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In Weco Projects APS v Piana & Ors [2020] EWHC 2150 (Comm),  Hancock J held on a case involving Brussel Ia’s consumer title, including the notion of contract of ‘transport’, Article 25’s choice of court regime, and anchor jurisdiction under Article 8(1) BIa.

The facts of the case are complex if not necessarily complicated. However the presence of a variety of parties in the chain of events led to litigation across the EU. Most suited therefore to be, as WordPress tell me, the 1000th post on the blog.

For the chain of events, reference is best made to the judgment itself. In short, a Yacht booking note, with choice of court and choice of law was made for the Yacht to be carried from Antigua to Genoa. Reference was also made to more or less identical standard terms of a relevant trade association. A clause was later agreed with the identity of the preferred Vessel to carry out the transfer, followed by subcontracting by way of a Waybill.

The Yacht was lost at sea. Various proceedings were started in Milan (seized first), Genoa and England.

At 21, Hancock J first holds obiter that express clauses in the contract have preference over incorporated ones (these referred to the trade association’s model contract), including for choice of court. Readers will probably be aware that  for choice of law, Rome I has a contested provision on ‘incorporation by reference’, although there is no such provision in BIa.

Next comes the issue of lis alibi pendens. Of particular note viz A31(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’] is the presence of two prima facie valid but competing exclusive choice of court agreements. Hancock J proceeds to discuss the validity of the English choice of court agreement in particular whether the businessman whose interest in sailing initiated the whole event, can be considered a consumer.

The judge begins by discussing whether the contract concerned is one of mere ‘transport’ which by virtue of A17(3) BIa rules out the consumer title all together. At 37 it is concluded that the contract is indeed one of transport and at 37(8) obiter that freight forwarding, too, is ‘transport’. Hancock J notes the limited use of CJEU authority, including Pammer /Alpenhof. In nearly all of the authority, the issue is whether the contracts at issue concerned more than just transport, ‘transport’ itself left largely undiscussed.

Obiter at 75, with reference to CJEU Gruber and Schrems, and also to Baker J in Ramona v Reliantco, Hancock J holds that Mr Piana had failed to show that the business use of the Yacht was merely negligible.

Following this conclusion the discussion turns to the impact of the UK’s implementation of the EU’s unfair terms in consumer contracts regulations, with counsel suggesting that the impact of these is debatable, in light of A25 BIa’s attempt at harmonising validity of choice of court. Readers will be aware that A25’s attempt at harmonisation is incomplete, given its deference to lex fori prorogati). Hancock J does not settle that issue, holding at 111 that in any event the clause is not unfair viz the UK rules.

Next follows the Article 8(1) discussion with reference to CJEU CDC and to the High Court in Media Saturn. Hancock J takes an unintensive approach to the various conditions: they need to be fulfilled without the court at the jurisdictional stage getting too intensively caught up in discussing the merits. At 139 he justifiably dismisses the suggestion that there is a separate criterion of foreseeability in A8(1). On whether the various claims for negative declaratory relief are ‘so closely connected’, he holds they are on the basis of the factuality of each being much the same and therefore best held by one court. Abuse of process, too, is ruled out per Kolomoisky and Vedanta: at 143: there is no abuse of process in bringing proceedings which are arguable for the purposes of founding jurisdiction over other parties.

(The judgment continues with extensive contractual review of parties hoping to rely on various choice of court provisions in the chain).

Quite an interesting set of Brussels Ia issues.

Geert.

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

On 10 August 2020, the European Commission launched a public consultation on Regulation 805/2004 creating a European Enforcement Order for uncontested claims (“the EEO Regulation”).

The consultation is carried out in the framework of an ongoing evaluation of the EEO Regulation.

In this context, the European Commission “seeks opinions on how the Regulation is working, also with regard to the revised Brussels I Regulation (Regulation 1215/2012). It also aims to collect practical experiences with the EEO Regulation, and attitudes towards its use in the future”.

The consultation is open until 20 November 2020 (midnight Brussels time) and can be found here.

Applications are now open for three- to six-month legal internships at the HCCH Permanent Bureau in The Hague, for the period from January to June 2021.

Interns work with our legal teams in the areas of family & child protection law, legal cooperation, dispute resolution, commercial & financial law. It’s a great way to gain practical experience, deepen your knowledge of private international law, and to understand how the HCCH functions.

Due to the current global situation and the associated travel limitations and restrictions, the Permanent Bureau of the HCCH may consider the possibility that internships be carried out remotely. Interns may also be eligible for a monthly stipend.

We encourage you to share this opportunity with law students and graduates within your networks.

Applications close on 30 September 2020. For more information, please visit the Internships page of the HCCH website.

This post is published by the Permanent Bureau of the Hague Conference of Private International Law (HCCH). 

Elections

As reported in this blog, the CJEU gave on 9 July 2020 its long-awaited judgment in VKI v Volkswagen (Case C-343/19). It ruled that the buyers of VW cars equipped with emissions test defeat devices can sue the manufacturer at the place where they had purchased the cars.

This result, which is broadly in line with the conclusions of the Advocate General, was hardly surprising. Nevertheless, a number of questions remain.

The first and most urgent of these is what the CJEU means by the “place of purchase”. The Austrian court that submitted the reference for a preliminary ruling had identified three different places that could meet this description: (1) the place where the contract to purchase  the cars had been concluded, (2) the place where the purchase price had been paid, and (3) the place where the transfer or delivery of the vehicles had taken place (see para 10 of the judgment). In the dispute at hand, all three places happened to be located in the same district, but this will not be the case universally. In cases where they are different, which of these three places is the CJEU referring to?

The second question relates to the extent to which competent court will be foreseeable. The CJEU reasoned that the manufacturer must have anticipated that damage will occur at the place of purchase, as it knowingly contravened the statutory requirements imposed on it at this location (para 37). But this place of damage is foreseeable only on the assumption that VW will always market the vehicles in the country of purchase. That the place of acquisition and the place of marketing can differ is illustrated by Article 5(1)(b) Rome II Regulation.

Third, one may harbour doubts about the CJEU’s argument that the tribunal at the place of purchase is best placed to carry out the assessment of damage (para 38). Proximity and the sound administration of justice would rather have suggested concentrating all cases in the court of the place of the manufacturer. The Court passed in silence over the main justification for locating jurisdiction over the tort in Austria; namely, the advantage to the tort victims in sparing them and their assignee the need to bring their claims in the home jurisdiction of the manufacturer, i.e. in Germany.

Fourth, it is unclear why the CJEU spent so much effort diffusing the referring court’s idea that the damage was “purely financial”. The Court of Justice was at great pains to make clear that the present case concerns material damage because the buyers received a vehicle with a defect (paras 32-35). Yet it did not draw any conclusions from this characterisation; in particular, it did not locate the damage at the place where the car had been used or registered. Instead, the Court abstracted from the vehicles and referred to the place of purchase, where the only loss incurred was…ehm…financial.

Fifth, it is a mystery why the CJEU – in holding that the damage occurred at the place of purchase for the purposes of Article 7 no 2 Brussels I bis Regulation – drew an analogy to the rules on unfair competition in Article 6(1) Rome II Regulation (para 39). The present case was not about unfair competition. Instead, the claimant brought a number of damages claims for defective vehicles.

Similarly, the situation was also quite different from the case of VKI v Amazon to which the Court of Justice referred. In that case, VKI had claimed in its own right when it applied for an injunction to restrain the use of unfair contract terms under the national law transposing Directive 2009/22/EC; whereas in the present case, it now brought a number of individual claims that had been assigned to it. It is true that the CJEU had ruled in VKI v Amazon that collective and individual claims must be treated under the same law. Yet this statement was made in the context of the validity of standard contract terms; it does not nearly have the same force with regard to damages claims. Even under the Court of Justice’s own standard in the new VW case, the latter will be judged under different laws and by different courts, depending on the country in which the vehicles were purchased.

The place of purchase that the CJEU identifies as the place where the damage occurred may be fortuitous, is subject to possible manipulation, and can hardly be determined in the case of e-commerce. It would have been more convincing to take into account other circumstances, such as the place of habitual residence of the purchasers, the place where they used the vehicle, and the place of marketing, as already suggested in this blog. Advocate General Sánchez Bordona had also suggested a combination of the place of purchase and the place of marketing. Only a holistic approach can properly balance the interests of the claimant and the defendant.

Trevor Hartley (London School of Economics) has published the 3rd edition of his textbook on International Commercial Litigation.

The book combines extensive texts presenting the topics discussed and extracts from cases and legislative materials (European regulations, international conventions, national acts). It is a mix of a textbook and a casebook.

As its title suggests, the focus of the book is on international civil procedure. It presents in depth issues of jurisdiction and foreign jugdments, but also freezing assets and the taking of evidence abroad. As its title does not suggest, the last part of the book also covers choice of law, and offers an in depth treatment of choice of law in contracts, torts and property.

The book is remarkable by the comparative stance that it takes on all the topics that the covers. It systematically presents the position in the EU, in England and in the U.S. It also sometimes includes cases and materials from other common law jurisdictions such as Canada.

Taking a fresh and modern approach to the subject, this fully revised and restructured textbook provides everything necessary to gain a good understanding of international commercial litigation. Adopting a comparative stance, it provides extensive coverage of US and Commonwealth law, in addition to the core areas of English and EU law. Extracts from key cases and legislative acts are designed to meet the practical requirements of litigators as well as explaining the ideas behind legal provisions. Significant updates include coverage of new case-law from the Court of Justice of the European Union. Of particular importance has been a set of judgments on jurisdiction in tort for pure financial loss, many of which have involved investment loss. New case law from the English courts, including the Supreme Court, and from the Supreme Court of the United States, is also covered.

Early July the Dutch Supreme Court followed-up on CJEU C–535/17 NK v BNP Paribas Fortis re the Peeters /Gatzen suit – a judgment I covered here. Roel Verheyden has additional analysis of the SC ruling, in Dutch, here. The SC held that the Dutch courts do not have jurisdiction, identifying Belgium as the Erfolgort per CJEU Marinari and Kolassa. As Roel notes, the SC (other than its AG) attention to potential ‘specific factors’ suggesting The Netherlands as an Erfolgort, is underwhelming and may lead to a general conclusion that Dutch Insolvency practitioners applying the Peeters /Gatzen suit to foreign parties while have to sue these abroad – leading to potential issues in the governing law itself and a disappearance of Peeters /Gatzen altogether.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.4.1, Heading 5.7.

Erfolgsort bij Peeters/Gatzen-vordering

Mark C. Weidemaier (University of North Carolina School Law) and G. Mitu Gulati (Duke Law School) have posted Unlawfully-Issued Sovereign Debt on SSRN.

The abstract reads:

In 2016, its economy in shambles and looking to defer payment on its debts, the Venezuelan government of Nicolás Maduro proposed a multi-billion dollar debt swap to holders of bonds issued by the government’s crown jewel, state-owned oil company Petroleós de Venezuela S.A. (“PDVSA”). A new government now challenges that bond issuance, arguing it was unlawful under Venezuelan law. Bondholders counter that this does not matter—that PDVSA freed itself of any borrowing limits by agreeing to a choice-of-law clause designating New York law.

The dispute over the PDVSA 2020 bonds implicates a common problem. Sovereign nations borrow under constraints imposed by their own laws. Loans that violate these constraints may be deemed invalid. Does an international bond—i.e., one expressly made subject to the law of a different jurisdiction—protect investors against that risk? The answer depends on the text of the loan’s choice-of-law clause, as interpreted against the backdrop of the forum’s rules for resolving conflict of laws problems.

We show that the choice-of-law clauses in many international sovereign bonds—especially when issued under New York law—use language that may expose investors to greater risk. We document the frequent use of “carve outs” that could be interpreted to require the application of the sovereign’s local law to a wide range of issues. If interpreted in this way, these clauses materially reduce the protection ostensibly offered by an international bond. We explain why we think a narrower interpretation is more appropriate.

Contrôle judiciaire

Détention provisoire - Covid -19

Extradition - détention provisoire

Written by Mayela Celis – The comments below are based on the author’s doctoral thesis entitled “The Child Abduction Convention – four decades of evolutive interpretation” at UNED (forthcoming)

As indicated in a previous post, the comments on the HCCH Guide to Good Practice on the grave-risk exception (Art. 13(1)(b)) under the Child Abduction Convention (subsequently, Guide to Good Practice or Guide) will be divided into two posts. In a previous post, I analysed the Guide exclusively through the lens of human rights. In the present post, I will comment on some specific legal issues of the Guide but will also touch upon on some aspects of human rights law.

Please refer to Part I. All the caveats mentioned in that post also apply here.

The Guide to Good Practice is available here.

I would like to touch upon three topics in this post: 1) the examples of assertions that can be raised under Article 13(1)(b) and their categorisation; 2) measures of protection and 3) domestic violence.

1) One of the great accomplishments of the Guide to Good Practice is the categorisation of the examples of assertions that can be raised under Article 13(1)(b) of the Child Abduction Convention. While at first sight the categorisation may appear to be too simplistic, it is very well thought through and encompasses a wide range of scenarios.

I include below the assertions as stated in the Guide:

Examples of assertions that can be raised under Article 13(1)(b)
a. Domestic violence against the child and / or the taking parent
b. Economic or developmental disadvantages to the child upon return
c. Risks associated with circumstances in the State of habitual residence
d. Risks associated with the child’s health
e. The child’s separation from the taking parent, where the taking parent would be unable or unwilling to return to the State of habitual residence of the child
    i. Criminal prosecution against the taking parent in the State of habitual residence of the child due to wrongful removal or retention
    ii. Immigration issues faced by the taking parent
    iii. Lack of effective access to justice in the State of habitual residence
    iv. Medical or family reasons concerning the taking parent
    v. Unequivocal refusal to return
f. Separation from the child’s sibling(s)

Nevertheless, while this categorisation is very comprehensive, there are a few matters that are mentioned only very briefly in the Guide and could have benefited from a more in-depth discussion. One of them is the extensive case law on what constitutes “zone of war” or a place where there is conflict. See footnotes 88 and 89 of the Guide under the heading c. Risks associated with circumstances in the State of habitual residence.

Perhaps due to political sensitivities, it would be hard to pinpoint in the Guide jurisdictions that have been discussed by the courts as possibly being a “zone of war”. Among these are Israel (most of the case law), Monterrey (Mexico – during the war on drugs) and Venezuela. See for example: Silverman v. Silverman, 338 F.3d 886 (8th Cir. 2003) [INCADAT reference: HC/E/USf 530] (United States); Kilah v. Director-General, Department of Community Services [2008] FamCAFC 81 [INCADAT reference: HC/E/AU 995] (Australia) and other references in footnotes 88 and 89 of the Guide.

Some of course may argue that “zone of war” is a gloss on the Convention and that as such it should not be analysed. However, one may also describe such situations without labelling them as “zone of war”, such as a State where there is conflict, be it military, social, political, etc. Perhaps this could have been expanded under the heading c. Risks associated with circumstances in the State of habitual residence of the Guide referred to above.

While the “zone of war” exception has hardly been successful, it would have been beneficial to discuss some of the arguments set forth by the parties such as: the fluctuation of violence throughout the years, terrorist attacks, a negative travel advice by a government concerning the State of habitual residence of the child, the specific place where the family lives and the risks of terrorism, the violence of drug cartels, and the fact of being a political refugee in the State where the child was abducted. The negative travel advice is particularly apposite to our times of Covid-19 as that would have given some guidance to the courts.

Another assertion made under Article 13(1)(b) of the Child Abduction Convention that could have been analysed in more depth by the Guide – perhaps under a. Domestic violence against the child and/or the taking parent – is the sexual abuse of children. The Guide includes very brief references to sexual abuse in the glossary, paragraphs 38 and 57, and footnote 76.

Undoubtedly, sexual abuse is a terrible and unbearable experience for children but it is still a taboo to single out this topic, let alone explain the current trends existing in the case law when this issue has been raised. Nevertheless, from my research there seems to be a very clear distinction in the case law: when the sexual abuse has been raised in the State of habitual residence and no action or insufficient action was taken by such authorities, and there is evidence of sexual abuse, the State where the child has been abducted tends to reject the return of the child to his or her State of habitual residence. In cases where this is not the case, the child is ordered back to the State of habitual residence, often with measures of protection. See for example: the multiple-layered decisions in the case of Danaipour v. McLarey, see for example the decision Danaipour v. McLarey, 386 F.3d 289 (1st Cir. 2004) [INCADAT reference: HC/E/USf 597] (United States). This brings us to:

2) The second topic of this post: measures of protection (also referred to as protective measures). The paragraphs dedicated to this topic in the Guide are 43-48. The Guide is absolutely at the forefront of the latest developments and social research on the effectiveness of measures of protection. It has answered the call of many professors/scholars and practitioners, who have cautioned about the indiscriminate use of measures of protection, in particular of undertakings, when the person causing the violence is known to infringe orders and not to heed the warnings of the courts. The Guide is to be commended for this great step forward.

The Guide defines undertakings as follows: “an undertaking is a voluntary promise, commitment or assurance given by a natural person – in general, the left-behind parent – to a court to do, or not to do, certain things. Courts in certain jurisdictions will accept, or even require, undertakings from the left-behind parent in relation to the return of a child. An undertaking formally given to a court in the requested jurisdiction in the context of return proceedings may or may not be enforceable in the State to which the child will be returned.” Because undertakings are a voluntary promise, their enforcement is fraught with problems, especially if the left-behind parent refuses to comply once the child has been returned. Where the primary carer (usually the mother) returns with the child to a “domestic violence” situation and it is not possible to enforce undertakings, both the mother and the child may be subject to a grave risk of harm. For more information, see Taryn Lindhorst, Jeffrey L. Edleson. Battered Women, Their Children, and International Law: The Unintended Consequences of the Hague Child Abduction Convention (Boston: Northeastern University Press, 2012). This leads us to:

3) The third topic of this post: domestic violence. Many claim that domestic violence is a human rights violation. In a wider context, there is indeed a correlation between domestic violence and human rights and this has been recognised by resolutions of the United Nations Committee on the Elimination of Discrimination against Women (CEDAW) and the judgment of the European Court of Human Rights. See for example AT (Ms) v. Hungary, (Decision) CEDAW Committee and Opuz v. Turkey (Application No. 33401/02), respectively.

While the issue of domestic violence in the context of Article 13(1)(b) of the Child Abduction Convention was the one topic that sparked concern among the Contracting States to the Child Abduction Convention, as well as judges and the legal profession alike, the Guide only dedicates a few paragraphs to it. See paragraphs 57-59 of the Guide. It also arrives at a conclusion, which raises some doubts.

In particular, the Guide states that “Evidence of the existence of a situation of domestic violence, in and of itself, is therefore not sufficient to establish the existence of a grave risk to the child.” There are a few problems with such a statement. Domestic violence comes in different shapes and sizes and the level of violence can be high or low. This statement is a “one-size-fits-all” and thus is necessarily flawed. In addition, it does not say what it means by “in and of itself”, does it mean prima facie? Also, it does not elaborate on what is necessary to invoke and substantiate domestic violence in order for this assertion to be considered sufficient. It also appears to set a standard of proof when it says that it “is not sufficient”, which might perhaps not be appropriate for a soft law instrument, such as a Guide to Good Practice, to do.

Some scholars have analysed and criticised this statement of the Guide. In particular, Rhona Schuz and Merle H. Weiner in the following article “A Small Change That Matters: The Article 13(1)(b) Guide to Good Practice” (Family Law LexisNexis©, January 2020) I refer to their arguments and prefer not to replicate them in this post.

Despite the weakness mentioned above and in Part I of this post, I believe that this Guide would be of great benefit to the legal profession.

Having all the above in mind, I would like to conclude with some words of the renowned American judge Richard Posner: “[t]here is a difference between the law on the books and the law as it is actually applied, and nowhere is the difference as great as in domestic relations.” (Van De Sande v. Van De Sande, 431 F.3d 567 (7th Cir. 2005) [INCADAT reference: HC/E/USf 812] (United States)).