Droit international général

According to the judgment in Blijdenstein, delivered by the Court of Justice in 2004, a public body which seeks reimbursement of sums paid under public law to the original maintenance creditor, to whose rights it is subrogated against the maintenance debtor, cannot rely on Article 5(2) of the Brussels Convention. It cannot, therefore, sue the debtor before the courts for the place of domicile/habitual residence of the original maintenance creditor.

In 2009, the EU legislator adopted the Maintenance Regulation. As it follows from Article 68 of this Regulation, it replaced the provisions of the Brussels regime relating to maintenance obligations. The Regulation contains a provision that seems to be somehow similar to Article 5(2) of the Brussels Convention. Its Article 3(b) allows to bring the proceedings in matters relating to maintenance obligations before the court for the place where the creditor is habitually resident.

Is that similarity sufficient to justify faithful application of interpretation provided in the judgment in Blijdenstein in relation to the provisions of the Maintenance Regulation? This is, in essence, the question at stake in the case WV, C-540/19. This Thursday, 18 June 2020, Advocate General Campos Sánchez-Bordona presented his Opinion in which he addresses that question.

Facts of the case and the question referred

In proceedings before a German court, a social assistance institution being a public body asserts claims for parental maintenance against the defendant who lives in Austria. The public body contends that the parental maintenance claim has been transferred to that body because it regularly granted the defendant’s mother social assistance benefits. Indeed, the defendant’s mother lives in Germany where she receives regular social assistance. The defendant submits that the German courts lack international jurisdiction.

In line with the submission of the defendant, the first instance considers that the German courts have no international jurisdiction. It argues that jurisdiction under Article 3(b) of the Maintenance Regulation is excluded because the creditor within the meaning of that provision is only the maintenance creditor itself, and not a state body asserting maintenance claims legally transferred to it by way of recovery. The second instance court disagrees and, ultimately, the German Supreme Court (Bundesgerichtshof, BGH) decides to refer a request for a preliminary ruling to the Court of Justice. It submits a following question:

Can a public body which has provided a maintenance creditor with social assistance benefits in accordance with provisions of public law invoke the place of jurisdiction at the place of habitual residence of the maintenance creditor under Article 3(b) of the Maintenance Regulation in the case where it asserts the maintenance creditor’s maintenance claim under civil law, transferred to it on the basis of the granting of social assistance by way of statutory subrogation, against the maintenance debtor by way of recourse?

Advocate General’s Opinion…

In his Opinion, Advocate General proposes to answer the preliminary question in the affirmative. In his view, Article 3(b) of the Maintenance Regulation can be relied on by a public body who contends that it has subrogated the original maintenance creditor.

At point 34, the Opinion recalls the judgment in Blijdenstein and explains that the Court held in its judgment, in essence, that a maintenance creditor is regarded as the weaker party in the proceedings in matters relating to maintenance obligations and therefore that creditor can rely on a rule of jurisdiction which derogates from this general principle of actor sequitur forum rei. The original maintenance creditor could therefore rely on Article 5(2) of the Brussels Convention. A public body which brings an action for recovery against a maintenance debtor is not in an inferior position with regard to the latter and it cannot bring its actions before the courts that would otherwise have jurisdiction under Article 5(2) of the Brussels Convention.

However, Advocate General develops a series of arguments in support of non-application of the interpretation provided for in the judgment in Blijdenstein within the framework established by the Maintenance Regulation.

First, at points 37 to 42, the Opinion lays down some arguments of systemic interpretation and stresses that the Maintenance Regulation establishes a complete system: while the Brussels regime is in principle not applicable in relation to the third-State defendants, the circumstance that the defendant is habitually resident in a third State does not entail the non-application of the Maintenance Regulation. If the public bodies could not rely on Article 3(b) of the Maintenance Regulation, the complete character of the system established by the Regulation would be affected. In all the scenarios where the debtor is a third-State defendant, a public body would most likely have to assert its claim before the courts of that third-State.

Next, at points 43 to 45, the Opinion adds that unlike in the Brussels regime, under the Maintenance Regulation the place of jurisdiction at the habitual residence of the maintenance creditor is conceptualized not as an exception, but as an alternative general place of jurisdiction.

Then, at points 46 to 47, the Opinion elaborates on the judgment in R. At paragraph 30 of this judgment, it is stated that the objective of the Maintenance Regulation consists in preserving the interest of the maintenance creditor, who is regarded as the weaker party in an action relating to maintenance obligations; Article 3 of that Regulation offers that party, when it acts as the applicant, the possibility of bringing its claim under bases of jurisdiction that do not follow the actor sequitur forum rei principle. In his Opinion, Advocate General emphasizes that the formulation of paragraph 30 of the judgment in R must have been influenced by the factual context of that case. It should not, however, be understood as preventing the public bodies from relying on some specific grounds of jurisdiction of Article 3.

After that, at point 51, the Opinion has recourse to an argument based on historical interpretation: even though a proposal endorsing a solution according to which a public body could bring action only before the courts for the place of habitual residence of the defendant was brought up during the drafting of the Maintenance Regulation, that proposal is not reflected in its final version.

Finally, at points 54 to 60, the Opinion addresses the objectives of the Maintenance Regulation. In particular, at point 59, Advocate General points out that Blijdenstein case law should be discontinued as it seems to contradict the logics of the Regulation – it does not reinforce the protection of the maintenance creditor. In fact, it favors the maintenance debtors once the maintenance of a creditor is covered by the payments of the public body: the debtor is no longer at risk of being sued before the courts of a Member State other than the Member State of his habitual residence.

… and insights on the lessons that may be learned from it:

The above presentation of the arguments developed by Advocate General in his Opinion is far from being extensive. It is best to recommend giving it an attentive lecture as there is much more to bite into. In addition to that, the Opinion raises some arguments that may be relevant in other contexts than that of the case WV, C-540/19.

continuity / adequacy of case law and its reversals

As mentioned before, the Opinion is structured around the question whether Blijdenstein case law should be still applied despite the modification of legal framework. It is interesting to note that, at point 69, the Opinion even anticipates a scenario in which the Court would decide not to follow the proposal of Advocate General. In this context, Advocate General puts forward some modifications that, according to him, should be introduced into the Blijdenstein case law.

The importance of the debate that this question may inspire extends far beyond the scope of the case reported here. When it comes to the interpretation of EU private international law instruments, what factors should be taken into account in assessing whether a pre-existing case law should be reversed? 

coordination between forum and ius

At points 61 to 66, the Opinion offers an additional argument in favor of discontinuation of Blijdenstein and allowing the public bodies to sue before the courts for the place of the creditor’s habitual residence. It argues that the interpretation proposed in the Opinion allows to ensure coordination between forum and ius – a court having jurisdiction under the Maintenance Regulation will, as far as possible, apply its own law.

In fact, since Blijdenstein times, not only the instrument containing the rules on jurisdiction in matters relating to maintenance obligations has changed. The legal landscape was profoundly altered by the common conflict of laws rules of the Hague Protocol on the Law Applicable to Maintenance Obligations. Under the general rule on applicable law of Article 3(1) of the Protocol, obligations shall be governed by the law of the State of the habitual residence of the creditor. As the Opinion notes, according to Article 64(2) of the Maintenance Regulation, a right of a public body to act in place of an individual to whom maintenance is owed or to seek reimbursement of benefits provided to the creditor in place of maintenance shall be governed by the law to which the body is subject. In most instances, a public body subrogating the original maintenance creditor is arguably established in the Member State of that creditor’s residence.

It seems that a similar point has been already tackled in the judgment in Kainz. At paragraph 20, it addresses the question relating to the necessity to ensure coordination between, on the one hand, jurisdiction to settle a dispute on the liability for damage caused by a product [under Article 5(3) of the Brussels I Regulation] and, on the other hand, law applicable to a non-contractual obligations arising to such damage [under Article 5(1) of the Rome II Regulation]. In the judgment in Kainz, that question is answered in the negative.

Yet, the Maintenance Regulation/the Hague Protocol duo seem to follow different logics than the aforementioned Regulations. There must have been a reason to extract the rules on jurisdiction in matters relating to maintenance from the Brussels regime and adopt a new Regulation.

It is true that the Protocol does not set a general rule according to which the maintenance obligation is governed by the law of the forum. As it follows from Article 3(1), it relies heavily on the law for the place of the creditor’s habitual residence.

However, one the one hand, even with its general rule on applicable law of Article 3(1), it can be argued that the Protocol does indirectly promote a coordination between ius and forum. That is the case as long as one accepts that, in practice, the application of the rules of jurisdiction of the Maintenance Regulation leads to the conferral of jurisdiction to the courts for the place of the creditor’s habitual residence (see, to that effect, paragraph 49 of the judgment in KP). On the other hand, as the Opinion remarks at its footnote 47, at least in some scenarios where it would reinforce the situation of the maintenance creditor, the Hague Protocol provides for a subsidiary application of the law of the forum. According to Articles 4(2) and (3) of the Protocol, the law of the forum applies when the creditor is ‘unable to obtain maintenance’ under the law primarily applicable to the maintenance obligation.

Moreover, striving to ensure that a court applies its own law somewhat echoes Recital 27 of the Succession Regulation. As a reminder, this Recital explains, inter alia, that the Regulation is devised so as to ensure that the authority dealing with the succession will, in most situations, be applying its own law.

At point 61 of the Opinion, Advocate General himself qualifies his argument drawn from the existence of the Maintenance Regulation/the Hague Protocol duo as being of a lesser theoretical importance, yet having practical bearing. However, the argument provokes also a more general question: to what extent the coordination of ius and forum is – and if so, in which constellations – a point of consideration in EU private international law? 

 

The Opinion is available in Spanish [original language] and, inter alia, in German and French. There is not English version yet.

 

Erasmus School of Law (Erasmus University Rotterdam) is recruiting five researchers (two postdocs, two PhDs and one parttime associate/endowed/full professor) for the research project Affordable Access to Justice: towards sustainable cost and funding mechanisms for civil litigation in Europe. 

This five year project is funded by the Netherlands Organisation for Scientific Research (NWO), and led by Prof. Xandra Kramer. This five year project will assess new pathways to civil justice funding and cost schemes, with a view to developing a balanced financing system securing access to justice in Europe. It builds onto the ongoing ERC consolidator project Building EU Civil Justice: challenges of procedural innovations – bridging access to justice.

Please contact Xandra Kramer (kramer@law.eur.nl) for more information on the project, and see Vici vacancies 2020 for for the vacancy descriptions, application requirements and procedure. You can apply here till 17 July 2020.

 

By Olivia Tambou

On 12-14 October 2020, the 2nd international Open Search Symposium (OSSYM 2020) will be hosted by the CERN (Geneva). The event is organised by the Open Search Foundation, which militates for the creation of an independent, free and self-determined access to information on the Internet.

You may participate to the Symposium in different ways: with scientific papers, sharing of practical experiences or by introducing concepts and positions during presentations and in the different interactive sessions. Full papers and abstracts presented at the OSSYM 2020 will be published in online proceedings following the event. Interested contributors should send their extended abstract (1 page) or full paper (4-6 pages) for any poster or oral presentation until 6 July 2020 at the following address: https://indico.cern.ch/e/ossym-2020.

Key legal questions to be addressed in the context on the Symposium could be: Competition law, data security/cybersecurity law, General Data Protection Regulation, ePrivacy Regulation, national vs. European law, Private international law, EU copyright legislation, liability, traceability of intellectual property rights and ownership by individuals, organisations and SMEs/corporates, data governance issues, as well as the fairness of digital platform and more globally fundamental rights issues including freedom of expression and protection against hate speech, and interaction with future rules on European digital single market, etc.

Note that the Symposium will be held either at physical meeting or as web-based conference (the final decision is to be taken in July). Registration will open on 16 July 2020 and close on 28 September 2020 (or when maximum number of participants is exceeded).

More information on this event is available here.

In Alexander Brothers Ltd (Hong Kong SAR) v Alstom Transport SA & Anor [2020] EWHC 1584 (Comm) Cockerill J discussed inter alia (at 177 ff) the impact of EU law on the ordre public assessment for potential refusal of recognition of an arbitral award under section 103 of the 1980 New York Convention.

CJEU authority are C-126/ 97 Eco Swiss (concerning EU competition law) and C-168/ 05 Claro (unfair terms in consumer contracts). At 183 Cockerill J does not suggest the CJEU authority should no longer stand. Indeed she suggests obiter that there is no reason to suggest the CJEU’s line of reasoning should not apply to wider issues than just competition law or consumer law. However, the burden of proof of showing that particular parts of EU law are of a nature to justify the ordre public exception, lies upon the party objecting to recognition. In casu Alstom have fallen short of that duty. Yes, there is scant reference to anti-corruption in the private sector; and yes there is EU money laundering law. However (at 186) ‘the EU has, in general terms, set its face against corruption. But aside from the area of money laundering it has not put in place mandatory laws or rules. In the context of international corruption of the kind in focus here it has left it to the individual member states to adopt what measures seem good to them. There is, in short, no applicable mandatory rule or public policy.’

An interesting discussion.

Geert.

Application for refusal of #arbitration award under New York Convention section 103: ordre public. Alternatively, issue estoppel, or failure of full and frank disclosure: all dismissed.
Cockerill J discussing ia C-126/ 97 Eco-Swiss. https://t.co/YF0dB6lVah

— Geert Van Calster (@GAVClaw) June 18, 2020

AG Manuel Campos Sánchez-Bordona delivered yesterday his opinion in case C‑540/19 (WV v Landkreis Harburg), which is about the Maintenance Regulation. Should the opinion be endorsed by the Court of Justice, the decision will be of great practical importance. The opinion is currently available in all EU official languages (save Irish), albeit not in English. Here is the French version:

« L’article 3, sous b), du règlement (CE) no 4/2009 […] doit être interprété en ce sens qu’un organisme public qui a fourni des prestations d’aide sociale à un créancier d’aliments et qui s’est subrogé légalement dans la créance alimentaire peut réclamer cette dette à la personne qui est tenue de la payer, au moyen d’une action récursoire, devant les juridictions de l’État où le créancier a sa résidence habituelle ».

Source : here

AG Szpunar delivered yesterday his opinion in case C‑433/19 (Ellmes Property Services Limited v SP), which is about Brussels I bis. The opinion is currently available in all EU official languages (save Irish), albeit not in English. Here is the French version:

« 1) L’article 24, point 1 [Bruxelles I bis] doit être interprété en ce sens qu’une action d’un copropriétaire tendant à la cessation de l’usage touristique d’un appartement par un autre copropriétaire, au motif que cet usage ne correspond pas à celui convenu dans le contrat de copropriété, ne relève de cette disposition que si cet usage est opposable à l’égard de tous. Il appartient au juge national d’effectuer les ultimes vérifications à cet égard.

2) L’article 7, point 1, sous a), de ce règlement doit être interprété en ce sens que, dans le cas où l’usage convenu dans le contrat de copropriété n’est pas opposable à l’égard de tous, une telle action relève de la notion de « matière contractuelle » au sens de cette disposition. Dans ces conditions, l’obligation contractuelle litigieuse consiste en une obligation de ne pas faire et, plus précisément, de ne pas modifier, d’une manière non conforme au contrat de copropriété, l’affection d’un bien dans le lieu où celui-ci se situe. Pour vérifier si le lieu d’exécution de cette obligation correspond au lieu où se situe l’appartement soumis au régime de copropriété, il appartient au juge national de déterminer ce lieu d’exécution conformément à la loi régissant cette obligation, selon les règles de conflit de la juridiction saisie ».

Source : here

On 28 May 2020, the German Federal Court of Justice (BGH) decided to refer a question for a preliminary ruling to the ECJ regarding Articles 80 and 84 of the General Data Protection Regulation (GDPR). The case, brought by consumer protection groups, is about the alleged violation, by the operator of a social network, of the obligation to inform users about the scope and purpose of the collection and use of their data.

Background

The Irish-based defendant, Facebook Ireland Limited, operates the “Facebook” social network. On the internet platform of this network there is an “app center” in which the defendant makes free online games of other providers accessible to the users of its platform. In November 2012, several games were offered in this app center, for which the following information could be read under the button “Play now”: “Clicking on Play game above gives this application: your general information, your email address, about you, your status. This application may post on your behalf, including your score and more.” In one game, the notice ended with the phrase: “This application may post information on your status, photos, and more on your behalf”.

The plaintiff is the umbrella organization of the consumer centers of the Federal states. It claims, among other, that the presentation of the information under the “Play now” button in the app center is improper, including from the point of view of the legal requirements for obtaining effective data protection consent from the user. It considers itself entitled to enforce injunctive relief by bringing an action before the civil courts in accordance with the relevant German rules on unfair competition and consumer protection.

In the first instance, the district court ordered the defendant to refrain from presenting games on its website in an app center in such a way that users of the internet platform, by clicking a button such as “play game”, allow the game operator to use personal data stored there, and is authorized to transmit (post) information on behalf of the user (LG Berlin, 28 October 2014, 16 O 60/13). The defendant’s appeal was unsuccessful (Kammergericht Berlin, 22 September 2017, 5 U 155/14). The defendant has filed a second appeal with the BGH.

The question

The question referred to the ECJ focuses on whether the criteria set out in Chapter VIII of the GDPR, in particular in Article 80(1) and (2) and in Article 84(1), conflict with national rules granting to competitors and associations, institutions and bodies authorized under national law, the right to sue before the civil courts for infringements under the GDPR regardless of the violation of specific rights of individual data subjects, and without any mandate from a data subject.

This question is controversial in the case law of the lower courts and in legal literature. Some consider that the GDPR contains a final regulation for the enforcement of the data protection provisions made in this Regulation, and that associations are therefore only authorized to bring proceedings under the conditions of Article 80 of the GDPR (which have not been met in the case at hand). According to others, the GDPR is not exhaustive, hence associations continue to be authorized to try and enforce injunctive relief in case of an alleged violation of personal data protection rules, independently of any infringement of specific rights of individual data subjects, and without the need of a mandate from a data subject.

The Court of Justice ruled in Fashion ID that the provisions of Directive 95/46/EC (the Data Protection Directive), which was in force until the General Data Protection Regulation became applicable on 25 May 2018, do not preclude associations from having legal standing. However, this decision does not indicate whether this right to bring an action remains in force under the GDPR.

Henshaw J in  DVB Bank SE v Vega Marine Ltd & Ors [2020] EWHC 1494 (Comm) (a substantively straightforward case on sums loaned) made some important observations on the benefits of summary judgment as opposed to a default judgment in the context of recognition and enforcement.

This a few days before publication of the thesis of Vincent Richard on the very topic.

There is no doubt the English courts have jurisdiction per a valid choice of court clause under A25 BIa. Claimants are pressing for summary judgment, citing

• Brexit. The Withdrawal Agreement extends EU law in civil procedure to proceedings issued before the end of the transition period, however claimants express anxiety over the speed of Greek enforcement proceedings given courts’ shutdown in the Covid19 era. At 61: ‘Greek counsel has advised the Claimants that the Greek courts shut down earlier this year for an indefinite period, so that obtaining an enforcement order in Greece would be likely to be delayed;’.
• More crucially however, Henshaw J notes at 61, correctly, that even under BIa, default judgments are more vulnerable:

there is a risk that an enforcement order based on a simple default judgment, even if obtained before 31 December 2020, might be set aside on public policy grounds. Greek counsel advised that the Greek courts would be much less likely to refuse to recognise and enforce a reasoned English judgment following a hearing on the merits.

Summary judgment was given against the defendants.

Geert.

Summary judgment granted.
Hanshaw J holding ia that for enforcement purposes both before and after Brexit (ordre public arguments in State of enforcement), summary judgment is to be preferred over default judgment. https://t.co/iS9Jhgjdp8

— Geert Van Calster (@GAVClaw) June 10, 2020

Today, AG Szpunar delivered his Opinion in the case of Ellmes Property Services, C-433/19, on the interpretation of Article 24(1) and Article 7(1)(a) of the Brussels I bis Regulation. This case arose from the following facts:

Both parties are co-owners of a house situated in Zell am See, Austria. The applicant, who is the owner of apartment No 10, has his home address at this location. The defendant company, which is the owner of apartment No 20, has its registered office in the United Kingdom. It uses its apartment, which was designated for residential purposes, for tourist purposes by regularly letting it out to holiday guests.

In his action brought before the Bezirksgericht Zell am See (District Court, Zell am See), Austria, the applicant seeks to prevent the use of the apartment for tourist purposes, contrary to its designated use and arbitrarily in the absence of consent of the other co-owners, which interferes with the applicant’s rights of co-ownership. He relied on the jurisdiction referred to in the first alternative in the first subparagraph of Article 24(1) of the Brussels Ia Regulation. The defendant objected on the basis of the lack of local and international jurisdiction.

The court of first instance declined local and international jurisdiction. In its view, the dispute relating to a private-law use agreement between co-owners did not directly concern their rights in rem. The court of second instance allowed the applicant’s appeal and rejected the defence of lack of local and international jurisdiction. It held that the designated use of a property subject to co-ownership was based on the private-law agreement between the co-owners (usually laid down in the co-ownership agreement). The designation for a specific use and the adherence to the use thus defined was one of the absolutely protected rights in rem of a co-owner. The defendant lodged an appeal with the Austrian Oberster Gerichtshof (Supreme Court) against that decision.

In this context, the Austrian Supreme Court referred to the ECJ the following questions:

(1) Is the first alternative in the first subparagraph of Article 24(1) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (‘Brussels Ia Regulation’) to be interpreted as meaning that actions brought by a co-owner seeking to prohibit another co-owner from carrying out changes to his property subject to co-ownership, in particular to its designated use, arbitrarily and without the consent of the other co-owners, concern the assertion of a right in rem?

(2) If the first question should be answered in the negative:
Is Article 7(1)(a) of the Brussels Ia Regulation to be interpreted as meaning that the actions referred to in paragraph 1 concern contractual obligations to be performed at the location of the property?

AG Szpunar, after scrutinizing the conditions, relevant case law and the purpose of Article 24(1), held that the application of that provision requires a right in rem which in turn necessitates an erga omnes effect of the underlying legal relationship of the co-owners regulating the modalities of the use of that co-ownership. Whether there was such an erga omnes effect in the concrete case at hand is to be determined by the national court according to the applicable national law. If there is no erga omnes effect, Article 7 (1) (a) will have to be applied to the applicant’s claim in question. This would mean that the national court will have to resort to the law governing that claim in order to determine its place of performance.

The Opinion is available in French [original language] and, inter alia, in German but not yet in English.

 

 

The University of Rijeka, Faculty of Law announced a call for application to the newly opened position of assistant, funded by the Croatian Science Foundation. It is a full-time position for the duration of the project (approximately 4 years) which is focused on research rather than teaching. The candidate will be expected to complete the doctoral studies conducing research on the various aspects of cross-border enforcement in EU under the mentorship of Professor Ivana Kunda, the Head of the Chair of International and European Private Law. Good command of English is required as well as certain level of Croatian. The call was announced yesterday and remains opened for 30 days.

The details of the call are available here, and questions could be addressed to ikunda@pravri.hr.

In Senior Taxi Aereo Executivo LTDA & Ors v Agusta Westland S.p.A & Ors [2020] EWHC 1348 (Comm) Waksman J discusses the same issues which I analysed in my review of Sabbagh v Koury (and he refers to that case at 51 ff). Proceedings arise out of the fatal crash of an Agusta Westland AW 139 twin turbine helicopter on 19 August 2011, during a flight from the Petrobras P-65 offshore oil platform in the Atlantic, west of Rio de Janeiro, to Macae Aerodrome in Brazil.

First and third defendant are an Italian company. Second defendant, AgustaWestland Ltd is an English company and the anchor defendant per A8(1) Brussels IA. At 32:

‘Defendants’ contention is that in order for Article 8 (1) to apply at all, the claim against the anchor defendant must at least be a sustainable one. I described this as “the Merits Test”. For present purposes, the requirement of sustainability can be equated with “viability”, “a real prospect of success”, a “serious issue to be tried” or a “good arguable case”. Neither party sought to argue that any fine point of distinction between these various expressions was relevant here.’

Reisch Montage and Freeport of course are CJEU authority referred to. As is Kolassa for the CJEU consideration of ‘merits review’ (particularly there: taking account of both defendant and claimant’s arguments) under A25 and A26 BIA) and CDC for the CJEU’s most recent proper discussion of the issue (at 86 Waksman J suggest CDC is not a ruling on the merits issue).

At 65 ff Waksman J follows the majority in Kabbagh, and not the dissent of Lady Justice Gloster – I as noted was more enclined to agree with her. Having confessed to his preference for there being a merits test, he then seeks to distinguish the CJEU in Reisch by focusing on the CJEU there finding on the basis of a ‘procedural bar’ in the Member State of the anchor defendant. At 83:

‘I do not find the reasoning of the CJEU here persuasive and I consider that the decision should be distinguished if possible. It can be distinguished because it is very clear from the judgments that the focus was on a national rule as to admissibility of the claim. Even allowing for differences of language, the expression “procedural bar” is not apt to include a lack of any substantive merit. Reisch is not therefore an obstacle to deciding that there is a Merits Test.’

And at 85:

‘that the reasoning of the court in Reisch was concerned more with what it simply saw as an illegitimate incursion of a domestic procedural rule (a bankrupt cannot without more be sued in ordinary litigation) into the operation of Article 6 (1). That, in and of itself decided the point. It was a question of form and not substance. But the Merits Test is a matter of substance.

Held: there is a Merits Test which must be satisfied before A8(1) can be invoked. That merits test is not met in casu.

A8(1)’s ‘so closely connected’ test clearly requires some appreciation of the facts and the legal arguments, as well as a certain amount of taking into account the defendant’s arguments. Yet this in my view does not amount to a merits test, and ‘sustainability’, “viability”, “a real prospect of success”, a “serious issue to be tried” or a “good arguable case” may well be synonyms – but there are not the same as an A8(1) merits test.

One to watch upon appeal.

Geert.

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

Includes challenge of the A8(1)BIa anchor jurisdiction.

Re fatal crash of Agusta Westland AW 139 helicopter on 19 August 2011, during a flight from the Petrobras P-65 offshore oil platform in the Atlantic, west of Rio de Janeiro, to Macae Aerodrome in Brazil. https://t.co/de4okNUMkY

— Geert Van Calster (@GAVClaw) June 13, 2020

On 26 May 2020, the European Commission launched a public consultation on cross-border investment within the EU.

Why this initiative?

First, the Commission is currently working on a new regulatory framework for intra-EU investments in order to make the internal market more attractive for foreign investors. The main objective of the future legislation will be to better protect and facilitate cross-border investments (see communication COM/2020/102, A New Industrial Strategy for Europe).

Second, following the Achmea judgment of the European Court of Justice (Case C-284/16), an agreement for the termination of intra-EU bilateral investment treaties has recently been adopted by a broad majority of Member States. At the same time, many investors but also arbitration practitioners have raised concerns because of this brutal change in the regulatory framework. They principally  invoke the loss of effective enforcement of their rights within the EU.

The main topics of the consultation are as follows: the first section contains some general questions aimed at gaining inputs on respondents’ familiarity with cross-border investments and linked issues; the second seeks feedback from stakeholders on rules to protect intra-EU investments; the third invites views on enforcement of intra-EU investment protection rules, including dispute resolution mechanisms and remedies when issues related to cross-border investments arise; the fourth section contains some general questions to assess the overall EU investment protection framework (as presented in section two and three); the fifth section seeks views of stakeholders on measures to facilitate and promote cross-border investment.

The consultation is open until 8 September 2020 and can be found here.

A short note on Public Joint Stock Company (Rosgosstrakh) v Starr Syndicate Ltd & Ors [2020] EWHC 1557 (Comm) just to illustrate the complications for recognition and enforcement in the absence of a near-automated process such as under Brussels IA (the Hague Judgments Convention is meant to lubricate the process internationally). Claimant applies for summary judgment on its claim for recognition and enforcement of three judgments obtained in its favour in the Russian courts in 2015 and 2016.

Moulder J first discussed the issue of lack of jurisdiction for the Russian courts and she finds at 93 after consideration that the discussions to and fro, and the evidence of Russian experts for each of the parties, necessitates proper discussion with oral evidence of the contractual construction, under Russian law, of the relevant choice of court clauses. Of course under BIa and other regimes operating with a certain amount of mutual trust, second-guessing jurisdiction is not part of the assessment.

Next, the allegations of bias are also discussed, with at 126 ia reference to an interference by President Putin, and at 138 a solid set of reasoning for Moulder J to dismiss the potential for summary judgment on this point, too. Of course bias is an ordre public issue which even under BIa’s rules for recognition of judgments from other Member States, might justify refusal of recognition.

Geert.

 

Application for summary judgment re recognition and enforcement of 3 Russian judgments refused.
I.a. allegations of bias require proper assessment. https://t.co/nfVLicgsQQ

— Geert Van Calster (@GAVClaw) June 17, 2020

 

 

Professor Matthias Lehmann, Chair of Private International and Comparative Law at the University of Vienna (from 1 September 2020), seeks highly skilled and ambitious research fellows (“prae-docs”).

Successful candidates will hold a first law degree from any jurisdiction, possess an excellent command of English, and have a basic knowledge of German. Knowledge of other languages and advanced IT skills are desirable qualities that may be taken into consideration.

One type of position is available in the area comparative and private international law (further details here).

Another type of position is available in the area of international business law, preferably with the candidate having some knowledge or background in banking and capital markets law (further details here).

Fellows are given the opportunity to complete a PhD or conduct post-doctoral research in accordance with the Faculty’s regulations. Other responsibilities include teaching, and supporting Professor Lehmann in his work at the Chair.

The positions involve 30 hours per week, of which 10 hours are set aside for the individual PhD project, and are remunerated according to the Austrian public salary scale (c. 2.200 Euro gross per month, rising to 2.600 Euro after 3 years). Contracts are for an initial term of four years, with a flexible early termination option for the candidate.

Applications (including a covering letter in German or English, a cv, and relevant diploma) should be submitted via the University of Vienna’s Job Centre portal (http://jobcenter.univie.ac.at) no later than 6 July 2020. Please include reference number 10950 for the specialisation in private international law and/or reference number 10951 for the specialisation in international business law. Questions about the positions can be addressed to matthias.lehmann@univie.ac.at.

By Michael Douglas and Mhairi Stewart

Andrew Bell is a leader of private international law in Australia. His scholarly work includes Forum Shopping and Venue in Transnational Litigation (Oxford Private International Law Series, 2003) and several editions of Nygh’s Conflict of Laws in Australia (see LexisNexis, 10th ed, 2019). As a leading silk, he was counsel on many of Australia’s leading private international law cases. In February 2019, his Honour was appointed President of the New South Wales Court of Appeal.

Recently, in Inghams Enterprises Pty Ltd v Hannigan [2020] NSWCA 82, his Honour provided a helpful exposition of the principles applicable to dispute resolution agreements, including arbitration and choice of court agreements. His Honour dissented from the majority of Justices of Appeal Meagher and Gleeson.

Background

Inghams Enterprises, the Australian poultry supplier, entered a contract with Gregory Hannigan by which Hannigan would raise and feed chickens provided by Inghams.

The contract was to continue until 2021 but in 2017 Inghams purported to terminate the contract for alleged breaches by Hannigan. Hannigan successfully sought a declaration that the contract had been wrongfully terminated; see Francis Gregory Hannigan v Inghams Enterprises Pty Limited [2019] NSWSC 321.

In May 2019 Hannigan issued a notice of dispute to Inghams seeking unliquidated damages for losses he incurred between 8 August 2017 and 17 June 2019 while the contract was wrongfully terminated.  Following an unsuccessful mediation in August 2019, Hannigan considered that clause 23.6 of the contract—extracted below—entitled him to refer the dispute to arbitration.

Hannigan’s referral to arbitration was premised by a complex and tiered dispute resolution clause: clause 23. Compliance with clause 23 was a precondition to commencing court proceedings. The clause also contained a requirement to provide notice of a dispute; to use ‘best efforts’ to resolve the dispute in an initial period; and to then go to mediation. If mediation were unsuccessful, then the clause provided that certain disputes must be referred to arbitration. Relevantly, clause 23 included the following:

‘23.1  A party must not commence court proceedings in respect of a dispute arising out of this agreement (“Dispute”), including without limitation a dispute regarding any breach or purported breach of this agreement, interpretation of any of its provisions, any matters concerning of parties’ performance or observance of its obligations under this agreement, or the termination or the right of a party to terminate this agreement) until it has complied with this clause 23.’

‘23.6  If:

23.6.1  the dispute concerns any monetary amount payable and/or owed by either party to the other under this agreement, including without limitation, matters relating to determination, adjustment or renegotiation of the Fee under Annexure 1 under clauses 9.4, 10, 11, 12, 13 and 15.3.3 …   

23.6.2 the parties fail to resolve the dispute in accordance with clause 23.4 within twenty eight (28) days of the appointment of the mediator

then the parties must (unless otherwise agreed) submit the dispute to arbitration using an external arbitrator (who must not be the same person as the mediator) agreed by the parties or, in the absence of agreement, appointed by the Institute Chairman.’ (Emphasis added.)

Inghams sought to restrain the referral to arbitration and failed at first instance; see Inghams Enterprises Pty Ltd v Hannigan [2019] NSWSC 1186.

Inghams sought leave to appeal. In hearing the question of leave together with the appeal, then granting leave, the two key issues for determination by the Court of Appeal were:

• Whether a claim for unliquidated damages could fall within the scope of the arbitration clause which required claims to be concerning monetary amounts ‘under this agreement’ (the construction issue); and
• Whether Hannigan had waived his entitlement to arbitrate by bringing the proceedings in 2017 (the waiver issue).

The construction issue

Meagher JA, with whom Gleeson JA agreed, determined Hannigan’s claim for unliquidated damages for breach of contract was not a claim ‘under’ the contract and therefore did not fall within the terms of the arbitration clause in clause 23.

The phrase ‘monetary amount payable and/or owed’ referred to a payment obligation by one party to another. Read with the phrase ‘under this agreement’, the clauses required that the contract must be the source of the payment obligation to invoke the requirement to arbitrate. A claim for unliquidated damages was beyond the scope of the clause.

The majority and Bell P thus disagreed on whether an assessment for unliquidated damages for breach of contract is ‘governed or controlled’ by a contract because the common law quantum of damages considers the benefits which would have been received under the contract. The majority found that liquidated damages are a right of recovery created by the contract itself and occur as a result of a breach; unliquidated damages for a breach are compensation determined by the Court.

Bell P included provided a detailed discussion of the interpretation of dispute resolution clauses and considered the orthodox process of construction is to be applied to the construction of dispute resolution clauses. That discussion is extracted below. Bell P’s liberal approach was not followed by the majority.

The waiver issue

The Court found that Hannigan did not unequivocally abandon his right to utilise the arbitration clause by initiating the breach of contract proceedings against Inghams for the following reasons:

1. Hannigan did not abandon his right to arbitration by failing to bring a damages claim in the 2017 proceedings.
2. In 2017 Hannigan enforced his rights under clause 23.11 by seeking declaratory relief.
3. The contract explicitly required that waiver of rights be waived by written notice.
4. The bringing of proceedings did not constitute a written agreement not to bring a damages claim to arbitration.

It was noted that if Hannigan had sought damages in 2017 then Ingham’s waiver argument may have had some force.

President Bell’s  dicta on dispute resolution clauses

In his dissenting reasons, Bell P provided the following gift to private international law teachers and anyone trying to understand dispute resolution clauses:

Dispute resolution clauses may be crafted and drafted in an almost infinite variety of ways and styles. The range and diversity of such clauses may be seen in the non-exhaustive digest of dispute resolution clauses considered by Australian courts over the last thirty years, which is appended to these reasons. [The Appendix, below, sets out a table of example clauses drawn from leading cases.]

Dispute resolution clauses may be short form or far more elaborate, as illustrated by the cases referred to in the Appendix. They may be expressed as service of suit clauses… They may provide for arbitration… They may be standard form… They may be bespoke… They may be asymmetric… They may and often will be coupled with choice of law clauses… They may be multi-tiered, providing first for a process of mediation, whether informal or formal, or informal and then formal, before providing for arbitral or judicial dispute resolution…

Dispute resolution clauses are just as capable of generating litigation as any other contractual clause, and the law reports are replete with cases concerned with the construction of such clauses. The cases referred to in the Appendix supply a sample.

Such clauses have also spawned specialist texts and monographs…

The question raised by this appeal is purely one of construction. It is accordingly desirable to begin by identifying the principles applicable to the construction of a dispute resolution clause. …

It has been rightly observed that “the starting point is that the clause should be construed, just as any other contract term should be construed, to seek to discover what the parties actually wanted and intended to agree to”…

In short, the orthodox process of construction is to be followed…

In the context of dispute resolution clauses, whether they be arbitration or exclusive jurisdiction clauses, much authority can be found in support of affording such clauses a broad and liberal construction…

In Australia, unlike other jurisdictions, the process of contractual construction of dispute resolution clauses has not been overlaid by presumptions cf [some other jurisdictions]. Thus, in [Rinehart v Welker (2012) 95 NSWLR 221] at [122], Bathurst CJ, although not eschewing the liberal approach that had been adumbrated in both Francis Travel and Comandate to the construction of arbitration clauses, rejected the adoption of a presumption … the presumption was that the court should, in the construction of arbitration clauses, “start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal”, and that the clause should be construed in accordance with that presumption, “unless the language makes it clear that certain questions were intended to be excluded from the arbitrator’s jurisdiction…

In [Rinehart v Hancock Prospecting Pty Ltd (2019) 93 ALJR 582], the plurality indicated that the appeals could be resolved with the application of orthodox principles of construction, which required consideration of the context and purpose of the Deeds there under consideration… In his separate judgment, Edelman J described as a “usual consideration of context” the fact that “reasonable persons in the position of the parties would wish to minimise the fragmentation across different tribunals of their future disputes by establishing ‘one-stop adjudication’ as far as possible”… This may have been to treat the considerations underpinning [leading] cases… as stating a commercially commonsensical assumption…

The proper contemporary approach was eloquently articulated in the following passage in [Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442] (at [167]) which I would endorse:

 “The existence of a ‘correct general approach to problems of this kind’ does not imply some legal rule outside the orthodox process of construction; nor does it deny the necessity to construe the words of any particular agreement. But part of the assumed legal context is this correct general approach which is to give expression to the rational assumption of reasonable people by giving liberal width and flexibility where possible to elastic and general words of the contractual submission to arbitration, unless the words in their context should be read more narrowly. One aspect of this is not to approach relational prepositions with fine shades of difference in the legal character of issues, or by ingenuity in legal argument… another is not to choose or be constrained by narrow metaphor when giving meaning to words of relationship, such as ‘under’ or ‘arising out of’ or ‘arising from’. None of that, however, is to say that the process is rule-based rather than concerned with the construction of the words in question. Further, there is no particular reason to limit such a sensible assumption to international commerce. There is no reason why parties in domestic arrangements (subject to contextual circumstances) would not be taken to make the very same common-sense assumption. Thus, where one has relational phrases capable of liberal width, it is a mistake to ascribe to such words a narrow meaning, unless some aspect of the constructional process, such as context, requires it.” (Citations omitted.)

Bell P’s appendix Schedule of Jurisdiction and Arbitration Clauses Case Name Citation Clause Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332; [1990] HCA 8 “10. Arbitration. Any controversy or claim arising out of, or relating to, this Agreement or the breach thereof, shall be settled by arbitration, in accordance with the rules, then obtaining, of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof.” IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466; (1991) 100 ALR 361 “9. Governing Law and Arbitration This Agreement will be construed in accordance with and governed by the laws of New South Wales. Any controversy or claim arising out of or related to this Agreement or the breach thereof will be settled by arbitration. The arbitration will be held in Sydney, New South Wales and will be conducted in accordance with the provisions of the Commercial Arbitration Act, 1984 (as amended). The decision of the arbitrator(s) will be final and binding.” Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160; (1996) 131 FLR 422 “ARTICLE 19

Arbitration

Any dispute or difference arising out of this Agreement shall be referred to the arbitration in London of a single Arbitrator to be agreed upon by the parties hereto or in default of such agreement appointed by the President for the time being of the Royal Aeronautical Society. The and the provisions of the Arbitration Act 1950 and any statutory modifications or re-enactments therefore for the time being in force shall apply. (sic)

ARTICLE 20

Applicable Law

This Agreement shall in all respects be interpreted in accordance with the Laws of England.” Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418; [1996] HCA 39 “Governing Law

This policy shall be governed by the laws of England. Any dispute arising from this policy shall be referred to the Courts of England.” FAI General Insurance Co Ltd v Ocean Marine Mutual Protection & Indemnity Association (1997) 41 NSWLR 117 “This Reinsurance is subject to English jurisdiction”, with a manuscript addition: “Choice of Law: English” Hi-Fert Pty Ltd v Kiukiang Maritime Carriers (No 5) (1998) 90 FCR 1; (1998) 159 ALR 142 “Any dispute arising from this charter or any Bill of Lading issued hereunder shall be settled in accordance with the provisions of the Arbitration Act 1950 and any subsequent Acts, in London, each party appointing an Arbitrator, and the two Arbitrators in the event of disagreement appointing an Umpire whose decision shall be final and binding upon both parties hereto.

This Charter Party shall be governed by and construed in accordance with English Law.

The Arbitrators and Umpire shall be commercial men normally engaged in the Shipping Industry.

Any claim must be in writing and claimant’s Arbitrator appointed within six months of the Vessel’s arrival at final port of discharge, otherwise all claims shall be deemed to be waived.” Recyclers of Australia Pty Ltd v Hettinga Equipment Inc (2000) 100 FCR 420; [2000] FCA 547 “Applicable Law, Pricing and Terms of Sale: Any contract between Buyer and Hettinga shall be governed, construed and interpreted under the law of the State of Iowa, and shall be subject to the terms and conditions listed below. Any Purchase Order issued by Buyer as a result of this quotation shall be deemed to incorporate the terms and conditions of this quotation. If there is any conflict between these conditions of sale and those of the buyer, these conditions shall control …

…

Arbitration: All disputes hereunder, including the validity of this agreement, shall be submitted to arbitration by an arbitrator in Des Moines, Iowa USA under the Rules of the American Arbitration Association, and the decision rendered thereunder shall conclusively bind the parties. Judgment upon the award may be entered in any court having jurisdiction.” HIH Casualty & General Insurance Ltd (in liq) v RJ Wallace (2006) 68 NSWLR 603; [2006] NSWSC 1150 “ARTICLE XVIII

SERVICE OF SUIT

The Reinsurer hereon agrees that:

i.   In the event of a dispute arising under this Agreement, the Reinsurers at the request of the Company will submit to the jurisdiction of any competent Court in the Commonwealth of Australia. Such dispute shall be determined in accordance with the law and practice applicable in such Court.

ii.   Any summons notices or process to be served upon the Reinsurer may be served upon MESSRS. FREEHILL, HOLLINGDALE & PAGE M.L.C. CENTRE, MARTIN PLACE, SYDNEY, N.S.W. 2000 AUSTRALIA who has authority to accept service and to enter an appearance on the Reinsurer’s behalf, and who is directed, at the request of the Company to give a written undertaking to the Company that he will enter an appearance on the Reinsurer’s behalf.

iii.   If a suit is instituted against any one of the Reinsurers all Reinsurers hereon will abide by the final decision of such Court or any competent Appellate Court.

ARTICLE XIX

ARBITRATION:

Disputes arising out of this Agreement or concerning its validity shall be submitted to the decision of a Court of Arbitration, consisting of three members, which shall meet in Australia.

The members of the Court of Arbitration shall be active or retired executives of Insurance or Reinsurance Companies.

Each party shall nominate one arbitrator. In the event of one party failing to appoint its arbitrator within four weeks after having been required by the other party to do so, the second arbitrator shall be appointed by the President of the Chamber of Commerce in Australia. Before entering upon the reference, the arbitrators shall nominate an umpire. If the arbitrators fail to agree upon an umpire within four weeks of their own appointment, the umpire shall be nominated by the President of the Chamber of Commerce in Australia.

The Arbitrators shall reach their decision primarily in accordance with the usages and customs of Reinsurance practice and shall be relieved of all legal formalities. They shall reach their decision within four months of the appointment of the umpire.

The decision of the Court of Arbitration shall not be subject to appeal.

The costs of Arbitration shall be paid as the Court of Arbitration directs.

Actions for the payment of confirmed balances shall come under the jurisdiction of the ordinary Courts.” Comandate Marine Corporation v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45; [2006] FCAFC 192 “(b) London

All disputes arising out of this contract shall be arbitrated at London and, unless the parties agree forthwith on a single Arbitrator, be referred to the final arbitrament of two Arbitrators carrying on business in London who shall be members of the Baltic Mercantile & Shipping Exchange and engaged in Shipping one to be appointed by each of the parties, with the power to such Arbitrators to appoint an Umpire. No award shall be questioned or invalidated on the ground that any of the Arbitrators is not qualified as above, unless objection to his action be taken before the award is made. Any dispute arising hereunder shall be governed by English Law.

…” Armacel Pty Ltd v Smurfit Stone Container Corporation (2008) 248 ALR 573; [2008] FCA 592 “21.3.1 This Agreement must be read and construed according to the laws of the state of New South Wales, Australia and the parties submit to the jurisdiction of that State. If any dispute arises between the Licensor and the Licensee in connection with this Agreement or the Technology, the parties will attempt to mediate the dispute in Sydney, Australia.

21.3.2 In the event that there is a conflict between the laws of the State of New South Wales, Australia and the jurisdiction in which the Equipment is located, then the parties agree that the laws of the State of New South Wales shall prevail.

21.3.3 If the licensee is in breach of this Agreement, the Licensee must pay to the Licensor on demand the amount of any legal costs and expenses incurred by the Licensor for the enforcement of its rights under this Agreement and this provision shall prevail despite any order for costs made by any Court.” BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (2008) 168 FCR 169; [2008] FCA 551 “(b)   Any dispute arising out of this Charter Party or any Bill of Lading issued hereunder shall be referred to arbitration in accordance with the Arbitration Acts 1996 and any statutory modification or re-enactment in force. English law shall apply …

(c)   The arbitrators, umpire and mediator shall be commercial persons engaged in the shipping industry. Any claim must be made in writing and the claimant’s arbitrator nominated within 12 months of the final discharge of the cargo under this Charter Party, failing which any such claim shall be deemed to be waived and absolutely barred.” Paharpur Cooling Towers Ltd v Paramount (WA) Ltd [2008] WASCA 110 [Background: “Clause 22 of the contract provides that when any dispute arises between the parties any party may give to the other party a notice in writing that a dispute exists. Clause 22 then sets out a process by which the parties are to endeavour to resolve the dispute. If they are unable to do so, Paramount (as Principal) at its sole discretion:”]

“[S]hall determine whether the parties resolve the dispute by litigation within the jurisdiction of the courts of Western Australia or arbitration under the Commercial Arbitration Act. [Paramount] shall notify [Paharpur], by notice in writing, of its decision to refer the dispute to litigation or arbitration within 28 days of either [Paramount] or [Paharpur] electing that the dispute be determined by either litigation or arbitration.”

“’Dispute’ means a dispute or difference between the parties as to the construction of the Contract or as to any matter or thing of whatsoever nature arising, whether antecedent to the Contract and relating to its formation or arising under or in connection with the Contract, including any claim at common law, in tort, under statute or for restitution based on unjust enrichment or for rectification or frustration or a dispute concerning a direction given and/or acts or failing to act by the Engineer or the Engineer’s Representative or interference by the Principal or the Principal’s Representative.” Electra Air Conditioning BV v Seeley International Pty Ltd ACN 054 687 035 [2008] FCAFC 169 “20. Dispute Resolution

20.1   If at any time there is a dispute, question or difference of opinion (“Dispute”) between the parties concerning or arising out of this Agreement or its construction, meaning, operation or effect or concerning the rights, duties or liabilities of any party, one party may serve a written notice on the other party setting out details of the Dispute.

Thereafter:

(a)   senior management of each party will try to resolve the Dispute through friendly discussions for a period of thirty (30) days after the date of receipt of the notice; and

(b)   if senior management of each party are unable to resolve the Dispute under Section 20.1(a), it shall be referred to arbitration in accordance with the Rules for the Conduct of Commercial Arbitrations of the Institute of Arbitrators and Mediators Australia. The number of arbitrators shall be 1. The place of arbitration shall be Melbourne, Australia. The language of arbitration shall be English. The arbitral award shall be final and binding upon both parties.

20.2   Pending the resolution of the Dispute under Section 20.1, the parties shall continue to perform their obligations under this Agreement without prejudice to a final adjustment in accordance with any award.

20.3   Nothing in this Section 20 prevents a party seeking injunctive or declaratory relief in the case of a material breach or threatened breach of this Agreement.”

“25. Governing law and Jurisdiction

This Agreement is governed by the laws of Victoria, Australia. Subject to Section 20, the parties irrevocably submit to the courts of Victoria, and any courts of appeal from such courts, in relation to the subject matter of this Agreement.” Ace Insurance Ltd v Moose Enterprise Pty Ltd [2009] NSWSC 724 Policy

“Should any dispute arise concerning this policy, the dispute will be determined in accordance with the law of Australia and the States and Territories thereof. In relation to any such dispute the parties agree to submit to the jurisdiction of any competent court in a State or Territory of Australia.”

Expona Endorsement

“Provided that all claims which fall under the terms of this endorsement, it is agreed:

(i)   the limits of liability are inclusive of costs as provided under supplementary payment in this policy.

(ii)   that should any dispute arise between the insured and ACE over the application of this policy, such dispute shall be determined in accordance with the law and practice of the Commonwealth of Australia.” Global Partners Fund Ltd v Babcock & Brown Ltd (in liq) [2010] NSWCA 196; (2010) 79 ACSR 383 Limited Partnership Agreement

“This Agreement and the rights, obligations and relationships of the parties hereto under this Agreement and in respect of the Private Placement Memorandum shall be governed by and construed in accordance with the laws of England and all the parties irrevocably agree that the courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement or the Private Placement Memorandum or the acquisition of Commitments, whether or not governed by the laws of England, and that accordingly any suit, action or proceedings arising out of or in connection with this Agreement or Private Placement Memorandum or the acquisition of Commitments shall be brought in such courts. The parties hereby waive, to the extent not prohibited by applicable law, and agree not to assert by way of motion, as a defence or otherwise, in any such proceeding, any claim that it is not subject personally to the jurisdiction of such courts, that any such proceedings brought in such courts is improper or that this Agreement or the Private Placement Memorandum, or the subject matter hereof or thereof, may not be enforced in or by such court.”

Deed of Adherence

“14. This Deed of Adherence and the rights, obligations and relationships of the parties under this Deed of Adherence and the Partnership Agreement and in respect of the Private Placement Memorandum shall be governed by and construed in accordance with the laws of England.

15. The Applicant irrevocably agrees that the courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Deed of Adherence, the Partnership Agreement, the Private Placement Memorandum, or the acquisition of Commitments whether or not governed by the laws of England, and that accordingly any suit, action or proceedings arising out of or in connection with this Deed of Adherence, the Partnership Agreement, the Private Placement Memorandum, or the acquisition of Commitments shall be brought in such courts. The Applicant hereby waives, to the extent not prohibited by applicable law, and agrees not to assert by way of motion, as a defence or otherwise, in any such proceeding, any claim that the Applicant is not subject personally to the jurisdiction of such courts, that any such proceeding brought in such courts is improper or that this Deed of Adherence, the Partnership Agreement or the Private Placement Memorandum, or the subject matter hereof or thereof, may not be enforced in or by such court. Faxtech Pty Ltd v ITL Optronics Ltd [2011] FCA 1320 “the agreement shall be interpreted, construed and enforced in accordance with the laws of England, and the parties submit to the jurisdiction of the competent courts of England (London).” Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66; (2013) 298 ALR 666 Asset Sale Agreement

“16.2 Governing Law and Dispute Resolution

(a)   This agreement is governed by the laws of Western Australia.

(b)   Subject to clause 16.2(d), the procedures prescribed in this clause 16 must be strictly followed to settle a dispute arising under this agreement.

(c)   If any dispute arises out of or in connection with this agreement, including any question regarding the existence, validity or termination of this agreement;

(1)   within ten Business Days of the dispute arising senior representatives from each party must meet in good faith, act reasonably and use their best endeavours to resolve the dispute by joint discussions;

(2)   failing settlement by negotiation, either party may, by notice to the other party, refer the dispute for resolution by mediation:

(A)   at the Singapore Mediation Centre (SMC) in Singapore;

(B)   under the SMC Mediation Procedures;

(C)   with one mediator;

(D)   with English as the language of the mediation; and

(E)   with each party bearing its own costs of the mediation; and

(3)   failing settlement by mediation, either party may, by notice to the other party, refer the dispute for final and binding resolution by arbitration:

(A)   at the Singapore International Arbitration Centre (SIAC) in Singapore;

(B)   under the United Nations Commission on International Trade Law Arbitration Rules (UNCITRAL) in force on the date of this agreement, which are deemed to be incorporated by reference into this clause;

(C)   to the extent, if any, that the UNCITRAL do not deal with any procedural issues for the arbitration, the procedural rules in the SIAC Arbitration Rules in force on the date of this agreement will apply to the arbitration;

(D)   with the substantive law of the arbitration being Western Australian law;

(E)   with one Arbitrator;

(F)   with English as the language of the arbitration; and

(G)   with each party bearing its own costs of the arbitration.

(d)   Nothing in this clause 16:

(1)   prevents either party seeking urgent injunctive or declaratory relief from the Supreme Court of Western Australia in connection with the dispute without first having to attempt to negotiate and settle the dispute in accordance with this clause 16; or

(2)   requires a party to do anything which may have an adverse effect on, or compromise that party’s position under, any policy of insurance effected by that party.”

Guarantee Agreement

“9.9. Governing law and jurisdiction

(a)   This document is governed by the laws of Western Australia.

(b)   Subject to clause 9.9(c)(iii)(G), the procedures prescribed in this clause 9.9 must be strictly followed to settle a dispute arising under this document.

(c)   If any dispute arises out of or in connection with this document, including any question regarding the existence, validity or termination of this document:

(i)   within 10 Business Days of the dispute arising senior representatives from each party must meet in good faith, act reasonably and use their best endeavours to resolve the dispute by joint discussions;

(ii)   failing settlement by negotiation, any party may, by notice to the other parties, refer the dispute for resolution by mediation; and

(A) at the Singapore Mediation Centre (SMC) in Singapore;

(B) with one mediator;

(C) with English as the language of the Mediation; and

(D) with each party bearing its own costs of the mediation; and

(iii)   failing settlement by mediation, any party may, by notice to the other parties, refer the dispute for final and binding resolution by arbitration:

 

(A)    at the Singapore International Arbitration Centre (SIAC) in Singapore or in Hong Kong;

(B)   under the United Nations Commission on International Trade Law Arbitration Rules (UNCITRAL) in force on the date of this agreement, which are deemed to be incorporated by reference into this clause;

(C)   to the extent, if any, that UNCITRAL do not deal with any procedural issues for the arbitration, the procedural rules in the SIAC Arbitration Rules in force on the date of this agreement will apply to the arbitration;

(D)   with the substantive law of the arbitration being Western Australian law;

(E)   with one arbitrator;

(F)   with English as the language of the arbitration; and

(G)   with each party bearing its own costs of the arbitration.

(d)    Nothing in this clause 9.9:

(i)   prevents any party seeking urgent injunctive or declaratory relief from the Supreme Court of Western Australia in connection with the dispute without first having to attempt to negotiate and settle the dispute in accordance with this clause 9.9; or

(ii)   requires a party to do anything which may have an adverse effect on, or compromise that party’s position under, any policy of insurance effected by that party.” AAP Industries Pty Limited v Rehaud Pte Limited [2015] NSWSC 468 Supply Agreement

“The agreed place of jurisdiction, irrespective of the amount in dispute, is Singapore.”

Conditions of Purchase

“This contract shall be construed in accordance with and governed in every respect by the laws of Singapore, and all disputes arising out of or in connection with this agreement shall be brought in the courts of Singapore.” Rinehart v Rinehart (No 3)

(and Rinehart v Welker, in relation to the Hope Downs Deed;

and Rinehart v Hancock Prospecting Pty Ltd, in relation to the Hope Downs Deed and April 2005 Deed of Obligation and Release) (2016) 257 FCR 310

 

(and (2012) 95 NSWLR 221;

 

 

and [2019] HCA 13; (2019) 366 ALR 635) April 2005 Deed of Obligation and Release

“This Deed shall be governed by and shall be subject to and interpreted according to the laws of the State of Western Australia, and the parties hereby agree, subject to all disputes hereunder being resolved by confidential mediation and arbitration in Western Australia, to submit to the exclusive jurisdiction of the Courts of Western Australia for all purposes in respect of this Deed.”

Hope Downs Deed

“20. CONFIDENTIAL MEDIATION/ARBITRATION

In the event that there is any dispute under this deed then any party to his [sic] deed who has a dispute with any other party to this deed shall forthwith notify the other party or parties with whom there is the dispute and all other parties to this deed (‘Notification’) and the parties to this deed shall attempt to resolve such difference in the following manner.

20.1 Confidential Mediation

(a)   the disputing parties shall first attempt to resolve their dispute by confidential mediation subject to Western Australian law to be conducted by a mediator agreed to by each of the disputing parties and GHR (or after her death or non-capacity, HPPL);

(b)   each of the disputing parties must attempt to agree upon a suitably qualified and independent person to undertake the mediation;

(c)   the mediation will be conducted with a view to:

(i)   identifying the dispute;

(ii)   developing alternatives for resolving the dispute;

(iii)   exploring these alternatives; and

(iv)   seeking to find a solution that is acceptable to the disputing parties.

(d)   any mediation will not impose an outcome on the disputing parties. Any outcome must be agreed to by the disputing parties;

(e)   any mediation will be abandoned if:

(i)   the disputing parties agree;

(ii)   any of the disputing parties request the abandonment.

20.2 Confidential Arbitration

(a)   Where the disputing parties are unable to agree to an appointment of a mediator for the purposes of this clause within fourteen (14) days of the date of the Notification or in the event any mediation is abandoned then the dispute shall on that date be automatically referred to
arbitration for resolution (‘Referral Date’) and the following provisions of this clause shall apply;

(i)   in the event that no agreement on the arbitrator can be reached within three (3) weeks of the Referral Date, the arbitrator will be Mr Tony Fitzgerald QC (provided he is willing to perform this function and has not reached 74 years of age at that time), or in the event Mr Tony Fitzgerald QC is unwilling or unable to act, the Honourable Justice John Middleton (provided he is no longer a Judge of the Federal or other Australian Court and provided he
has not reached 74 years of age at that time), and irrespective of whether either of these persons have carried out the mediation referred to above, or in the event that neither is willing or able to act,

(ii)   subject to paragraph (iv) below by confidential arbitration with one (1) party to the dispute nominating one (1) arbitrator, and the other party to the dispute nominating another arbitrator and the two (2) arbitrators selecting a third arbitrator within a further three (3) weeks, who shall together resolve the matter pursuant to the Commercial Arbitration Act of Western Australia and whose decision shall be final and binding on the parties;

(iii)   if the arbitrators nominated pursuant to paragraph 2(a)(ii) are unable to agree in the selection of a third arbitrator within the time provided in paragraph 2(a)(iii), the third arbitrator will be designated by the President of the Law Society of Western
Australia and shall be a legal practitioner qualified to practise in the State of Western Australia of not less than twenty (20) years standing.

(iv)   in the event that a disputing party does not nominate an arbitrator pursuant to Clause 2(a)(ii) within twenty-one (21) days from being required to do so it will be deemed to have agreed to the appointment of the arbitrator appointed by the other disputing party.

(b)   The dispute shall be resolved by confidential arbitration by the arbitrator agreed to by each of the disputing parties or appointed pursuant to paragraph 2(a)(i) above (or if more than one is appointed pursuant to paragraph 2(a)(ii) then as decided by not less than a majority of them) who shall resolve the matter pursuant to the Commercial Arbitration Act of Western Australia and whose decision shall be final and binding on the parties.

(c)   The arbitration will take place at a location outside of a Court and chosen to endeavour to maintain confidentiality and mutually agreed to by the disputing parties and failing agreement in Western Australia and the single Arbitrator or the Chairman of the Arbitral Tribunal as the
case may be will fix the time and place outside of a Court for the purposes of the confidential hearing of such evidence and represen­tations as any of the disputing parties may present. If any of the parties request wheelchair access, this will be taken into account in the selection of the premises and parking needs. Except as otherwise provided, the decision of the single arbitrator or, if three arbitrators, the decision of any two of them in writing will be binding on the disputing parties both in respect of procedure and the final determination of the issues.

(d)   The arbitrators will not be obliged to have regard to any particular information or evidence in reaching his/their determination and in his/their discretion procure and consider such information and evidence and in such form as he/they sees fit;

(e)   The award of the arbitrator(s) will be to the extent allowed by law non-appealable, conclusive and binding on the parties and will be specifically enforceable by any Court having jurisdiction. …

[21. the deed] shall be governed by and be subject to and interpreted according to the laws of the State of Western Australia”.”

August 2009 Deed of Further Settlement

“16. The CS Deed and this Deed will be governed by the following dispute resolution clause:

(i)   the parties shall first seek to resolve any dispute or claim arising out of, or in relation to this Deed or the CS Deed by discussions or negotiations in good faith;

(ii)   Any dispute or claim arising out of or in relation to this Deed or the CS Deed which is not resolved within 90 days, will be submitted to confidential arbitration in accordance with the UNCITRAL Arbitration Rules then in force. There will be three arbitrators. JLH shall appoint one arbitrator, HPPL shall appoint the other arbitrator and both arbitrators will choose the third Arbitrator. The place of arbitration shall be in Australia and the exact location shall be chosen by HPPL. Each party will be bound by the Arbitrator’s decision.

(iii)   A party may not commence court proceedings in relation to any dispute arising out of or in relation to this Deed or the Original Deed or the CS Deed;

(iv)   The costs of the arbitrators and the arbitration venue will be borne equally as to half by JLH and the other half by the non JLH party. Each party is responsible for its own costs in connection with the dispute resolution process; and

(v)   Despite the existence of a Dispute, the parties must continue to perform their respective obligations under this Deed.” Mobis Parts Australia Pty Ltd v XL Insurance Company SE [2016] NSWSC 1170 “The place of jurisdiction for any dispute arising out of this Policy shall be Bratislava”, with an anterior clause: “This Policy shall be governed exclusively by Slovakian law. This also applies to Insured Companies with a foreign domicile.” Parnell Manufacturing Pty Ltd v Lonza Ltd [2017] NSWSC 562 “16.5 Governing Law/Jurisdiction. This Agreement is governed in all respects by the laws of the State of Delaware, without regard to its conflicts of laws principles. The Parties agree to submit to the jurisdiction of the courts of Delaware.” Royal Bank of Scotland plc v Babcock & Brown DIF III Global Co-Investment Fund LP [2017] VSCA 138 “This Letter Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed in that State. Each of the parties hereto (a) consents to submit itself to the personal jurisdiction of the United States District Court for the Southern District of New York or any court of the State of New York located in such district in the event any dispute arises out of this Letter Agreement or any of the transactions contemplated by this Letter Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court and (c) agrees that it will not bring any action relating to this Letter Agreement or any of the transactions contemplated by this Letter Agreement in any court other than such courts sitting in the State of New York. THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE OTHER IN ANY MATTERS ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT.” Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61 Risk Transfer Agreement

“The parties shall strive to settle any dispute arising from the interpretation or performance of this Agreement through friendly consultation within 30 days after one party asks for consultation. In case no settlement can be reached through consultation, each party can submit such matter to the court. The English Courts shall have the exclusive jurisdiction for all disputes arising out of or in connection with this Agreement.”
Promotion Agreement

“This Agreement is governed by the law in force in New South Wales. The parties submit to the non-exclusive jurisdiction of the courts having jurisdiction in New South Wales and any courts, which may hear appeals from those courts in respect of any proceedings in connection with this Agreement.” Conclusion

Respectfully, Bell P’s dissenting reasons are to be preferred to those of Meagher JA, with whom Gleeson JA agreed. Bell P’s reasons are more consistent the weight of authority on construction of arbitration and choice of court agreements in Australia and abroad. On the other hand, the majority approach shows that Australian courts often do not feel bound to follow the solutions offered by foreign courts to common private international law problems.

Michael Douglas co-authored this post with Mhairi Stewart. This post is based on their short article first published by Bennett + Co.

In October 2019, Vincent Richard defended a PhD thesis on default judgments in the European judicial area, written under the joint supervision of Gilles Cuniberti and Loïc Cadiet.

The abstract reads:

French judges regularly refuse to enforce foreign judgements rendered by default against a defendant who has not appeared. This finding is also true for other Member States, as many European regulations govern cross-border enforcement of decisions rendered in civil and commercial matters between Member States. The present study examines this problem in order to understand the obstacles to the circulation of default decisions and payment orders in Europe. When referring to the recognition of default judgments, it would be more accurate to refer to the recognition of decisions made as a result of default proceedings. It is indeed this (default) procedure, more than the judgment itself, which is examined by the exequatur judge to determine whether the foreign decision should be enforced. This study is therefore firstly devoted to default procedures and payment order procedures in French, English, Belgian and Luxembourgish laws. These procedures are analysed and compared in order to highlight their differences, be they conceptual or simply technical in nature. Once these discrepancies have been identified, this study turns to private international law in order to understand which elements of the default procedures are likely to hinder their circulation. The combination of these two perspectives makes it possible to envisage a gradual approximation of national default procedures in order to facilitate their potential circulation in the European area of freedom, security and justice.

The thesis, in French, is titled Le jugement par défaut dans l’espace judiciaire européen and can be accessed here.

International comity underlies the rule of both Ralli Brothers v Compania Naviera Sota y Aznar (‘Ralli Bros’) [1920] 2 KB 287 and Foster v Driscoll [1929] 1 KB 470, jointly known as ‘illegality under foreign law’. They both engage lois de police of the place of performance, and the English courts’ attitude towards not assisting with contractual performance that would go against such lois. Per Cockerill J in Magdeev v Tsvetkov [2020] EWHC 887 at 307:

“The Foster v Driscoll and Ralli Bros principles differ in this way: the latter is concerned only with whether the contract between the parties necessarily involves performance of an act which is illegal by the law of the place of performance, irrespective of the object and intention of the parties; the former is only concerned with whether the object and intention of the parties is to perform their agreement in a manner which involves an illegal act in the place of performance, and is not concerned with whether the contract necessitates the undertaking of such an act…’

At issue in Colt Technology Services v SG Global Group SRL [2020] EWHC 1417 (Ch), is an injunction to restrain SGG (of Italy) from presenting a winding-up petition against it. SGG claims that Colt UK is indebted to it in the sum of US$4,936,619.93 plus interest. Colt UK contends that the debt is bona fide disputed on substantial grounds, such that the Companies Court is not an appropriate forum to determine the dispute and the presentation of a winding-up petition would be an abuse of process. Colt UK says that SGG was not the true supplier of the services under the relevant agreement, but was a shell company acting as a front for another supplier and was engaged in a form of VAT “missing trader” fraud with the Italian authorities as victims.

After due consideration Wicks J holds that Colt UK has a properly arguable illegality defence to the sums claimed by SGG, based on the Ralli Bros principle. Held: the presentation of a winding-up petition against Colt UK would be an abuse of process and in all the circumstances it is right to restrain SGG from taking that step.

Another interesting example of international comity in private, commercial litigation.

Geert.

The Centre of Commercial Law Studies (CCLS) at Queen Mary University London is publishing a new journal, the Transnational Commercial Law Review (ISSN 2515-3838). This is an online fully open access peer-reviewed journal. It is dedicated to publishing academic research and commentary of the highest quality in terms of originality and rigour.

Submissions to the Review are by invitation only and no unsolicited submissions will be considered. The Review will publish research outputs linked with the academic programme of the Institute of Transnational Commercial Law recently established by CCLS in partnership with Unidroit, including the Transnational Commercial Law Lecture Series which will showcase research by eminent researchers in this field, as well as the most high-quality contributions to the CCLS’s New Voices in Commercial Law Seminar Series.

More details can be found here.

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

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. For more information about the programmes of The Hague Academy of International Law, please consult the website: https://www.hagueacademy.nl/.

Given the extremely positive feed-back of so many participants of earlier events of this type, participation is highly recommended to the global PIL community.

On 12 May 2020, the Court of Appeal of England and Wales delivered an interesting decision in SAS Institute Inc. v. World Programming Ltd.

This is a long and complex case, which has reached, inter alia, the European Court of Justice on certain issues of IP law. But the case also raises a number of issues of private international law (see already the reports of Geert van Calster here and here).

In this post, I would like to focus on one particular aspect of last month’s judgment, namely the territoriality of enforcement of judgments, but the case is also concerned with the conditions for issuing anti-enforcement injunctions.

Background

The background of the enforcement issues is a dispute between a U.S. company (SAS) and a UK company (WPL) which resulted in a judgment delivered by a court of North Carolina and ordering WPL to pay about US$ 79 million. The American judgment, however, was denied enforcement in the UK on various grounds, including abuse of process and public policy.

The judgment creditor then initiated enforcement proceedings in a Californian court over assets located in various jurisdictions, including the U.K. The assets were debts of customers of WPL. The Californian enforcement orders required WPL to assign the debts to SAS (the Assignment Orders) and, for debts already paid, to turnover monies already paid to SAS (the Turnover Order).

Affecting Assets, Directly or Indirectly

The Court of Appeal started by recalling the basic principle, which is undoubtedly widely shared, according to which enforcement should be strictly territorial. Accordingly, in principle, the American enforcement orders were found to be exorbitant and infringe the sovereignty of the UK insofar as they affected the debts situated in the UK.

But, the judgment creditor argued, the territoriality principle really applied only to in rem enforcement proceedings. In contrast, the Assignment and Turnover Orders acted in personam. As many readers will know, English courts have a long tradition of using equitable remedies to do indirectly what they recognise they should not do directly. In recent times, the best example has certainly been the power to issue freezing orders with respect to assets situate abroad.

The admissibility of in personam remedies in this context was addressed by Lord Collins in Masri v Consolidated Contractors International (UK) Ltd (No. 2) in 2008. In this judgment, Lord Collins explained that in personam remedies would only be admissible if three conditions were met.

59. As I have said, the fact that it acts in personam against someone who is subject to the jurisdiction of the court is not determinative. In deciding whether an order exceeds the permissible territorial limits it is important to consider: (a) the connection of the person who is the subject of the order with the English jurisdiction; (b) whether what they are ordered to do is exorbitant in terms of jurisdiction; and (c) whether the order has impermissible effects on foreign parties. 

In the SAS v. WPL case, the Court of Appeal found that there were connections between the English debtor and the U.S., as the WPL was conducting business in the U.S. But it found the foreign orders raised problems insofar as they required positive actions from the English debtor. Finally, the Court of Appeal insisted that the American orders did include any proviso protecting third parties, in particular by assuring them that their position would not be affected unless the American orders were declared enforceable by the court of the situs of the debt (ie here the English court).

The Court concluded:

83. In the circumstances, the proposed Assignment and Turnover Orders can properly be regarded as exorbitant, being contrary to the internationally accepted principle that enforcement of a judgment is a matter for the courts of the state where the asset against which it is sought to enforce the judgment is located.

The Court then moved on to discuss whether it should issue an anti-enforcement injunction.

And the Brussels Ibis Regulation?

It does not seem that the applicability of the Brussels I bis Regulation was raised at any point in this case.

One wonders, however, whether English courts were free to define territoriality of enforcement in a case concerned with enforcement of foreign judgments over assets situated in a Member State. There is no doubt that the jurisdiction of the English courts to rule on such matters was governed by Article 24(5) of the Brussels I bis Regulation, which applies irrespective of the domicile of the parties.

It could be that the Court of Appeal considered that the source of the territoriality principle did not matter, because it is so widely accepted. Lord Justice Males repeated several times that the principle is recognised internationally, and flows from rules of international law. Most unfortunately, however, he did not cite any source of international law in support of his position, but rather other English judges.

The devil is in the details. Everybody can agree on the existence and content of a principle of territoriality of enforcement when one remains at a high level of generality. But the doctrine developed by Lord Collins in Masri is sophisticated, and there is no particular reason indicating that it is representative of customary international law or, more importantly, EU autonomous law under Article 24(5) of the Brussels I bis Regulation.