Agrégateur de flux

On 29 April 2020, the (national) Court of Appeal of Luxembourg ruled that the conditions of res judicata are determined by uniform European rules and not by national law. In particular, the court held that the triple identity requirement developed in the context of lis pendens equally applies to define the conditions of res judicata.

In 1985, a Luxembourg company installed a storage machine in a warehouse in Weissenau, Germany. In 1988, a fire broke out in the warehouse and destroyed it. Three German insurance companies covered the losses and, after being subrogated in the rights of the insured, sued the Luxembourg company in Munich, Germany, for DEM 3.885.395, DEM 12.054.105 and DEM 67.820 (about € 6 million in total).

The German companies sued on both contractual and tort grounds. Although the issue was debated in the Luxembourg proceedings, it seems that the German court declined jurisdiction with respect to the contractual claim. With respect to the tort claim, the German court found that the claim was admissible but dismissed it. The first instance judgment was rendered in 1994.

While the German insurers were (unsuccessfully) appealing through the German court system up until the German Federal Court (BGH), the Luxembourg defendant initiated proceedings in 1998 in Luxembourg against one of its French subscontractor, seeking a declaration that, should the Luxembourg defendant be found liable of the loss, the French subcontractor should indemnify it. A few months later, the German insurers also initiated proceedings against the Luxembourg defendant in the same Luxembourg court seeking payment of the exact same sums (DEM 3.885.395, DEM 12.054.105 and DEM 67.820). Their claim was primarily for breach of contract, and subsidiarily in tort.

The Luxembourg party argued that the recognition of the German judgment in Luxembourg prevented relitigation of the same dispute in Luxembourg courts. On appeal, it also challenged the jurisdiction of Luxembourg courts to entertain the action on the ground of lis pendens.

The Luxembourg Court of Appeal dismissed the jurisdictional challenge in a first judgment of 8 July 2015. First, it noted that the issue had not been raised before the court of first instance. Secondly, it ruled that the Luxembourg proceedings had been initiated after the German court not only had been seized but had actually delivered its judgment. It held that the lis pendens doctrine did not apply if the second proceedings were initiated after a judgment had been rendered.

The key question was therefore whether the German judgment prevented relitigation in Luxembourg. Remarkably, both parties primarily argued that the conditions and scope of res judicata were governed by the Brussels Convention, and should thus be determined autonomously. However, both parties had also filed with the court expert evidence on the conditions and scope of res judicata under German law.

The court noted that the parties agreed that EU law governs and ruled that the Brussels Convention defines the scope and conditions of res judicata. It therefore declared the expert reports on German law irrelevant.

The court identified and applied two rules of EU law.

The first was deduced from the Gothaer case (C-456/11). It relates to the scope of res judicata. The issue was whether the reasons of the judgment could be taken into consideration to determine the scope of the foreign judgment, or whether the court should only look at the operative part of the judgment (dispositif).  The court suggested that the following part of Gothaer was of general application:

the concept of res judicata under European Union law does not attach only to the operative part of the judgment in question, but also attaches to the ratio decidendi of that judgment, which provides the necessary underpinning for the operative part and is inseparable from it.

The second rule identified by the Luxembourg Court of Appeal was the triple identity requirement. The court did not explain which judgment of the CJEU supported this conclusion. I can certainly think of a number of judgments defining the requirements for lis pendens, but I am not sure the CJEU has ever ruled that the same requirements were also applicable in the context of a European concept of res judicata in civil and commercial matters.

The Court then conducted a close analysis of the German judgment, that it compared to the claims made in Luxembourg. It underscored certain important differences between the German and Luxembourg laws of liability which explain why a claim could be made on a tort basis under German law, while it could only be made on a contractual basis in Luxembourg. It eventually concluded that the German judgment was res judicata in Luxembourg and declared the claims of the insurance companies inadmissible.

The most interesting part of the judgment is no doubt the proposition that a European concept of res judicata exists under the Brussels Convention. As far as I am aware, the vast majority of scholars in Europe debate whether res judicata should be governed by the law of the state of origin or the law of the requested state.

Gothaer is certainly authority for the proposition that the res judicata of jurisdictional rulings should be defined at European level, but the court insisted that the rationale was the uniform application of European rules, i.e. jurisdictional rules provided by the Brussels I Regulation. In the present case, the issues debated before the German and Luxembourg courts were governed by national law (German tort law and Luxembourg contract law).

This being said, would it be illogical to resort to the same requirements to define lis pendens and res judicata? Both doctrines aim at avoiding conflicting decisions.

The 9th Journal of Private International Law Conference was due to be hosted by the Singapore Management University in 2021. Due to the ongoing pandemic, the Editors of the Journal (Professor Jonathan Harris QC of King’s College, London and Professor Paul Beaumont FRSE of the University of Stirling) and the conference organiser (Associate Professor Adeline Chong, Singapore Management University) have decided to postpone the conference to 2022 (tentatively June 2022). We will announce further details in due course.

Rome I and Rome II in Practice, a volume edited by Emmanuel Guinchard focusing on the application of the theoretically uniform rules of Rome I and Rome II by the national courts of the Member States, has recently been published by Intersentia. A true treasure trove for scholars of comparative private international law, the book features national reports from 20 Member States and the UK drafted by specialist authors as well as a review of the case law of the CJEU and extensive conclusions by the editor. Each national report contains both general remarks on the jurisprudence of the national courts as well as a structured review of the application of the two Regulations to a wide range of specific questions.

Several of the national reports have been provided by current or former editors of this blog, including Apostolos Anthimos (Greece), Matthias Weller (Austria & Germany), and Pietro Franzina (Italy).

Further information and the table of contents can be found here.

Jonathan Daval comparaît devant la cour d’assises de Haute-Saône, à Vesoul, pour le meurtre de son épouse Alexia Daval, en 2017. Un meurtre qu’il a fini par reconnaître trois mois après les faits. Il encourt la réclusion criminelle à perpétuité (C. pén., art. 224-1).

en lire plus

La personne mise en examen peut, à l’appui de son appel d’une ordonnance de mise en accusation, invoquer les dispositions de l’article 122-1 du code pénal sans que l’article 706-128 du code de procédure pénale n’impose que l’article 122-1 du code précité soit expressément cité dans son acte d’appel.

en lire plus

This brief note considers aspects of the recent litigation over the identification of an unspecified applicable law of an arbitration agreement having an English seat. Though the UK Supreme Court concluded that the applicable law of the arbitration agreement itself was, if unspecified, usually to be the same as that of the contract to which the arbitration agreement refers, there was an interesting division between the judges on the method of determining the applicable law of the arbitration agreement from either the law of the arbitral seat (the view favoured by the majority) or from the applicable law of the underlying contract (the view favoured by the minority). As will become clear, the author of this note finds the views of the minority to be more compelling than those of the majority.

In a simplified form the facts were that, in February 2016, a Russian power station was damaged by an internal fire. ‘Chubb’, insurer of the owners of the power station, faced a claim on its policy. In May 2019, Chubb sought to sue ‘Enka’ (a Turkish subcontractor) in Russia to recover subrogated losses. Enka objected to these Russian proceedings claiming that under the terms of its contract of engagement any such dispute was to be arbitrated via the ICC in England: in September 2019, it sought declaratory orders from the English High Court that the matter should be arbitrated in England, that the applicable law of the arbitration agreement was English, and requested an English anti-suit injunction to restrain Chubb from continuing the Russian litigation.

Neither the arbitration agreement nor the contract by which Chubb had originally engaged Enka contained a clear provision specifically and unambiguously selecting an applicable law. Though it was plain that the applicable law of the underlying contract would, by the application of the provisions of the Rome I Regulation, eventually be determined to be Russian, the applicable law of the arbitration agreement itself could not be determined as directly in this manner because Art. 1(2)(e) of the Regulation excludes arbitration agreements from its scope and leaves the matter to the default applicable law rules of the forum.

After an unsuccessful interim application in September 2019, Enka’s case came before Baker J in December 2019 in the High Court. It seems from Baker J’s judgment that Enka appeared to him to be somewhat reticent in proceeding to resolve the dispute by seeking to commence an arbitration; this, coupled with the important finding that the material facts were opposite to those that had justified judicial intervention in The Angelic Grace [1995] 1 Lloyd’s Rep 87, may explain Enka’s lack of success before the High Court which concluded that the correct forum was Russia and that there was no basis upon which it should grant an anti-suit injunction in this case.

In January 2020, Enka notified Chubb of a dispute and, by March 2020, had filed a request for an ICC arbitration in London. Enka also however appealed the decision of Baker J to the Court of Appeal and duly received its requested declaratory relief plus an anti-suit injunction. The Court of Appeal sought to clarify the means by which the applicable law of an arbitration agreement should be determined if an applicable law was not identified expressly to govern the arbitration agreement itself. The means to resolve this matter, according to the court, was that without an express choice of an applicable law for the arbitration agreement itself, the curial law of the arbitral seat should be presumed to be the applicable law of the arbitration agreement. Thus, though the applicable law of the underlying contract was seemingly Russian, the applicable law of the arbitration agreement was to be presumed to be English due to the lack of an express choice of Russian law and due to the fact of the English arbitral seat. Hence English law (seemingly wider than the Russian law on a number of important issues) would determine the scope of the matters and claims encompassed by the arbitration agreement and the extent to which they were defensible with the assistance of an English court.

In May 2020, Chubb made a final appeal to the UK Supreme Court seeking the discharge of the anti-suit injunction and opposing the conclusion that the applicable law of the arbitration agreement should be English (due to the seat of the arbitration) rather than Russian law as per the deduced applicable law of the contract to which the arbitration agreement related. The UK Supreme Court was thus presented with an opportunity to resolve the thorny question of whether in such circumstances the curial law of the arbitral seat or the applicable law of the agreement being arbitrated should be determinative of the applicable law of the arbitration agreement. Though the Supreme Court was united on the point that an express or implied choice of applicable law for the underlying contract usually determines the applicable law of the arbitration agreement, it was split three to two on the issue of how to proceed in the absence of such an express choice.

The majority of three (Lords Kerr, Hamblen and Leggatt) favoured the location of the seat as determinative in this case. This reasoning did not proceed from the strong presumption approach of the Court of Appeal (which was rejected) but rather from the conclusion that since there had been no choice of applicable law for either the contract or for the arbitration agreement, the law with the closest connection to the arbitration agreement was the curial law of the arbitral seat. As will be seen, the minority (Lords Burrows and Sales) regarded there to have been a choice of applicable law for the contract to be arbitrated and proceeded from this to determine the applicable law of the arbitration agreement.

The majority (for the benefit of non-UK readers, when there is a majority the law is to be understood to be stated on this matter by  that majority in a manner as authoritative as if there had been unanimity across all five judges) considered that there was no choice of an applicable law pertinent to Art.3 of Rome I in the underlying contract by which Enka’s services had been engaged. It is true that this contract did not contain a helpful statement drawn from drafting precedents that the contract was to be governed by any given applicable law; it did however make many references to Russian law and to specific Russian legal provisions in a manner that had disposed both Baker J and the minority in the Supreme Court to conclude that there was indeed an Art.3 choice, albeit of an implied form. This minority view was based on a different interpretation of the facts and on the Giuliano and Lagarde Report on the Convention on the law applicable to contractual obligations (OJ EU No C 282-1). The majority took the view that the absence of an express choice of applicable law for the contract must mean that the parties were unable to agree on the identity of such a law and hence ‘chose’ not to make one. The minority took the view that such a conclusion was not clear from the facts and that the terms of the contract and its references to Russian law did indicate an implied choice of Russian law. As the majority was however unconvinced on this point, they proceeded from Art.3 to Art.4 of Rome I and concluded that, in what they regarded as the absence of an express or implied choice of applicable law for the contract, Russian law was the applicable law for the contract.

For the applicable law of the arbitration agreement itself, the majority resisted the idea that on these facts their conclusion re the applicable law of the contract should also be determinative for the applicable law of the arbitration agreement. Instead, due to the Art.1(2)(e) exclusion of arbitration agreements from the scope of the Regulation, the applicable law of the arbitration agreement fell to be determined by the English common law. This required the identification of the law with which the arbitration agreement was ‘most closely connected’. Possibly reading too much into abstract notions of international arbitral practice, the majority concluded that, in this case, the applicable law of the arbitration agreement should be regarded as most closely connected to the curial law of the arbitral seat. Hence English law was the applicable law of the arbitration agreement despite the earlier conclusion that the applicable law of the contract at issue was Russian.

As indicated, the minority disagreed on the fundamental issue of whether or not there had been an Art.3 implied choice of an applicable law in the underlying contract. In a masterful dissenting judgment that is a model of logic, law and clarity, Lord Burrows, with whom Lord Sales agreed, concluded that this contract contained what for Art.3 of Rome I could be regarded as an implied choice of Russian law as ‘… clearly demonstrated by the terms of the contract or the circumstances of the case’. This determination led to the conclusion that the parties’ implied intentions as to the applicable law of the arbitration agreement were aligned determinatively with the other factors that implied Russian law as the applicable law for the contract. Russian law was (for the minority) thus the applicable law of the underlying contract and the applicable law of the ICC arbitration (that, by March, 2020 Enka had acted to commence) was to take place within the English arbitral seat in accordance its English curial law. Lord Burrows also made plain that if had he concluded that there was no implied choice of Russian law for the contract, he would still have concluded that the law of the arbitration agreement itself was Russian as he considered that the closest and most substantial connection of the arbitration agreement was with Russian law.

Though the views of the minority are of no direct legal significance at present, it is suggested that the minority’s approach to Art.3 of the Rome I Regulation was more accurate than that of the majority and, further, that the approach set out by Lord Burrows at paras 257-8 offers a more logical and pragmatic means of settling any such controversies between the law of the seat and the law of the associated contract. It is further suggested that the minority views may become relevant in later cases in which parties seek a supposed advantage connected with the identity of the applicable law of the arbitration. When such a matter will re-occur is unclear, however, though the Rome I Regulation ceases to be directly applicable in the UK on 31 December 2020, the UK plans to introduce a domestic analogue of this Regulation thereafter. It may be that a future applicant with different facts will seek to re-adjust the majority view that in the case of an unexpressed applicable law for the contract and arbitration agreement that the law of the seat of the arbitration determines the applicable law of the arbitration agreement.

As for the anti-suit injunction, it will surprise few that the attitude of the Court of Appeal was broadly echoed by the Supreme Court albeit in a more nuanced form. The Supreme Court clarified that there was no compelling reason to refuse to consider issuing an anti-suit injunction to any arbitral party who an English judge (or his successors on any appeal) has concluded can benefit from such relief. They clarified further that the issuance of an anti-suit injunction in such circumstances does not require that the selected arbitral seat is English. The anti-suit injunction was re-instated to restrain Chubb’s involvement in the Russian litigation proceedings and to protect the belatedly commenced ICC arbitration.

Napag Trading Ltd & Ors v Gedi Gruppo Editoriale SPA & Anor [2020] EWHC 3034 (QB) engages (and refers to) the issues I previously reported on in inter alia Bolagsupplysningen, Saïd v L’Express,

It is worthwhile to list both claimants and defendants.

On the claimants side, Napag Trading Limited (“the First Claimant”) is an English-domiciled company. Napag Italia Srl (“the Third Claimant”) is an Italian-domiciled subsidiary of the First Claimant. Sgr Francesco Mazzagatti (“the Second Claimant”), an Italian national with his main residence in Dubai, is the CEO and sole director of, and 95% shareholder in, the First Claimant. The First Claimant trades, and the Third Claimant has traded, in petroleum-based products.

On the defendants side, Gedi Gruppo Editoriale S.p.A. (“the First Defendant”) is the publisher amongst other things of L’Espresso which is a weekly Italian-language political and cultural magazine available both in print and online in England and Wales. Società Editoriale Il Fatto S.p.A. (“the Second Defendant”) is the publisher of Il Fatto Quotidiano (“Il Fatto”), a daily Italian-language newspaper published in England and Wales only on the internet.

An earlier Brexit-anticipatory forum non conveniens challenge was waived away by Jay J at 7: ‘Only the Second Defendant saw fit to raise a forum non conveniens challenge in advance of 1st January 2021 and the relevant EU regulation no longer applying. I would have been very reluctant to rule on this sort of application on an anticipatory basis.’

Identifying a centre of interest in England and Wales, leading to full jurisdiction there for damages, per CJEU e-Date and Bolagsupplysningen and also a precondition to apply for injunctive relief (see also Bolagsupplysningen: only courts with full jurisdiction may issue such relief) is of course a factual assessment.

The Second Claimant is an entrepreneur, born in Calabria but now living in Dubai. He founded the Third Claimant in 2012. Initially, it traded in oil and petroleum products from offices in Rome. The Third Claimant dealt in particular with the Italian oil company Eni S.p.A. (“Eni”), headquartered in Rome and in part state-owned, and Eni Trading & Shipping S.p.A. (“Ets”) which is based in Rome and has a branch in London. Second Claimant incorporated the First Claimant in April 2018. His evidence is that London was a better base from which to conduct and grow his business because he was encountering resistance from some banks and financial institutions who were diffident about working with an Italian company. More specifically, the strategy was to hive off the Third Claimant’s oil and gas business into the First Claimant, and the former would devote itself to trading in petrochemicals. Additionally, the idea was to invest in an “upstream” development in the UK Continental shelf, and the first discussions about this were in November 2018.

Justice Jay revisits the CJEU’s instructions re centre of interests for natural persons per e-Date. At 29:

First, other things being equal, and certainly in the absence of evidence to the contrary, a natural person’s “centre of interests” will match his or her habitual residence. Whether or not this may accurately be described as an evidential presumption does not I think matter (in my view, no legal presumption is generated); in any case, the CJEU – subject to my second point – is not purporting to assist national courts as to the rules of law that should govern the exercise of ascertainment. Secondly, general considerations of predictability and the need for clarity militate in favour of straightforward and readily accessible criteria rather than any microscopic examination of the detail.

At 32 follows an interesting discussion of para 43 of the CJEU Bolagsupplysningen judgment

“43. It is also appropriate to point out that, in circumstances where it is not clear from the evidence that the court must consider at the stage when it assesses whether it has jurisdiction that the economic activity of the relevant legal person is carried out mainly in a certain member state, so that the centre of interests of the legal person which is claiming to be the victim of an infringement of its personality rights cannot be identified, that person cannot benefit from the right to sue the alleged perpetrator of the infringement pursuant to article 7(2) of Regulation No 1215/2012 for the entirety of the compensation on the basis of the place where the damage occurred.”

After a reference to what Justice Jay calls Bobek AG’s ‘masterly opinion’, in particular the burden of proof issues are discussed which Jay J justifiably holds are not within the scope of Brussels Ia (not at least in the sense of deciding the procedural moment at which proof must be furnished). I agree with his finding that the CJEU’s meaning of para 43 is simply that

in the event that the national court concluded that it could not identify the “centre of interests” because the evidence was unclear, article 7(2) of the RBR could not avail the claimant.

Conclusion of the factual consideration follows (probably obiter: see 150) at 161: first Claimant has the better of the argument that its “centre of interests” is in England and Wales.

Jay J then discusses at 35 ff that whether there actually is damage within E&W as a matter of domestic law to decide to good arguable case standard, that the case may go ahead. That discussion shows that  the actual concept of ‘damage’ within the meaning of Brussels Ia and indeed Rome II is not quite so established as might be hoped, and it is held at 141 that no serious damage has occurred within E&W for there to be jurisdiction.

The case is a good illustration of the hurdle which national rules of civil procedure continue to form despite jurisdictional harmonisation under EU private international law rules.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2.

Third ed. forthcoming February 2021.

Jurisdiction, libel over the internet.
Consideration of centre of interests per #CJEU Bolagsupplysningen (found to be E&W at good arguable case level). https://t.co/VOi2KS5qFb

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

You are kindly invited to the webinar “HOPINEU Lecture Series: Covid-19 & Business Interruption (BI) Insurance” on 27 November 2020 at 4:00pm (GMT+3).

This event is supported by the Erasmus+ Programme of the European Union and organised as part of the Jean Monnet Module project “Harmonisation of the Principles of Insurance Law in Europe” (HOPINEU) run at Koç University.

For updates on this Jean Monnet Module, please follow @hopineu1 #HOPINEU on Twitter.