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The Hague Academy of International Law announced the extension of the deadline to apply for the 2021 Centre for Studies and Research (postponement of the 2020 edition) until 1 September 2020. The programme will take place between 16 August and 3 September 2021 and will focus on the topic of Applicable Law Issues in International Arbitration.

The programme description reads:

International arbitration has long been the most successful method for settling all kinds of international commercial disputes, and still is – notwithstanding the surrounding criticism – the leading method for settling disputes between foreign investors and the host state. One of the characteristics of international arbitration is that it to a large extent relies on an international or transnational legal framework. The effects of arbitration agreements and of arbitral awards, as well as the role of the courts regarding arbitration agreements and awards, are regulated in international conventions such as the New York or the ICSID Conventions. Furthermore, although there is room for specificities of national law, commercial arbitration acts are largely harmonised especially through the impact of the UNCITRAL Model Law. Similarly, even if arbitral institutions try to distinguish one from each other by providing for some specific tools, the essential content of arbitration rules does not vary. It can be said, consequently, that the transnational framework of arbitration is intended to create to the extent possible an autonomous system of dispute resolution, which can be applied in a uniform way irrespective of the country in which the proceedings take place or the award is sought enforced. The procedural autonomy of arbitration may also have an impact on how arbitral tribunals relate to the substance of the dispute.

As arbitral awards are final and binding, and domestic courts and ICSID annulment committees do not have the power to review them in the merits, arbitral tribunals enjoy a considerable flexibility in selecting and applying the rules of law applicable to the dispute, even though they are constrained to respect the will of the parties. Legal literature has strongly emphasized that this flexibility creates an expectation of delocalization: both from the procedural and from the substantive point of view, arbitration is described as a method for settling disputes that strives for uniformity on a transnational level and should not be subject to national laws. The autonomy and flexibility of arbitration, however, are not absolute. The international instruments that regulate arbitration either make, in some contexts, reference to national law or call for the application of (general or concrete) international law. Also, they do not cover all aspects of arbitration, thus leaving room for national regulation. Additionally, the restricted role that courts and ICSID ad hoc committees have in arbitration does not completely exclude that national law may have an impact. While court and committee control is not a review in the merits, application of the parameters for validity or enforceability of an award, even where these parameters are harmonised, may depend on national regulation.

Importantly, the definition of what disputes are arbitrable is left to national law. While the scope of arbitrability has been significantly expanded starting from the last two decades of the last century, there are signs now that it may be restricting. The scope of arbitrability may be looked upon as a measure of the trust that the legal system has in arbitration. From another perspective, it may represent the way in which States approach the settlement of international commercial disputes: intending to keep an exclusive power by means of the exclusion of private deciders, or adopting the role of controllers of the regularity of arbitration. As far as investment arbitration is specifically concerned, it is well known that States’ attitudes are diverse and may change from time to time. In both cases, States’ policy choices may have an impact on applicable law issues.

All the foregoing considerations, succinctly exposed, are the frame for the present topic. On such a basis, it is possible to develop two lists of issues to be individually addressed. The first list deals with the fundamental aspects of the topic. Among the issues included therein, some refer to all types of arbitration, while others are rather specific to either commercial or investment arbitration. The second list responds to the fact that the applicable law is not necessarily unitary. Indeed, according to the principle of severability, a different law may apply to the procedural aspects and to the substantive aspects of the dispute, and within these two categories there are further possibilities for severing the applicable law. Thus, one can wonder to which issues is it appropriate to apply international sources of law, to which issues is it appropriate to apply soft sources of law, to which is it appropriate to apply national sources of law, and to which issues is it appropriate to apply (or to create) transnational standards. Or a combination of these sources? On which basis may this selection be made, and what are its effects on the autonomy of arbitration, on the expectations of the parties and on the credibility and legitimacy of arbitration as an out-of-court judicial system that enjoys enforceability?

The Directors of Research, Prof. Giuditta Cordero-Moss (University of Oslo) and Prof. Diego Fernández Arroyo (Sciences Po, Paris), invite applications from researchers including students in the final phase of their doctoral studies, holders of advanced degrees in law, political science, or other related disciplines, early-stage professors and legal practitioners. Applicants should identify the specific topic on which they intend to write. Participants will be selected during the fall of 2020, and will convene at The Hague during the programme period to finalize their papers. The best articles will be included in a book to be published in the fall of 2022.

All applicants are required to register online via the appropriate registration form.

More information about the programmes of The Hague Academy of International Law can be found here.

Written by Saloni Khanderia

Associate Professor Saloni Khanderia (Jindal Global Law School, O.P. Jindal Global University, Sonipat, India) recently published a new paper in the Oxford University Commonwealth Law Journal on ‘The ascertainment of the applicable law in the absence of choice in India and South Africa: a shared future in the BRICS’. The article may be accessed here.

The Russian journal Pravovedenie has issued a call for papers on Recognition and enforcement of foreign judgments: problems and prospects.

Having regard to the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, the editors seek contributions to be published in a special issue of the journal focusing on the cooperation of States in ensuring access to justice at the stage of recognition and enforcement of foreign decisions.

The deadline for submissions is 1 May 2021.

More details are available here.

In T‑574/18 Agrochem-Maks the General Court at the end of May upheld the Commission Regulation not extending market authorisation for the active substance oxasulfuron, a pesticide. The EC Regulation noted that EFSA, the European Food Safety Authority, had identified a large number of data gaps resulting in the inability to finalise the risk assessment in several areas and that ‘in particular, the available information on oxasulfuron and its metabolites did not allow finalising the assessment of the overall consumer exposure, the groundwater exposure, the risk to aquatic organisms, earthworms, soil macro and microorganisms and non-target terrestrial plants’. Since  ‘it has not been established with respect to one or more representative uses of at least one plant protection product that the approval criteria provided for in Article 4 of Regulation … No 1107/2009 [on plant protection products; see here, GAVC] [were] satisfied’, authorisation was not renewed.

The case at issue is brought by a small Croatian, family-owned company. That is a change from the classic pattern in this kind of cases, with large bio-agricultural industry routinely taking cases to the CJEU in laser-shoot fashion, hoping they might hit the target once or twice.

The General Court extensively outlines the procedure foreseen in the relevant EU laws, thereby identifying the core issue in near all of these cases held under the precautionary principle: the EU courts do not carry out a merits review; rather, they assess whether holes have emerged in the preparation of a decision, which could mean that the Institutions could not reasonably have come to the decision they came to.

That is no different here: at 62: ‘the EU Courts must verify that the relevant procedural rules have been complied with, that the facts admitted by the Commission have been accurately stated and that there has been no manifest error of appraisal or misuse of powers’. At 65, per CJEU T-13/99 Pfizer: ‘a scientific risk assessment carried out as thoroughly as possible on the basis of scientific advice founded on the principles of excellence, transparency and independence is an important procedural guarantee whose purpose is to ensure the scientific objectivity of the measures adopted and preclude any arbitrary measures.’

Specifically for current Regulation: at 66: ‘the burden of proving that the conditions for approval or renewal under Article 4 of Regulation No 1107/2009 are met lies, in principle, with the notifier.’ At 67 per CJEU T-584/13 BASF Agro: ‘it is the person seeking approval who must prove that the conditions of such approval are met in order to obtain it, and not the Commission which must prove that the conditions of approval are not met in order to be able to refuse it’.

The General Court then at length considers the procedure followed, including the reasons for the identified gaps, and then assesses the application of the precautionary principle to same: at 109 ff with reference to the 2000 Communication on the Precautionary Principle, COM(2000)1. Crucially, at 121, as noted ‘(u)nder Regulation 1107/2009 when the applicant words its renewal application, it bears the burden of proving the efficacy and safety of the substance in question.’ ‘Since it did not discharge that burden, the approval of the active substance could not be renewed.’

The case highlights once again the crucial nature of administrative compliance with the rulebooks under EU regulatory law. Many of us will have sat through presentations by EFSA or EC officials outlining the rules in excruciating and yes, not very sexy detail. Yet to follow procedure to a tee is crucial to ensure defence against corporations taking issue with the findings at the CJEU.

The case also emphasises the importance of burden of proof and, preferably, the ‘no data, no market’ rule in EU regulatory law.

There might of course still be an appeal with the Court.

Geert.

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

Precautionary principle, standard of proof, standards of judicial review. https://t.co/gHDzyIQS1u pic.twitter.com/R1Z1qCy4qq

— Geert Van Calster (@GAVClaw) May 29, 2020

Must Article 107 TFEU be interpreted as meaning that a system whereby a private, non-profit eco-body, approved by the public authorities, receives contributions from those who place on the market a particular category of product and who enter into a contract with it to that effect, in return for a service consisting in the organisation on their behalf of the treatment of the waste from those products, and redistributes to operators responsible for the sorting and recovery of that waste, subsidies the amount of which is set out in the approval, in the light of environmental and social targets, is to be regarded as State aid within the meaning of that provision?

That is the question as phrased in C‑556/19 Société Eco TLC and on which Pitruzzella AG Opined on 28 May. TLC stands for Textiles, Lignes de maisons, and chaussures (textiles, household linen and shoes). Producers or as the case may be first importers pay a fee to the collective body in lieu of their personal commitments under extended producers responsibility per Waste Framework Directive 2008/98.

The AG of course revisits the definition of ‘State Aid’ under CJEU C-379/98 Preussen Elektra, on which more here and here. Preussen Elektra remains controversial for it would seem to give Member States quite a bit of room for manoeuvre to reach the same result as direct State Aid more or less simply by inserting a private operator who receivs funds directly from private operators however in line with direct State instructions on level and modalities of payment.  The AG opines that in the case at issue there is no State Aid however he directs further factual lines of enquiry (ia re the State control over payments by the collective body to recyclers.

Geert.

Handbook of EU Waste law, 2nd ed. 2015 OUP, para 4.116 ff.

 

State Aid, collective #waste recycling bodies. https://t.co/UaPdf4T69b

— Geert Van Calster (@GAVClaw) May 29, 2020

La Cour de cassation se prononce sur la détermination du juge compétent dans l’Union dans une affaire où était demandée la nullité d’une procuration de vendre un bien, en énonçant pour la première fois « le principe de perpétuation de la compétence selon lequel l’acte introductif d’instance fixe la saisine du tribunal et détermine la compétence pendant la durée de l’instance ».

en lire plus

TÜV Rheinland LGA Products et Allianz IARD
DISC
L’interdiction générale de discrimination en raison de la nationalité ne peut être invoquée pour contester une clause, contenue dans un contrat conclu entre un fabricant de dispositifs médicaux et une compagnie d’assurances, limitant territorialement la couverture d’assurance de responsabilité civile

Jean-Sylvestre Bergé and Giulio Cesare Giorgini have edited Le sens des libertés économiques de circulation – The sense of economic freedoms of movement, published by Bruylant.

At a time in which economic freedoms of movement (economic law, free trade, international trade and European freedoms of movement) are increasingly being challenged, it is crucial to explore in depth the capacity of disciplines (law, human and social sciences, hard sciences) to question the sense of these freedoms. Different forms of knowledge thus question the conception that their constructions and analyses relate to these freedoms. What directions are being taken? What are the objectives pursued? Are there any gaps between the initial ambitions and the achievements that can be observed today? Bringing together experienced researchers and young researchers in an intergenerational dialogue, this book is original and multidisciplinary, international and comparative in nature. It places the contemporary dynamics of economic law and flow phenomena in a perspective that allows their comprehension through studies organised around clearly identified issues.

The table of contents is can be found here.

See here for more information.

Alianța pentru combaterea abuzurilor
Environnement et consommateurs
La protection stricte de certaines espèces animales prévue par la directive « habitats » s’étend aux spécimens qui quittent leur habitat naturel et se retrouvent dans des zones de peuplement humain

Prezident Slovenskej republiky
Liberté d'établissement
Le fait que, en Slovaquie, le pouvoir de nommer et de révoquer le président de l’autorité de régulation nationale est passé du président de la République au gouvernement ne constitue pas, en soi, une violation de la directive sur le marché de l’électricité

ratiopharm
Rapprochement des législations
Les entreprises pharmaceutiques ne peuvent pas distribuer gratuitement aux pharmaciens des échantillons de médicaments délivrés uniquement sur ordonnance

Transportes Aéreos Portugueses
Transport
Le comportement perturbateur d’un passager aérien peut constituer une « circonstance extraordinaire » susceptible d’exonérer le transporteur de son obligation d’indemnisation pour l’annulation ou le retard important du vol concerné ou d’un vol suivant opéré par lui-même au moyen du même aéronef

 

Maura Alessandri just published Casebook sui contratti di vendita internazionale (in Italian) She kindly provided the following summary.

This year international trade law celebrates the 40th birthday of the “United Nations Convention on Contracts for the International Sale of Goods”, adopted in Vienna on 11 April 1980 (hereinafter referred to as “CISG”).

Although the CISG has been in force in Italy since 1 January 1988, Italian companies are often not familiar with its rules and tend to ignore its existence or not to apply it  (even when it applies automatically). Case law on CISG is gaining an increasing importance in Italy.

With a view to making the CISG better and more readily known, this Casebook aims to provide international trade lawyers and practitioners with a guide, easy to read and quick to consult, of the most significant judgments and arbitration awards issued in Italy in application of CISG.

It includes a selection of 96 Italian judgments and 12 arbitral awards. These include some of the most significant and well-known judgments which have become an important and useful reference for Judges and lawyers since they deal with the most frequent questions in practice. The publication of most of the arbitral awards have been authorized by the National and International Chamber of Arbitration of Milan, one of the most prestigious Chambers of Arbitration which daily deals with international trade law issues.

The published materials aim to help international trade lawyers to easily track the precedents which solved specific issues regarding the CISG’s autonomous and internationally oriented application and avoid what Honnold called “homeward trend”.

The book is intended for consultation through an analytical index of selected keywords in order to lead the reader directly to the relevant judgments and arbitral awards.

The following issues come up in the decisions taken up in the Casebook:

• some decisions quote foreign decisions to promote the CISG’s uniform interpretation and application;
• some decisions stress that uniform substantive law (i.e. the CISG) prevails over the rules of private international law (such as the Hague Convention of 1955);
• some show the correct steps to be followed in order to check whether the CISG applies (either directly or indirectly). The direct application of CISG represents the most frequent scenario, i.e. an Italian company selling goods to a company which has its place of business in another Contracting State;
• some decisions deal with the relationship between the CISG and the General terms and conditions (and the so-called Battle of the forms);
• other decisions focus on what is (under an autonomous and uniform interpretation) a reasonable time for the notice of lack of conformity of the goods or which is the place of delivery (including Incoterms) with a view to ascertaining the competent court (and thus dealing with forum shopping’s issues);
• some decisions ascertain which is the competent court when dealing with an international sales contract, applying for example EU Regulation no. 44/2001 (precedessor of no. 1215/2012), or the Brussels Convention of 1968;
• in the same framework, arbitration is also frequently used in international trade law; the arbitral awards are intended to provide some cases (which are usually kept strictly private and confidential and not easily known) in which arbitrators have interpreted and applied CISG’s rules.

The book contains: 1) a list of the judgments and awards cited in chronological order, 2) the text of these judgments and awards, 3) the Italian (unofficial) text of the CISG, 4) a list of the Contracting States, and 5 ) a reasoned analytical index that constitutes the true asset and  increases the usefulness of the book.

Title: Maura Alessandri, “Casebook sui contratti di vendita internazionale. Raccolta ragionata della giurisprudenza italiana (sentenze e lodi arbitrali) sulla Convenzione di Vienna del 1980 sui contratti di vendita internazionale di beni mobili (CISG)”, Bologna, Bonomo Editore, 2020, ISBN: 978-88-6972-156-4

Available at Bonomo Editore or on Amazon.

 

 

 

 

Commission / Dôvera zdravotná poistʼovňa
Aide d'État
La Cour confirme la décision de la Commission selon laquelle les organismes d’assurance maladie opérant sous le contrôle de l’État slovaque ne relèvent pas des règles du droit de l’Union en matière d’aides d’État

by Fieke van Overbeeke, Legal Counsel at the International Institute for International and Foreign Law – the Netherlands and research fellow at the University of Antwerp – Belgium.

 On 13 December 2018, the Dutch Supreme Court (Hoge Raad) has submitted a long-awaited preliminary question to the Court of Justice of the EU (C-815-/18): does the Posting of Workers Directive apply to road transport operations? The referring judgment (in Dutch) is available here.

The Posting of Workers Directive (96/71/EC) contains ‘mini’ conflict of laws rules for some important labour law regulations, such as minimum wages. These rules determine i.a. when these labour law regulations are mandatorily applicable in cross-border labour flows in the EU and consequently can have a profound impact on cross-border road transport operations. The aim of the Directive: to balance the free movement of services, worker protection and fair competition.

But why did this preliminary question actually need to be posed? It seems unconventional to assume that this Directive, which generally aims to regulate labour flows in the EU, should not apply to the particular labour flows in the road transport sector. The background of this ambiguity is that the Directive has been developed particularly in view of the labour flows in the construction sector and is tailored accordingly. In this sector, it is often about relatively simple facts: a construction worker usually works in Member State A and is temporarily posted to Member State B to work only in that state. The ‘scope rules’ of the Directive mirror this situation: a part of the labour law regulations of the temporary country of work, other than the country of usual employment, must be guaranteed to the worker (art. 2(1) Posting of Workers Directive).

These ‘scope rules’ are indeed difficult to apply to the atypical labour flows in road transport. There are many different employment models in road transport, but the common denominator is that, in principle, labour is not performed in one temporary country of work, but in a whole number of consecutive ‘very’ temporary countries of work, and, additionally, precisely because of these highly mobile activities it is often impossible to designate a country of ‘usual’ employment.

A perfect illustration is the employment model in the FNV case that forms the basis of the preliminary questions to the Court of Justice EU. In short: a Hungarian transport company posts drivers to a Dutch transport company to carry out transport in and from the Netherlands throughout the EU. The drivers are paid the lower Hungarian salary. The trade union FNV does not agree with the drivers being paid this lower salary and initiates court proceedings against the Hungarian transport companies before the Dutch courts.

Ruling in first instance: the Posting of Workers Directive applies; the ‘where’ scope rule of the Directive also includes the ‘from where’-rule. Consequence: the Dutch (minimum) wage is due. Ruling in second instance: the Posting of Workers Directive does not apply; the Directive cannot be interpreted as that it contains a ‘from where’-rule. Consequence: the Dutch (minimum) wage is not due. The Supreme Court concluded that this is not an acte eclair or éclairé and submitted the case to the Court of Justice EU.

In his conclusion of 30 April 2020, AG Bobek provides his take on the matter: 1. The Posting of Workers Directive applies to the road transport sector; 2. In order to qualify as a ‘temporary country of work’ within the meaning of the Directive, there must be a sufficient connection between the working activities and the country of work (and thus, in a sense, the Directive includes a ‘from where’-rule). E.g. according to the AG, the mere crossing of a territory (transit operations) will, as a rule, not meet the requirement of a sufficient connection, whereas posting drivers from transport company A to B to work in and from the premises of transport company B gives a good indication of a sufficient link. This seems to be good news for the trade union FNV.

AG Bobek’s conclusion is in line with the general assumption of the EU legislator that the Posting of Workers Directive applies to road transport. During the development of the new Posting of Workers Directive in 2018, which explicitly excludes the road transport sector from its scope (for the time being), the EU institutions (Council, Parliament, Commission) stated that the Posting of Workers Directive applies to road transport:

‘The new elements of this Directive will apply to the transport sector once the sector specific legislation (currently under negotiation) enters into force. Until that moment, there is a clear understanding by the three institutions and the Member States that the rules of the 1996 Posting Directive shall apply. This was called into question by a number of Member States in the past.’

From a legal point of view, this outcome can be well substantiated. Among other things, the AG points out that the Posting of Workers Directive fully excludes working activities in the maritime sector from its scope (Article 1(2) Posting of Workers Directive), which could indicate that the rest of the transport sectors are covered.

The AG also rightly rejects the argument that the Posting of Workers Directive does not apply to road transport because its legal basis is the free movement of services, which would not apply to the transport sector because this sector is regulated separately in the transport title of the TFEU (see in particular Article 58(1) TFEU). The AG considers it peculiar to interpret the scope of secondary EU law narrowly, in spite of the clear wording of the specific instrument. Moreover, according to the AG, this could create additional block exemptions, which are not contained, or at least hinted at, anywhere in the text of such a secondary law instrument. The AG then refers to other sectors that are regulated separately in the Treaties, such as public health, energy, tourism or culture and states that it would be a stretch to conclude that the Directive also misses application to working activities in these sectors. Finally, the AG indicates that, in any event, it is generally considered that legislation based on the free movement of services could apply to the transport sector.

The fact that the legal basis of the Posting of Workers Directive has no implications for its applicability to the transport sector was actually long and widely assumed. However, a recent judgement of the CJEU in the Dobersberger case (C-16/18) caused a great deal of confusion in this respect and the AG was therefore obliged to pay more attention to the matter. In the Dobersberger case it was about an employment model in a railway context; more specifically about the catering working activities of Hungarian personnel in trains, plying the route between Hungary, Austria and Germany. In this case, the CJEU starts its reasoning by observing that the legal basis of the Posting of Workers Directive is the free movement of services and that transport activities are regulated by the separate transport title; the Court then considers that catering activities (in a train) do not qualify as transport activities and that the case therefore could be examined in the light of the Posting of Workers Directive. By constructing its reasoning as such, the CJEU strongly suggests that the Posting of Workers Directive cannot apply to transport activities. Fortunately, AG Bobek now clarifies that the CJEU has not explicitly ruled that the Posting of Workers Directive cannot apply to transport activities and to that extent paves the way for the CJEU in the present FNV case to apply the Posting of Workers Directive.

Considering the general assumption of the EU legislator that the Posting of Workers Directive applies to road transport and the strong legal arguments mentioned above, it is to be expected that the Court will follow the AG in this respect.

Now that it has been established that the Posting of Workers Directive may apply to road transport operations, a second question must be addressed: when exactly can we speak of a temporary country of work within the meaning of the Posting of Workers Directive? The AG solves this question by pointing to the requirement of a sufficient link, which must be assessed on a case by case basis and taking into account all specific circumstances.

According to the AG, reference can be given to the interpretation of the habitual workplace criterion in Article 8 of the Rome I Regulation (Regulation 593/2008; the Directive’s ‘big brother’ that determines which employment law as a whole is applicable to the employment contract and to which the Directive can deviate with its mandatory labour law regulations).

In the Koelzsch case (C-29/10), the CJEU has given specific criteria for the interpretation of the ‘habitual workplace’ of Article 8 Rome I in the context of road transport operations, which, according to AG Bobek, is relevant for the definition of the temporary country of work in the Directive, since ‘both instruments seek to ascertain certain types of material connections between the worker and a given Member State’. The CJEU summed up various factors, such as the place: from which the work is carried out, where the work is carried out, where instructions are received, where the work is organised by the driver, where the lorries are parked, where the lorries are unloaded and to which the driver returns. The AG additionally points to the Nogueira case (C-168/10 and C-169/16) and the overall importance of aiming to reflect the ‘true nature of legal relationships’ and to prevent ‘circumvention strategies’.

It is more difficult to predict to what extent the AG will be followed by the Court on this second point. Indeed, the solution proposed by the AG concerning the sufficient link and the wide margin of appreciation can lead to very complex cases, which could turn out to be rather uncertain for transport planning in the sector. In addition, the EU proposal providing clarifications on the application of the Posting of Workers Directive to road transport operations (COM 2017, 278), currently under negotiation in Brussels, will not solve this either, given the primary focus of this proposal on bilateral, crosstrade and cabotage operations (without discussing the employment model of the posting of personnel between companies at all). See yesterday’s post on this blog and here for more information on this proposal.

To summarise: AG Bobek concludes that the Posting of Workers Directive can apply to road transport operations, which means that, i.a., the minimum wages of Member States where the drivers temporarily work must be guaranteed. This is in line with the general assumption of the EU legislator and is well founded in law. It is to be expected that the Court of Justice will follow the AG in this respect.

According to the AG, the criterion of a sufficient link should play an important role in determining the temporary country of work within the meaning of the Posting of Workers Directive. The criteria given by the CJEU in the Koelzsch case with regard to the definition of the ‘habitual workplace’ in the Rome I Regulation can provide guidance in this matter. It is more difficult to predict to what extent the Court will follow the AG regarding this point.

The author is a member of the International Institute for International and Foreign Law, a Hague-based NGO which has been providing legal consultancy to professionals (judges, lawyers, notaries, mediators etc.) regarding private international law and foreign law for over a hundred years.

 

 

In La Micro Group (UK) Ltd & Anor v La Micro Group, Inc & Ors[2020] EWHC 1405 (Ch) 1st Claimant, LA Micro Group (UK) Ltd (“LA (UK)”), is an English company. It was incorporated in 2004 and acquired by the 2nd Claimant, Mr David Bell, a British citizen resident in England. It now has two issued shares, one in the name of Mr Bell, and one in the name of the 3rd Defendant, Mr Arkadiy Lyampert. Mr Bell and Mr Lyampert are also the two directors of the company. The substantive question raised in the action is as to the beneficial ownership of LA (UK). The position of the Claimants is that Mr Bell and Mr Lyampert are not only the legal owners of the two issued shares but also the beneficial owners, and that they are each entitled to 50% of the distributable profits of the company by way of dividends. Mr Lyampert’s position is the same, although he has indicated that he does not intend to take any active part in the proceedings. All defendants are resident in California.

This preliminary issue is one of jurisdiction given claimants seek permission to serve out of jurisdiction. There are a variety of proceedings in California: disputes between Mr Frenkel and Mr Lyampert in 2010 led to Mr Frenkel and some of LA Inc’s other employees, including Mr Gorban, leaving LA Inc and starting a competing business called IT Creations, Inc (“ITC”). In the words of the Court of Appeal of California, “a profusion of lawsuits followed”.

It is i.a. argued by defendants that it would an abuse of process for LA Inc to relitigate the same issues as were decided by that judgment, even if the CAL judgments do not strictly give rise to res judicata given the differences between parties.

At 49 Nugee J holds on that particular issue that the relevant CAL Judgment did not decide anything about whether LA Inc had lost its rights to a beneficial interest in LA (UK), and the findings of fact on which the Claimants rely were not necessary to the English court’s decision on any of the matters that were in issue.

Of specific interest to the blog is the forum non conveniens application at 58 ff., with at 68 ff consideration of whether one of the pending CAL proceedings is the mirror image of the English ones, which would count heavily in a forum non consideration given the English law’s preference for the whole issue to be submitted to one tribunal. At 78 Nugee J  sums up the core issue:

The choice is between (i) allowing the English proceedings to continue so that a definitive answer can be given to one discrete question (has LA Inc lost its beneficial interest?) which will then enable the Californian court to proceed on a correct understanding of what has been decided in England rather than on what is said to be a misapprehension; or (ii) requiring the Claimants, unless they are willing to abandon their claims, to go to California to argue matters that on the view I take are matters of English law and largely concern acts taking place in England.

At 77 Nugee J expresses strong support for Gleichlauf:

(T)here are many advantages in questions of law being decided by a home court rather than a foreign court. Evidence and cross-examination is not required, which is likely to make resolution of the point both quicker and cheaper. And the court is familiar with its own law, in a way that it is not with foreign law, which means that the court’s resolution of the issues is likely to be both easier and more soundly based. Other things being equal, I have no doubt that it is preferable, both in terms of practical convenience and in terms of the ends of justice, for questions of English law to be argued in England as questions of law rather than for them to be argued in California as questions of fact on expert evidence (and possibly, although I have no evidence as to whether this would be the case, before a jury).

He concludes at 92:

England is the most appropriate forum for those matters to be decided; but even in relation to the declarations in respect of Mr Lyampert’s share, leaving the parties to litigate in California has a mix of advantages and disadvantages and there is not in my judgment sufficient to displace England as the forum in which the dispute can most suitably be tried for the interests of all the parties and for the ends of justice.

Nugee J does not therefore give Gleichlauf preponderant weight ab initio. Yet all other things being equal, Gleichlauf in this case pushed back a finding of forum non.

Geert.

Application for stay on forum non conveniens grounds. Dismissed.
Nugee J: 'Leaving parties to litigate in CAL has mix of (dis)advantages, not sufficient to displace EN as forum in which dispute can most suitably be tried for the interests of all parties and for ends of justice. https://t.co/Rm3i16dEPg

— Geert Van Calster (@GAVClaw) June 3, 2020

In February 2020, the Spanish Constitutional Court ordered the review of a judgment requiring the actor Christopher Lee to pay 710.000 Euros to the author of a painting that was used to promote a film without the latter’s permission.

The Court considered that the Commercial Court of Burgos (Spain) had violated Lee’s fundamental right to an effective judicial protection, in that it had not heard him nor proceeded to personal service of the judgement at any time prior to issuing an enforcement order against the actor in October 2009.

The controversy relates to the movie Jinnah and, specifically, to one of the posters by which it was promoted. The Commercial Court of Burgos considered that the use of the work “constituted an infringement of exclusive rights” and awarded a compensation to the author of the work.

The  lawsuit had been filed by the painter against a business corporation (The Quaid Project Limited), Mr. Christopher Frank Carandini Lee and Mr. Juan Francisco Aneiros Rodríguez, as representative of the official website of Christopher Lee. The three co-defendants were domiciled in London; neither The Quaid Project Limited nor Mr. Carandini Lee appeared. At the time, only Mr. Aneiros could be personally served at the address established in a contract previously signed with the plaintiff.

The decision against Lee was therefore taken in absentia. It has turned out that the Burgos Court’s attempts to have the claim and the judgment served to the defendant at the addresses provided by the claimant were unsuccessful, and that the Court contented itself with service by publication. After the judgment was delivered, a writ of execution (auto de despacho de ejecución) was granted and certified as a European enforcement order, thus allowing for enforcement to be tried in the United Kingdom (Lee’s place of residence).

According to the Constitutional Court, the absence of personal service led to a violation of Lee’s right of access to justice, for it prevented him from participating in proceedings where his financial obligations were at issue. The Court also expressed doubts regarding the assessment of the damages, which had been made without calling for any expertise. Despite this, the Court in Burgos had considered the figure to be appropriate and in September 2010 had ordered that the defendants’ bank accounts be seized, requesting information for this purpose from different banking entities.

After learning about the proceeding “through a letter” written by the claimant’s lawyers, that reached him “through a London-based office,” in February 2014 Lee asked unsuccessfully for the proceedings to be declared void. The actor passed away in June 2015; an application was filed with the Constitutional Court by his heirs, which in a judgment dated February 24 has ruled in favor of C. Lee.

On the Legal Standing of the Heirs

Before the Constitutional Court, the claimant in the ordinary proceedings contested the legal standing of Lee’s heirs in light of UK succession law, relying in particular on the condition of testamentary executor and manager of the estate of Birgit Lee.

The Constitutional Court dismissed this part of the defense recalling its previous case law based on Article 162.1 b) of the Spanish Constitution and Article 46.1 b) of the Constitutional Court Act, whereby legal standing derives from having “a legitimate interest”. The category is interpreted broadly and granted to any person whose legal stance (“círculo legal”) may be harmed by the violation of a fundamental right, even if the violation does not occur directly against him or her.

The Court went on to add that, in the past, the heirs of a deceased plaintiff had been admitted to take over in an “amparo” appeal for the defense of personality rights. When (like in the case under examination) the ruling on “amparo” entails economic consequences for the estate, the recognition of legal standing to the heirs is even more reasonable.

On the Violation of the Right to a Due Process

The main issue raised by the appellants before the Constitutional Court focused on the violation of the late Lee’s right to a due process, caused by the wrongful application by the Spanish commercial court of Regulation (EC) No 805/2004 creating a European Enforcement Order (EEO) for uncontested claims. In this context, the appellants argued first  that only a judicial decision ending the ordinary proceedings, and not the writ of execution can be certified as an EEO. Secondly, in a nutshell, they contested the enforceability of the resolution adopted in absentia, with service having been made by edicts by a court which relied on the informations given by the claimant without further ado.

The Constitutional Court was silent as to the first prong of the complaint. In my view, the appellant was wrong: whereas according to Article 517 Spanish Code of Civil Procedure (Ley de Enjuiciamiento Civil) the enforcement title is indeed the decision on the merits, the definition of “resolution” comprises as well the writ of execution which in Spanish procedural law follows and opens up the enforcement procedure itself.

As to the second prong, the Court was requested to examine whether the application made by the Spanish commercial court of the EEO Regulation, granting the EEO based on service by publication, violated the right to effective judicial protection of the defendant. For this purposes, the Constitutional Court started by asserting that the Burgos Court, to the extent it applied rules of European Union law, must have been aware that it was not only bound by Article 24.1 of the Spanish Constitution, but also by Article 47 of the Charter of Fundamental Rights of the European Union (CFREU).

The Constitutional Court focused then on how service had been made, in order to assess whether in the procedure prior to the adoption of the judgement the certification of which is at stake , the rights to a hearing and to self-defense of the debtor had been respected. This examination is reserved for cases in which the non-appearance of the defendant amounts to a tacit admission of the claim or of the facts alleged by the creditor under the law of the Member State of origin, and, as a consequence, the claim may be deemed “uncontested” for the purposes of Regulation No 805/2004. Regarding service without proof of receipt by the debtor (Article 14 of the Regulation), the Regulation describes various admissible modalities, all of which require that the debtor’s domicile is known with certainty. In this way, the Regulation establishes a minimum standard of the right of defense so as to ensure that the non-appearance of the debtor was conscious and voluntary, thus an absence of the intention to challenge the credit can be inferred therefrom.

At this point, the Constitutional Court makes the most important assertion of its judgment, acknowledging the need to assess “whether a notification by edicts made totally ignoring the debtor’s address, which may eventually be valid in our system from the point of view of Article 24.1 [Spanish Constitution], is also valid from the perspective of Article 47 CFREU for the purposes of granting a European Enforcement Order”. It goes on saying that “the answer to this question, taking into account Recital 13 of Regulation 805/2004 and the decision of the Court of Justice (First Chamber) in Case C-292/10, Cornelius de Visser, of 15 March 2012, must be negative. The Court of Justice of the European Union affirms that although a default judgment is among the titles that can be certified as European enforcement orders (Article 3 of the Regulation), this is not the case when it has been issued without determining the domicile of the respondent” (the translation is mine).

In my view, this is not a bad judgment. However, one cannot avoid feeling a little bit dismayed when learning  that one of the defendants, Mr. Juan Aneiros, who could be served at his domicile, was the son-in-law of C. Lee and, as said, the manager of his official website. Difficult to believe that C. Lee could only learn about the process after he had been sentenced to pay, but not before. However, this was for the Constitutional Court to decide; it has spoken and – not unimportat in this tough times for the EU – followed the case law of the CJEU.

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Ce mercredi, le procureur a requis la condamnation du maire de Sanary-sur-Mer et des deux autres prévenus du dossier, tandis que la défense a plaidé la relaxe.

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