Flux Belges et Lux

I have a bit of catching up to do with the blog and I shall start with the case that is currently also being discussed over at the EAPIL blog. The CJEU has held in C-700/20 London Steam-Ship Owners’ Mutual Insurance Association Limited v Spain (re: the Prestige oil spill). I have further background and links to the English judgments that preceded the reference in my review of the AG Opinion. In that review, I predicted the Court would probably not follow its Advocate General and I should have betted on it for the Court, in Grand Chamber no less, did indeed largely not follow its Advocate General.

Had it been up to the Court of Appeal, the case should have not been referred at all, and given the consequences of the CJEU’s judgment, the referral may come to be regretted.

Essentially, the question at issue is whether an English ‘Section 66’ (Arbitration Act) judgment, which confirms an arbitral award is enforceable in the same way as a judgment in ordinary, qualify as a judgment under the recognition and enforcement Title of Brussels Ia (the case is formally subject to its predecessor, the Brussels I Regulation – see here for a BI- BIa table of equivalence which will make reading of the judgment easier)? If it does, the Spanish judgment contradicting the award is unlikely to be recognised.

Of note is that the 1958 New York Convention does not come into play in the proceedings for the reason that those proceedings do not involve, as Article I(1) of that convention requires, the recognition and enforcement of an arbitral award in a State other than that in which that award was made: the award was made in the UK.

The AG, despite his broad interpretation of the arbitration exclusion in the case at issue, suggests the proceedings are not caught by the arbitration exception, for reasons I discuss in my earlier post. The Court disagrees all in all in succinct terms.

It is worth relisting the 3 issues which the High Court is unsure about, followed by the CJEU’s answer to each:

First, whether a judgment such as its judgment given under Section 66 of the Arbitration Act 1996 qualifies as a ‘judgment’, within the meaning of Article 34(3) of Brussels I, where that court has not itself heard all the substantive merits of the dispute which had been heard by the arbitration tribunal.  Secondly, it has doubts whether a judgment falling outside the material scope of BI  by reason of the arbitration exception may nevertheless be relied on to prevent recognition and enforcement of a judgment from another Member State pursuant to Article 34(3).

Answering these together, the Court [44] kicks off with a curt reference to a fairly unqualified statement in CJEU Rich [18]: ‘the Contracting Parties [to the Brussels Convention, GAVC] intended to exclude arbitration in its entirety, including proceedings brought before national court’.  Further support is found in the 4th (!) para of recital 12 of Brussels Ia, referring specifically to recognition and enforcement proceedings as being excluded from Brussels Ia: [the Regulation does not apply] ‘nor to any action or judgment concerning the annulment, review, appeal, recognition or enforcement of an arbitral award.’

With reference to CJEU Gazprom, the Court [45] notes that the lex causae for recognition and enforcement of arbitral awards is national law, including the international law obligations the Member State may have adhered to. As noted however, the New York Convention does not apply to the recognition of the award at issue.

[48] ff the CJEU however concedes, partially with reference to earlier case-law, that judgments on issues carved out from the Regulation, may nevertheless qualify as a ‘judgment’ as meant in Article 34(3) [‘a judgment shall not be recognised’ ‘3. if it is irreconcilable with a judgment given in a dispute between the same parties in the Member State in which recognition is sought’]. This is mostly meant to protect Member State’s internal legal order and ensure that its rule of law is not disturbed by the obligation to recognise a judgment from another Member State which is inconsistent with a decision given, in a dispute between the same parties, by its own court.

This recycling of a carved-out subject-matter, via the enforcement title remains awkward to me, and is a similar back-door entry into BIa as for ex-EU judgments in C-568/20 J v H Limited.

[54] the Court then makes a leap which is reminiscent of its effet utile (safeguarding the overall objectives of the Brussels regime) approach viz anti-suit and arbitration in CJEU West Tankers : ‘the position is different where the award in the terms of which that judgment was entered was made in circumstances which would not have permitted the adoption, in compliance with the provisions and fundamental objectives of that regulation, of a judicial decision falling within the scope of that regulation.’

[59] it lists the two cardinal sins under Brussels I which the award, had it been a judgment covered by the Regulation (but surely it is not!), would have committed: it would have infringed ‘two fundamental rules of that regulation concerning, first, the relative effect of an arbitration clause included in an insurance contract [here the CJEU refers to Assens Havn, GAVC] and, secondly, lis pendens [here, [64] ff, the Court finds the lis pendens conditions would have been met had the two sets of proceedings both been included in the Regulation, GAVC].’

This whole construction requires a parallel universe being built next to BIa (or it is effectively nonsense, as prof Briggs puts it).

[71] the CJEU formulates an instruction for courts faced with request for arbitral awards:

It is for the court seised with a view to entering a judgment in the terms of an arbitral award to verify that the provisions and fundamental objectives of Regulation No 44/2001 have been complied with, in order to prevent a circumvention of those provisions and objectives, such as a circumvention consisting in the completion of arbitration proceedings in disregard of both the relative effect of an arbitration clause included in an insurance contract and the rules on lis pendens laid down in Article 27 of that regulation

The UK courts not having so verified, [72] ‘a judgment entered in the terms of an arbitral award, such as that at issue in the main proceedings, cannot prevent, under Article 34(3) of Regulation No 44/2001, the recognition of a judgment from another Member State.’ As Gilles Cuniberti notes, this instruction, effectively to arbitral tribunals (for if they ignore them, their award risks becoming unenforceable) to verify lis pendens requirements  is at odds with CJEU Liberato, and an extraordinary extension of the BIa rules to arbitral tribunals.

Thirdly, is it permissible to rely on Article 34(1)’s orde public exception as a ground for refusing recognition or enforcement of a judgment from another Member State, on the basis that such recognition or enforcement (of the Spanish judgment) would disregard the force of res judicata acquired by a domestic arbitral award or a judgment entered in the terms of such an award. Here, the CJEU [74] ff answers that the issue of the force of res judicata acquired by a judgment given previously is already exhaustively dealt with under Articles 34(3) and (4) of Brussels Ia and cannot therefore be resurrected under the ordre public exception.

The judgment is concocted reality, but not one which surprises me as I already indicated in my post on the AG’s Opinion. It is time the EU have a fundamental reflection on its relation with commercial arbitration. Treated with odd deference in the discussions on investor-state dispute settlement (think: CJEU Achmea, Komstroy etc) yet seriously obstructed in the case-law on the Brussels regime.

Geert.

EU Private International Law, 3rd ed. 2021, ia 2.120.

As I suspected when I reviwed the Opinion AG https://t.co/PphA3zHY0j the #CJEU seems less forgoving of the #arbitration exception in Brussels Ia. More soon. https://t.co/ROQO2oM9Kh

— Geert Van Calster (@GAVClaw) June 20, 2022

The arbitration community in particular was eagerly awaiting judgment of the US Supreme Court in ZF Automotive v Luxshare. SCOTUS has now held that the use of the relevant US CPR rule, on assistance of foreign tribunals, does not apply to arbitration.

Matthias Lehmann reviews the judgment here and makes valid points on how the ruling could and perhaps should have gone the other way, particularly in light of the use of ‘international’ and ‘tribunal’. Whatever the merits of the finding, it confirms a limiting approach courts are taking in accepting discovery shopping. This is also testified eg by the Dutch courts’ approach in Kiobel, and the English courts’ approach in Akkurate and, in an alternative view, in Glaxo v Sandoz.

Geert.

I am in tidying up mode clearly for my goodness I have way too many windows open on various browsers. And as always: Bloggo, ergo sum. (Or at the least: when I blog and /or Tweet the cases seem more firmly lodged in my memory). In FDI v Barclays & Ors [2022] EWHC 391 (Ch) defendants applied successfully for a case management stay to allow for clarification of the position in parallel US multi-district litigation (‘MDL’) proceedings (started earlier) involving the LIBOR fixing rate scandal. The confusion seems to be about what US  jurisdictional decisions in those proceedings mean against at least some of the defendants in the UK proceedings.

The UK proceedings were started pre-Brexit. One assumes therefore that the decision takes full advantage of the wedge that exists between a procedural, case management stay and a full-blown jurisdictional decision. The latter surely needs to be discussed under Brussels Ia, including its Articles 33-34 forum non-type mechanism, lest  one were to argue res judicata which, if the US Proceedings have not moved beyond jurisdictional decisions, is unlikely.

The judgment also indicates that a further CMC – Case Management Conference will be held in October. One looks forward to further development there.

Geert.

#LIBOR fixing, successful application for case management stay to clarify relationship with US proceedings
Claims based on US State law of deceit and EN competition law

Oddly no consideration of A33-34 BIa

FDI v Barclays & Ors [2022] EWHC 391 (Ch) https://t.co/33oGvgTizQ

— Geert Van Calster (@GAVClaw) February 25, 2022

I tweeted on the case at the time I think and now bumped into it as per ‘too many open browser windows -syndrom’ ;-): Liman J’s January’s judgment in Suez Water New York v Dupont, Chemours et al serves as a good primer (Legally Blonde a strong second) to explain general (where the defendant is ‘at home’) and specific (based on the defendant’s contacts with the State) personal (as opposed to subject-matter) jurisdiction.

In the US (with slight variations in federal and State approaches), general personal jurisdiction over the defendant arises either because of its continuous and systematic business affiliations with the state (indisputably established in case of domicile in the State) or, in the case of foreign corporations (incl in the business and human rights context) where its activities make it ‘essentially at home’ in the State (Daimler v Bauman). Specific personal jurisdiction, aka ‘long arm’ jurisdiction, exercised against those ‘not at home’ in the State, requires contact with the State, typically through the (attempted) sale or supply of goods or services, the commitment of a wrongful act (tort) or Moçambique-type matters such as transactions involving real estate in the State.

In the case at issue, the judge concludes that claimant, who is seeking to recover the water remediation costs of PFAS, ‘forever chemicals’ pollution,  has made the requisite prima facie showing of personal jurisdiction over the original manufacturers (ia of ‘Teflon’ non-sticky pans) albeit just barely, accepting a prima facie link between those defendants’ marketing activities  in New York and the contamination. However the judge does not prima facie accept jurisdiction over the successor corporations, holding that under New York law, successor jurisdiction is appropriate only where a predecessor and successor remain one and the same after some corporate-restructuring event. If this trend continues, it would be a vindication for escaping environmental liabilities by the use of special purpose vehicles, including corporate restructuring.

The case in the end faltered on the basis of vagueness in the claim however I understand this can be remedied (and may have been done so on the meantime). Other courts will have different approaches and unfortunately the length of the judgment (which also discusses eg public nuisance claims) illustrates  the industry will battle liability to the end. Another sad, sad case-study for the late lessons from early warnings collection.

Geert.

‘Soonish’ was pretty accurate – I have been busy teaching LAW5478 at Monash. In Bourlakova v Bourlakov [2022] EWHC 1269 (Ch),  Trower J held ia against a stay of English proceedings on Article 34 Brussels Ia grounds. My paper on Article 33-34 is in the editorial stages at the Journal of Private International Law and the case will be included in its overview of the case-law so far. That case-law is predominantly English, perhaps a reflection of how (wrongly) English courts are convinced into thinking the Article 33-34 defence is another form of a forum non convenience objection to jurisdiction.

As in many of the cases (including Municipio de Mariana in which a Court of Appeal judgment ought to be delivered around June /July), the judge has to consider a mixed forum non conveniens (for the non-EU based defendants) and Article 33-34 (for the EU domicileds) defence. On top of that, there are applications for a  case-management  stay, and objections to valid service in Latvia. In other words, the classic ‘everything including the kitchen sink’ jurisdictional defence, leading to a judgment of over 400 paras long!

Jurisdiction in the case as far as Brussels Ia i concerned, is a combination of Article 4 and 8(1) – the Lugano Convention also has a calling.

Claimants are Mrs Loudmila Bourlakova and two companies of which she is the ultimate beneficiary, one of which (Hermitage One Limited (“H1”)) is incorporated in the Isle of Man and the second of which (Greenbay Invest Holdings Limited (“Greenbay”)) is incorporated in the Seychelles.  First defendant is Oleg Bourlakov, who died on 21 June 2021, which was after the commencement of these proceedings but before the applications to challenge jurisdiction had been made. The major part of his and his family’s wealth derived from the acquisition and subsequent sale of Novoroscement OJSC, a major Russian cement producer, which was sold for US$1.45 billion in 2007. Both Bourlakovi are or were Ukrainian, Russian and Canadian nationals. At the material time they were both domiciled in Monaco, although during the course of their marriage they had lived in a number of other jurisdictions including Canada.

Claimants allege that, since late 2017, there had been an irretrievable breakdown in marital relations. Divorce proceedings were initiated by Mrs Bourlakova in Monaco in 2018. It was common ground in the Monaco divorce proceedings that the law governing the matrimonial property regime is Ukrainian law and the Ukrainian concept of community property applied to the marriage. The Monegasque courts remained seised of the divorce proceedings at the time of Mr Bourlakov’s death.

Second to fourth defendants were all involved in the provision of fiduciary corporate services and advice to Mr Bourlakov, together with companies and foundations owned or controlled by him. Domicile for these is England, Cyprus or Switzerland. Fifth defendant, domiciled in Israel, somehow got caught up in the proceedings through a family trust, and is pursuing alternative litigation in England. Sixth defendant is a German qualified lawyer domiciled in Latvia, other defendants (family members ) are domiciled at Estonia or (companies) Panama.

The essence of the allegations is that Mr Bourlakov and his advisers conspired to reduce the share of the ex-wife in the matrimonial estate.  Mr Bourlakov and Mrs Bourlakova have never lived in England and the alleged partnership at the heart of the dispute is unrelated to England, did not operate here and is not governed by English law. None of the underlying assets which the claimants believe form part of Mr Bourlakov’s estate are located in England (or even held through English companies). Neither though, does Monaco (the alternative forum suggested in the jurisdictional objection) feature in the factual matrix.  One of the defendants is domiciled in England and one or two relevant meetings were held in England.

Divorce proceedings were commenced in Monaco and Mr Bourlakov and his advisers filed criminal proceedings there against Mrs Bourlakova on the basis of alleged breach of trust, concealment and money-laundering.  As is often the case in continental European proceedings, a civil claim there was lodged with an investigating judge, which will eventually lead to a court required to rule on the civil claim as well as the criminal one. Mr Bourlakov’s compaint has led to nought however Mrs Bourlakova’s counterclaim is still pending there in some, disputed form, as are Mr Bourlakov’s estate proceedings.

There is an extraordinarily complex web of issues to be held under English and EU jurisdictional rules but I shall limit this post to the Article 34 stay application – which was held obiter.

The judge [292] firstly notes, as noted obiter (for the A34 defence was raised too late), with reference ia to CJEU Aertssen,  that the defendants had not properly established that the Monaco criminal proceedings, viewed from the pont of Monegasque criminal procedure, were an “action pending before the court of a third state” for the purposes of A34 at the time the current proceedings were commenced.

[294] ff also discuss, equally obiter, whether any related third state action must fall within the scope of BIa for A34 to apply at all. [298] ff in that respect refer to two cases in which it was accepted that the court must be satisfied that the proceedings pending in the foreign jurisdiction, as well as the English proceedings, fall within the scope of BIa. However, in neither [BB Energy (Gulf) DMCC v Al Amoudi, WWRT Ltd v Tyshchenko, both engaged with the insolvency exclusion of BIa] was there a judicial decision on the point.

[312] Trower J also notes that A34 ‘accepts more risk of an irreconcilable judgment than article 30’, despite the reference in the recitals to flexibility. ‘Related’ actions are also discussed with reference to Viegas, and the judge [330] ff suggests he would not have ordered a stay on five further grounds, some of them related it seems to the ‘sound administration of justice’ requirement (and cited, too, for the refusal of a case management stay).

A complex web of findings and claims, with the A34 discussion showing that much is still outstanding on its application. I do not yet know whether permission to appeal has been sought and if so, on what grounds.

Geert.

European Private International, 3rd ed. 2021, Heading 2.2.15.3.2, para 2.539 ff

Unsuccessful application for an Article 34 'forum non conveniens light' application in light of Monaco criminal proceedings.
Review on the blog soonish (it's busy here @MonashLawSchool)

Bourlakova v Bourlakov [2022] EWHC 1269 (Ch)https://t.co/zYJiztXQFm

— Geert Van Calster (@GAVClaw) May 26, 2022

A post I started writing on 14 December 2021 so it’s about time I’ld finish it. In  Guistra v Twitter 2021 BCCA 466 (the case echoes Haaretz in Ontario) the Supreme Court of British Columbia with  Grauer J delivering the unanimous opinion, upheld jurisdiction for the BC courts on the basis of the claim pointing to a tort having been committed in BC, BC therefore being locus delicti commissi. The Court held that damage in the jurisdiction, locus damni, needs then not separately be argued.

Mr. Giustra, a British Columbia resident, alleges that Twitter published tweets that defamed him in British Columbia, as well as elsewhere.  Twitter asserts nota bene that, in law, it cannot properly be considered a “publisher” of tweets that were authored and posted on its platform by its users. That issue is deferred for the merits of the claim: at the jurisdiction level, the pleading is what is important: compare with the situation under Brussels Ia.

A forum non conveniens challenge in favour of the courts at California was rejected, where reference was made ia to Google v Equustek. There is an elephant in the room here, so identified, namely that a claim in California is doomed to fail on free speech grounds, and that an eventual Canadian judgment is doomed to be unenforceable at least in the US.

A good judgment for comparative purposes.

Geert.

Forum delicti commissi, no need to establish forum damni, damage to reputation in the jurisdiction. Rejection of forum non conveniens jurisdiction challenge also upheld.
Via @Greg_Callus https://t.co/OrRV0fsrFi

— Geert Van Calster (@GAVClaw) December 14, 2021

Kumlin & Anor v Jonsson & Ors [2022] EWHC 1095 (QB) disciplines forum shopping, in this case libel tourism, in a claim that is considered a SLAPP: a Strategic Lawsuit against public participation.

First Claimant is an entrepreneur, businessman and investor in sustainable and ethical business ventures, resident in Monaco, with business interests in the UK including in the Second Claimant, of which he is the founder, Chairman and Chief Executive Officer. He is a Swedish citizen. Second Claimant is a public limited company registered in England and Wales. Claimants’ case is that between 29 September 2020 and 2 November 2020 the Defendants, or some of them, all of whom are Swedish, published or caused to be published on the Website eight articles concerning the Claimants. There was further publication via Facebook, Twitter, etc, where links to the Articles were posted. 

The Articles are in Swedish. Knowles J [30] advances the reasoning, proposed by defendants, that jurisdiction under any of the gateways as a result of A4 BIa, locus damni or locus delicti commissi (A7(2) BIa per CJEU Bier and Shevill), or centre of interests (A7(2) BIa, per CJEU eDate and Bolagsupplysningen) only exist to the degree the case is actually actionable in those cases which, he submits, requires reference to the domestic laws of those Member States (e.g. a minimum ‘publication’ threshold). I believe this is incorrect: jurisdiction and actionability are not the same. While lex fori on threshold issues will have an immediate impact on the practical reality of a claim, it does not stand in the way of principled jurisdiction under BIa, which exists without reference to national laws.

The judge refers to much CJEU and E&W authority, all of it discussed on this blog, most recently the Court of Appeal in Mincione.

Knowles J’s discussion eg [69] ff of the intensity of publication etc required, under residual double actionability rules, in my view is a threshold question and not, as it is presented, a jurisdictional, gateway question, albeit the analysis in this section is mixed with justifiable discussion of direct v indirect damage under the CJEU Marinari rule. The judgment is much more extensive on this point than it could have been in my opinion.

[224] it is concluded that on the centre of interest issue, which is relevant for the natural person claimant only, his centre of interests is Monaco, where he is habitually resident. That is a factual assessment which is unlikely to be material for an appeal.

Geert.

EU private international law, 3rd ed. 2021, 2.439 ff.

#slapp, CJEU Bolagsupplysningen claxon. I have not yet seen the actual judgment. Should be an interesting jurisdictional read. https://t.co/yibMYgKcgz

— Geert Van Calster (@GAVClaw) May 11, 2022

I give background to Collins AG’s Opinion in C-700/20 The London Steam-Ship Owners’ Mutual Insurance Association Limited v Kingdom of  Spain here. The Court of Appeal nota bene in the meantime has held that the High Court should have never referred, as I report here.

Does an English ‘Section 66’ (Arbitration Act) judgment, which confirms an arbitral award is enforceable in the same way as a judgment in ordinary, qualify as a judgment under the recognition and enforcement Title of Brussels Ia? If it does, the Spanish judgment contradicting the award is unlikely to be recognised.

The case at issue in essence enquires how far the arbitration exception of Brussels Ia stretches. Does the arbitration DNA of the case once and for all means any subsequent involvement of the courts is likewise not covered by Brussels Ia (meaning for instance that it must not have an impact on the decision to recognise and enforce an incompatible judgment issued by another Member State in the case); or should the  involvement of the courts in ordinary be judged independently against the Regulation’s definition of ‘judgment’.

The case therefore echoes the High Court’s later intervention in the infamous West Tankers case, and the recent CJEU judgment in C-568/20 J v H Limited (on third country judgments).

(44) the 1958 New York Convention does not come into play in the proceedings for the reason that those proceedings do not involve, as Article I(1) of that convention requires, the recognition and enforcement of an arbitral award in a State other than that in which that award was made: the award was made in the UK.

The AG suggests a broad scope of the exclusion, seeking support in the Jenard and Schlosser Reports. He also confirms the exclusion of arbitration has the effect, in particular, of making it impossible to use that regulation to enforce an arbitral award in another Member State by first turning it into a judgment and then asking the courts of the other Member State to enforce that judgment under Chapter III.

However, in the case at issue he suggests the proceedings are not caught by the arbitration exception, for 3 reasons:

(53) the notion of ‘judgment’ needs to be interpreted broadly;

(54) CJEU Solo Kleinmotoren instructs that for a finding to be a ‘judgment’,  ‘the decision must emanate from a judicial body of a Contracting State deciding on its own authority on the issues between the parties’;  that is the case here for (55) the S66 court does not rubberstamp; it discusses and settles a range of substantive issues between the parties;

(57) there is no requirement that a court must determine all of the substantive elements of a dispute in order to deliver a judgment that satisfies the purposes of that provision; reference here is made to CJEU C-394/07 Gambazzi (see the Handbook 2.576).

In the view of the AG (62) A1(2) is not determinative as to whether a judgment under the recognition and enforcement Title comes within the scope of the Regulation. Those provisions, he suggest, were enacted for different purposes and pursue different objectives: they aim to protect the integrity of a Member State’s internal legal order and to ensure that its rule of law is not disturbed by being required to recognise a foreign judgment that is incompatible with a decision of its own courts. A1(2) on the other hand is firmly part of the free movement of judgments rationale of the Regulation (and limitations thereto).

I think the CJEU judgment could go either way and if I were a betting man (which I am not) I suspect the Court will not follow and instead will take the same holistic approach towards protecting the application of Brussels Ia by the courts in ordinary, as it did in CJEU West Tankers. By the very nature of s66 (and similar actions in other Member States), the ‘issues between the parties’ are different in actions taking place entirely in courts in ordinary, and those in arbitration awards which are subsequently sanctioned (in the sense of ‘approved’) by a court. The latter proceedings do not discuss ‘the issues’ between the parties. They only engage a narrow set of checks and balances to  ensure the soundness of the arbitration process.

Neither do I follow the logic (63) that if the UK were not allowed to take account of the s66 judgment in its decision to recognise, it would mean that Member States would have to ignore all internal judgments with res judicata in an excluded area, including insolvency, social security etc., in favour of other Member States judgments ‘adjudicating upon the same issue’ (63): if they truly adjudicate upon ‘the same issue’, the judgment of the other Member State will be exempt from Brussels Ia. This is unlike the case at hand which clearly did involve a Spanish judgment on a subject matter covered by the Regulation. The arbitration exemption is the only exemption that relates to a modus operandi of conflict resolution: all the others relate to substantive issues in conflict resolution.

Commercial arbitration enjoys a peculiar privilege in the CJEU’s view on ADR (see CJEU Komstroy). I do not think however the Court will give it a forum shopping boost in the context of Brussels Ia.

Geert.

EU Private International Law, 3rd ed. 2021, ia 2.120.

The CJEU a little while back held in C‑498/20 ZK v BMA on the applicable law for the Dutch ‘Peeters Gatzen’ suit, for which I reviewed the AG Opinion here. The suit is  a tortious suit brought by a liquidator. In Nk v BNP Paribas the CJEU held at the jurisdictional level it is covered by Brussels Ia, not by the Insolvency Regulation.

A first issue of note, which I discuss at some length in my earlier post, is whether the liability is carved-out from Rome II as a result of the lex societatis provision. The CJEU confirms the AG’s contextual analysis, without repeating his general criterion, emphasises the need for restrictive interpretation, and specifically for the duty of care holds that liability resulting from a duty of care of a corporation’s bodies and the outside world, is covered by Rome II. This is important for business and human rights litigation, too: [55]

Pour ce qui concerne spécifiquement le manquement au devoir de diligence en cause au principal, il convient de distinguer selon qu’il s’agit du devoir spécifique de diligence découlant de la relation entre l’organe et la société, qui ne relève pas du champ d’application matériel du règlement Rome II, ou du devoir général de diligence  erga omnes, qui en relève. Il appartient à la seule juridiction de renvoi de l’apprécier.

The referring judge will have to decide whether the case engages the duty of care vis-a-vis the wider community (including the collectivity of creditors) however it would seem most likely that it does. If it does, locus damni is held, confirming the AG view, to be The Netherlands if the referring judge finds that the insolvent corporation’s seat is based there. The financial damage with the creditors is indirect only and does not establish jurisdiction.

[44] Should a judge decide that they do not have jurisdiction over the main claim, they also and necessarily have to relinquish jurisdiction over the warranty /guarantee claim against a third party under A8(2) BIa. CJEU Sovag is referred to in support.

Geert.

#CJEU this morning in ZK v BMA on jurisdiction and applicable law for the Peeters Gatzen #insolvency suit.

See my review of the Opinion AG here https://t.co/9eVzlPMQPX
Judgment herehttps://t.co/jtJJXerEld

— Geert Van Calster (@GAVClaw) March 10, 2022

Pal v Damen & Anor [2022] EWHC 4697 (QB) is another application (compare Clarke v Kalecinski) of Brussels Ia’s consumer section to cosmetic surgery contracts. Respectfully, the analysis is a botched job.

Claims are both in contract and in tort, as is usual in this type of litigation. Jurisdiction on the basis of the consumer title against the Belgium-based surgeon is undisputed, as is the lack of jurisdiction under Article 7(2)’s tort gateway against the clinic where the surgery was performed, locus damni (direct damage, CJEU Marinari) and locus delicti commissi both being in Belgium. The core question is whether there is a contract between surgeon and /or the clinic and the patient, and whether this is a consumer contract.

The second question needs to be determined first. The clinic essentially provides the hardware for the surgeon, but also ensures patient flow via its website http://www.wellnesskliniek.com which without a doubt meets with the  CJEU Pammer /Alpenhof criteria and therefore ‘directs its activities’ towards the UK. Its general terms and conditions, of which it is somewhat disputed that claimant ticked the relevant box, state ia that the clinic ‘is not party to the treatment agreement between the physician and the patient.’ 

The  expert evidence [25] ff centres around Belgian law. Expert for one of the defendants is their Belgian counsel, and Cook M dismisses his report [55] as not meeting relevant CPR requirements on expert evidence. On the basis of the remaining evidence, the judge finds [59]

the Claimant has established a good arguable case for the existence of a contract for medical treatment and /or medical services between her and the Surgeon and accordingly this Court has jurisdiction over that claim. The Claimant has failed to establish a good arguable case for the existence of a contract for medical treatment and /or medical services against the Clinic and accordingly the Court does not have jurisdiction over that claim.

With respect, the direction of analysis is entirely wrong. The first line of enquiry should have been whether there is a consumer contract with either or both of the Belgian parties, and if there is with one, whether the other party could have been caught in its jurisdictional slipstream. Á la Bonnie Lackey but then in the opposite direction: in Bonnie Lackey the question was whether persons in the immediate orbit of the undisputed ‘consumer’-claimant, may also sue under the consumer title. In current case, the question would be whether those in the immediate vicinity of the business-defendant, may be sued under the consumer title. The existence of a consumer contract is entirely an EU law question, not a Belgian law one.

Next, if the decision were taken that at least one of the parties is not caught by the consumer title, the existence of a ‘contract’ (for the provision of ‘services’) under Article 7(1) would be triggered, as would the forum contractus under Article 7(1)a, with an analysis of where the services were or should have been provided. This, too, is an analysis that requires EU law and EU law alone. [There is no trace in the judgment of a choice of court and /or law which for the former per A25 Brussels Ia may require Belgian law, with renvoi, a lex fori prorogati but even then only for the material ‘consent’ issue].

Belgian law does not come into this analysis at all, unless, potentially and most unlikely, one argues that the A7(1) analysis requires the conflicts method, should a contract for medical services not be caught by Article 7(1)’s ‘provision of services’: in that case, Rome I’s decision tree would be required to determine lex contractus and place of performance. Even then however it is not at all certain that Belgian law would be the outcome of Rome I’s matrix.

Geert.

EU Private International Law, 3rd ed. 2021, 2.222 ff, 2.385 ff.

Consumer contract re plastic surgery, jurisdiction
Whether contract exists with BE surgeon alone or also his clinic
Odd descent into BE substantive law
'Expert' reports largely held inadmissible
On the blog soon

Pal v Damen & Anor [2022] EWHC 4697 (QB) https://t.co/GgFEsYZrYP

— Geert Van Calster (@GAVClaw) May 5, 2022

Krzysztof Pacula reported end of March on CJEU C-723/20 Galapagos Bidco v DE and justifiably highlighted the Brexit issue. The case concerns a move of COMI – centre of main interest within the context of the Insolvency Regulation 2015/848 and it is on the element of impromptu move that my post will focus.

Galapagos SA is a Luxembourg holding company whose centre of administration (‘effective place of management‘ according to the former directors) was moved in June 2019, at least so contend previous directors, to England. At the end of August 2019, they apply to the High Court in England and Wales to have insolvency proceedings opened.

Echos of the tussle are here and of course also in Galapagos Bidco SARL v Kebekus & ors [2021] EWHC 68 (Ch). The day after the move of centre of administration, the former directors were replaced with one other, who moved centre of administration to Dusseldorf and issued relevant market regulation statements to that effect. This move was subsequently recognised  by the Courts at Dusseldorf as having established COMI there. The High Court action in London was never withdrawn and would seem to have been dormant since.

Applicant in the proceedings is Galapagos BIDCO Sarl, a creditor of Galapagos SA. It is I understand (but I am happy to be corrected by those in the know) Luxembourg based. As Krzysztof reports, it contests that the German move has effected move of COMI which it argues lies in England (although I fail to see how its reasoning should not also apply to the earlier instant move from presumably Luxembourg to England).

The question that arises is whether, in the determination of the centre of a debtor company’s main interests, specific requirements must be imposed to prevent abusive conduct. Specifically, in the light of the Regulation’s stated aim of preventing forum shopping, whether ‘on a regular basis’ in the second sentence of the first subparagraph of Article 3(1) Insolvency Regulation 2015, presupposes an adequate degree of permanence and is not present if the establishment of a centre of administration is pursued at the same time as a request to have insolvency proceedings opened. Respondents in the appeal, which include the insolvency administrator (trustee) contend that the requirement of administration ‘on a regular basis’ is fulfilled if the administration is permanent.

The CJEU unfortunately fails to answer that question, choosing to reply instead with a hierarchical answer which encourages race to court: [36]

the court of a Member State with which a request to open main insolvency proceedings has been lodged retains exclusive jurisdiction to open such proceedings where the centre of the debtor’s main interests is moved to another Member State after that request is lodged, but before that court has delivered a decision on that request, and that, consequently, where a request is lodged subsequently for the same purpose before a court of another Member State, that court cannot, in principle, declare that it has jurisdiction to open such proceedings until the first court has delivered its decision and declined jurisdiction.

However in the case at issue, the Withdrawal Agreement has the effect that if the High Court has not, as it would seem, taken its decision on the opening of proceedings prior to the end of Brexit Implementation Day 1 January 2021 (CET), the German courts need no longer apply that consequence of mutual trust and are at liberty to determine the existence of COMI.

The CJEU ends by suggesting Q1 no longer needs answering. Yet I think it does. Perhaps not so much for the case at issue (which explains why the judicially economical CJEU does not offer a reply). The German courts, as Zacaroli J notes in his decision [14], held in October 2019 that COMI for GAS has successfully moved to Germany as from 25 August 2019, the day the capital market and bondholders were informed that the centre of administration had been moved to Düsseldorf. Yet the file does not suggest that COMI prior to the attempted move, existed in Germany: it was established there following the new director’s decision. In accordance with the Regulation’s presumptions, it would have previously existed in Luxembourg. The element of ‘on a regular basis’ therefore still matters. Is the CJEU suggesting that a mere information of the capital markets suffices to move COMI?

Geert.

EU Private International Law, 3rd ed. 2021, Heading 5.6.1.

Abu Dhabi Commercial Bank Pjsc v Shetty & Ors [2022] EWHC 529 (Comm) engages Rome II by way of the applicable law to the claim playing a role in the forum non conveniens challenge. (Compare BRG Noal v Kowski for a similar discussion under Rome I). The case confirms the importance of retained Rome I and II discussion. The stage is set at [7]

at the heart of the jurisdiction challenge is an assertion that England is manifestly not the most suitable forum for the resolution of this dispute which all defendants maintain should be resolved by the UAE courts. Unsurprisingly, ADCB places significant reliance for its case that England is the most suitable forum for resolution of this dispute on the fact that Plc was a FTSE 100 quoted company, that the contracts by which the two most important of the Core Facilities were given contractual effect (the Syndicated Facility Agreement and the Club Facility Agreement) were drafted and completed in London by a prominent London law firm and were subject to London arbitration clauses and on its contention that England is the governing law of the dispute. Equally unsurprisingly the defendants emphasise that Plc was a holding company that carried on no active business activity, that the activity in London was essentially administrative in nature, that the lending which it is alleged lies at the heart of the scheme was lending by ADCB (a UAE registered entity trading in the UAE) to entities within the Group including principally Healthcare, all of which were based elsewhere than England and Wales. They maintain that if what is alleged is true then this was from first to last a conspiracy that was conceived and carried into effect in the UAE. They maintain that the governing law is beyond argument UAE law.

I shall limit the post to the Rome II element: Pelling J discusses this [64] ff, with the core element [68-69]:

the damage occurred when a UAE based company drew down against or otherwise benefitted from the Core Facilities offered by a UAE based bank. …ADCB … ultimately acted upon the representations in Abu Dhabi, from where the relevant loan funds were drawn down by NMC Healthcare“.

In the case of a misrepresentation or fraud, the locus damni is held to be the place where that misrepresentation is acted upon. UAE law as lex causae is in fact also and primarily confirmed by A4(2) Rome II: joint place of habitual residence, held [71] to be the UAE. Application of the A4(3) escape clause is dismissed [77], and a passing reference to a potential for A12 Rome II’s culpa in contrahendo leading to English law as the lex contractus, is summarily dismissed [78].

A stay is granted.

Geert.

Forum non conveniens
UAE clearly and distinctly more appropriate forum
Consideration ia of UAE law as applicable law under Rome II

Abu Dhabi Commercial Bank Pjsc v Shetty & Ors [2022] EWHC 529 (Comm)https://t.co/P0o1I2YbZL

— Geert Van Calster (@GAVClaw) April 1, 2022

In Chep Equipment Pooling BV v ITS Ltd & Ors [2022] EWHC 741 (Comm), Salter DJ untangles a myriad of jurisdictional gateways, partially tortious (with reference to UKSC Brownlie, and to CJEU Bier etc where relevant), partially contractual and subject to choice of court. A forum non challenge is rejected.

The choice of court discussion is interesting in particular for at 48 the judge mixes the forum prorogati rule of Article 25 BIa juncto its recital 20. One of the defendants claims the privilege of an A25 choice of court to establish compulsory Belgian jurisdiction. The judge notes that the agreement of which the clause is part, is governed by Belgian law and

The Audit Agreement, although in the English language, is governed by Belgian law. Rightly, neither party had tendered evidence of the principles of interpretation of jurisdiction clauses under Belgian law. At this stage of the proceedings, reliance on the presumption of similarity with English law is sufficient: see Brownlie (supra) at [157], per Lord Leggatt. In those circumstances, I must simply apply to this provision the principles of interpretation articulated in Fiona Trust and Holding Corpn v Privalov [2007] UKHL 40, [2007] Bus LR 1719.

This is a touch incorrectly formulated. Per BIa, the existence of consent and its expression are governed by A25, not by reference to any national law. The validity of consent by contrast does rely on national law however it is not the lex contractus of the underlying agreement which is relevant but rather the lex fori prorogati (also Belgian law), with renvoi. The judge in my view cannot rely on English law to judge the validity of choice of court at good arguable case level: once jurisdiction settled, it will not be allowed to be revisited. Even at this stage, therefore, per BIa the enquiry arguably must be made under Belgian law. Whether there was actually any suggestion that under Belgian (and subject to renvoi) law consent may not have been given, is not clear from the judgment.

Claimants tried to argue that the claim does not arise ‘out of or in connection with’ the Audit Agreement that contains choice of court however the judge disagrees. This part of the claim therefore must be litigated in Belgium (and an A8(1) anchor would of course not assist to keep the proceedings in England).

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.10.4.

Mix of jurisdictional arguments, partially related to Brussels Ia, partially English gateways and forum non conveniens

Chep Equipment Pooling BV v ITS Ltd & Ors [2022] EWHC 741 (Comm)https://t.co/HInLrba4IF

— Geert Van Calster (@GAVClaw) April 1, 2022

Samsung Electronics Co. Ltd & Ors v LG Display Co Ltd & Anor [2022] EWCA Civ 423 concerns follow-on damages claimed against non-EU based defendants. The European Commission had earlier found the existence of a cartel. The Court of Appeal confirms the refusal of service out of the jurisdiction on forum non conveniens grounds, holding, like the first instance judge, that England & Wales are clearly not the appropriate forum (Taiwan and /or South Korea are).

I report the case for it contains an interesting Ps on the confidentiality of the EC finding: Males LJ:

The parties were united in urging upon us that the Commission Decision is confidential and that reference to its recitals should not be made in open court. I have to say that, as a general proposition, this seems paradoxical. I find it hard to see how a Decision can at the same time be both confidential and binding in public follow-on proceedings. To that extent it appears that any requirement of confidentiality may be in tension with the fundamental constitutional principle of open justice. Moreover, this particular Commission Decision deals with events which are now in the distant past and has been extensively litigated in the years since it was made. It is hard to think that there is any real confidentiality left.

Nevertheless I have been careful to confine my citation from the Decision to what is necessary to explain the submissions made to us and the conclusions which I have reached. I have referred only to recitals which were alleged to explain and support the operative part of the Decision (cf. Emerald Supplies Ltd v British Airways Plc [2015] EWCA Civ, [2016] Bus LR 145 at [68]) and have omitted any reference to other participants in the cartel who were not represented before us.

This invites interesting reflections on the principles of open justice in EU competition law findings – a discussion I shall leave to others.

Geert.

Follow-on damages action re EC finding of cartel, viz non-EU defendants.
Refusal of service out confirmed, E&W clearly not the appropriate forum.
Interesting ps on confidentiality of EU decision

Samsung Electronics ea v LG Display ea [2022] EWCA Civ 423https://t.co/vmDSR5OvCC

— Geert Van Calster (@GAVClaw) April 1, 2022

A brief post on the judgment of the CJEU in C-561/20 United Airlines. The CJEU held that the EU flight delay compensation rules of Regulation 261/2004 apply to a flight operated by non-EU airline on behalf of EU airline, even when  the delay relates to flight segment outside the EU. On the issue of international jurisdiction, the Court engages with customary international law questions, referring ia to its C-366/10 ATAA judgment which I discussed here.

The CJEU firstly [51] repeats that since

a principle of customary international law does not have the same degree of precision as a provision of an international agreement, judicial review must necessarily be limited to the question whether, in adopting the act in question, the institutions of the European Union made manifest errors of assessment concerning the conditions for applying such a principle

I do not think its poor view on the lucidity of customary international law is justified, however its finding that only manifest errors may lead to illegality does of course mean the CJEU does not have to worry about all the nuts and bolts of territorial jurisdiction. It suffices [52] that there is a close connection with the territory of the EU since the Regulation specifies that connecting flights fall within the scope of that regulation on the ground that the passengers have started their journey from an airport located in a Member State. [53]:

The regulation applies to a long delay caused in a leg of a flight operated in a third country only in limited and clearly defined circumstances in which the flight concerned, taken as a whole, is operated from an airport located in the territory of a Member State. Such a flight and its passengers thus retain a close connection with the territory of the European Union, including for the leg of the flight operated outside the European Union.

Flights which are wholly operated in a third country or between two third countries, without any connection with EU territory [55].

Geert.

#CJEU: EU #flightdelay rules apply to flight operated by non-EU airline on behalf of EU airline, even when delay relates to flight segment outside the EU.

Once text of full judgment available, we can see how much the Court engages with AG discussion of territoriality, int law. https://t.co/rGqA1n2idi

— Geert Van Calster (@GAVClaw) April 7, 2022

BRG NOAL GP SARL & Anor v Kowski & Anor [2022] EWHC 867 (Ch) continues the current trend of forum non conveniens applications galore, following Brexit. In the case at issue, with Luxembourg suggested as the appropriate forum, applicable law determination, under (retained) Rome I’s ‘characteristic performance’ rule plays a core role.

Applicable law needs to be determined essentially viz an undertaking as I understand it, by a, validly removed, investment fund General Partner, not to torpedo the subsequent orderly continuation of the fund. The core commitment reads

“I, [name], hereby acknowledge that [NOAL GP] is the managing general partner (“General partner”) of [the Fund] with effect from 27 August 2021 and unconditionally and irrevocably undertake (a) not to assert otherwise, or to induce or procure an assertion to the contrary or otherwise challenge or question the validity of its appointment or induce or produce such challenge or question, in any applicable forum and (b) to cooperate with and assist the General Partner in completing a full, orderly and timely transfer of the control of the Partnership and all of its assets and any obligations to the General Partner”.

Claimant [57] suggests the specific Undertaking in and of itself meets the CJEU Handte definition of a stand alone contractual obligation, however Smith J does not specifically hold on this for in her view even if this were correct, the overall contractual construction would have an impact on the applicable law consideration, seeing as in her view:

no choice of law was made; no default ‘passe partout’ contract as listed in A4(1) Rome I applies; A4(2) Rome I’s ‘characteristic performance’ test does not lead to an answer ([61]: there is no ‘characteristic performance’] and at any rate even if there were, the judge would have applied A4(3)’s escape clause to lead to Luxembourg law; and the ‘proper law of the contract’ per A4(4) Rome I ‘clearly’ [63-64] leads to Luxembourgish law.

In conclusion, a stay is ordered and the forum non application is successful. In my view the judge jumped too easily to Articles 4(3) and (4), denying Article 4(2)’s or even Article 3 choice of law’s effet utile. It is not unusual for judges to let their predetermination to apply A4(3) and /or (4) determine their A4(2) search for a lex contractus. Yet that frequency does not make the judgment right.

Geert.

EU Private International Law, 3rd ed, 2021, Heading 3.2.6.2.

Another extensively litigated forum non conveniens jurisdictional challenge, with core role for applicable law determination, retained A4 Rome I 'characteristic performance'
Stay in favour of Luxembourg proceedings

BRG NOAL v Kowski [2022] EWHC 867 (Ch) https://t.co/j3jAekQVXG

— Geert Van Calster (@GAVClaw) April 12, 2022

[contact-form]

When CJEU Bolagsupplysningen was held, I flagged immediately (I was not alone) that the judgment would necessarily create follow-up litigation.

At the level of the CJEU itself, Mittelbayerischer Verlag somewhat reigned in the consequences of Bier and Shevill, albeit not directly related to the discussions in Bolagsupplysningen. In Gtflix, the Court confirmed that each Member State where damage has occurred, will continue to have locus damni jurisdiction even if the claimant requests rectification of the information and the removal of the content placed online in another jurisdiction: one with full jurisdiction as either the Handlungsort or the place of the claimant’s centre of interests.

In England and Wales, Saïd v L’Express (a first instance case) held that it follows from Bolagsupplysningen that so far as internet publications are concerned, a claimant who is seeking injunctive relief (removal, correction in particular) may do so only in the places with full jurisdiction. This was implicitly confirmed in Napag, also a first instance case.

This conclusion has now been overturned by the Court of Appeal in Mincione v Gedi Gruppo Editoriale SPA [2022] EWCA Civ 557. This is a libel case brought by an Italian national with acquired British citizenship who is resident in Switzerland. He sues the Italian-domiciled publisher of a daily newspaper and weekly magazine, both of which are published predominantly in Italy and in the Italian language.

The first instance judge, Mincione v Gedi Gruppo Editoriale SpA [2021] EWHC 2006 (QB) had followed Said and Napag. The Court of Appeal notes that as a result of the Withdrawal Agreement it is bound by Bolagsupplysningen, it having been held before Brexit, and that it  ‘can have regard to’ ([65]) Gtlfix.

Warby J, seeking support in Gtflix, holds injunctive jurisdiction to restrain a harmful internet publication that has either occurred or “may occur”, does exist for the locus damni court yet only in respect of publication that may occur within the territorial jurisdiction of the court concerned. It can justify a domestic internet injunction, even for a ‘mosaic’ (locus damni) court, yet not to grant an injunctive remedy that would inevitably take effect extraterritorially.

The first instance judgment therefore is overturned on legal substance but  largely confirmed in practical reality: [72]. Current proceedings are largely held in substance, albeit not in form, to be a claim for a single and indivisible remedy. That is because a domestic internet injunction, prohibiting further publication, in this case however limited it might be in form, would, on the undisputed evidence, inevitably have extraterritorial effect. In future, technology might mean that an order framed as a domestic internet injunction would or could take territorial effect only. Yet in current technological reality, it is said that ordering removal would immediately have extraterritorial substantive effect. Those with knowledge of the technology may have more to say about this. Update 29 04 4:50 PM: the first instance judgment suggests this is related to the limited E&W jurisdiction, while the order would impact other parts of the UK, too: [98]: geo-blocking can only be done at a UK level, and the removal of a YouTube video can also be only done at a UK level (not: the E&W level).

The only part of the claim where jurisdiction for injunctive relief, if claimant is found at trial to have been libelled, will be possible, is for a so-called ‘section 12’ internet injunction: an order to publish a summary of the eventual judgment. That is because in the view of the the Court of Appeal, this relief can be targeted to the current subscriber basis of the publication outlets in England and Wales only.

Per Soriano, post Brexit a claimant will have to show that England and Wales is clearly the most appropriate place to bring an action, with locus damni per  SC Brownlie the tort gateway. Bolagsupplysningen will therefore not echo for much longer in E&W, and I doubt therefore that the SC will hear an appeal if it were sought.

Geert.

EU private international law, 3rd ed. 2021, 2.439 ff.

Court of Appeal overturns on the implications of #CJEU Bolagsupplysningen – jurisdiction to remove offensive articles published on the internet
Review on the blog shortly

Mincione v Gedi Gruppo Editoriale SPA [2022] EWCA Civ 557 https://t.co/UEZHfsSyy0

— Geert Van Calster (@GAVClaw) April 29, 2022

In JJH Enterprises Ltd (Trading As ValueLicensing) v Microsoft Corporation & Ors [2022] EWHC 929 (Comm) Picken J makes a debatable point in his discussion of a forum non conveniens application by defendants, Microsoft.

In the proceedings ValueLicensing claim damages arising from alleged breaches of competition law by Microsoft. The claim is a ‘stand alone’ one, not a ‘follow-on’ one. There is no underlying infringement decision of the European Commission (or any domestic competition regulator) on which ValueLicensing can rely to establish that an infringement of competition law has been committed.

Some of the Microsoft entities firstly seek summary dismissal of the case against them, arguing they cannot be held liable for an alleged infringement of either Article 101 or 102 TFEU as a result of an overall Microsoft ‘campaign’ in which they did not demonstrably take part. Here [31] ff there is interesting discussion ia of Provimi (Roche Products Ltd. & Ors v Provimi Ltd [2003] EWHC 961 (Comm)), which held that an entity that implements an agreement in breach of A101 to which a member of the same undertaking is a party can be held liable for the infringement even though the implementer itself does not know of the infringement. Specifically, whether Provimi was wrongly decided following from Cooper Tire Europe Ltd v Bayer Public Co Ltd [2010] EWCA Civ 864  – this is an issue for which CJEU referral is not possible post Brexit.

The judge however refers to the broader concept of ‘undertaking’ in the A101-102 sense following eg CJEU C-882/19 Sumal SL v Mercedes Benz Trucks Espana SL. Sumal, Picken J holds [44], is relevant authority both pre and post Brexit.

Quite how parties see a difference in the lex causae for the competition law infringement pre and post Brexit is not clear to me. Post Brexit it is said to be ‘English law’ (held to include 101-102 TFEU prior to Brexit), full stop, while post Brexit that law is said to be determined by (retained) Article 6 Rome II, which for same of the claim will be English law as being one of the ‘affected markets’ per A6 Rome II.

It is in the forum non application that the judge posits [78] that an important consideration of England as the more appropriate forum, is

it is clear that Microsoft UK’s position at trial will be that in certain material respects English law has taken a divergent path from EU law. In such circumstances, it would be wholly inappropriate, and certainly undesirable, for a court in Ireland to be determining whether Microsoft UK is right about this. On the other hand, there would be no difficulty with the Court here applying EU competition law, either as part of English law (in respect of the pre-Brexit period and, if that is what the Court determines is the case, also in respect of the post-Brexit period) or as part of the laws of other EU/EEA member states, since the Court here is very experienced in doing just that.

If it is true that under forum non, only English courts can be held properly to determine the direction of English law post Brexit, the hand of many a claimant in forum non applications will surely be strengthened.

Geert.

Forum non conveniens
Interesting point [75] that E&W are the most appropriate forum, given that it must be EN courts determining whether EN law differs substantially from EU law post #Brexit

JJH Enterprises (ValueLicensing) v #Microsoft [2022] EWHC 929https://t.co/XP3z4nX8KV

— Geert Van Calster (@GAVClaw) April 19, 2022

In Amir Soleymani v Nifty Gateway LLC [2022] EWHC 773 (Comm) Abrose J largely rejected jurisdiction for the English courts in a claim following auction brought by a UK-based digital artwork collector. Another part of the claim was stayed pending arbitration in New York.

Faced with a clause in Nifty’s general terms and conditions that provide for binding arbitration in New York and for New York law to be the governing law of the contract, claimant seeks a declaration that the arbitration agreement was unenforceable due to it being unfair under the UK Consumer Rights Act 2015. Alternatively, he argued the governing law clause is invalid on the same statutory ground, and that a contract arising from the auction is void for illegality pursuant to the UK Gambling Act 2005.

Of note is that the US based arbitrator, in the proceedings initiated by Nifty, is considering himself (with procedural and discovery orders having been issued) broadly similar issues under consumer protection provisions of the ADR provider.

At [34] the qualification of NFTs as ‘art’ or merely ‘technology’ [‘the nature of NFTs as assets, and whether they are artwork, with the Claimant’s position being that he was trading in digital art whereas the Defendant maintained that an NFT is merely a unique string of code stored on a blockchain ledger that makes a digital artwork accessible, and marks authenticity’] is announced as potentially relevant for substance but not for current application.

The discussion largely takes place under retained EU law (s15b of the Civil Jurisdiction and Judgments Act 1982 (as amended)). The judge holds [55] that the claim falls within the arbitration exception of (retained) Brussels Ia seeing as, as she qualifies it

The principal focus and subject matter of Mr Soleymani’s claim is whether he is legally obliged to arbitrate.

Recital 12 BIa is called upon in support. Claimant ([49]-[50] in particular are a good summary of the position) essentially argues such a view is incompatible with the effet utile of the consumer title. I believe that point has merit and one imagines it will be on this point that appeal will be sought (Bitar v Banque Libano-Francaise was offered in some support).

Whether the contract is a ‘consumer’ contract is still discussed [62] ff viz the claim for declaratory relief regarding the unfairness of the arbitration clause under the Gambling Act. The judge holds [79] that on the evidence put forward, Claimant has the better of the argument as to whether the Defendant was directing commercial activities to England (and the UK more generally). However she decides to grant the defendant a stay (which would not have been possible pre-Brexit) in favour of the unfairness issues being discussed in the New York arbitration. (These issues may later return to a UK court in the shape of an ordre public opposition to enforcement of the award in the UK).

I will of course notify if and when permission to appeal will have been granted.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.3.2, and 2.2.9.2.

No doubt permission to appeal will be sought in this case involving unfair commercial practices act, consumer protection, #arbitration exception of Brussels Ia https://t.co/aGB7eReFQU

— Geert Van Calster (@GAVClaw) April 6, 2022

I reviewed Pikamae AG’s Opinion in C-568/20 J v H Limited here. The issue is whether, exequatur having been abandoned in Brussels Ia, arguments as to whether the a judgment issued in a third, non EU Member, State of origin be at all covered by Brussels Ia may be raised by way of an Article 45 objection to recognition and enforcement.

The CJEU has now held and first of all clarifies its findings in C-129/92 Owens Bank. [36]: Owens Bank does not mean that a decision adopted on the basis of a judgment emanating from a third State, in accordance with the rules on jurisdiction and procedure of a Member State, may never fall within the scope of that regulation. [26] it is sufficient (but also necessary, GAVC) that they be judicial decisions which, before their recognition and enforcement are sought in a State other than the State of origin, have been, or have been capable of being, the subject, in that State of origin and under various procedures, of an inquiry in adversarial proceedings. This re-emphasises the audi alteram partem principle such as emphasised eg in CJEU Zulikarpašić. It also means that ‘exequatur sur exequatur ne vaut‘ is not quite dead, as has been suggested – a mere confirmative order of an ex-EU judgment without adversarial proceedings would not enjoy free movement.

At [29] the Court moreover instructs, with reference to the principle of mutual trust, that the courts in the State of recognition, must not apply the definition restrictively. In the case at issue [32] the High Court order at issue in the main proceedings was, at the very least, the subject of a summary hearing in the Member State of origin, hence it qualifies as a ‘judgment’.

While the Court effectively acknowledges that this amounts to Brussels Ia-sanctioned recognition and enforcement of non-EU judgments through the backdoor (‘on the substance, that [UK, GAVC] order was made so as to give effect to judgments delivered in a third State which are not, as such, enforceable in the Member States’: [33]), A45’s grounds of refusal, including infringement of ordre public, remain available: [45]

Such an infringement may, inter alia, lie in the fact that the party against whom enforcement is sought was not able to defend him or herself effectively before the court of origin and to challenge the decision sought to be enforced in the Member State of origin

Geert.

EU Private International Law, 3rd ed 2021, 2.573.

CJEU this morning, Brussels Ia, recognition and enforcement by EU MS of money judgment issued in third State, may only constitute 'judgment' enjoying Part III recognition & enforcement if audi alteram partem principles are methttps://t.co/HldcLYDgSZ

— Geert Van Calster (@GAVClaw) April 7, 2022