonable dispute settlement mechanism and therefore, the Court has no jurisdiction.

At the public hearing in C-186/19 held in Luxembourg on 12 December, the CJEU could not hide its surprise when told by the parties that the Dutch Appellate Court had granted immunity of jurisdiction to Shape and JCFB. The judges and AG wondered whether a reply to the preliminary reference would still be of any use. One should take into account that the main point at the hearing was whether the “civil or commercial” nature of the proceedings for interim measures should be assessed in the light of the proceedings on the merits (to which interim measures are ancillary, or whether the analysis should solely address the interim relief measures themselves.

Maria.

In C‑212/18 Prato Nevoso Termo Energy the CJEU held on the not always straightforward concurrent application of the Waste Framework Directive (WFD) 98/2008 and the various Directives encouraging the uptake of renewable energy. It referred i.a. to the circular economy and to precaution.

On the face of it the economic and environmental benefits of the case may seem straightforward. Prato Nevoso operates a power plant for the production of thermal energy and electricity. It applied for authorisation to replace methane as the power source for its plant with a bioliquid, in this case a vegetable oil produced by ALSO Srl, derived from the collection and chemical treatment of used cooking oils, residues from the refining of vegetable oils and residues from the washing of the tanks in which those oils were stored. ALSO has a permit to market that oil as an ‘end-of-waste’ product within the meaning of relevant Italian law , for use in connection with the production of biodiesel, on condition that it has the physico-chemical characteristics indicated in that permit and that the commercial documents indicate ‘produced from recovered waste for use in biodiesel production’.

Prato Nevoso was refused the requested authorisation on the ground that the vegetable oil was not included in a relevant Italian list, which sets out the categories of biomass fuels that can be used in an installation producing atmospheric emissions without having to comply with the rules on the energy recovery of waste. The only vegetable oils in those categories are those from dedicated crops or produced by means of exclusively mechanical processes.

The argument subsequently brought was that the refusal violates Article 6 WFD’s rules on end-of-waste, and Article 13 of the RES Directive 2009/28. That Article essentially obliges the Member States to design administrative procedures in such a way as to support the roll-out of renewable energy.

The CJEU first of all refers to its finding in Tallina Vesi that Article 6(4) of Directive 2008/98 does not, in principle, allow a waste holder to demand the recognition of end-of-waste (EOW) status by the competent authority of the Member State or by a court of that Member State. MSs have a lot of flexibility in administering EOW in the absence of European standards. That the use of a substance derived from waste as a fuel in a plant producing atmospheric emissions is subject to the national legislation on energy recovery from waste, is therefore entirely possible (at 39). A13 of the RES Directive has no impact on that reality: that Article does not concern the regulatory procedures for the adoption of end-of-waste status criteria.

Nevertheless, the MS’ implementation of the RES Directives must not endanger the attainment of the WFD, including encouragement of the circular economy etc. and likewise, the WFD’s waste hierarchy has an impact on the RES’ objectives. A manifest error of assessment in relation to the non-compliance with the conditions set out in Article 6(1) of Directive 2008/98 could be found to be a MS violation of the Directive.

At 43: ‘It is necessary, in this case, to examine whether the Member State could, without making such an error, consider that it has not been demonstrated that the use of the vegetable oil at issue in the main proceedings, in such circumstances, allows the conclusion that the conditions laid down in that provision are met and, in particular, that that use is devoid of any possible adverse impact on the environment and human health.’ At 44:  ‘It is for the national court, which alone has jurisdiction to establish and assess the facts, to determine whether that is the case in the main proceedings and, in particular, to verify that the non-inclusion of those vegetable oils in the list of authorised fuels results from a justified application of the precautionary principle.’

At 45 ff the CJEU does give a number of indications to the national judge, suggesting that no such infringement of the precautionary principle has occurred (including the reality that specific treatment and specific uses envisaged of the waste streams, has an impact on their environmental and public health safety). At 57: It must be considered that the existence of a certain degree of scientific uncertainty regarding the environmental risks associated with a substance — such as the oils at issue in the main proceedings — ceasing to have waste status, may lead a Member State, taking into account the precautionary principle, to decide not to include that substance on the list of authorised fuels’.

An important judgment.

Geert.

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

In A v OOO “Insurance Company Chubb” [2019] EWHC 2729 (Comm), Carr J refused an ex parte application for interim relief seeking (i.a.) anti-suit and discontinuation of Russian proceedings, pro agreed arbitration in London. Defendants are domiciled at Russia, France and Switserland. At 33 ff Carr J lists five reasons for refusal, despite as readers will know the English courts’ general willingness to assist arbitration. Three of her reasons jump out: the lack of full and frank disclosure (ia relating to contractual provisions); the lack of immediate urgency requiring ex parte application; and some of the measures sought being more than just interim measures (assessment of that nature required evidence by a Russian law expert on the further continuation, if any, of Russian proceedings following anti-suit).

A good reminder that these applications are neither straightforward nor should be taken for granted.

Geert.

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

[2019] EWHC 3196 (Ch) Kinsella et al v Emasan et al is not quite as extensive an analysis on choice of court as Etihad Airways v Prof Dr Lucas Flöther which I review here.  Nevertheless the required ‘good arguable case’ standard is again responsible for the extensive discussion of the issue.

Issues are similar as under A25 BIa – in the case at issue it is the Lugano Convention (Article 23) that is engaged. Teverson M’s analysis is very much a factual, contractual one: the basis of Emasan’s (defendant, domiciled at Switzerland) jurisdiction challenge is that: it is domiciled in Switzerland; an alleged 2002 Agreement was an oral agreement which was not subject to any jurisdiction agreement; that alleged 2002 Agreement was not varied by 2006 and 2007 Deeds in such a way as to bring claims for breaches of its alleged terms within the ambit of the jurisdiction clauses contained in those later Deeds, but was superseded by them; there is no other basis upon which the jurisdiction of the English Courts is established in relation to claims based on the 2002 Agreement.

Whether choice of court was made for the 2002 agreement depended on whether A23 Lugano’s conditions were fulfilled that the agreement be made in writing or evidenced in writing; or in a form which accords with practices which the parties have established between themselves (the lex mercatoria gateway was not relevant at issue).

Every one of the written agreements made to give effect to claimant’s entitlement under the original, oral 2002 Agreement included a jurisdiction clause recognising the jurisdiction of the English Courts. A great deal of emphasis was placed on witness statements. At 101 Master Teverson holds that the agreement on jurisdiction under the 2002 agreement can properly in the circumstances of this case be regarded as evidenced by the jurisdiction clauses in the 2006 and 2007 Deeds.

Geert.

(Handbook of) European Private international law, 2nd ed. 2016, Ch.2, Heading 2.2.9

The CJEU on Thursday last week largely confirmed Saugmansdgaard ØE’s Opinion which I reviewed here, in C-421/18 Dinant Bar v maître JN, however with different emphasis than the AG. The Court insists that in accordance with Belgian law, registration with the bar association constitutes a legal obligation to which practising as a professional lawyer is subject, and that individuals wishing to practise that profession must be a member of a bar association and must comply with decisions taken by that association, notably as regards the payment of fees.

Disputes concerning those fees then are not civil and commercial and therefore not covered by Brussels I a, unless,

‘in so far as those fees constitute consideration for services freely consented to, including insurance services, which that bar association may have negotiated with a third party with a view to obtaining more advantageous terms for its lawyer members, the obligation to pay those fees would be of a contractual nature and, therefore, an action initiated with a view to ensuring that that obligation is performed would come within the scope of Article 7(1)(a) of Regulation No 1215/2012. It is for the referring court to ascertain whether that is the case in the dispute in the main proceedings’.

The AG had emphasised the factual circumstances of the case, in which the Bar had lowered the fees for maître JN to the very insurance premium only. In most cases of course Bar fees disputes probably will be about more than that and the Court’s approach may lead to split (non)applicability of Brussels Ia, in which payments for services freely consented to will have to be distinguished from those due in return for public service obligations. (Bar councils may wish to split these sums in their yearly invoice).

Geert.

Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.2.2

[2019] EWHC 3128 (Comm) Lotus v Marcassus Sport Sarl concerns the application of Articles 29-30 Brussels Ia – the lis alibi pendens rules.

Lotus, an English company, is a well-known manufacturer of cars. By a series of four written contracts entered in 2016, Lotus appointed Marcassus, a French company in the business of distributing sports cars, as a non-exclusive dealer and authorised repairer of Lotus cars in Toulouse and Bordeaux. Each of these contracts was governed by English law and provided for the non-exclusive jurisdiction of the English courts.

In September 2018 Lotus gave notice terminating one of the four agreements. It is common ground that the parties’ overall relationship thereafter terminated. Marcassus then brought proceedings in the Toulouse Commercial Court, claiming loss of profits and bonuses and seeking to enforce contractual penalties. A summons was filed with the Hussier de Justice on 21 December 2018 for onward transmission to the Foreign Process Section of the High Court for service on Lotus, summoning Lotus to appear in Toulouse on 26 March 2019. Marcassus’ claim was filed at the Toulouse Commercial Court on 7 January 2019. Lotus did indeed appear at the hearing on 26 March 2019 and has served a defence disputing the claim, but not claiming in respect of or relying on Marcassus’ non-payment of the 2018 invoices. Lotus offered to undertake not to make such a claim in the Toulouse proceedings hereafter, provided of course that these proceedings were permitted to continue. Meanwhile, on 13 March 2019, Lotus issued these proceedings claiming the amounts due under the 2018 invoices. Marcassus was served with the claim form on 24 April 2019.

Phillips J first of all (at 15 ff ) deals with the issue of which course was ‘seized’ first (compare MB v TB). Lotus contended that Marcassus’ application should fall at the first hurdle because Marcassus has not demonstrated when, if at all, the summons in the Toulouse proceedings was received by the “authority responsible for service” of that summons for the purposes of A32 Brussels Ia, and so cannot establish that the Toulouse court was seised before the English court was seised by the issue of the claim form on 13 March 2019. Marcassus’ case is that the relevant authority is the Hussier de Justice, it being accepted that he received the summons on 21 December 2018. But, in the alternative, if the relevant authority is the Foreign Process Section of the High Court (as Lotus contends), Marcassus invites the inference that it was received by that authority shortly after that date, but in any event before 13 March 2019. Marcassus points to the fact that Lotus appeared before the Toulouse court on 26 March 2019 and has taken no point on service in those proceedings.

Phillips J decides not to hold on this point given that he rejects Article 29 lis alibi pendens anyway – however he indicates he does not find Lotus’ assertion very attractive.

On Article 29, Marcassus accepted that the proceedings, whilst between the same parties, do not presently involve the same “cause of action” however argued that the court could take into account the likely future shape of the proceedings, namely, that Marcassus would seek to set-off and counterclaim the very same claims it has brought in Toulouse. This approach however cannot fly per CJEU C-111/01 Gantner, at 31: in order to determine whether there is lis pendens in relation to two disputes, account cannot be taken of the defence submissions, whatever their nature, and in particular of defence submissions alleging set-off, on which a defendant might subsequently rely when the court is definitively seised in accordance with its national law” and the Article 29 route was duly dismissed.

On Article 30, the claims were found not to be ‘related’ on grounds of Lotus having secured an exclusion of set-off in the contract (Phillips J spent some time debating whether the contract did include such clear exclusion of set-off). This clause effectively keeps the claims on various invoices at arm’s length.

Even had Article 30’s conditions been met, the case would not have been stayed on grounds that the judge (unlike in A29 cases) has discretion whether to do so. Referring to The Alexandros T, at 44: ‘it is obvious that these proceedings should be permitted to continue so that the question of whether clause 29.2 is an effective no set-off clause is determined in this jurisdiction. That issue. (sic) which does not arise in the Toulouse proceedings (limiting the extent of “relatedness”), is an issue of the interpretation of an English law contract (establishing close proximity with this jurisdiction) and can be determined speedily in a summary judgment application (indicating that the stage proceedings have reached is not a factor against this jurisdiction). Further, the parties have expressly agreed to the jurisdiction of the English courts, albeit on a non-exclusive basis.

Application dismissed.

Geert.

(Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2, Heading 2.2.14.5

In [2019] EWHC 3172 (QB) Rahmatullah and Ali v Ministry of Defence and the Foreign and Commonwealth Office claimants argue on the basis of the torts of negligence and misfeasance in public office. They are Pakistani nationals both of whom allege that they were captured by British forces in Iraq in February 2004. They contend that they were subsequently handed over to United States’ control and, thereafter, taken to Afghanistan where they were subjected to prolonged detention, torture and mistreatment.

At issue in this civil case is whether the English PIL rule of locus damni (for personal injury cases) needs to be displaced in favour of English law, by virtue of the exceptions to this rule including, all else failing, ordre public. (For the relevant text, see the judgment).

Rome I does not apply given the case clearly is one of acta iure imperii. Note that this does not, in England and Wales, displace the residual rules of the Private International Law (Miscellaneous Provisions) Act 1995.

Turner J keeps the discussion very to the point, holding that there is no reason to displace the general rule: the law of Iraq applies to the claims prior to the claimants’ rendition from Iraq to Afghanistan and that of Afghanistan thereafter. His clear application of the precedents is much enjoyable.

One particularly interesting point is raised at 34:

The claimants make the further point that transferring a detainee from one country to another in breach of Article 49 [of the Fourth Geneva Convention, GAVC] would legitimise forum shopping by illegal rendition. The defendants accepted during the course of oral submissions that circumstances could arise in which this was a legitimate concern where, for example, a detainee had been relocated in a rogue state selected for its lack of adequate legal protection for those within its geographical and jurisdictional boundaries. However, in this case there is no evidence to suggest that any consideration of the putative advantages of the application of Afghan jurisprudence lay behind the rendition decision or indeed to the effect that Afghan law would provide, as a matter of fact, a particularly suitable environment within which to achieve any such darker purpose.

Of note is also, at 29, claimants’

‘point that those in senior positions who are to be held accountable for the alleged failures under the return claim were based in England and were acting (or failing to act) in the exercise of state authority.’

An argument which, Turner J finds, has been found to be relevant in the authorities, however not striking with sufficient force in casu to meet the very high burden of proof for displacing the standard rule.

Geert.

An essentially Dutch group employs English restructuring law and has the resulting restructuring recognised in Canada. Need one say more to show that regulatory competition is alive and well and that the UK, England in particular need not fear a halt to restructuring forum shopping post Brexit.

Blakes first alerted me to the case, the Initial recognition order 2019 ONSC 5774 is here (I have not yet managed to locate the final order). Insolvency trustee PWC have a most informative document portal here. See also the Jones Day summary of the arrangements here. The main issue of contention was the so-called third party release in favour of Syncreon Canada which could have bumped into ordre public hurdles in Ontario as these clearly have an impact on the security of underlying debt. The way in which the proceeding are conducted (fair, transparent, with due consideration of minority holders etc.) clearly have an impact on this exercise.

Geert.

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

In [2019] EWHC 2766 (Ch) Vestel Elektronik v HEVC Advance and Koninklijke Philips NV, Hacon J found no jurisdiction in a stand-alone competition law damages case (no finding of infringement yet; claim is one of abuse of dominant position). He rejected the existence of jurisdiction against Philips NV (of The Netherlands) on the basis that no damage existing or potential could be shown grounding Article 7(2) Brussels Ia tortious Jurisdiction. Against the Delaware defendant, the relevant CPR rules applied per Four Seasons v Brownlie did not lead to jurisdiction either.

Geert.

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

Hot on the heels of yesterday’s post on e-collars, a short note on yet another trade and animal welfare /biodiversity case. In [2019] EWHC 2951 (Admin) Friends of Antique Cultural Treasures v Secretary of State for the environment, food and rural affairs, Justice Jay (‘Jay J’ even though correct might sound a bit too intimate) upheld the UK’s planned ban on ivory trade, stricter than anything in place elsewhere. As a general rule, the Act interdicts the sale of antique worked ivory, that is to say pre-1947 artefacts, unless one of limited exemptions is applicable.

The discussion engages CITES, pre-emption /exhaustion by harmonised EU law, the environmental guarantee of Article 193 TFEU (albeit not, oddly, the issue of notification to the EC), Article 34 TFEU, and A1P1 ECHR.

On uncertainty, Justice Jay refers to the precautionary principle: at 155: ‘we are in the realm of scientific and evidentiary uncertainty, and the need for a high level of protection. §3.1 of the Commission’s 2017 Guidance makes that explicit. Although the evidence bearing on the issues of indirect causation and demand in Far Eastern markets may be uncertain, statistically questionable, impressionistic and often anecdotal, I consider that these factors do not preclude the taking of bold and robust action in the light of the precautionary principle.’

Rosalind English has analysis here and refers even to Edmund de Waal’s novel The Hare with the Amber Eyes which has been on my reading list after my wife recommended it – this is a good reminder.

Geert.

EU environmental law (with Leonie Reins), Edward Elgar, 2018, p.28 ff., and Chapter 17 (p.308 ff).

I tweeted the judgment the day it was issued, apologies for late succinct review. I wrote a few years back on the legality of use restrictions on goods lawfully marketed in other Member States, and see also my brief review of Amsterdam’s booze bikes here. In [2019] EWHC 2813 (Admin) The Electronic Collar Manufacturers Association v Secretary of State for Environment, Food and Rural Affairs, Morris J upheld the UK Government’s ban on e-collars (a hand-held remote-controlled (not automated: a distinction that matters as Rosalind English points out) e-collar device for cats and dogs, used particularly in dogs for training purposes).

His analysis engages all the right issues in discussing the lawfulness of a ban at 204 ff under Article 34 TFEU (including consultation and commissioned research issues and of course proportionality), less focused than I would have expected perhaps on the fact that these items are lawfully marketed elsewhere in the EU, and indeed A1P1 (Article 1, first Protocol) ECHR. The remainder of the judgment discusses internal UK judicial review. An excellent primer on trade and animal welfare under EU and ECHR law.

Geert.

In [2019] EWCA Civ 2073 the Court of Appeal on Tuesday confirmed the High Court’s analysis of Vedanta. I discuss the High Court’s finding at length here. Best simply to refer to that post – readers of the CA judgment shall read Faux LJ confirming the implications of Vedanta. Note also the discussion on the limited impact of the Singaporean pre-action (particularly disclosure) proceedings: precisely because they were pre-action and not intended to at that stage launch a multiplicity of proceedings.

The Rome II argument was left untouched for appellant conceded that failure on the Vedanta point would sink the appeal.

Geert.

(Handbook of) European private international law, second ed. 2016, Chapter 8, Headings 8.3.1.1., 8.3.2; Chapter 4, Heading 4.4.

Rather than blogging my own piece on this week’s CEPS study, I am happy to reblog the analysis of one of the co-authors of my earlier paper on same. Excellent analysis with which I agree entirely.

BLING

K J Garnett

On the day before Commission President Ursula von der Leyen’s new team was voted in by the European Parliament, an independent, Brussels-based, think-thank CEPS published their third report on the Innovation Principle : ‘Study supporting the interim evaluation of the innovation principle’. With von der Leyen promising to tackle climate change and promote a European Green Deal now would be a good time to examine whether the innovation principle fits in with this vision for greater sustainability or whether its true intention is to curb Europe’s strict environmental laws?  

As lawyers we are familiar with general principles and those practicing European law are familiar with the fact that the EU applies a number of general principles : proportionality, subsidiarity, substantive & fundamental human rights, precaution,… Authority for the EU’s legal principles stems from primary law, typically the Treaties themselves or, more rarely, when the CJEU…

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Thank you Antonio Pastor for signalling Central Santa Lucia L.C. v. Meliá Hotels International S.A., litigation on which also more background here. The Spanish courts at MAllorca (appeal expected)  have declined jurisdiction  concerning confiscated property in Cuba after the end of suspension of Title III of the Libertad Act (the “Helms-Burton Act”, well known to trade and international lawyers alike) on the basis of sovereign immunity, as Antonio explains.

However as I understand Antonio’s summary (I fear I do not have Spanish to consult the judgment myself), the Court obiter also applied Article 24(1) Brussels Ia reflexively: if Brussels Ia grants exclusive jurisdiction to the courts of the Member State in which the property is situated in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, then EU Courts should decline jurisdiction if that real estate happens to be located ex-EU. Readers will remember the discussions on this issue in one or two earlier postings on this blog.

Interesting, to say the least.

Geert.

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

Sabbagh v Khoury [2019] EWHC 3004 (Comm) evidently builds upon the High Court and Court of Appeal previous judgments. Pro memoria: claimant established jurisdiction against all the defendants she wished to sue in relation to each element of her claim. Following judgment by the Court of Appeal and the refusal of permission to appeal further by the Supreme Court, the defendants had to decide whether to acknowledge service and accept the jurisdiction of the English Courts or to refuse to acknowledge service.

That jurisdiction should be debated at all was the result of claimant wanting to amend her claim, and having earlier been partially granted such permission. At 13: each defendant decided to acknowledge service and accept the jurisdiction of the English Courts but in each case they purported to qualify the terms on which they acknowledged service, hinging particularly on CPR Part 14: Admissions, and suggesting that a “concession” made on claimant’s behalf that certain Share Sale Agreements relied on by the defendants were “existent, valid and effective“, should have an impact on jurisdiction.

It is interesting to see the qualifications verbatim: at 13: ‘Thus in its letter of 26 March 2018, CMS Cameron McKenna Nabarro Olswang LLP on behalf of the Sabbagh defendants qualified their Acknowledgement of Service as being “… confined to the existing claims set out in the Claim Form, to the limited extent that the Court of Appeal accepted the English court’s jurisdiction over such claims, but subject to the numerous concessions your client has made including but not limited to her explicit abandonment of any claim to be presently entitled to or for delivery up of shares …”. Jones Day, the solicitors then acting for the first defendant similarly qualified his Acknowledgement of Service – see their letter of 26 March 2018. Baker McKenzie qualified the other Khoury defendants’ Acknowledgement of Service as being “… only in respect of the two claims as set out in the Claimant’s Claim Form … and is subject to the numerous concessions the Claimant has made to date …” and added that: “We understand that the Claimant intends to seek to amend her Particulars of Claim and our clients’ position as to whether any such amendment(s), if allowed, impact on the jurisdiction of the court over our clients as regards any claims other than those to which this Acknowledgement of Service is filed is fully reserved, including as to jurisdiction and/or the arbitrability of any such amended claims”. In the circumstances, it is probable that the amendment Baker McKenzie had in mind was one substantially in terms of the draft re-amended Particulars of Claim that had been placed before the Court of Appeal.’

At 21 ff Pelling J discusses the relationship between the amended claim, the earlier findings on jurisdiction, and the ‘concession’, leading at length eventually to hold that there was no impact of the concession on the extent of jurisdiction,

As Pelling J notes at 1 in fine: ‘Even allowing for the value at risk in this litigation all this is obviously disproportionate.’ One assumes the role of various counsel in the alleged concessions made earlier, must have had an impact on the energy with which the issue was advocated.

The case will now proceed to trial, lest there be any other jurisdictional challenges.

Geert.

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

In Clearlake Shipping Pte Ltd v Xiang Da Marine Pte Ltd [2019] EWHC 2284 (Comm) Andrew Burrows QC essentially halted an attempt by Xiang Da Marine to construct third party proceedings in Singapore so as to avoid choice of court pro England following a series of contracts relating to the chartering of a vessel.

The proceedings, which the interim anti-suit injunctions are restraining, are third party proceedings brought in Singapore by Xiang Da against Clearlake and Gunvor. Those third party proceedings have arisen in relation to an action in Singapore against Xiang Da brought by China-Base Ningbo Group Co Ltd (hereinafter ‘China-Base’). In so far as Xiang Da is liable to pay damages or otherwise suffers loss by reason of the claim brought against it by China-Base, it seeks an indemnity or contribution from Clearlake and Gunvor as third parties. (The claim by China-Base against Xiang Da in Singapore in the meantime has been discontinued. But the third party proceedings remain extant; and those third party proceedings could still be used by Xiang Da to seek to recover loss suffered by reason of the claim brought against it by China-Base.)

The judgment is best consulted for further context; RPC have analysis here, 22 Essex Street here. The judgment is a good reminder of the law on anti-suit injunctions. One can also appreciate that given privity of contract, anti-suit granted viz-a-vis third party proceedings must be treated with caution. Yet restrained application of same is a good way to discipline overly creative proceedings designed simply to circumvent choice of court (and which with respect to the third party involved are vexatious or oppressive).

Geert.

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

[2019] EWHC 3105 (Fam) P v P is a case which does not have private international law implications – and I am not a family law expert. I simply flag the issues briefly for transgender family law issues do feature repeatedly in PIL scholarship and current case may become a point of reference.

In 1990, when 34 years of age, the applicant ‘AP’ underwent gender re-assignment surgery, transitioning from female to male. It follows that he had lived as a male for nearly 19 years at the point when he married JP who is a woman, and who was born a woman. At the time of the marriage in 2009, AP had not obtained a Gender Recognition Certificate (referred to in the judgment as a ‘GRC’), and his birth certificate had not been changed; his birth certificate showed him still as a female. GRC was not in existence in 1990, at the time of the transition.

In 2017, AP contacted the Department for Work and Pensions (‘DWP’) raising queries about his pension entitlement. He was advised that his marital status could not be recognised. Despite a letter from AP’s general practitioner in 1990 confirming that AP had “now had surgery and other treatment for gender reassignment”, he was still legally female and was so at the time he purported to enter into the marriage with JP. AP understood the advice from the DWP to be that if he wished the marriage to be recognised as lawful, he would have to either obtain a declaration of validity or he would need to ‘re-marry’ her, but legally as a man.

AP therefore applied to the court to have the 2009 marriage declared lawful: “… so that I can continue to remain married to my wife. I do not wish to have my marriage declared void. This would be emotionally very distressing for us both.” 

Cobb J (concluding at 73 in fine that ‘I am conscious that this outcome will be very distressing to AP and JP’) reviews ECHR authority in particular Goodwin v UK (2002), but also the CJEU (MB v. Secretary of State for Work and Pensions; and C-673/16, Coman v Romania and in the end held that applicant’s Article 8 rights had not been infringed by the refusal of application of lawfulness, at 54 ff and summarising at 65 ff. At 66 he lists a number of initiatives applicant could have taken to make use of the UK’s provision for a legal mechanism for the recognition of the relationship of AP and JP. Absence of said provisions by the UK might have led to a finding of Article 8 ECHR breach – but availability of measures remedying the 1990 absence of GRC seem to have counted heavily to applicant’s disadvantage.

Geert.

[2019] EWHC 3107 (Comm) Etihad v Air Berlin (officially: Etihad Airways v Prof Dr Lucas Flöther, who is the insolvency practitioner for Air Berlin) raises the issues of whether the relevant dispute arises in connection with the “particular legal relationship” between the parties, as required by Article 25 Brussels Ia, and the question whether so-called “asymmetric” jurisdiction clauses fall within Article 31 of Brussels Recast, an issue which I reviewed at the time of Commerzbank v Liquimar. (This in the very week that Michiel Poesen and I received copy of Mary Footer’s edited volume on optional choice of court, with our Chapter on Belgium).

Those reading this post and the judgment had better hold on – for this is more than just a quick safety briefing – the required ‘good arguable case’ standard is responsible for the extensive discussion of the issues, perhaps not entirely in line with the instruction for conciseness per the Supreme Court in Vedanta.

Etihad acquired a 2.99% stake in Air Berlin in August 2011 and, in December 2011, increased its shareholding to 29.21% pursuant to an agreement governed by English law and contained an exclusive jurisdiction clause in favour of the English courts. Between 28 and 30 April 2017, Etihad entered into a number of agreements for the purposes of providing Air Berlin with financial support. One of these was a facility agreement which contains the discussed jurisdiction clause:

33.1 JURISDICTION 

33.1.1 The courts of England have exclusive jurisdiction to settle any disputes arising out of or in connection with this Agreement (including a dispute relating to non-contractual obligations arising from or in connection with this Agreement, or a dispute regarding the existence, validity or termination of this Agreement) (a “Dispute“).

33.2.2 The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

33.1.3 This Clause 33 is for the benefit of the Lender only. As a result, the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.

In a letter dated 28 April 2017 from Mr James Hogan, the then President and CEO of Etihad Aviation Group PJSC, to the directors of Air Berlin (the “Comfort Letter”), which provided as follows: 

“For the purposes of the finalisation of the financial statements of Air Berlin plc for the year ended 31 December 2016, having had sight of your forecasts for the two years ending 31 December 2018, we confirm our intention to continue to provide the necessary support to Air Berlin to enable it to meet its financial obligations as they fall due for payment for the foreseeable future and in any event for 18 months from the date of this letter. Our commitment is evidenced by our historic support through loans and obtaining financing for Air Berlin”.

In German proceedings, started first, Air Berlin advances two alternative claims against Etihad under German Law: i) A claim for breach of the Comfort Letter on the basis that the Comfort Letter is legally binding. ii) Alternatively, if the Comfort Letter is not legally binding, a pre contractual claim in culpa in contrahendo, on the basis that Etihad used its negotiating power during the negotiations between the parties to avoid providing a clearly binding statement whilst, at the same time, inspiring the trust of Air Berlin that it would adhere to the commitment in the Comfort Letter.

Clearly Air Berlin considers the comfort letter a separate ‘agreement’ or ‘contract’ to which the widely formulated choice of court and law provisions of the Facility Agreement do not apply.

In the English proceedings, Etihad seeks the following declarations:

a) The claims made and declarations sought in the German Proceedings are subject to the exclusive jurisdiction of the English court within Article 25 of the Judgments Regulation, because, on its true construction, they are within the scope of the exclusive jurisdiction clause contained in the 2017 €350m Facility Agreement (the one with the jurisdiction clause discussed above);

b) The claims made and declarations sought in the German Proceedings are governed by English Law on the true construction of the governing law clause in the Facility Agreement, an implied agreement between the same parties and/or the application of Rome I and/or Rome II;

c) The Claimant is not liable for breach of the Comfort Letter, as alleged in the German Proceedings, because that letter, on its true construction, did not create a legally binding promise to provide financial support to Air Berlin;

d) The Claimant is not liable on the basis of culpa in contrahendo, as alleged in the German Proceedings, because the facts and matters relied on in the German Proceedings do not give rise to a cause of action known to English law; and

e) Further, and in any event, the Claimant is not liable to the Defendant as alleged by the Defendant in the German Proceedings.

On Article 25 the list of authority was of course very long. On Article 31, reference was made for background in particular to Commerzbank AG v Liquimar Tankers Management Inc. in which Cranston J supported as I discussed at the time, the cover of asymmetric choice of court by Article 31.

On Article 25, the

I. first point to discuss

was whether the choice of court agreement in the facilities agreement extended to the comfort letter. Etihad puts forward adopting the broad, purposive and commercial approach to interpreting such clauses which it suggests has been mandated by the English authorities, concluding the dispute arises out of or in connection with that agreement. Air Berlin emphasises that application of the standard of proof must take into account the EU law requirement that an exclusive jurisdiction clause under Article 25 must be “clearly and precisely” demonstrated.

At 56 ff Jacobs J first reiterates the jurisdiction clause relied upon, contained in the Facility Agreement, which is expressly governed by English law. Clause 32 of that agreement provides: “This Agreement and all non-contractual obligations arising from or connected with it are governed by English law”. The question of whether, as a matter of contractual interpretation, the clause conferring jurisdiction extends to claims in respect of the Comfort Letter and the related claims advanced in the German proceedings is to be determined by reference to English law. This may surprise uninitiated readers first reading Article 25 and relevant recitals, however to those with conflicts insight it will be well known that Article 25 merely scratches on the surface of the contractual depth of choice of court. 

At 69 he sums up the principles (with reference to Fiona Trust), discusses them at length, and summarises at 102:

(i) the width of the jurisdiction clause in the Facility Agreement, (ii) the fact that the Comfort Letter was part of the overall support package where all relevant agreements between Etihad and Air Berlin were governed by English law with English jurisdiction clauses, (iii) the close connection between the Comfort Letter and the Facility Agreement in terms of the genesis of the Comfort Letter, (iv) Etihad’s good arguable case that the Comfort Letter did not create contractually binding obligations and was ancillary to the Facility Agreement, (v) the absence of any competing jurisdiction clause in any of the agreements within the support package, and the existence of English law and jurisdiction clauses in the relevant agreements as part of that package, and (vi) the reasonable foreseeability of disputes which required consideration of the Comfort Letter in conjunction with the Facility Agreement – all lead to the conclusion that the parties intended disputes arising in relation to the Comfort Letter to fall within the jurisdiction clause of the Facility Agreement.

Conclusion on this issue, at 109: ‘interpreting the jurisdiction agreement in the Facility Agreement as a matter of English law, there is a good arguable case that (i) the jurisdiction clause in the Facility Agreement is applicable to the Comfort Letter and any non-contractual claim in connection therewith, and (ii) the claim commenced by Air Berlin in Germany falls within the scope of that clause.’

On Article 25, the

I. second point to discuss at 110 ff was the requirement in Article 25 for the dispute to arise “in connection with a particular legal relationship” – a condition which Etihad must meet separately from the above conclusion that as a matter of English law, the claims made in Germany fell within the scope of the jurisdiction agreement in the Facility Agreement. Arguments here to some extent overlap with the strength or otherwise of the connection between the Facility Agreement and the Comfort Letter, discussed above. Reference here clearly was made to Airbus and the CJEU in Powell Duffryn. In the latter the CJEU held ‘”This requirement aims to limit the effect of an agreement conferring jurisdiction to disputes originating from the legal relationship in connection with which the agreement was concluded. It seeks to prevent a party from being surprised by the referral to a specified court of all disputes which arise in the relationships which it has with the other party and which may originate in relationships other than that in connection with which the agreement conferring jurisdiction was concluded”. The principles of Powel Duffryn were also followed in the equally seminal CDC case.

At 134 ff Jacobs J dismisses the argument that the way in which a particular claim is formulated in the foreign proceedings is determinative of the issue of whether the dispute arises in relation to a particular relationship. Rather: ‘it is obviously necessary to look at the nature of the claim made in those foreign proceedings. It is clear that what is then required is for the court to consider the substance of the claim that is made.’ At 136 ff he lists the arguments leading him to the conclusion that there is ‘no doubt that the dispute concerning the Comfort Letter can fairly (and certainly to a good arguable case standard) be said to originate from [the borrower /lender] relationship.’

The final issue to consider then was Article 31(2): “2. Without prejudice to Article 26, where a court of a Member State on which an agreement as referred to in Article 25 confers exclusive jurisdiction is seised, any court of another Member State shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement.”

The issue is therefore whether the jurisdiction clause in the present case is a clause which “confers exclusive jurisdiction” within the meaning of Article 31(2). A related question is whether the English court can properly be described as being “seised on the basis of” such exclusive jurisdiction agreement within the meaning of Article 31 (2). Air Berlin says “no” to both questions (on the first, purely on the basis of the clause being asymmetric), and Etihad says “yes”.

Reference is made to Codere, Commerzbank, leading to a firm finding that the clause is exclusive in casu, for it is (in prof Fentimann’s words) ‘exclusive against a counterparty’ and in Louise Mellett’s words (ICLQ, referenced in the judgment)

‘”In an asymmetric agreement, the borrower has promised not to sue anywhere other than the chosen jurisdiction. The question of whether the other party did or did not agree to do the same does not arise when the bank is seeking to enforce the agreement and should be irrelevant. Thus, the point is not so much that “considered as a whole” [asymmetric agreements] are agreements conferring exclusive jurisdiction, as the judge put it in Commerzbank. Rather, each obligation can be considered on its own; the clause includes a promise by the borrower not to sue in any jurisdiction and that promise is capable of being protected by Article 31(2). Each different obligation necessarily falls to be considered separately and the fact that the bank is not under a similar obligation is neither here nor there.”

(Further scholarship discussed includes Dickinson and Lein, and Ahmed; the Hague Convention is also discussed, with reference to Clearlake, on which I have review forthcoming next Monday: I shall update the link once I have posted).

Reference to the CJEU on the Article 31 issue, requested by Air Berlin, is dismissed, something which may have to be reconsidered by the Court of Appeal. But even on the Article 25 discussion (I am thinking in particular of the relevance or not of the formulation of the claim), more CJEU authority in my view would be welcome.

Geert.

(Handbook of) European Private international law, 2nd ed. 2016, Ch.2, Heading 2.2.9, Heading 2.2.9.4.1, Heading 2.2.9.5.

A quick note on Hiscox v Weyerhaeuser [2019] EWHC 2671 (Comm), in which Knowles J was asked to continue an anti-suit injunction restraining Weyerhaeuser from continuing proceedings in the US courts and ordering parties to turn to arbitration. He obliged.

In April 2018 Weyerhaeuser filed proceedings in the US District Court (Western District of Washington at Seattle)for a declaratory judgment in respect of certain of its insurance excess policies in the tower of excess liability. Weyerhaeuser sought, among other things, a declaration that there is no valid arbitration agreement applicable to any coverage disputes between itself and various defendant insurers and that the US District Court is the appropriate forum for any such disputes.

Knowles J lists the various proceedings pending in the US however particularly in the light of all parties being established businesses, is not impressed by arguments of comity or fairness to restrain the English courts from further involvement in the matter. He expresses the hope and expectation that the US courts will come to the same conclusion as himself, in light of the contractual provisions.

Geert.

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