Flux Belges et Lux

My thoughts on the Court of Appeal’s finding in Zubaydah v FCO are here. I am pleased to have played a role for claimant’s lawyers, pro bono, in the proceedings before the UK Supreme Court, which held today in Zubaydah (Respondent) v Foreign, Commonwealth and Development Office and others (Appellants).

The issue in the appeal is whether the law applicable under sections 11 and 12 of the Private International Law (Miscellaneous Provisions) Act 1995 (“PILA”) to torts alleged to have been committed by two of the UK’s security agencies  is the law of England and Wales or the law of each of the six countries in which the claimant alleges he was unlawfully detained and tortured by the CIA. The High Court had held for the latter, which follows from the generally applicable lex loci damni rule. The Court of Appeal reversed, holding for the former on the basis of the small window to displace the general rule and this finding has now been confirmed by the Supreme Court.

The relevant PILA sections read as follows

“11. Choice of applicable law: the general rule.

(1) The general rule is that the applicable law is the law of the country in which the events constituting the tort or delict in question occur.

(2) Where elements of those events occur in different countries, the applicable law under the general rule is to be taken as being—

(a) for a cause of action in respect of personal injury caused to an individual or death resulting from personal injury, the law of the country where the individual was when he sustained the injury;

(b) for a cause of action in respect of damage to property, the law of the country where the property was when it was damaged; and

(c) in any other case, the law of the country in which the most significant element or elements of those events occurred.

(3) In this section “personal injury” includes disease or any impairment of physical or mental condition.”

“12. Choice of applicable law: displacement of general rule.

(1) If it appears, in all the circumstances, from a comparison of—

(a) the significance of the factors which connect a tort or delict with the country whose law would be the applicable law under the general rule; and

(b) the significance of any factors connecting the tort or delict with another country,

that it is substantially more appropriate for the applicable law for determining the issues arising in the case, or any of those issues, to be the law of the other country, the general rule is displaced and the applicable law for determining those issues or that issue (as the case may be) is the law of that other country.

(2) The factors that may be taken into account as connecting a tort or delict with a country for the purposes of this section include, in particular, factors relating to the parties, to any of the events which constitute the tort or delict in question or to any of the circumstances or consequences of those events.”

Two background documents are of particular relevance: ‘LCR’ = the Law Commission Report December 1990; and ‘JCP’ =  the Joint Consultation Paper 1984. The LCR [2.6] ff had justified its proposal for amendment to the English prior rule of double actionability for torts, by suggesting it does away with 3 main challenges of the double actionability rule:

• • • its anomalous character (it was said to give too much weight to English and Scots law as lex fori, contrary to the UK’s general happiness to apply foreign law);
    • its injustice in terms of giving an advantage to the wrongdoer (the victim’s burden of proof under the double actionability rule is particularly heavy); and
    • the uncertainty and speculative implication NOT in the rule but in a relevant exception, Boys v Chaplin [1971] AC 356.

[54] The approach to be adopted when considering whether the general rule is displaced pursuant to section 12 was considered by the Court of Appeal in VTB Capital plc v Nutritek International Corpn [2012] EWCA Civ 808 and in current case Lord Lloyd-Jones and Lord Stephens for the majority [54] ff summarise the four principles that follow from that case.

Note that [62] the Supreme Court criticises parties’ agreement that the determination of the defendants’ appeal did not require any consideration of the potential application of section 14 PILA (the ordre public correction):

We consider that there is an artificiality about deciding which law governs the liability in tort of the UK Services without considering public policy considerations under section 14 of the PILA. Although, we express no view on the matter, there is scope for suggesting, for example, that on the presumed facts of this case, it is a constitutional imperative that the applicable law in relation to the tort of misfeasance in public office in relation to the acts and omissions of the UK Services should be the law of England and Wales. However, we have been presented with a preliminary issue on sections 11 and 12 of the PILA and must seek to address it solely on that basis. We conclude this part of the judgment by observing that, depending on the outcome of the appeal, it may be necessary for a court to consider the impact, if any, of section 14 of the PILA at a later stage of these proceedings.

[73] the Court of Appel was held to have been correct in rebuking the first instance judge for focusing too much on the role of the CIA

The required focus is on the torts committed by the defendants or those for whom they are responsible. Instead, the Court of Appeal considered, the judge had focused on the overall conduct of the CIA. In our view, there is force in this criticism.

[74] ff discusses the treatment by the first instance judge of factors relevant in displacing the locus damni general rule: (1) First, the claimant had no control over his location and in all probability no knowledge of it. (2) So far as the UK Services were concerned, the claimant’s location from time to time was irrelevant and may well have been unknown. (3) The claimant had been rendered to the Six Countries precisely because this would enable him to be detained and tortured outside the laws and legal systems of those countries.  The Supreme Court agrees with the Court of Appeal’s finding that the judge had wrongly applied the relevance of these factors. Those finding fault with the Supreme Court’s approach may find this too much of a factual analysis rather than a point of law I imagine (as indeed Lord Sales does to some degree in his dissent).

[80] the Court of Appeal itself is then held to have fallen short of the proper exercise in applying s12:

It seems to us, however, that the Court of Appeal has also fallen into error in relation to the required focus under section 12 of the PILA on the torts committed by the defendants. Section 11(1) provides that the general rule is concerned with “the country in which the events constituting the tort … in question occur”. Similarly, section 12 refers to “the significance of the factors which connect a tort … with the country whose law would be the applicable law under the general rule” and with “another country”. In our view, the Court of Appeal, in approaching the section 12 exercise, interpreted the scope of the relevant torts too narrowly in that it equated the torts in question with the conduct of the UK Services which is alleged to be wrongful.

Rather than conflating the conduct of the UK Services with the torts,

The Court of Appeal should have focused on the torts alleged against the UK Services for which the defendants are said to be vicariously responsible

leading [82] ff the SC itself completing the s12 exercise.

The significance of the connection between the torts and each of the Six Countries arising from the claimant’s detention there and the infliction of his injuries there is held to be massively reduced by the factors discussed in [92] ff:

reasonable expectations and involuntary presence [93];

the security services’ indifference as to where the claimant was held and them never expecting or intending to have their conduct judged by reference to the laws of the places where he was held [94];

the insulated environments within which claimant was held and where he could be denied any access to the local law (alleged to apply in Moziak fashion by the defendants) or recourse to local courts [95], countries which in effect were insulated form the courts [97];

the sheer number of black sites in which the claimant was held diminishes the significance of the law of any one of them, and moreover it would be impossible for him to establish where he sustained which injury [96];

[98] ff conversely, the strong factors connecting the torts to the UK:

the alleged vicarious liability of the UK Government [99];

the relevant acts and omissions of the UK Services in requesting information from the CIA were more likely than not to have taken place in England, and were likely committed by the UK Services for the perceived benefit of the United Kingdom [100]; and

the actions were taken by UK executive agencies acting in their official capacity in the purported exercise of powers conferred under the law of England and Wales [101].

Lord Sales dissented, pointing also to the Court of Appeal and the High Court simply disagreeing on the weight to be given to the various factors, and in his own analysis of those factors he reaches the conclusion that the Mozaik of the 6 laws should apply.

It is rare for an applicable law issue in tort to be discussed to such extent by the Supreme Court and the judgment carries great relevance.

Geert.

Illegal rendition, applicable law, displacement of the ordinary lex loci damni rule
More soon (and background here https://t.co/dYdGJILOJ2)
Pleased to have played a small (pro bono) role in the appeal with the SC. https://t.co/szromMgIQp

— Geert Van Calster (@GAVClaw) December 20, 2023

Ugljesa Grusic has excellent and prompt analysis of Hugh Hall Campbell KC against James Finlay (Kenya) Ltd [2023] ScotCS  CSIH_39 here. I have background to the issues ia here and I reported on the now successfully appealed first instance judgment [2023] CSOH 45 here.

Dr Grusic first of all highlights the lack of engagement by the Court (as indeed at first instance level, too) with the impact of the employment section of the Civil Jurisdiction and Judgments Act 1982 on both the question of availability at all of choice of court in employment contracts to displace domicile jurisdiction, and of the overall availability of forum non conveniens in the same circumstances.

Next, unlike the first instance judge, the Inner House held that relevant Kenyan labour law protection (including compensation) does apply to the contracts at issue, [67] that the applicants have a working and affordable regime at their disposal in Kenya to try and obtain such compensation and [69] for the reason stayed the case at least until the Kenyan scheme will play its role (or not). [70] the court oddly adds that its stay is not one of forum non conveniens, which it says it is currently leaving undecided.

One assumes PTA with the UKSC will be sought for the points identified by Ugljesa are very much unresolved points of law.

Geert.

In Lott & Ors v PSA Automobiles SA & Ors [2023] EWHC 2568 (KB), Fontaine SM deals with an evidential /discovery issue in one of the dieselgate cases, where the car manufacturers intend to contest the extent of the binding nature of CJEU judgments finding relevant software to constitute cheating devices within the meaning of European standardisation laws.

[22] The French Defendants are found to have submitted to the jurisdiction of the E&W courts at least in relation to the Claimants’ application for further information and specific disclosure. [26] ff discusses the relevant French ‘blocking statute’ which prohibits French nationals and certain others from providing documents and information of an economic, commercial, industrial, financial or technical nature to foreign public authorities or for the purposes of establishing evidence for foreign judicial or administrative proceedings. Relevant authority on the effect of the French statute is listed [28], with [29] emphasis on

Orders for production and inspection are matters of procedural law, governed by the lex fori, here English law. Local rules apply; foreign law cannot be permitted to override this Court’s ability to conduct proceedings here in accordance with English procedures and law.

and [30] a proposal by the French defendants, asking that the application be provided only pursuant to a letter of request under the Hague Taking of Evidence Convention (as cover for the French statute, refused however [81]:

i) I have no real means of assessing how real is the risk of prosecution if the documents so ordered were provided directly by the French Defendants to the Claimants, even if protected by a confidentiality order or confidentiality ring. That might have been provided by expert evidence of French law, but I have given reasons why that was not permitted at this stage. However, I do take into account both the letter from SISSE which explains the French authority’s position, and the interests of international comity, which support the use of the Hague Convention route.

ii) The French Defendants were well aware of the difficulties caused by the FBS at the hearing on 9 February 2022, and assured the court that once their legal representatives and an engineer had been able to take instructions in France from their clients they would seek the relevant documents via the Hague Convention themselves, but that has not been done, and no explanation provided. If it had been done by the French Defendants solicitors within a reasonable time after that hearing the relevant information and documents would have been available some time ago. It was also not explained why the FBS would prohibit the French Defendants from providing information and documents to their own clients other than through the Hague Convention. It is not a reasonable approach for the French Defendants to come back to court some 17 months after that hearing and now insist that the Claimants make a Hague Convention request, without any explanation for the change of stance, and the substantial delay.

iii) The prejudice to the Claimants that will inevitably be caused to provision of information and documents by reason of that delay if these have to be provided via the Hague Convention, that is likely to impact their ability to provide a fully pleaded draft GPOC and/or GLO issues which in turn may cause delay to the hearing of the GLO application.

iv) I take account of the fact that this is group litigation where there is, as in Cavallari, “an asymmetry of information” between the parties, and the relevant technical information is held by the Defendants, primarily by the French Defendants.

An interesting judgment on evidential forum shopping.

Geert.

#Dieselgate class action, discovery
Impact of French 'blocking' statute (preventing FR defendants from handing over documents) and Hague Evidence Convention viz English lex fori as procedural law

Lott & Ors v PSA Automobiles SA & Ors [2023] EWHC 2568 (KB)https://t.co/FQken9cGG1

— Geert Van Calster (@GAVClaw) October 17, 2023

In Clifford Chance LLP v Societe Generale SA [2023] EWHC 2682 (Comm), Henshaw J has held on a jurisdiction challenge in a claim for professional negligence claim brought by SocGen against Clifford Chance alleging that they negligently handled a dispute between SocGen and Goldas Kuyumculuk Sanayi Ithalat Ihracat AS and other companies in the same group.

Clifford Chance’s claim is one for negative declaration of contractual liability: it seeks declarations that they are not liable to SocGen in professional negligence, and that CC Europe was not retained by SocGen at all. SocGen has subsequently commenced proceedings against CC LLP and CC Europe in the High Court of Paris, seeking damages in excess of €140 million. The first hearing in that court is due to take place in March 2024.

SocGen challenged the jurisdiction of the E&W courts with reference to its framework agreement with Clifford Chance, which includes French choice of court and French choice of law. As was to be expected, Clifford Chance argue that that agreement does not apply to the work at issue (given the interference of various Clifford Chance legal entities, it was inevitable that issues of privity would arise; see also the discussion [103] ff on agency). The judge, applying French principes of contractual interpretation, holds [90] ff that on the facts, the framework agreement does not apply to the retainer at issue. As a result of the Rome Convention (as discussed at [67], Rome I not applying ratione temporis), English law applies to that retainer as a result of E&W being the habitual residence of the service provider.

[112] ff deal succinctly with (and reject)  the subsidiary issue of forum non conveniens: [120] it is not shown

that the courts of France are clearly and distinctly the more appropriate forum. To the contrary, this court is that forum.

I wonder whether Clifford Chance in the French proceedings will now be arguing Article 33-34 lis pendens, seeing as the English proceedings were instituted first, however that would depend on the exact parties to the proceedings and the basis for jurisdiction against them: if the French courts find there is a legally binding choice of court in the claim, Articles 33-34 cannot apply and we will find ourselves in an interesting post-Brexit competition between courts.

Geert.

Judgment now here. Jurisdiction challenge fails, choice of court held not to apply to specific retainer. Interestingly, will CC argue A33, 34 in FR given the alleged invalidity of choice of court?
Clifford Chance v Societe Generale [2023] EWHC 2682 (Comm)https://t.co/YCRVwiE3hL https://t.co/v58xuSXo7C

— Geert Van Calster (@GAVClaw) October 29, 2023

Below in simple format and here in easier lay-out, is the program for our conference on the Tangier Statute Centenary Conference, 18 December next in Tanger.

We are very excited.

The Tangier Statute Centenary Conference, 18th December 2023

Colloque international à l’occasion du centenaire du Statut de Tanger, 18 décembre 2018

Programme

Local time/heure locale : UTC+1 (= Central European Time/Heure normale d’Europe Centrale)

Morning/Matinée: Faculté des Sciences Juridiques, Économiques et Sociales de Tanger

09:00-09:30:         Registration/Inscriptions

09:30-10:30:         Welcome speeches/Discours de bienvenue

• Welcoming words by the organizers/Mots de bienvenue des organisateurs
• Address by Mr Mounir Lymmouri, President of the Tangier City Council/Allocution de M. Mounir Lymmouri, Président du Conseil de la Ville de Tanger
• Address by a Representative of the Presidence of Abdelmalek Essaâdi University/Allocution d’un.e représentant.e de la présidence de l’Université Abdelmalek Essaâdi
• Address by Prof. Toufik Essaid, Dean of the Tangier Faculty of Legal, Economic, and Social Sciences/Allocution de M. le Professeur Toufik Essaid, Doyen de la Faculté des sciences juridiques, économiques et sociales de Tanger.

10:30-10:45: Keynote speech by Prof. Hamid Aboulas, Vice-Dean of the Tangier Faculty of Legal, Economic, and Social Sciences/Discours d’ouverture de M. le Professeur Hamid Aboulas, Vice-Doyen de la Faculté des sciences juridiques, économiques et sociales de Tanger

• Quelques aspects de la transformation de la ville de Tanger de 1923 à après l’indépendance

10:45-11:00:         Coffee break/Pause café

11:00-12:00:         Panel 1: Between Internationalism and Colonialism: Contextualizing the Tangier Statute/Entre internationalisme et colonialisme : le Statut de Tanger dans son contexte (Chair/Présidence: Fouzi Rherrousse)

• Ambivalences de la souveraineté, impérialisme et droit international : réflexion à partir du statut spécial de la Ville de Tanger (1923-1956) (Oumar Kourouma)
• La souveraineté marocaine à l’épreuve du statut international de Tanger de 1923 (Antoine Perrier)
• The International Situation of the City of Tangier During the Protectorate (Adil Rajaa)

12:00-13:00:         Panel 2: The International City as a Product and a Precedent: Connecting Tangier to Other International Spaces/La Ville internationale comme produit et comme précédent : les liens entre Tanger et d’autres espaces internationaux (Chair/Présidence: Michel Erpelding)

• The theory and practice of international administration: Comparison between Tangier and territories administered by the League of Nations (Philip Burton)
• The Statute of Tangier as the inspiration for the Draft Statute for the City of Jerusalem (Fulvio Bontempo and Alessia Tortolini)
• The International Zone of Tangier, 1924-1956: the European Union’s Accidental Incubator? (Willem Theus)

13:00-15:00:       Lunch break/Pause déjeuner

Afternoon/après-midi : Palace of Italian Institutions/Palais des Institutions Italiennes

15:00-15:20:       Welcome speeches/Discours de bienvenue

• Adress by Mr Marco Silvi, Consul General of Italy in Casablanca/Allocution par M. Marco Silvi, Consul général d’Italie à Casablanca
• Address by Mr Riccardo Finozzi, representative of the association Dimore Storiche del Mediterraneo/Allocution par M. Riccardo Finozzi, représentant de l’association Dimore Storiche del Mediterraneo

15:20-16:20:       Panel 3: Implementing the Tangier Statute: The Administration of the International City in Practice/La mise en œuvre du Statut de Tanger : Enjeux pratiques de l’administration de la Ville Internationale (Chair/Présidence: Rachid El Moussaoui)

• Tanger : la dimension méditerranéenne de l’économie marocaine (Sersar El Mahdi)
• Structuration et évolution de l’enseignement dans Ville de Tanger (Faiza El Alaoui)
• Les enjeux politiques et juridiques de la planification urbaine et architecturale de la zone internationale de Tanger (1925-1956) (Romain Micalef)

16:20-17:20:       Panel 4: Administering Justice in the International City: The Mixed Court of Tangier/Rendre la justice dans la Ville internationale : le Tribunal mixte de Tanger (Chair/Présidence : Geert van Calster)

• Capitalism as Juridical Creed: The Uneasy Relationship of the Tangier Mixed Court with Public International Law (Dimitrios A. Kourtis) (online/en ligne)
• Divergence et convergence juridiques: analyse de deux décisions des Tribunaux mixtes de Tanger et du Caire (Aya Bejermi and Adam Belkadi) (online/en ligne)
• Jewish Law in the Mixed Court of Tangier, 1925-1956 (Jessica M. Marglin)

17:20-17:40:       Coffee break/Pause café

17:40-18:20: Panel 5: Lawyering in the International City: Selected Portraits of ‘Mixed Lawyers’/Pratiquer le droit dans la Ville internationale : Portraits choisis de « juristes mixtes » (Chair/Présidence : Francesco Tamburini)

• Le fabuleux destin de deux bâtonniers tangérois : Alphonse Ménard et Daniel Saurin (Fouzi Rherrousse)
• Incunable d’Europe : Nicola Catalano et la Zone internationale de Tanger (Marco Fioravanti)

18:20-19:20:       Panel 6: Flooding the Airwaves from the International City: Tangier as a Broadcasting Platform/Remplir les ondes à partir de la Ville internationale : Tanger comme plate-forme de radiodiffusion (Chair/Présidence : Willem Theus)

• A Case of Strategic Litigation: the 1938-1939 ‘Radio-Tanger’ Case and the Liberalization of Tangier’s Airwaves (Michel Erpelding)
• The Italian Radiotelegraphic Service in the International Zone, 1931-1956: Shattered Dreams for a Mediterranean Power (Francesco Tamburini)
• Radio Frontier: Tangier as the Mediterranean’s Radio Hub, 1939-1963 (Arthur Asseraf) (online/en ligne)

19:20-19:30:       Closing remarks/Conclusions

In Case C-497/22 EM v Roompot Service BV, the CJEU has confirmed its strict reading of Article 24 Brussels Ia’s ‘tenancies of immovable properties’ provision, confirming Richard de la Tour AG’s convincing Opinion [ia his reasoning (35) ff].

Proceedings are between EM, domiciled in Germany, and Roompot Service BV, which has its registered office in the Netherlands and operates a holiday park there, comprising tourist accommodation.

[15] Per CJEU Rösler (241/83), Hacker (C‑280/90) and Dansommer (C‑8/98), contracts involving the letting of holiday accommodation abroad generally fall within the exclusive jurisdiction of the courts of the Member State in which the immovable property concerned is situated. An exception can be made to that principle only when the contract concerned is a contract of a complex nature, that is to say, a contract providing for the performance of a range of services in consideration for the lump sum paid by the customer.

[16] the additional services in the present case were the offer, on the internet page of the defendant in the main proceedings, of a variety of bungalows with different facilities, the booking of the bungalow chosen for the customer, reception of the customer at the destination and the handing over of the keys, the provision of bed linen and the carrying out of cleaning at the end of the stay – the question therefore is whether this qualifies the contract as being one of a ‘complex nature’, or [17] whether these are merely minor ancillary services, which arguably do not cancel out A24.

After recalling the restricted nature of A24 in general, the Court [27] repeats what it said most recently in Obala re the ratio legis for A24(1) exclusive jurisdiction:

as regards tenancies of immovable property in particular, it is clear from that case-law that that exclusive jurisdiction is justified by the complexity of the relationship of landlord and tenant, which comprises a series of rights and obligations in addition to that relating to rent. That relationship is governed by special legislative provisions, some of a mandatory nature, of the State in which the immovable property which is the subject of the lease is situated, for example, provisions determining who is responsible for maintaining the property and paying land taxes, provisions governing the duties of the occupier of the property as against the neighbours, and provisions controlling or restricting the landlord’s right to retake possession of the property on expiry of the lease

[29]  core consideration is whether the subject matter of that dispute relates directly to the rights and obligations arising from that tenancy (reference to CJEU Sharewood by analogy).

Two main lines of enquiry have to be pursued:

Firstly, the nature of the services at issue: 

[34] the categorisation of a contract relating to the performance of a range of services, in addition to the short-term letting of holiday accommodation, requires (reference to Richard de la Tour AG (28)) an assessment of the contractual relationship in question as a whole and in its context. [39] Where additional services are offered in return for a lump sum on the same terms as those offered to customers of a hotel complex, A24(1) is not engaged. By contrast, any additional service that is ancillary in nature to such a letting would not necessarily modify the categorisation of the contract concerned to that of tenancy, but would have to be examined in the context of that contract.

[40] neither cleaning at the end of the stay nor providing bed linen are sufficiently weighty services liable to distinguish, on their own, a tenancy from a complex holiday organisation contract. Although it is true that cleaning usually is the responsibility of the tenant at the end of a lease, it cannot be ruled out that, due to the particular nature of seasonal lettings of holiday homes, the lessor may take on that task, without that modifying the nature of the contract as a tenancy of immovable property. The same holds true for providing bed linen and handing over keys.

[41] On the other hand, information and advice, booking and reception services forming part of the offer proposed by a tourism professional, together with the letting, in return for a lump sum, constitute services which are generally provided as part of a complex holiday organisation contract.

Further, the capacity in which the travel organiser concerned intervenes in the contractual relationship at issue in the main proceedings.

[43] Per CJEU Hacker etc, the fact that the travel organiser is not the owner of the accommodation, but is subrogated in the owner’s rights, is not such on its own as to modify a possible categorisation of the contract concerned as a tenancy of immovable property. On the other hand if that travel organiser intervenes as a tourism professional and proposes, in the context of an organised stay, additional services in consideration of which the offer is accepted, that fact may be an indication of the complex nature of that contract.

In conclusion [44], while the national court will have to confirm, the circumstances suggest A24(1) is not engaged.

The judgment is a useful reminder of the A24(1) lines of enquiry.

Geert.

EU private international law, 4th ed. 2024, 2.182 ff.

CJEU confirms restrictive application of A24(1) Brussels Ia 'tenancy' agreements, in case concerning rental of bungalow park accommodation with additional (not merely 'ancillary') services

C‑497/22 EM v Roompot Service BVhttps://t.co/0lv8QdJAVI

— Geert Van Calster (@GAVClaw) November 16, 2023

A note on RM RENT A CAR v KFZ BRÜNING ECLI:NL:RBNHO:2023:7489 in which the Noord-Holland court of first instance much more readily accepts the escalation of a purely domestic (German) contract to the ‘international’ plain. Clearly in contrast with de la Tour AG in Inkreal.

RM Rent A car argues that the close links it has with The Netherlands, as a result of a number of its directors are domiciled in The Netherlands, as is its mother holding Network4Cars Trading B.V., explain Dutch choice of court and the Dutch governing law clause. It also refers to the Report Jenard, a contrario I assume (for that detail is not given) p.37 in fine (where the report argues that (now) A25 does not apply between to parties domiciled in the same State and designating a court of that State).

KFZ Brüning by contrast argue that the sale between two German corporations, of German registered vehicles, with delivery in Germany, lacks the international element required to trigger Brussels Ia.

The Court goes about the issue in a roundabout way. It says nothing about the ‘international character’ (arguably implicitly acknowledging it), instead merely finding 2.8 that there is no proof that in signing the purchase order, Brüning also consented to the GTCS.

As noted, an interesting judgment in light of the AG’s Opinion in Inkreal.

First instance Noord-Holland, A25 Brussels Ia choice of court
Lack of reference to general terms & conditions in Purchase Order = ineffectiveness of choice of court in those GTCs
Implicitly acknowledges 'international' element of prima facie German casehttps://t.co/v8TE2B9SpY

— Geert Van Calster (@GAVClaw) August 29, 2023

Still mopping up that blog queue….In Case C-393/22 EXTÉRIA s.r.o. v Spravime, s.r.o.  the CJEU has held that a contract to enter into a future services contract is not itself a services contract within the meaning of Article 7(1) Brussels Ia., rather, a contract whose forum contractus needs to be determined using CJEU 12/76 Tessili v Dunlop‘s ‘looking over the fence’ method.

The applicant in the main proceedings, which provides consultancy services in the field of occupational safety and health, and the defendant in the main proceedings concluded, on 28 June 2018, a contract to enter into a future contract relating to the future conclusion of a franchise agreement. The contract contained, in addition to the obligation to conclude that contract in the future, certain contractual terms and conditions and an undertaking on the part of the defendant in the main proceedings to pay an advance of EUR 20 400, exclusive of value added tax, and, in the event of failure to comply with that obligation, a contractual penalty equal to the amount of that advance.

The contract to enter into a future contract provided for the application of Czech law, without any agreement on jurisdiction having been concluded.

Alleging that the defendant in the main proceedings had failed to fulfil its obligation to pay the advance in question, the applicant in the main proceedings withdrew from the contract to enter into a future contract and claimed payment of the contractual penalty.

(34) The concept of ‘services’, within the meaning of the second indent of Article 7(1)(b), implies, at the very least, that the party providing them 1. carries out a specific activity 2. in return for remuneration (see ia CJEU Kareda).

Re 1, (35) the existence of an activity requires the performance of positive acts, to the exclusion of mere abstentions (see ia CJEU Corman-Collins and Granarolo). re 2, remuneration granted in return for an activity, (36) this cannot be understood in the strict sense of the payment of a sum of money, since the receipt of a package of benefits representing an economic value may be regarded as constituting remuneration (same case-law).

(37) a contract to enter into a future contract, the objective of which was to conclude a future franchise agreement and preserve the confidentiality of the information contained in that contract to enter into a future contract, is not an ‘activity’. Moreover, in the absence of any actual activity carried out by the co-contractor, the payment of the contractual penalty cannot be characterised as remuneration.

(39) that the obligation to pay the contractual penalty is closely linked to the franchise agreement which was to be concluded and under which it would be possible to determine the place where the services concerned should have been provided, does not rescue the issue. This is said (40) to follow from the need to interpret exceptions to A4 restrictively, and from the requirements of predictability.

A useful judgment.

Geert.

EU private international law, 3rd ed. 2021, para 2.412. 4th ed forthcoming January 2024.

New #CJEU judgment Jurisdiction Regulation Brussels Ia
Contract to enter into a future services contract is not itself a services contract; jurisdiction to be determined following 'looking over the fence' method, A7(1)(a)

C-393/22 Exteria https://t.co/yZNRz0f9ap

— Geert Van Calster (@GAVClaw) September 14, 2023

Butcher J as I noted in my Tweet on the judgment at the time, has largely granted immediate leave to appeal his ruling in London Steam-Ship Owners’ MIA v [Spain] (Re Prestige) [2023] EWHC 2473 (Comm), in which he entertains yet further litigation forming part of the protracted procedures arising from the sinking of the M/T Prestige in 2002. [Of note is that he did not allow appeal on the issue of the effect of the CJEU Judgment in Prestige, on the jurisdiction of Sir Peter Gross as arbitrator in a second set of arbitration proceedings; I imagine permission to appeal that point has been sought separately with the Court of Appeal itself).

I have reported repeatedly on the issues and the trigger for most of the discussions in the judgment is the CJEU Grand Chamber Judgment which I called a parallel universe here. I stand by my criticism in that post, not because I suggest the CJEU is some lawless band of brigands upending the rule of law. Clearly it is not. Rather, I find the CJEU’s lack of consistent treatment of arbitration whether commercial or investment, troubling. I also fail to understand its backdoor disciplining of arbitration procedures (via the res judicata and privity issues which I discuss in my previous posts) if these procedures are principally excluded from the scope of Brussels Ia.

The Prestige saga is an indictment first of all of the failure of environmental law (one of my other academic and practice hats) properly to address one of the most outrageous outcomes of the fossiel fuel area, which is to pollute twice over nature and human health alike in causing environmental catastrophe by spilling crude oil. As for international litigation, it is an indictment of the failure of international and European law alike to develop a systematic approach to the outcomes of litigation in ordinary, and arbitration.

Now to the case at hand. My discussion of same is greatly helped by professor Giles Cuniberti’s post over at EAPIL, and the comments on same, and I would suggest readers refer to Giles’ summary of the case and the issues.

Core to the appeal will be to what degree the English courts (pro memoria: the proceedings are subject to Brussels Ia and were introduced pre Brexit) are bound by all of the findings in the CJEU judgment, particularly those with an impact on what the arbitrator should have checked (the CJEU ordinarily practices judicial economy; in the case at hand some argue it answered questions that were not put to it). This provoked an interesting debate on the extent of the authority of those parts of the CJEU judgment which in a precedent system would likely be called obiter. The preliminary reference procedure however is not like a common law precedent or authority regime. What exactly it is will undoubtedly be discussed upon appeal and as professor Dickinson replies in comment to Giles’ post, there may be a way for the European Commission to use the Withdrawal Agreement’s dispute settlement provisions to clarify how CJEU authority is supposed to work.

Geert.

Unsuccessful appeal of #arbitration award following (and mostly ignoring) #CJEU Prestige judgment (see https://t.co/2ysTMGyzwT)
Permission to appeal largely granted instantly

London Steam-Ship Owners' MIA v [Spain] (Re Prestige) [2023] EWHC 2473 (Comm)https://t.co/VSBL2uQ9ip

— Geert Van Calster (@GAVClaw) October 6, 2023

X v Y (yep, annoying and entirely without reason, an anonymous judgment) ECLI:NL:RBLIM:2023:4342 is an interesting illustration of Brussels Ia’s Article 7(1)(a’)s ‘looking over the fence’ aka the conflicts method for determining forum contractus.

The method implies that beyond the standard contractual categories for which Article 7(1)(b) locks in forum contractus as a European ius commune, the ‘place of performance of the obligation in question’ needs to be determined by provisionally identifying the lex contractus and then using that lex contractus to determine place of performance, leading to a conclusion whether the judge seized has jurisdiction or not. See CJEU 12/76 Tessili v Dunlop.

In the case at issue, the contract is a loan and the applicable law is determined with reference to CJEU Kareda. This is where the court veers off course (my first categorisation by Tweet of the judgment being an excellent example therefore needs to be corrected): In Kareda the CJEU held that the credit agreement at issue was to be considered an ‘agreement for the provision of services’ per A7(1)(b), locking in forum contractus “in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided”. In such case, no more looking over the fence is required, let alone consideration of Article 4(3) Rome I etc.

Geert.

Students claxon
First instance Limburg, excellent example of 'looking over the fence' aka the conflicts method per CJEU Tessili v Dunlop to determine forum contractus per A7(1)a BIa, A4(2) Rome I (no A4(3) manifest closer connection
ECLI:NL:RBLIM:2023:4342https://t.co/g6EdSsEs2c

— Geert Van Calster (@GAVClaw) October 20, 2023

The UK Supreme Court has dismissed the appeal in Skatteforvaltningen (the Danish Customs and Tax Administration) v Solo Capital Partners LLP & Ors [2023] UKSC 40, confirming the Court of Appeal’s finding that the claim against the majority of the defendants may go ahead.

I reviewed the first instance judgment here and the Court of Appeal’s here and I shall not repeat all the issues. Readers should note that the issues discussed are of wider relevance to current developments in both public and private international law (business and human rights litigation, climate change litigation etc.).

[21] Lord Lloyd-Jones summarises the Dicey rules at play (and also notes the editors of the 16th d and those before them pointing out the inroads that in recent years have been made into the principle) and [22] he makes a delightfully concise reference to somewhat different US views on the rationale for the issue.

[39] after reviewing the authorities, it is held that

The Danish tax system undoubtedly provided the context and the opportunity for the alleged fraud and the operation of the fraud can be understood only by an examination of that system. It may well be that at the trial of this action it will be necessary to address that in detail. However, as we have seen [that’s a reference to Dicey as summarised above, GAVC], there is no objection to the recognition of foreign tax laws in that way. Because the present proceedings do not involve an unsatisfied claim to pay taxes due in Denmark, they fall outside the scope of the revenue rule.

[41] applies fraus and nemo auditur in dismissing appellants’ attempt to present themselves as taxpayers

The appellants seek to circumvent this difficulty by nevertheless portraying the refund applicants as taxpayers. It is said that by making applications for withholding tax refund applications the applicants brought themselves within the Danish tax system and became Danish taxpayers. It is also said that the respondent by paying “refunds” accepted them into the Danish tax system. It is further said that in rescinding the “refunds” the respondent was acting in the capacity of a taxing authority. The appellants therefore maintain that, in all the circumstances, the recipients of “refunds” and the respondent were in the relationship of taxpayer and taxing authority. As the Court of Appeal pointed out (at para 136) this submission is misconceived. The applications for “refunds” were all based on the lie that the applicants had paid tax in the first place which, on the respondent’s pleaded case, they had not. This attempt to portray the applicants as taxpayers cannot bind the respondent as the victim of their fraud and the applicants cannot take advantage of their own wrongdoing in order to bring themselves within the revenue rule.

[44] ff discusses the impact of (commentary on) CJEU C-49/12 Sunico, which was also discussed by the  first instance judge in current case and by Szpunar AG and the CJEU in Movic.

[53] ff then discusses the sovereign authority rule, essentially considering whether the claim is a simple money claim like thirteen to the dozen, and with reference (via Dr Mann) to Grotius’ ‘actus qui a rege sed ut a quovis alio fiant’.

[58] again substance is distinguished from context

appellants are undoubtedly able to point to prior exercises of sovereign power by Denmark in creating its laws relating to the taxation of dividends and in operating the tax system. This, however, merely provides the context for the present claims. The substance of the claims, as we have seen, does not involve any act of a sovereign character, any exercise or enforcement of a sovereign right, or any vindication of sovereign power. On the contrary, the respondent is simply bringing restitutionary claims to recover monies of which it has been defrauded, a course open to any private citizen who had been similarly defrauded.

Unlike in first instance, neither Lugano nor Brussels Ia feature substantially at the Court of Appeal or Supreme Court. That is a pity for how the Dicey rules and similar ones in the current EU Member States relate to Lugano and Brussels, is not clear-cut.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.28 ff. (4th edition forthcoming January 2024).

For background see https://t.co/B5DeTbT5g4
More on the blog soon.

via @bwmlindsay https://t.co/3tVcUeFyL7

— Geert Van Calster (@GAVClaw) November 8, 2023

In Limbu & Ors v Dyson Technology Ltd & Ors [2023] EWHC 2592 (KB) a jurisdictional challenge on forum non conveniens grounds in allegations of forced labour at Dyson’s Malaysian Supplier, was successful. The judgment shows the impact of neither Brussels Ia (with a forum non conveniens ultra light regime) or the Lugano Convention (no forum non conveniens at all) applying.

The case is said [18] to raise a number of novel questions: whether the unjust benefit in a claim for unjust enrichment has to flow directly from the claimant to the defendant; and whether a party can be liable in negligence for the treatment by a third party — a supplier — of that third party’s employees. I do not think nota bene that the latter is correct: IMHO undoubtedly it can (for similarish considerations, albeit at strike-out level, see the Court of Appeal in Begum v Maran). The question is under what conditions.

[16] the judgment lists the concessions made by the defendants:

(i) D1 and D2 will submit to the jurisdiction of the Malaysian courts if they are sued there;

(ii) The Dyson Defendants will not seek security for costs or an adverse costs order against the Claimants if and to the extent such costs would not be recoverable under the Qualified One Way Cost Shifting regime in England;

(iii) The Dyson Defendants will pay the reasonable costs necessary to enable the Claimants to give evidence in Malaysian proceedings including (if necessary) affidavit affirmation fees and other costs necessary for the Claimants to give remote evidence including travel and accommodation costs, costs associated with the provision/set-up of suitable videoconferencing technology and other costs associated with the logistics of giving evidence remotely;

(iv) The Dyson Defendants will not oppose an application by the Claimants for remote attendance at a hearing/the trial in Malaysian proceedings;

(v) The Dyson Defendants will pay for the Claimants’ share of the following disbursements to the extent reasonably incurred and necessary: (a) Court interpretation fees, (b) Transcription fees, and (c) Joint expert evidence; and

(vi) The Dyson Defendants will not seek to challenge the lawfulness of any success fee arrangement entered into between the Claimants and their Malaysian lawyers.

A further undertaking was given in the course of the hearing before me: that the Dyson Defendants would not oppose an application for a split trial.

Sheldon DJ, with reference to Spiliada, sets out the jurisdictional test as follows [28-29]

With respect to “service in” cases [defendants domiciled in England, served there ‘of right’, GAVC], the burden of proof rests on the defendant to show that England is not the natural or appropriate forum and that there is another available forum which is clearly and distinctly more appropriate: Stage 1. If so, then the burden shifts to the claimant to show that there are special circumstances such that justice requires the trial to take place in England: Stage 2.

With respect to “service out” cases [defendant in respect of whom permission to serve abroad has been obtained, GAVC], the burden of proof is on the claimant at Stage 1 to show that England is the appropriate forum for the trial of the action, and that it is “the proper place in which to bring the claim” (CPR rule 6.37(3)). According to Lord Goff in Spiliada … the claimant must show that this is “clearly so”. If the claimant fails to establish that England is the proper forum, then Stage 2 will apply.

[30] the judge refers to Briggs J in Vedanta emphasising a preference for  a single forum, so as not to run the risk of irreconcilable judgments, should there be bifurcation. [37] He refers to Lord Briggs’ reference [87] in Vedanta that when the E&W-domiciled anchor defendant)s) have agreed to submit to a foreign jurisdiction, but the claimant has made a deliberate choice to sue in this forum and has thereby engendered the risk of irreconcilable judgments, it “would offend the common sense of all reasonable observers to think that the proper place for this litigation to be conducted was England”.

That element of Lord Briggs’ speech was subject to a requirement that substantial justice can be obtained abroad, and I pointed out here that I found that a massive get out off jail free card.

The judge in current case [43ff] emphasises the caution that should be applied when considering whether “substantial justice” can be obtained in the foreign jurisdiction.

First, it has been observed that there have been “judicial warnings of undoubted authority that the English court should not in this context conclude, other than in exceptional cases, that the absence of a means of funding litigation in the foreign jurisdiction, where such means are available in England, will lead to a real risk of the non-availability of substantial justice”: see Lord Briggs JSC in Vedanta at §93 referring to Connelly v RTZ Corpn plc (No 2) [1998] AC 854 (“Connelly“), 873 per Lord Goff, and Lubbe and Others v Cape Plc [2000] 1 WLR 1545 (“Lubbe“), 1555 per Lord Bingham.

Second, as Lord Goff noted in Connelly at p874D, “seeking to take advantage of financial assistance available here to obtain a Rolls Royce presentation of his case, as opposed to a more rudimentary presentation in the appropriate forum” would not be sufficient to justify such a refusal.

Third, and more generally, Lord Briggs warned in Vedanta at §11 that the “conclusion that a foreign jurisdiction would not provide substantial justice risks offending international comity. Such a finding requires cogent evidence, which may properly be subjected to anxious scrutiny”.

Authorities discussed were then Connelly, Lubbe, Pike, Unilever, and of course Vedanta. [52] Claimants argue that from an access to justice perspective, where the English Court was seized of jurisdiction, and knows that a fair trial is possible here, it should not lightly relinquish that jurisdiction – I think they are right. Parties’ respective arguments are summarised [54] ff and the judge held as follows [83] ff.

On “Spiliada Stage 1. The key factors are said to be

(i) Neither England nor Malaysia are practically convenient for all of the parties and witnesses. This factor in essence is said to be neutral. 

(ii) There is no completely common language for each of the witnesses, and so this factor is neutral.

(iii) Lex causae will be Malaysian, and this it is [97] said “is a factor which clearly favours hearing the case in Malaysia.” This section I find does not properly represent the way in which English courts can and do apply foreign law even when that law may not be clear to the foreign country itself. (And by the way was it common ground that the unjust enrichment claim would be subject to Malaysian law?)

(iv) The issues in this case took place in both England and Malaysia, [102] “however, the place where the harm occurred was in Malaysia (even if there are ongoing injuries for the Claimants who live outside of Malaysia), and the underlying alleged mistreatment took place in Malaysia. In my judgment, the centre of gravity of this case is plainly Malaysia, and this is a strong factor pointing towards Malaysia as being the proper forum.”

I disagree. As the judge said himself, this claim raises new issues on unjust enrichment in the supply chain and the English outsourcing corporation’s liability for mistreatment in the supply chain. The main focus of the trial will in reality be concerned with the E&W defendants and the Dyson Defendants’ policies, activities and arguments about their liability, as claimant’s counsel argues [104].

(v) The documents relevant to the case are held in both England and Malaysia. Wherever a trial is held, it seems most likely that the relevant documents will be obtainable. This factor is said slightly to favour Malaysia.

(vi) There is a real risk of a multiplicity of proceedings, and of irreconcilable judgments, wherever this claim is heard. However [121] particularly in light of related defamation proceedings, this element is said to favour E&W.

In conclusion on Spiliada Stage 1, [122]:

England is not the natural or appropriate forum and that Malaysia is another available forum which is clearly and distinctly more appropriate. The centre of gravity in this case is Malaysia: that is where the primary underlying treatment about which the Claimants complain took place, and is therefore the forum with “the most real and substantial connection” per Lord Goff in Spiliada at 478A. Malaysian law is also the governing law, and there are good policy reasons for letting Malaysian judges consider the novel points of law that are being raised in this claim within the context of their jurisprudence, rather than letting an English Court second guess what they might decide. In my judgment, these factors are not “dwarfed” by countervailing factors (per Lord Mance in VTB). The risk of irreconcilable judgments resulting from the defamation proceedings is an important factor, but it does not tilt the balance in favour of the English Court being the proper forum to determine the Claimants’ claim.

On to Stage 2: are there special circumstances such that justice requires the trial to take place in England? Neither the

difficulties in obtaining justice for migrant workers,

that the claims were complicated and needed suitably qualified advocates, the lawyers who argued labour and migrant cases did not have the expertise necessary to deal with this kind of case, and teaming up was unlikely

that it was not possible to case manage out complexity, and although personal injury cases could easily be divided into liability and quantum this was not possible for a claim of unjust enrichment, where establishing the extent of enrichment was part of the question of liability. A very substantial part of the case would involve unjust enrichment, and an estimate of 6 months for the trial had been given

that there would be very significant disbursements, not least on expert fees; and there would be a need for forensic accounting for the unjust enrichment claim;

that the claims would involve considerable financial risk for the Claimants’ legal representatives. They would have to commit thousands of hours of work, and be at risk that they would not recover them. Among other things, there would also be translation costs, hundreds of hours for reviewing documents, setting up hearings in Bangladesh. The fact that there was one witness who had said he would do the case was not sufficient.

that the prospect of a small band of practitioners being willing to take the risk was reduced when considering that they would be opposed by Defendants without any effective limitation on resources, represented by one of the largest law firms in the world, and where aggressive and heavy-handed approach is likely to be taken in the defence of the proceedings

that it was inappropriate to rely on the undertakings given by the Dyson Defendants. Paying for the disbursements does not touch the size of the financial risk. There was also a conflict of interest here, as the Claimants’ legal representatives would be negotiating with the Defendants’ legal representatives over the reasonableness of the costs incurred;

that there was no cogent evidence that the gaps could be filled by NGOs; and

that the Claimants contended that partial CFAs were unlawful; and even if they were lawful, the basic fee to be paid cannot be nominal, and the fee that would have to be paid by the Claimants would be set at a level which was unrealistic.

was held [171] to be one of the “exceptional cases” in which “the absence of a means of funding litigation in the foreign jurisdiction, where such means are available in England, will lead to a real risk of the non-availability of substantial justice”, per Lord Briggs JSC in Vedanta at §93.

I do find the evident reliance in many of these factors, on defendants’ commitments troubling, including from an Article 6 ECHR point of view; I do not think the judge is right on the applicable law being Malaysian law issue-   and that element was really the only one favouring Malaysia; and the main focus of the trial on the claim argued will in reality be concerned with the E&W defendants and the Dyson Defendants’ policies, activities and arguments about their liability.

Geert.

EU private international law, 4th ed. 2024, Chapter 7.

A case which unfortunately illustrates the impact of Brexit on #bizhumanrights claims
Successful jurisdictional challenge on forum non conveniens grounds in allegations of forced labour at @Dyson Malaysian Supplier
Limbu ea v [Dyson] [2023] EWHC 2592 (KB)https://t.co/JWVryJDEzc pic.twitter.com/a3nYD478nw

— Geert Van Calster (@GAVClaw) October 20, 2023

Richard de la tour AG opined last Thursday in C‑566/22 Inkreal aka Inkreal s. r.  v Dúha reality s. r. o..

At issue is whether the sole use of international choice of court suffices to escalate a purely internal case to the ‘international’ level, hence within the reach of the Brussels Ia Regulation. The AG opined it does not. I don’t think he is right and I suspect the CJEU will not follow him.

FD, resident in Slovakia, as the assignor, and Dúha reality s. r. o., a company domiciled in Slovakia, as the assignee, concluded two loan agreements on 29 June 2016 and 11 March 2017 respectively. By means of a voluntary assignment agreement dated 8 December 2021, FD assigned the claims arising from those loan agreements to Inkreal, a company domiciled in Slovakia. In each of those agreements, the parties agreed that ‘any ambiguities or disputes arising from the agreement and in connection therewith shall be first resolved by negotiation aimed at reaching a solution acceptable for both parties. If the parties are unable to settle such a dispute, the dispute shall be settled by a court of the Czech Republic having substantive and territorial jurisdiction, in line with the [Code of Civil Procedure], as amended’. Following non-payment, Inkreal brought an action before the Czech courts, in application of the choice of court agreement.

(31) onwards the AG sides with that part of scholarship (most of the authors he refers to wrote in French or German, just a few in English and he seems to only cite Mankowski as holding opposite views; I am not saying that French or German scholarship ought not to be cited, far from it, it ought to much more frequently in all possible EU languages; yet there is more scholarship on the issue both by English scholars and by others writing in English) and national case-law which argues against Article 25 BIa catching such choice of court, alleging lack of ‘international’ element.

He develops five main reasons (see the Opinion for more detail) with often only one source for each.

1. (32).  The mere will of the parties in a purely internal situation must not suffice: existence of an international element has to be established according to “objective criteria”. I for one do not understand how party autonomy is not an “objective criterion”.
2. (33) ff Brussels Ia cannot have the effect of eliminating any distinction between the national and international rules of jurisdiction governed by EU law.  Four arguments to the contrary of a textual or teleological nature based on A25 BIa must in the AG’s view be dismissed. First, that non-EU domiciled parties can make valid choice of law for an EU court in his view is of no value; Second, the independence of the will of the parties cannot enables parties to “call into question the scope of that regulation, which is limited to international and not purely internal situations.” ( a clear circular argument);  Third, A25’s new lex causae rule for substantive validity of choice of court cannot rescue choice of court which does not initially engage with a ‘international’ situation (again circular); Fourth, the clear movement from Brussels I onwards towards supporting choice of court does not justify authorising the parties to derogate from national rules on jurisdiction without any limit or connecting factor. 
3. (38) The AG cites CJEU Owusu, Lindner and IRnova as confirming his view that “objective criteria” are required to support an international element (Owusu and IRnova) or the foreign nationality of the defendant (Lindner).
4. (40 ff) Rome I cannot be used as a benchmark, both because purely internal situations in Rome I remain subject to mandatory national provisions (see of course VinylsItalia) and because Rome I’s DNA is party autonomy which Brussels Ia’s Article 25 it is suggested is not. (Had he not lost me already, the AG would certainly have lost me here). The AG also refers in support to the 2005 Hague Choice of Court Convention and recitals in Council Decision 2014/887 (making the EU accede to that Convention and referring to links between both and one or two Hague anchors in Brussels Ia; but nowhere near the symmetry the AG suggests), opining that A1(2) Hague Convention somehow needs to be extended to Brussels Ia: that Article reads “a case is international unless the parties are resident in the same Contracting State and the relationship of the parties and all other elements relevant to the dispute, regardless of the location of the chosen court, are connected only with that State.” Extending A1(2) Hague 2005 to Brussels Ia in my view is a massive stretch of statutory construction.
5. Finally (43) the AG somewhat backtracks and suggests factors testifying to an international element “should be assessed by the court seised on a case-by-case basis in a flexible manner or according to a broad conception.”

Finally the AG suggests (45 ff) that the CJEU should advice the referring court and ‘practice’ in general on the A25 conflit (viz the ‘international element’) mobile issue. When must the international nature of the situation be assessed: when the jurisdiction agreement is concluded or when the designated court is seised by the parties? Here he emphasises the contractual nature of the determination of jurisdiction (in direct contrast with his views above) and legal certainty rather than foreseeability, and suggests the international nature be assessed at the stage when the choice of court clause is agreed, not when the court is seised. That in my view undermines the core forum shopping intention of both Article 25 and Article 26 (voluntary appearance).

(49) the AG oddly backtracks again on this issue by suggesting that “it might be accepted that, in an internal situation with a prospect of becoming international, the parties [may] agree, when concluding their agreement, to designate a court of a Member State in sufficiently precise terms which express their intention  and provide for the exclusive jurisdiction of national courts where there is doubt as to the existence of a criterion requiring an international element.”  Rather than increasing legal certainty, that is bound to upend it IMHO.

The CJEU of course is not likely to entertain this last part of the Opinion.

In general, I believe it will have a more generous view of party autonomy and an eye on the interests of the European Judicial Area (per prof Dickinson), perhaps also as suggested by Matthew Hoyle, referring to Brussels Ia’s corrective mechanisms both for protected categories and ordre public (Article 45 BIa).

Ugljesa Grusic’s excellent post on  Sayn-Wittgenstein-Sayn v HM Juan Carlos Alfonso Victor Maria De Borbon y Borbon [2023] EWHC 2478 (KB) is prompting me to try and do something about the draft posts queue for the blog. Ugljesa has very good overview and this post can largely refer to his.

Nicklin J had earlier held that in [2022] EWHC 668 (QB) that in a former lover’s harassment case against the former King of Spain, Juan Carlos, the former King does not enjoy foreign sovereign immunity under the State Immunity Act 1978. That was overruled upon appeal [a Saint Nicholas gift for the King, held 6 December 2022 [2022] EWCA Civ 1595] for all pre-abdication conduct which the Court of Appeal held does fall under foreign sovereign immunity. The claim continued for the remainder and is ratione temporis subject to Brussels Ia (the EU jurisdictional rules for cases like this).

Collins Rice J in current judgment resoundingly held [303] ff against jurisdiction on the basis of the gateway for tort, and obiter blew the claim out off the water in many other ways:

My principal conclusion is that the High Court of England and Wales lacks jurisdiction to try this claim. That is because it has not been brought against the Defendant in his country of domicile, as is his default entitlement; and the Claimant has not satisfied me she has a good arguable case that her claim falls within an exception to that default rule. That in turn is because she has not sufficiently established that the ‘harmful event’ of which she complains – harassment by the Defendant – happened in England.

I am not satisfied either that the Defendant has, or should be deemed to have, submitted to the jurisdiction of the High Court by his own conduct of this litigation so far.

In the alternative, if I had been able to conclude that the High Court did have jurisdiction over this claim, I would have refused the Claimant’s application to amend her claim. This application was multifaceted; she wished to amend her claim in a number of respects and my reasons for refusing vary correspondingly. They include the inconsistency of her proposals with the decision of the Court of Appeal on the extent of the Defendant’s state immunity from suit; problems with the clarity, accuracy and consistency of the way she wanted to change her case; and the lack of good enough explanations for the timing of the changes she wanted to make. My conclusion in all the circumstances was that the changes did not introduce and express matters on which she would have a real prospect of succeeding at trial.

I would also have granted the Defendant’s application to strike out her claim. The claim did not comply with the rules of court applicable to the drafting of a harassment claim. As pleaded, I could not be satisfied that her statement of case disclosed reasonable grounds for bringing her claim as she did.

The Claimant has an account she wishes to give of her personal and financial history with the Defendant, and about the harm he has caused her peace of mind and personal wellbeing, and her business, social and family life. I take no view about that account as such. The only question for me has been whether the Claimant can compel the Defendant to give his side of the story to the High Court. My conclusion, as things stand, is that she cannot.

[17] ff the judge discusses ‘submission’ aka voluntary appearance under Article 26 Brussels Ia and essentially held [42] that the former King’s reservation of his jurisdictional position (made within the PCR prescribed 14 days within acknowledgment of service) pending resolution of the state immunity issue was apparently intended to be comprehensive, rather than to have deliberately conceded anything.

I believe that finding is right in essence however there is also a clear warning here for defendants that if they wish to oppose jurisdiction they better be comprehensive about it from the start.

For the determination of locus delicti commissi and locus damni under Article 7(2) Brussels Ia, the judge holds [62] ff

In this case, the parties have proceeded on the basis that I must hold in mind both the autonomous (internationally consistent) meaning of the ‘place of the harmful event’ together with the guidance on that provided by the CJEU, and, at the same time, the function of national tort law in identifying the legally relevant ‘harm’ in the first place. Authority for that appears (in a non-defamation case) in the decision of the Supreme Court in JSC BTA Bank v Ablyazov & Anor [2020] AC 7272 per Lord Sumption and Lord Lloyd-Jones JJSC at [32]-[33]. Having confirmed that the expression ‘place where the harmful event occurred‘ required an autonomous interpretation, the judgment continues:

However, the requirement of an autonomous interpretation does not mean that the component elements of the cause of action in domestic law are irrelevant. On the contrary, they have a vital role in defining the legally relevant conduct and thus identifying the acts which fall to be located … In particular, whether an event is harmful is determined by national law.

Approaching the question of the special jurisdiction therefore requires considering the autonomous question of whether England is either the place of the ‘event giving rise to the damage’ or the place ‘where the damage occurs’; and the relevant ‘event’ and ‘damage’ are determined by English tort law. The latter requires consideration of whether the relevant components of an actionable tort, occurring in England, have been made out to the relevant standard.

A lot more can be said about this issue. The need for autonomous interpretation on the one hand (note [103] the reference to CJEU Melzer which IMHO can work both in the defendant’s and claimant’s favour), the role of the putative lex causae for Vorfrage and characterisation, and the role of the lex fori in same on the other are not easily reconciled.  And as I point out here, there is a lot that JSC BTA Bank did but also a lot it did not entertain.

Ugljesa is absolutely right in his post to refer, as the judge did in current case, to CJEU Shevill’s potential for national law to limit forum shopping possibilities, however the CJEU in Shevill (para 41) does also emphasise the Brussels’ regime’s effet utile (which nb also made it into ECHR Arlewin v Sweden and engages ia Article 6 ECHR):

The criteria for assessing whether the event in question is harmful and the evidence required of the existence and extent of the harm alleged by the victim of the defamation are not governed by the Convention but by the substantive law determined by the national conflict of laws rules of the court seised, provided that the effectiveness of the Convention is not thereby impaired.  (emphasis added)

Ugljesa finally is absolutely right in pointing to the lack of Rome II input into the extraterritoriality issue and this I suspect is but one element on which appeal may and can be sought.

Geert.

EU Private International Law, 4th ed. 2024, Heading 2.2.12.2

1/2 Following earlier only partially successful foreign sovereign immunity defence, former Spanish King Juan Carlos succeeds in Brussels Ia jurisdictional challenge to harassment claim
E&W held to be neither locus damni nor loci delicti commissi, nor centre of claimant's interest

— Geert Van Calster (@GAVClaw) October 6, 2023

https://bsky.app/profile/gavclaw.bsky.social/post/3kb3ifsvp742p

X v Y (*grumbles his usual grumble about anonymisation*) ECLI:NL:GHDHA:2023:1759  is an interesting judgment discussing, yet not determining, the extent of Rome I’s Article 18’s ‘burden of proof’ provision. Clearly the discussion has echoes for the similar provision in Article 22 Rome II.

Article 18 Rome I

Burden of proof

1.   The law governing a contractual obligation under this Regulation shall apply to the extent that, in matters of contractual obligations, it contains rules which raise presumptions of law or determine the burden of proof.

2.   A contract or an act intended to have legal effect may be proved by any mode of proof recognised by the law of the forum or by any of the laws referred to in Article 11 under which that contract or act is formally valid, provided that such mode of proof can be administered by the forum.

Article 22 Rome II

Burden of proof

1.   The law governing a non-contractual obligation under this Regulation shall apply to the extent that, in matters of non-contractual obligations, it contains rules which raise presumptions of law or determine the burden of proof.

2.   Acts intended to have legal effect may be proved by any mode of proof recognised by the law of the forum or by any of the laws referred to in Article 21 under which that act is formally valid, provided that such mode of proof can be administered by the forum.

The court first of all [5.6] justifiably confirms that A24(1) BIa does not stand in the way of its jurisdiction, which parties agreed to in a choice of court clause per A25 BIa: the claim concerns monies allegedly still owed on the transfer of a share of ownership in German real estate. It does not have rights in rem in that property as the object of the proceedings.

Choice of law was made for German law. The A18 Rome I issue is triggered by a declaration made by the claimant in the main proceedings, in front of a German notary. Claimant argues that statement was made to speed up the entry of the sale in the German land register, not to discharge the defendant in the main proceedings of the monies owed. The court [5.9] holds that German law as a result of A18 only determines the burden of proof and evidentiary value of that statement, to the degree German law has specific rules relating to the law of obligations generally or for the specific contract at issue.

On the facts, the court [5.16] holds that it need not determine the lex causae issue for evidentiary value under the Dutch ‘antikiesregel’ ―meaning the court being absolved of the proprio motu obligation to determine applicable law if the alternatives lead to the same result― for under neither laws the notarial statement has discharging effect. I for one am not convinced that the antikiesregel complies with the effet utile of EU private international law, but that is a different matter.

Geert.

Extent of A18 Rome I's burden of proof being subject to lex causae, v procedure being subject to lex fori (here: sale of ownership of German real estate, subject to German law as lex voluntatis)

Den Haag court in appeal, X v Y ECLI:NL:GHDHA:2023:1759 https://t.co/SXDUgdORYB

— Geert Van Calster (@GAVClaw) September 19, 2023

In C-632/21 JF and NS v Diamond Resorts Europe Limited (Sucursal en España) (‘Diamond Resorts Europe) the CJEU has held that Article 6(2) Rome I on consumer contracts is exhaustive, preventing a consumer to shop for more favourable laws different from those of their habitual residence.

Applicants are British consumers resident in the UK who concluded, on 14 April 2008 and 28 June 2010 respectively, two timeshare contracts with Diamond Resorts Europe, an English company operating as a branch in Spain of the Diamond Resorts group. The accommodation subject to the timeshare is spread across the EU with focus on Spain. Applicants request invalidity of the contracts on the basis of the Spanish timeshare laws, which implement the relevant EU law at issue. They seize a Spanish court, claiming the proceedings have as their object a right in rem in immovable property (the jurisdictional echo of C-73/04 Klein v Rhodos Management already should have made them think otherwise imho). Defendants argue the claim concerns a right in personam which in consequence of Rome Convention’s and /or the Rome I Regulation’s provisions on consumer contracts, are subject to the laws of the habitual residence of the consumers, i.e. English law.

The CJEU first of all holds (para 55) that as a consequence of Articles 66(a) and 126 of the UK-EU Withdrawal Agreement, the Rome Regulation applies to one of the contracts only, the other one being subject to the Rome Convention. It also confirms (para 52) that despite the contracts having been concluded between UK parties, the contract is clearly ‘international’ given the presence of foreign elements.

Next, it confirms without much ado (para 70 ff) the contracts as consumer contracts, notes lex voluntatis as being English law, and in consequence of the consumer title, that lex voluntatis being the same lex contractus as would have applied in the absence of choice.

Importantly, with reference mutatis mutandis to CJEU Schlecker, and a clear hint as to the future reply in VK v N1,

“An interpretation whereby it would be possible to derogate from the conflict-of-law rules laid down by the Rome I Regulation for determining the law applicable to consumer contracts, on the ground that another law would be more favourable to the consumer, would necessarily seriously undermine the general requirement of predictability of the applicable law and, therefore, the principle of legal certainty in contractual relationships involving consumers” (para 75)

A further question on Article 9 overriding mandatory provisions is declared inadmissible for lack of any detail on the nature of the national laws, given by the referring court.

Geert.

New #CJEU judgment applicable law Rome I, re timeshare agreements and consumer law
C-632/21 Diamond Resorts Europehttps://t.co/IBmyg43pzM

— Geert Van Calster (@GAVClaw) September 14, 2023

I discussed Richard de La Tour AG’s Opinion in C-590/21 Charles Taylor Adjusting Limited v Starlight Shipping Company and Overseas Marine Enterprises Inc here.

The CJEU held last week, [27] qualifying as the AG did, the English orders as a quasi anti-suit injunction in the circumstances of the order (leaving some room for distinguishing).

Rather more so (and correctly so) than its AG, it [35] points to the nature of ordre public as expressed in (now) A45 BIa as being a concept of the national legal order of the Member States, even if [36] the origin of that rule may lie in EU law (such as here the rule [37] that “every court seised itself determines, under the applicable rules, whether it has jurisdiction to resolve the dispute before it”).

The CJEU’s reference to Meroni and its stating that a Member State “cannot, without undermining the aim of [Brussels Ia], refuse recognition of a judgment emanating from another Member State solely on the ground that it considers that national or EU law was misapplied in that judgment” [29], with reference ia to Liberato), imho mean that it does not push the principle of ‘non-review’ quite so emphatically as the AG did, however one cannot see in what circumstances an order such as this would survive (now) Article 45.

Finally, the CJEU does not discuss the AG’s ‘ ‘unless it gives effect to a decision which would have been prohibited in direct proceedings’, which I flagged in my earlier post.

The judgment is consistent with the (much contested) Turner and West Tankers approach, and it leaves some open questions on the qualification of orders as ‘quasi anti-suit’,  and the individual circumstances in which they might not clash with ordre public.

Geert.

(EU Private International Law, 3rd ed. 2021, ia 2.95 ff.

#CJEU European court confirms 'quasi anti-suit injunctions' (here ia related to cost order) may fall foul of BIa's recognition rules: MSs may use ordre public to refuse to enforce

C‑590/21 Charles Taylor Adjusting v Starlight Shipping re: The Alexandros Thttps://t.co/u5vT91nLjN

— Geert Van Calster (@GAVClaw) September 7, 2023

In Crane Bank Ltd & Ors v DFCU Bank Ltd & Ors [2023] EWCA Civ 886 core issue is the scope and application of the foreign act of state rule and of the limitations and exceptions to which it is subject. The foreign act of state rule in its narrow sense essentially holds that courts should not question the validity of acts taken by a foreign government within that government’s territory – see Reliance. [2] the facts:

The first appellant, Crane Bank Limited (“CBL”), was formerly a major commercial bank in Uganda. The second to seventh appellants are shareholders in CBL. In these proceedings the appellants assert that from about Spring 2016 senior Ugandan government officials and officials of the Bank of Uganda (“the BoU”) engaged in a corrupt scheme to take control of CBL, making improper use of statutory and regulatory powers to do so, and then to sell its assets for the benefit of the parties to the scheme. The appellants allege that the first respondent (“DFCU Bank”), another Ugandan commercial bank, joined the corrupt scheme as purchaser of CBL’s assets from the BoU (acting as receiver of CBL), that purchase being at a gross undervalue. DFCU Bank’s holding company (the second respondent) and certain current and former executives and directors of DFCU Bank (the third to fifth respondents) are also alleged to have joined the scheme

[5] appellants contend that the first instance Judge should have found that there was at least a serious issue to be tried (for the purpose of founding jurisdiction) that:

i) the sale by the BoU (as receiver) to DFCU Bank was commercial rather than sovereign in character, therefore falling outside the foreign act of state rule (“the Commercial Activity Exception”); and/or

ii) all of the executive acts in question engaged the English public policy of combatting and not giving legal protection to bribery and corruption, therefore falling outside the foreign act of state rule (“the Public Policy Exception”); and/or

iii) investigating the acts of bribery and corruption alleged against DFCU Bank in paragraph 69(m) of the Amended Particulars of Claim (“the APoC”) did not require the Court to inquire into or adjudicate on the legality of executive acts of the Ugandan state, and so would not infringe the foreign act of state rule (“the Kirkpatrick Exception”); and/or

iv) the application of the foreign act of state rule in this case would be incompatible with Article 6 of the European Convention on Human Rights and therefore contrary to s.6 of the Human Rights Act 1998 (“the Article 6 issue”).

The Foreign Act of State rule is expressed [13] as that courts “will not adjudicate or sit in judgment on the lawfulness or validity under its own law of an executive act of a foreign state, performed within the territory of that state”. It is different from foreign sovereign immunity:“Whereas immunity bars an otherwise good legal claim against a specific person, the foreign act of state rule provides that a claim which falls within it is not a good claim at all as a matter of English law, no matter the identity of the defendant” ([69]).

For his definition, Lord Justice Philipps refers to the Supreme Court in “Maduro Board” of the Central Bank of Venezuela v “Guaidó Board” of the Central Bank of Venezuela [2023] AC 156. Futher reference is made [14] to Yukos Capital for the exceptions:

Yukos Capital (No. 2) [2014] QB 458 at [68]-[115]. For the purposes of the appeal, the following are relevant:

(i) the Public Policy Exception:

“”[T]he doctrine will not apply to foreign acts of state which are in breach of clearly established rules of international law, or are contrary to English principles of public policy, as well as where there is a grave infringement of human rights”. (Oppenheimer v Cattermole [1976] AC 249, 277–278, per Lord Cross; Kuwait Airways Corpn v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883; Yukos Capital (No 2), paras 69-72.)”

(ii) the Commercial Activity Exception:

“The doctrine does not apply where the conduct of the foreign state is of a commercial as opposed to a sovereign character. (Empresa Exportadora de Azucar v Industria Azucarera Nacional SA (The Playa Larga) [1983] 2 Lloyd’s Rep 171; Korea National Insurance Corpn v Allianz Global Corporate & Specialty AG [2008] EWCA Civ 1355; [2008] 2 CLC 837; Yukos Capital (No 2), paras 92-94.)”

(iii) the Kirkpatrick Exception:

“The doctrine does not apply where the only issue is whether certain acts have occurred, as opposed to where the court is asked to inquire into them for the purpose of adjudicating on their legal effectiveness. (Kirkpatrick (1990) 493 US 400; Yukos Capital (No 2), paras 95-104.)”

The appeal was not allowed on the latter exception but it was on the other two, with Phillips LJ giving complete yet concise analysis of such good quality that there is little point in trying to summarise it here: please refer to the judgment.

I will say a little more about the A6 ECHR argument. The discussion here echoes the discussion in SKAT on Dicey Rule 3 and substantive v jurisdictional rules, and Belhaj v Straw [2017] UKSC 3: where Phillips LJ refers to distinction between domestic laws which excluded liability (which do not engage Article 6) and procedural bars (which do). [71] it is held that the result of foreign act of State is that  domestic law provides a complete defence to what would otherwise be an actionable (therefore A6 ECHR kosher) claim and [72] that, if a proportionality test were to be introduced in foreign act of State (so as to meet alleged A6 ECHR standards), “it would have a major impact on the rule and its applications”. That latter statement I would suggest does not cut much ice in light of a potential ECHR incompatibility.

There is undoubtedly more to be said however seeing as the appeal was largely successful, no more is to be expected from appellants at least on these issues.

Geert.

! scope & application of foreign act of state rule and of the limitations and exceptions to which it is subject.
Ia whether there is impact from A6 ECHR rights

Crane Bank Ltd & Ors v DFCU Bank Ltd & Ors [2023] EWCA Civ 886https://t.co/26BU9W9fOs

— Geert Van Calster (@GAVClaw) July 27, 2023

As Peter Bert reports here, the German Federal Supreme Court or Bundesgerichtshof has held in Case v-ZR-112.22 X v Trustees of Max Stern estate, a case related to ‘Lost art’, that Article 26 Brussels Ia applies to claims against a non-EU domiciled defendant. The trustees had  objected to jurisdiction in first instance but had not formally repeated that upon appeal.

[9] the court finds support first of all in CJEU C-412/98 Group Josi Reinsurance in particular para [44] of that judgment: “Admittedly, under Article 18 of the Convention [=A26 BIa, GAVC], the voluntary appearance of the defendant establishes the jurisdiction of a court of a Contracting State before which the plaintiff has brought proceedings, without the place of the defendant’s domicile being relevant.”

Group Josi however concerned the position of the claimant: [33]: ‘whether the rules of jurisdiction laid down by the Convention apply where the defendant has its domicile or seat in a Contracting State, even if the plaintiff is domiciled in a non-member country.” In the discussion that followed, the CJEU emphasised the general absence in the Convention of attention being paid to the claimant’s domicile (let alone nationality), pointing out that instead the Convention focuses on the defendant’s domicile in a Convention State, with then [44] the concession that (now) Article 26 exceptionally does not pay any attention to the defendant’s domicile. That does not imply however that the CJEU dropped any condition for Convention-States domicile in Article 26. The Bundesgerichthof’s “Der Gerichtshof der Europäi-schen Union hat deshalb – wenngleich nicht tragend – schon in Bezug auf Art. 18 Satz 1 EuGVÜ angenommen, dass es auf den Wohnsitz des Beklagten nicht ankomme” lifts para 44 of Group Josi out off its context.

[10] the Bundesgerichtshof acknowledges that A6(1) BIa refers to A25 but not to A26: “1.   If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall, subject to Article 18(1), Article 21(2) and Articles 24 and 25, be determined by the law of that Member State.” It suggests however a close relationship between A25 and A26, referring to CJEU Taser to emphasise A26’s character as impromptu choice of court, and focuses on the party autonomy element of both A25 and 26.

[11] BIa’s DNA of predictability is said to support a wide catchment area for A26, and [12] all of this is said to be acte claire hence not requiring CJEU referral.

Given the clear language of A6(1), I am not convinced.

Geert.

EU Private International Law, 3rd ed. 2021, 2.211. Fourth ed. forthcoming 2024.

Nb judgment is here https://t.co/6bg2FHOHaV pic.twitter.com/0dXjQdrSnL

— Geert Van Calster (@GAVClaw) August 4, 2023

McCarthy v Jones & Anor [2023] EWCA Civ 589 is an appeal from Jones & Anor v McCarthy [2022] EWHC 2186 (Ch) which I had not reported on the blog probably because I had not seen it (it happens to the best of us).

Jarman J in the first instance judgment summarised the facts [1 ff] as follows:

first claimant Mr Jones and the defendant Mr McCarthy orally agreed (the 2008 agreement) to exchange assets, whereby Mr McCarthy would obtain beneficial ownership of a yacht known as Biggest Buzz (the yacht) and registered in the British Virgin Islands (BVI), in exchange for Mr Jones acquiring a villa near Palma, Mallorca (the villa) and a mooring (the mooring) situated on mainland Spain. The yacht was registered in the name of the second claimant, a company owned and controlled by Mr Jones. The legal title to the villa was in the name of Mr McCarthy. The mooring was in the name of Mr McCarthy’s father. There was at the time, a substantial mortgage on the yacht and another on the villa. It was envisaged by Mr Jones and McCarthy at the time that after the swap the yacht and the villa would be sold to third parties. It is also not in dispute that part of the reason for the swap was to enable Mr Jones to buy a bigger boat.

In the autumn of 2008, Mr McCarthy sold the yacht to a third party for around £1 million, having had the use of it since the 2008 agreement was made. The second claimant had cleared the outstanding mortgage on the yacht. Mr McCarthy retained the proceeds of this sale, as was envisaged by the parties. The villa was not sold until 2016, at a price of €1.1 million. The proceeds of that sale were also retained by Mr McCarthy, which was something not envisaged at the time.

The primary remedy sought by the claimants is damages for breach of the 2008 agreement on the part of Mr McCarthy, to put them in the position they would have been in if Mr McCarthy had complied with his obligations thereunder by selling the villa at the direction of Mr Jones at its market value of €1.58 million or at least the value for which it was sold at €1.1million.

Alternatively, the claimants say that they are entitled to an account of profits and a constructive trust over the proceeds of sale of the villa, if this provides a more advantageous remedy to the claimants than that available in contract. Mr McCarthy was paid €150,000 by a Brian Proctor in December 2014 under an agreement between them which related to the villa and the mooring, and then bought it back for €950,000. Mr McCarthy then sold the villa to a third party in November 2016 for €1.1 million, so the wrongful proceeds of sale amount to €1.25 million.

The interest to the blog lies in the applicable law issues for the equitable relief. The first instance judge reported the procedural interest as follows [101]

It is not in dispute that matters of contract concerning the villa are governed by the law of England and Wales. Several weeks before the hearing was due to start, the claimants applied to amend their claims to include equitable remedies in respect of the villa. This gave Mr McCarthy little time to seek a report from an expert in Spanish law as to such remedies, as it was contended on his behalf, somewhat unusually, that despite the position regarding contractual remedies as set out above, any equitable remedies would be governed by Spanish law. This was not accepted by Mr Campbell, but he indicated that if the amendments were allowed, and if it was eventually determined that equitable remedies were governed by Spanish law, the claimants would rely solely on their claims in contract. This concession was referred to in the order made allowing the amendments, and repeated in Mr Campbell’s skeleton argument for the substantive hearing.

In other words claimant wanted to amend their claim so as to include equitable relief, a move which defendant opposed but was happy to forgive only if the judge held that that relief was subject to Spanish law, in contrast with the remainder of the claim which parties agreed was subject to English law as the lex contractus. Claimant OK-ed this route, committing to dropping the claim for equitable relief should the judge indeed find this was subject to Spanish law.

The judge duly [102] ff determined lex causae for equitable relief in the case and despite parties’ agreement that English law is the lex contractus, held it to indeed be Spanish law under the ‘most closely connected’ formula of the Rome Convention (the contract not being subject to the Rome I Regulation).

In so doing, he clearly (but without being specific about it) echoed the antediluvian (or is it?; authority and scholarship seem confused about the issue) distinction between rights, subject to the lex contractus, and remedies, subject to the lex fori – although it is odd to then subject those remedies to Spanish law. Unlike Rome I and Rome II, the Rome Convention does not have an Article specifying the ‘scope of the law applicable’, which includes in Rome I (A12(2) “within the limits of the powers conferred on the court by its procedural law, the consequences of a total or partial breach of obligations, including the assessment of damages in so far as it is governed by rules of law;”: itself of course courting controversy by referring to the limits of the lex fori’s procedural rules (see ia here for some of the discussions) and in Rome II Article 15(c) “the existence, the nature and the assessment of damage or the remedy claimed”, each with the complication of the ‘evidence and procedure’ carve-out from the scope of application of the Regulation.

On appeal, the applicable law issue was not revisited, albeit Lewison LJ [3] notes viz an issue different than the remedies issue

It is common ground that the result of the 2008 agreement was that (looking at the matter through the eyes of the law of England and Wales) Mr Jones became entitled to the beneficial interest in the villa despite Mr McCarthy’s retention of the legal title. Whether the existence of such an interest would be recognised as a matter of Spanish law was not explored either at trial or on this appeal. We were asked (rather unsatisfactorily) to assume that the law of England and Wales applied. What was in issue at the trial was whether Mr Jones had ceased to be entitled to that beneficial interest; or was estopped from denying that he had. The judge found against Mr McCarthy on both issues; and, with the permission of Asplin LJ, Mr McCarthy appeals.

E&W authority does not usually make a fuss when parties are in agreement that a specific law applies to the claim, so why such concession here would be ‘unsatisfactory’ is not entirely clear to me.

I am not finding it easy to get my head round the issues here. Perhaps the hot European summer is getting to me.

Geert.

1/2 Appeal dismissed re beneficial interest in Spanish villa despite retention of legal title
Of interest: Lewison LJ:
Whether…would be recognised as matter of SP law was not explored..We were asked (rather unsatisfactorily) to assume that the law of England and Wales applied

— Geert Van Calster (@GAVClaw) May 25, 2023