Agrégateur de flux

I flagged [2020] EWHC 2191 (Ch) Virgin Atlantic (the plan in the meantime has been sanctioned in [2020] EWHC 2376 (Ch)) in an update of my earlier post on the Colouroz Investment Scheme of Arrangement.

Restructuring practitioners have been justifiably excited by this new addition to England’s regulatory competition in restructuring tourism.

In my many posts on Schemes of Arrangements (see in particular Apcoa with the many references to later cases in that post; and Lecta Paper), I have summarised the modus operandi: no firm decision on jurisdiction under Brussels Ia is made (it is by no means certain but scheme creditors have so far not taken much of a swipe seeing as they tend to accept the attraction of the debtor company continuing as  a going concern following the use of an English scheme). If at least one of the creditors is domiciled in England, it is considered sued and a defendant per Article 4 Brussels Ia. Other, non-England domiciled creditors are then pulled into English jurisdiction using the one anchor defendant per Article 8(1). Trower J extends that assumption to Restructuring Plans at 58 ff:

1. 1. 1. It is now well-established that an application for sanction of a Part 26 scheme is a civil or commercial matter and the reasoning seems to me to apply with equal force to a Part 26A restructuring plan. However, it has never been completely determined whether the rule laid down in Article 4(1) of the Regulation, that any person domiciled in an EU member state must (subject to any applicable exception) be sued in the courts of that member state, also applies to a Part 26 scheme, although the matter has been referred to and debated in a number of cases.

1. 1. 1. In the present case, I shall adopt the usual practice of assuming without deciding that Chapter II and, therefore, Article 4 of the Recast Judgments Regulation applies to these proceedings on the basis that Plan Creditors are being sued by the company and that they are defendants, or to be treated as defendants, to the application to sanction the scheme. If, on the basis of that assumption, the court has jurisdiction because one of the exceptions to Article 4 applies, then there is no need to determine whether the assumption is correct and I will not do so.

1. 1. 1. In the present case, the Company relies on the exception provided for by Article 8 of the Recast Judgments Regulation. By Article 8, a defendant who is domiciled outside a member state may be sued in that member state provided that another defendant in the same action is domiciled there and provided that it is expedient to hear the claims against both together to avoid risk of irreconcilable judgments resulting in separate proceedings. The consequence of this is that if sufficient scheme creditors are domiciled in England then Article 8(1) confers jurisdiction on the English court to sanction a scheme affecting the rights of creditors domiciled elsewhere in the EU, so long as it is expedient to do so, which it normally will be (see, for example, Re DTEK Finance Plc [2017] BCC 165 and [2016] EWHC 3563 (Ch) at the convening and sanctioning stages).

1. 1. and concluding at 61
      1. In the present case, the evidence is that at least one Plan Creditor from each class is domiciled in the jurisdiction. Perhaps most importantly, so far as in terms of Trade Plan Creditors, it is 90 out of 168. In my view, this is amply sufficient to ensure that the requirements of Article 8 are satisfied.’

Article 25 BIa jurisdiction is obiter dismissed at 62 for not all creditors have credit arrangements subject to English choice of court.

Restructuring Plans do have features which differ from Schemes of Arrangement and some of those do trigger different considerations at the recognition and enforcement level than have hitherto been the case for Schemes.

Geert.

(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 2, Chapter 5. Note: 3rd of the Handbook is forthcoming (February 2021).

What is ‘habitual residence’ for the purposes of the EU regulations on family matters (succession included)? The questions, coupled with the one on how many habitual residences a person may have for the same purposes, is a known source of headaches for the national courts. In the last months, several requests for a preliminary ruling on the issue have been filed with the CJEU originating from different Member States, as if the judges had got into an agreement to ‘corner’ the Court in Luxembourg to try and
get once and for all (?) a helpful answer.

In the E.E. case (C-80/19, judgment of 16 July 2020), the Lietuvos Aukščiausiasis Teismas (Supreme Court of Lithuania) asked the CJEU whether, for the purposes of Regulation No 650/2012 (the Succession Regulation), the habitual residence of the deceased can only be one or, on the contrary, a number of places of habitual residence in different States would be admissible. The referring court acknowledged the former to be the likely correct answer, but added ‘that position is not, however, expressly prescribed and there is [therefore] a need for greater clarity and explanation from the Court of Justice in that context’. It was indeed correct. Like the AG, the CJEU elaborated on how to the ‘one and only’ deceased’s habitual residence is to be determined, finding support in the recitals of the Regulation. The decision is reported and commented by Carlos Santaló in this blog.

Some days before the E.E. decision, on 30 June 2020, a request on the meaning of ‘habitual residence’ was lodged (C-289/20, IB), this time in relation to Regulation No 2201/2003 (Brussels II bis) . The question, from the Paris Court of Appeal, reads as follows: ‘Where, as in the present case, it is apparent from the factual circumstances that one of the spouses divides his time between two Member States, is it permissible to conclude, in accordance with and for the purposes of the application of Article 3 of Regulation No 2201/2003, that he or she is habitually resident in two Member States, such that, if the conditions listed in that article are met in two Member States, the courts of those two States have equal jurisdiction to rule on the divorce?’

The request is not yet available at curia.eu in a language other than French. A short summary would be that the spouses have different views on whether France is the habitual residence of IB (the husband); much of the discussion revolves around his intention to reside there. In this regard, IB explains that he has been carrying out his professional activities in France since 2010 and in a stable and sustainable manner since 15 May 2017; that he moved to Paris, in an apartment belonging to his father; that he leads a social life there, and that it is his wife’s refusal to come and live in France, although she stays there regularly, in the Parisian apartment or in a vacation home acquired in 2017, which led them to lead a parallel daily life. The wife (FA) replies that it was never agreed or envisaged that the family would settle in France; the family’s habitual residence was in Ireland, where the children were brought up; the husband never changed his residence in Ireland but only the address of his place of work. FA argues that the fact that IB has worked and received his income in France for more than six months is insufficient to characterize his habitual residence within the meaning of Article 3 of Regulation No 2201/2003, whereas he has continued to come to Ireland, to the family home, until the end of 2018; he continued to lead the same life there; he previously lived there and he consulted a lawyer in Ireland when the spouses considered, from September 2018, to divorce.

On 15 September 15 2020, the Audiencia Provincial (Court of Appeal) of Barcelona sent a request for a preliminary reference to the CJEU, also on the notion of ‘habitual residence’ of adults in Regulation No 2201/2003; the request is nonetheless broader, encompassing as well the Maintenance Regulation, and further aspects of both EU instruments. The Spanish order was reported in Prof. José Carlos Fernández Rozas’s blog on 25 September 2020, with a link to the official document in Spanish. I found it of big interest and have summarized the factual situation and the questions in English for the EAPIL, while waiting for the case to be given a file number and properly translated.

The litigants were married on 25 August 2010 at the Spanish Embassy in Guinea Bissau (Africa); the wife is a Spanish national, while the husband has Portuguese nationality. Their children have both Spanish and Portuguese nationality. The family resided in Guinea-Bissau from August 2010 until February 2015; they moved then to the Republic of Togo. They separated de facto in July 2018. Mother and children continue to reside in the matrimonial home; the husband moved to a bungalow, in the same country.

Both spouses work for the European Commission at the Delegation in Togo, as contractual agents. According to the evidence submitted contractual agents are granted diplomatic status in the country of destination, whereas in the EU Member States they are considered as EU officials only (NoA: this point seems to be nonetheless contested).

On 6 March 2019, the legal representative of the wife lodged an application for divorce with the Spanish courts. She asked as well for the dissolution of the matrimonial property regime, for the adoption of measures regarding the custody of the children, for maintenance for the children, and for the exclusive use of the family home in Togo. The Spanish Court of First Instance dismissed the application for divorce on the basis of lack of jurisdiction.

The wife appealed against the order before the Audiencia Provincial in Barcelona. The following questions (freely translated by myself) are now before the CJEU:

1)          How should the concept of ‘habitual residence’ in Article 3 of Regulation No 2201/2003 and on Article 3 of Regulation 4/2009 (the Maintenance Regulation) be interpreted in relation to nationals of Member States who remain in a third State by reason of the functions they are entrusted with as contractual agents of the EU, and who, in that third State, are accorded the status of diplomatic agents of the EU due to the fact that their presence there is linked to the exercise of the functions they perform for the Union?

2)          Is the determination of the habitual residence of the minor children of the couple under Article 8 of Regulation No 2201/2003 affected in any way where, for the purposes of Article 3 of Regulation No 2001/2003 and Article 3 of Regulation No 4/2009, the determination of the spouses’ habitual residence is dependent on their status as contractual agents of the European Union in a third State?

3)          Should the minor children be deemed not to have their habitual residence in the third State, can account be taken of the link between the nationality of the mother, her residence in Spain prior to the celebration of the marriage, the Spanish nationality of the minor children and their birth in Spain for the purposes of determining habitual residence under Article 8 of Regulation No 2201/2003?

4)          If it is established that neither the habitual residence of the parents nor that of the children is in a Member State, and given that under Regulation No 2201/2003 no other Member State would be competent to settle the claims, does the fact that the defendant is a national of a Member State preclude the application of the residual rules of jurisdiction under Articles 7 and 14 of Regulation No 2201/2003?

5)          Should it be established that neither the habitual residence of the parents nor that of the minors is in a Member State, for the purposes of determining the maintenance of the children, how is the forum necessitatis rule of Article 7 of Regulation No 4/2009 to be interpreted and, in particular, which elements are needed to establish that proceedings cannot reasonably be filed or carried out in a third country with which the dispute has a close relationship (in this case, Togo)? Is it compulsory, on the other hand, to demonstrate that an attempt at bringing proceedings in that State has been made, with a negative outcome? Moreover, would the nationality of any of the litigants be considered a ‘sufficient connection’ to the Member State (for the purposes of Article 7 of the Maintenance Regulation)?

6)          In a situation like the one at stake, where the spouses have strong ties with Member States (nationality, former residence) would it be contrary to Article 47 of the European Charter of Fundamental Rights to conclude, in application of the rules of the Regulations, that no Member States has jurisdiction to adjudicate?

Clearly the CJEU has a chance to elaborate; good that the national authorities keep on asking.

The Committee on Civil Liberties, Justice and Home Affairs of the European Parliament has released today its report on the establishment of an EU Mechanism on Democracy, the Rule of Law and Fundamental Rights (A9-0170/2020). The rapporteur is Michal Šimečka.

It is attached to this post.

In Marriott v Fresson & Ors [2020] EWHC 2515 (Comm) at issue in the jurisdictional challenge is whether Articles 24(2) or (3) Brussels Ia are engaged in litigation essentially seeking to uphold commitments included in two contracts expressly governed by English law and with an exclusive jurisdiction clause in favour of the courts of England. The goal of the agreements being the transfer of shares in Spanish-domiciled corporation (PEV), the question is whether they ‘have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or the validity of the decisions of their organs’ (A24(2)) alternatively ‘have as their object the validity of entries in public registers’ (A24(3)).

Toledano DJ referred ia to Koza, Zavarco, and C-144/10 BVG and held that the principal object of the proceedings is the enforcement of shareholder agreements.

Even the defendants, in their jurisdictional challenge, do not suggest that the proceedings directly call into question the validity of any specific decision of PEV organs. Rather, they contend that the proceedings are principally concerned with a claim to the legal ownership of shares in PEV which impacts upon the composition of the shareholders of PEV and prospectively therefore upon the validity of decisions of the shareholders as an organ of that company.

That was a bit optimistic for Brussels Ia’s exclusive jurisdictional rules quite clearly do not aim at claims whose eventual effect might engage the heads of jurisdiction listed in them. The distinction however is not always easy to make. Claimants may creatively formulate their claims so as they do not fall within A24 (a tactic used particularly in A24(4) intellectual property rights cases, hence requiring the judge to decide what the true object of the proceedings might be; see e.g. Chugai v UCB).

Marriott v Fresson clearly differs from Ferrexpo, which is discussed in the judgment, where validity of the resolutions of the company’s general meeting of shareholders was the direct and specifically formulated claim engaged Article 24 which was applied reflexively.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6, Heading 2.2.6.5.

Challenge to jurisdiction on the basis of Articles 24(2) and (3) Brussels Ia. Fails. Principal object of the proceedings held to be the enforcement of shareholder agreements. https://t.co/479ryb3lV5

— Geert Van Calster (@GAVClaw) September 25, 2020

On 7 September 2020, Nicaragua and Thailand were issued with certificates confirming an affirmative vote in favour of their respective admissions as Members of the HCCH, following a six-month voting period which ended on 4 September 2020. Both Nicaragua and Thailand are now each invited to deposit an instrument of acceptance of the HCCH Statute to become a Member of the HCCH.

On 12 September 2020, the HCCH 1965 Service Convention entered into force for Austria. It currently has 78 Contracting Parties. More information is available here.

On 16 September 2020, Serbia signed the HCCH 2007 Child Support Convention. The next step for it to enter into force is for Serbia to deposit its instrument of ratification. More information is available here.

On 28 September 2020, the United Kingdom deposited its instrument of accession to the HCCH 2005 Choice of Court Convention and its instrument of ratification to the HCCH 2007 Child Support Convention. The United Kingdom is currently bound by both Conventions by virtue of the approval of the EU, and they will continue to be applicable until 31 December 2020. Both Conventions will then enter into force on 1 January 2021, ensuring a seamless continuity in operation. More information is available here.

On 2 September 2020, the Proceedings of the Twenty-First Session were published online. The series contains all the minutes and working documents of the Twenty-First Session of the HCCH, during which the HCCH 2007 Child Support Convention was concluded. It also includes relevant documents from the preparatory Special Commissions and the preliminary studies carried out by the Permanent Bureau. It is published in bilingual form, with English and French texts appearing side by side. It is available for download here.

On 22 September 2020, the Explanatory Report on the HCCH 2019 Judgments Convention was approved following a two-month silent approval procedure during which no Member of the HCCH raised an objection. This report, prepared in both English and French, reflects the discussions and consensus-based negotiations leading to the adoption of the Convention, and, although non-binding in nature, will serve as an important and authoritative resource in the implementation, operation and interpretation of the HCCH Judgments Convention. More information is available here.

These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website.

Preuve

Contrat de travail, exécution

Statuts professionnels particuliers

On 28 September 2020, the United Kingdom of Great Britain and Northern Ireland deposited its instrument of accession to the HCCH Convention of 30 June 2005 on Choice of Court Agreements (2005 Choice of Court Convention) and its instrument of ratification to the HCCH Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance (2007 Child Support Convention). The full text of the HCCH’s announcement is here.

Guillaume Payan (University of Toulon, France) edited a Compendium of the Hague Conventions and Protocols enriched by case law from Belgian, French, Luxembourg and Swiss jurisdictions, as well as European jurisdictions (CJUE and ECtHR), published by Bruylant (Conventions et Protocoles de La Haye annotés : Recueil annoté avec les jurisprudences des juridictions belges, françaises, luxembourgeoises et suisses ainsi que des juridictions européennes).

The author has provided the following abstract in English:

Established 125 years ago, the main goal of the Hague Conference on Private International Law (HCCH) is to work for the progressive unification of the private international law rules. Against that background, international conventions are negotiated and, by now, 40 conventions have already been adopted. The most recent is the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.

This book brings together all of these Conventions and Protocols, enriched by numerous doctrinal references and more than 600 case law references from Belgian, French, Luxembourg and Swiss jurisdictions.

Are also included judgments of the Court of Justice of the European Union and the European Court of Human Rights. The European Courts also have to integrate the Hague Conventions into their reasoning.

Finally, the book contains practical information on the Contracting Parties to the various conventions and on any declarations formulated by the Contracting Parties, as well as on the Central Authorities designated for the proper application of the conventions.

This work is prefaced by Christophe Bernasconi (Secretary General of the Hague Conference).

Contributors to the book include : Lora Arnould (Lawyer in Brussels, Belgium), Aude Berthe (Judge in Liège, Belgium), Prof. François Bohnet (University of Neuchâtel, Switzerland), Catalina Constantina (University of Neuchâtel, Switzerland), Carmela -Milena Liccardo (Lawyer in Brussels, Belgium) and Prof. Séverine Menetrey (University of Luxembourg, Luxembourg)

The book’s table of contents can be found here. For further information see here.

Yesterday (28 September 2020), the United Kingdom “deposited its instrument of accession to the HCCH Convention of 30 June 2005 on Choice of Court Agreements […] and its instrument of ratification to the HCCH Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance”. The United Kingdom is currently bound by these conventions “by virtue of the approval of the European Union. These new instruments of accession and ratification ensure continuity in the application of these Conventions after the conclusion of the transition period following the withdrawal of the United Kingdom from the EU. Both Conventions will continue to be applicable to and in the United Kingdom until 31 December 2020, in accordance with the Withdrawal Agreement. The 2005 Choice of Court Convention and 2007 Child Support Convention will then enter into force for the United Kingdom on 1 January 2021”.

Source: here

Celebrating the 40th birthday of the Austrian Private International Law Act, scholars from numerous European countries have contributed to a festschrift of more than 400 pages edited by Florian Heindler (Sigmund Freud University Vienna). The essays focus on the possible reform of the Austrian PIL Act, its value, and its role as a national PIL Codification influenced and partly derogated by EU legislation. The contributions from Andrea Bonomi (in English), Axel Flessner, Fabienne Jault-Seseke, Thomas John, Caroline Sophie Rupp, Thomas Bachner, Ena-Marlis Bajons Wolfgang Faber, Edwin Gitschthaler, Florian Heindler, Helmut Heiss, Brigitta Lurger, Martina Melcher, Andreas Schwartze, and Bea Verschraegen deal with the general part of the PIL act and specific issues such as conflict of laws in family, property, succession, and company law matters.

The table of contents can be accessed here.