Agrégateur de flux

Alors que le déconfinement débute dans plusieurs États membres, la Commission et le Conseil européens ont publié une communication conjointe le 14 avril, destinée à fournir une feuille de route commune aux États membres, un outil pour que se développe, cette fois-ci, une approche coordonnée.

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By Stephen G.A. Pitel, Faculty of Law, Western University

Instrubel, N.V., a Dutch corporation, has been attempting in litigation in Quebec to garnish assets of the Republic of Iraq.  The difficult issue has been the nature of the assets sought to be garnished and where they are, as a matter of law, located.  The assets are funds in a bank account in Switzerland payable to the Republic of Iraq (through the Iraqi Civil Aviation Authority) by IATA, a Montreal-based trade association.

The judge at first instance held the assets were not a debt obligation but in effect the property of the Republic of Iraq and located in Switzerland and so could not be subject to garnishment in Quebec proceedings.  The Court of Appeal reversed, holding the assets were a debt due to the Republic of Iraq which it could enforce against the trade association at its head office in Quebec, so that the debt was located in Quebec under the basic rule for locating the situs of a debt.

Last December the Supreme Court of Canada denied the appeal for the reasons of the Quebec Court of Appeal.  One judge, Justice Cote, dissented with reasons to follow.  On May 1, 2020, she released those reasons: see International Air Transport Association v. Instrubel, N.V., 2019 SCC 61 (available here).

As a Quebec case, the decision is based on the civil law.  Justice Cote’s dissent hinges on the view that the funds in the account are the property of the Republic of Iraq, not the IATA, and are merely being held by the latter before being remitted to the former (see para. 36).  The funds are not part of the “patrimony” of the IATA.  This is because the nature of the agreement between the Republic of Iraq and the IATA is one of “mandate” (see paras. 40-41 and 45).  As Justice Cote notes (at para. 48) “there is a general principle in the law of mandate that a mandatary’s obligation towards a mandator is not a debt”.  While the payments that went into the bank account were collected and held by the IATA, they were made to the Republic of Iraq (para. 53).  Indeed, the account “is for practical purposes equivalent to a trust account” (para. 61).

As noted, the six judges in the majority simply adopted the reasons of the Quebec Court of Appeal (available here).  So they did not directly engage with Justice Cote’s reasons.  The Court of Appeal concluded (at para. 41) that “there is no ownership of or real right to the funds … Rather, there is a creditor/debtor relationship”.  It also observed that the Republic of Iraq “never owned the debts due it by various airlines in consideration of landing at Iraqi airports.  It does not now own the funds collected in satisfaction of those debts and deposited by IATA in its bank account.  IATA’s obligation is to pay a sum of money not to give the dollar bills received from third parties” (para. 43).

The Court of Appeal noted (at para. 50) a practical rationale for its conclusion: “More significantly it seems that [Instrubel, N.V.] and others in similar positions which seek to execute an unsatisfied claim would be forced into an international “shell game” of somehow discovering (or guessing) where the mandatary/garnishee (IATA), deposited the money – a virtually impossible task.  The law, correctly applied, should not lead, in my view, to such unworkable results.  As the in personam debtor of ICAA, it matters not whether IATA deposited the money it collected and giving rise to such indebtedness in a bank account in Geneva, New York or Montreal.  The situs of its bank account does not change the situs of the debt IATA owes to its creditor.  As such, that funds were initially collected in Montreal or at an IATA branch office in another country is inconsequential.”

The case is at minimum important for what it does not do, which is authorize the garnishing of assets outside Quebec.  All judges take the position that would be impermissible.

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I sincerely continue to be humbled when cited by Advocates-General at the CJEU. Even more so therefore when it happens twice (see also Movic) in one week. In his Opinion in C-253/19 Szpunar AG refers to the Handbook’s analysis of C-341/04 Eurofood. The reference to that judgment is part of his assessment of ‘centre of main interests’ in the context of natural persons not exercising an independent business or professional activity, who benefit from free movement. The CJEU has not ruled on the issue before.

The AG points out that the European Insolvency Regulation (EIR) 1346/2000 (‘EIR 2000’), unlike its successor, Regulation 2015/848 (‘EIR 2015’), did not have time limitations under which the presumptions of COMI apply (see here for my paper on the main changes introduced by EIR 2015). However the EIR 2000 did have such presumption without the time limits, for companies and legal persons, and it generally, like the current EIR, requires courts to check whether COMI for natural persons or otherwise is located on their territory. This requires the court to check against the criteria for rebuttal of any presumptions of COMI. That test runs along the criteria that have repeadtedly featured on the blog (cue search string ‘COMI’): COMI designates the place where the debtor conducts the administration of its interests on a regular basis and is therefore ascertainable by third parties.

‘Habitual residence’ is not defined by the EIR 2015 and I concur with the AG that references to its application in family European PIL are of limited value. At 45: priority should be given not to factors relating to a debtor’s social or family situation but to those relating to a debtor’s financial position. In the case of natural persons not engaged in a self-employed activity, the line separating their financial situation and their family situation is blurred (at 46). The Virgos Schmitt report already discussed the application of of the insolvency regime to natural persons and advised that COMI as applied to natural persons ought to focus on the economic interests.

At 49 the AG suggests that ‘habitual residence’ no longer reflects a natural person’s COMI if does not fulfil its role as the place where a debtor’s economic decisions are taken, as the place where the majority of its revenue is earned and spent, or as the place where the major part of its assets is located. That entails quite a broad scope for rebuttal of course. The AG refines this in the remainder of the Opinion. He refers to national case-law on the issue, and to the importance of free movement rights. He also suggests an important limitation: namely that in his view, the mere presence of a natural person’s  one immovable asset (the ‘family home’, GAVC) in another Member State than that of habitual residence, in and of itself does not suffice to rebut COMI.

As in all other scenarios of rebuttal, the ascertainability in particular by (potential) creditors is key. That is a factual consideration which the national courts are in prime position to make.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1.

Due to the circumstances, all oral hearings at the CJEU scheduled until 25 May 2020 are postponed to a later date.

Regarding private international law, the judgment in C-641/18, Rina, a request for a preliminary ruling referred by the District Court of Genoa (Italy), will be read on 7 May  2020. The case requires the Court to address the relationship between a customary principle of international law on international immunity and Regulation No 44/2001 (Brussels I). The Court should as well reflect on the extent the answer to that question may be influenced by the interest in ensuring access to the courts. In his opinion of 14 January 2020, AG Szpunar concluded that

Article 1(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters is to be interpreted as meaning that an action for damages brought against private-law bodies in respect of classification and certification activities carried out by those bodies as delegates of a third State, on behalf of that State and in its interests, falls within the concept of ‘civil and commercial matters’ within the meaning of that provision.

The principle of customary international law concerning the jurisdictional immunity of States does not preclude the application of Regulation No 44/2001 in proceedings relating to such an action.

Rina will be a 1st Chamber decision (Bonichot, Silva de Lapuerta, Safjan, Bay Larsen, Toader), with judge Camelia Toader as juge rapporteur.

Ms Toader is also the reporting judge in joined cases C-267/19 PARKING – C-323/19, Interplastics, to be released on the same day. The cases correspond to identical requests for a preliminary ruling and for interpretation of the grounds of the CJUE’s judgments of 9 March 2017, Zulfikarpašić (C-484/15) and Pula Parking (C-551/15). The referring court (Commercial Court, Zagreb, Croatia) explains that

Although the Court’s position is clear and unequivocal as to the fact that, in Croatia, notaries are not entitled to issue writs of execution based on an authentic document, that practice, which is at odds with Regulation No 1215/2012, continues. Following the decision of the Court of 9 March 2017, notaries have issued more than one million writs of execution.

Then, at the courts’ level, there is a divergent application of the CJUE’s decision in Pula Parking, in that

for the most part, [the courts and tribunals of the Republic of Croatia] consider that the decision relates exclusively to enforcement proceedings conducted by notaries in which the party against whom enforcement is sought is a natural person and national of another EU Member State.

Therefore, the Zagreb court had thought it necessary to submit a request for a preliminary ruling, in order to determine “whether natural and legal persons from Croatia, as citizens of the European Union, are on an equal footing with natural and legal persons from other EU Member States, and whether foreign legal persons are on an equal footing with foreign natural persons as regards the application of EU law in the Republic of Croatia.”

The case will be decided (without AG’s Opinion) by Judges Safjan, Toader, and Jääskinen, sitting as 6th Chamber.

Finally, the Opinion of AG Saugmandsgaard Øe in C-59/19, Wikingerhof, will be known on 28 May 2020. For the record, the requests comes from the German Bundesgerichtshof, and a hearing had taken place last January. The CJEU has been asked to address (again) the boundaries between Article 7(1) and Article 7(2) of the Brussels I bis Regulation, in the context of an action to stop commercial practices considered to be contrary to competition law, covered by contractual provisions resulting from an abuse of a dominant position. The judgment will be a Grand Chamber one.

Tamás Szabados (ELTE Eötvös Loránd University, Budapest) is the author of Economic Sanctions in EU Private International Law, a book that has been recently published by Hart.

The blurb reads:

Economic sanctions are instruments of foreign policy. However, they can also affect legal relations between private parties – principally in contract. In such cases, the court or arbitration tribunal seized must decide whether to give effect to the economic sanction in question. Private international law functions as a ‘filter’, transmitting economic sanctions that originate in public law to the realm of private law. The aim of this book is to examine how private international law rules can influence the enforcement of economic sanctions and their related foreign policy objectives. A coherent EU foreign policy position – in addition to promoting legal certainty and predictability – would presuppose a uniform approach not only concerning the economic sanctions of the EU, but also with regard to the restrictive measures imposed by third countries. However, if we examine in detail the application of economic sanctions by Member States’ courts and arbitral tribunals, we find a somewhat different picture. This book argues that this can be explained in part by the divergence of private international law approaches in the Member States.

More information here.

Dans une lettre ouverte aux président.e.s de la Commission européenne, du Conseil européen et du Parlement européen du 17 avril dernier, des juristes de nombreux États membres demandent une amnistie immédiate pour les personnes privées de liberté les plus vulnérables ainsi qu’un recours accru aux mesures alternatives à la détention.

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A collection of essays titled Innovación Docente y Derecho internacional privado (Educational innovation and private international law) has recently been published by Comares. The editors are María Asunción Cebrián Salvat and Isabel Lorente Martínez (University of Murcia).

The abstract reads as follows.

Now more than ever, and particularly in an European context, private international law has a great impact on the professional life of law students, no matter the path that they choose. This book collects from a very practical perspective the contributions in educational innovation of several professors and lecturers of private international law. Through the successive chapters, the work shows some tools which are useful to face the challenge of adapting both this subject and the way of teaching it to the new demands of the 21st century law market. This market requires highly specialized professionals, capable of mastering new technologies and of applying them to the field of Law. In the different chapters of this work you can find the experiences of these professors, their proposals for adapting the content of the subject to suit the European Higher Education Area and their suggestive innovative methodologies (legal clinics, film viewing, use of the case method, use of legal dictionaries, debate, online forums…). These experiences have been tested in Spanish Law Faculties, but can be similarly applied in other European countries where private international law or international litigation are taught.

More information here.

Edward Elgar has just published Conflict of Laws and the Internet, by Pedro de Miguel Asensio has published.

The blurb reads:

The ubiquity of the Internet contrasts with the territorial nature of national legal orders. This book offers a comprehensive analysis of jurisdiction, choice of law and enforcement of judgments issues concerning online activities in the areas in which private legal relationships are most affected by the Internet. It provides an in-depth study of EU Law in this particularly dynamic field, with references to major developments in other jurisdictions. Topics comprise information society services, data protection, defamation, copyright, trademarks, unfair competition and contracts, including consumer protection and alternative dispute resolution.

More information available here.

Pedro de Miguel Asensio from the Universidad Complutense de Madrid has published a book on Conflict of laws and the Internet. The publisher’s blurb reads as follows: . The ubiquity of the Internet contrasts with the territorial nature of national legal orders. This book offers a comprehensive analysis of jurisdiction, choice of law and enforcement of judgments issues concerning online activities in the areas in which private legal relationships are most affected by the Internet. It provides an in-depth study of EU Law in this particularly dynamic field, with references to major developments in other jurisdictions. Topics comprise information society services, data protection, defamation, copyright, trademarks, unfair competition and contracts, including consumer protection and alternative dispute resolution. . Key features include:

• comprehensive analysis of the complex conflict of laws issues that arise in connection with Internet activities
• discussion on the jurisdiction of national courts and the determination of applicable law
• a European perspective on the relationship between Internet Law and Private International Law (PIL)
• consideration of the cross-border effects of judgments in all major fields of PIL affected by the Internet.

Conflict of Laws and the Internet will be a vital resource for practitioners and policy-makers alike with applications for IT law experts and companies active in e-commerce. Providing a strong doctrinal base for an area of ever increasing importance and attention, this book will also be a valuable reference for academics working in the fields of IT law and PIL.

Additional information plus access to its detailed table of contents are available here.

I am most grateful to Hans Baron van Houtte, my predecessor in the conflicts chair at Leuven, for alerting me to the partial award of the Iran-US claims tribunal of 10 March last (case No. A15 (II:A)). Hans is a former President of the tribunal, which was established by the ‘Algiers declarations’ following the 1979 Tehran hostage crisis.

The award (a mere 691 pages) and separate opinions can best be accessed here. In the 10 March award, the Tribunal discussed at length the issue of the applicable law for transfer of title in movable property. In doing so, however, it also gives scholars a most wonderful insight and expose on the private international law /choice of law process in arbitration.

The issue is relevant for under the Algiers Declarations, the US is obliged to transfer to Iran, ‘Iranian properties’ subject to the jurisdiction of the United States on 19 January 1981. Hence what exactly constitutes ‘Iranian properties’?

From p.67 (para 135) onwards of the main award, the Tribunal discusses the general process of choice of law in arbitration, referring to a wealth of scholarship on the issue, going back to the mixed arbitral tribunals of the early 20th century etc. For anyone interested in the issue, this is most compelling reading. Many greats of PIL are cited, including the late prof Francois Rigaux (pictured here at Leuven in 2010 with profs Weizuo Chen, Jacques Herbots, Marc Fallon, and myself).

The Tribunal’s conclusion on the issue is that under the ‘general principles of private international law’, the lex rei sitae of the movable governs the passing of title in movable property.

The Tribunal does not hide the further complexities of this rule, including of course the very determination of that situs, and the role of lex contractus.

Indeed for instance on p.272 ff (para 967 ff) the Award discusses one particular claim concerning a case where, under the default rule of the lex rei sitae —- here, the goods were manufactured by, and in the possession of, Zokor, which was situated in the State of Illinois, United States. The applicable lex rei sitae is therefore the law of Illinois  —-property is passed by delivery, and where, under the default rule of the lex contractus –– here arguably Iranian law –– title is already passed by the conclusion of the sales contract or as soon as the goods are manufactured.

At 973 the Tribunal notes the choice of law pro Iranian law, made by the parties, However, it holds ‘the situs was and remained, during all relevant points in time, Illinois. Consequently, according to the general principle of private international law, as identified earlier in this Partial Award, it was for Section 2-401(2) UCC in connection with other contract law of the situs to determine whether the parties had agreed to derogate from the fallback rule.’ (which the Tribunal found, they had not).

That is not entirely crystal clear, and indeed in his separate Opinion prof van Houtte, while generally happy with the Tribunal’s approach, points out some inadequacies:

At 13: ‘The Parties assumed for years that the determination of whether property was “Iranian” as between the seller and the buyer was a contractual issue between those parties governed, inter alia, by the proper law of the contract (lex contractus). It was only at the Hearing session on 9 October 2013 that – in response to a question from the bench – the Parties’ argumentation focused on the lex rei sitae; from that point on, the lex contractus was virtually no longer considered. (…) I regret that the contractual aspects of the transfer of property rights inter partes and the impact of the law of the contract thereupon were not further explored at the Hearing’.

at 15: ‘I observe that the Parties could also have further elaborated on the extent to which the legal situs necessarily coincides with the geographical location of assets in export sales or turn-key contracts.’

And at 18, specifically with respect to the Zokor case that I mention above, ‘One may wonder, de lege ferenda, whether in Claim G-111 (Zokor) it was necessary for the Tribunal to construe and apply its own “general principles of international private law”’ and whether it should not instead adopt the approach which Iranian courts would have applied. These would have had jurisdiction pre the 1979 agreement and the transfer of jurisdiction to the Tribunal, van Houtte argues, does not imply it should settle contractual disputes under different principles than the Iranian courts would have applied’.

A most, most interesting read.

Geert.

 

On 16 April 2020, the Hague Conference announced that the Guide to Good Practice on the Use of Video-Link under the 1970 Evidence Convention has been published. “The Guide analyses the latest developments in relation to the use of video-link in the taking of evidence under the HCCH 1970 Evidence Convention, including references to internal law and other international agreements. It also outlines good practices to be followed and reflects the information provided by Contracting Parties in their respective Country Profiles”. It may be found here

Source: here

 

Background: “At its thirty-fifth session (New York, 13–17 May 2019), the [UNCITRAL] Working Group considered a draft convention prepared by the Comité Maritime International (CMI) on the recognition of foreign judicial sales of ships, known as the “Beijing Draft” […]. The Working Group decided that the Beijing Draft provided a useful basis for its deliberations on the topic of the judicial sale of ships”.

An annotated second revision of the Beijing Draft has now been released. It may be found here along with a note by the UNCITRAL secretariat there

Relevant UNCITRAL meetings have been suspended due to coronavirus.

AG Szpunar delivered today his opinion in Case C‑253/19 (MH, NI v OJ, Novo Banco SA), which is about the concept of the ‘centre of main interests’ of the Insolvency bis Regulation.

The background and the question: “1. The concept of the ‘centre of main interests’ formed the cornerstone of the system established by Regulation (EC) No 1346/2000. That concept was set out in Article 3(1) of that regulation, and was used as a connecting factor designating the courts having jurisdiction to open insolvency proceedings against a debtor. […] the Court had not yet had the opportunity to address the interpretation of that concept in the context of natural persons not exercising an independent business or professional activity who benefit from the free movement of persons and workers.
2. Regulation No 1346/2000 was repealed by Regulation (EU) 2015/848, which also uses the concept of ‘centre of main interests’. The question in the present case is as follows: can the Court’s case-law, developed within the framework of Regulation No 1346/2000 and relating to that concept, be transposed — and if so, to what extent — to proceedings against a natural person who is in the situation referred to above? This case thus provides the Court with the opportunity to rule on jurisdiction in insolvency matters in relation to any person not pursuing an activity as a self-employed person who exercises his right of free movement, and whose assets are located in the Member State of his former habitual residence”.

The suggested response: “Article 3(1), first and fourth subparagraphs, of Regulation (EC) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings must be interpreted as meaning that the presumption that the habitual residence of a debtor who is a natural person not engaged in a self-employed activity is the centre of his main interests may be rebutted if the place of habitual residence does not fulfil its role as the place where a debtor’s economic decisions are taken, as the place where the majority of his revenue is earned and spent, or as the place where the major part of his assets is located.

However, that presumption cannot be rebutted in favour of the Member State within the territory of which a debtor’s sole immovable asset is located in the absence of any other indication that the centre of that debtor’s main interests is located in that Member State. That fact may be determined on the basis of objective factors which are ascertainable by third parties (current and potential creditors) and relate to the financial interests of that debtor”.

Source: here

AG Szpunar delivered on 23 April 2020 his opinion in Case C‑73/19 (Belgische Staat v
Movic BV, Events Belgium BV, Leisure Tickets & Activities International BV), which is about the concept of ‘civil and commercial matters’ in Brussels I bis.

The issue: “In its judgment of 1 October 2002, Henkel, the Court held that the concept of ‘civil and commercial matters’, which defines the scope of the majority of EU instruments of private international law, encompassed proceedings in which an action for an injunction preventing the use of unfair terms was brought by a consumer protection association. By this reference for a preliminary ruling, the referring court asks the Court to determine whether that concept also encompasses proceedings in which the public authorities of a Member State bring an action in relation to unfair market and/or commercial practices”.

The suggested response: “Article 1(1) of Regulation (EU) No 1215/2012 […] must be interpreted as meaning that proceedings relating to an action brought by the public authorities of a Member State against persons governed by private law established in another Member State, in which a declaration is sought that infringements constituting unfair commercial practices have taken place, together with an order for the cessation of those practices, an order for measures of publicity at the expense of the defendants, and an order for penalty payments to be made in a fixed amount in respect of every future infringement, fall within the scope of ‘civil and commercial matters’ within the meaning of that provision.

On the other hand, such proceedings do not fall within the scope of that expression in so far as they relate to an action in which the public authorities seek the grant of special powers that go beyond those arising from the rules applicable in relationships between private individuals”.
Source: here

The Court of Appeal in [2020] EWCA Civ 574 Enka Insaat Ve Sanayi AS v OOO “Insurance Company Chubb” & Ors has overturned Baker J in [2019] EWHC 3568 (Comm) Enka Insaat ve Sanayi v OOO “Insurance Company Chubb” et al. which I reviewed here.

The case is mostly about the proper law of the arbitration agreement (Flaux J using the shorthand the ‘AA law’) aka the lex arbitri. Given that this is excluded from Rome I, residual rules apply which of course under English common law has Sulamerica as its main authority. In this case Enka contends that the AA law is English law, and Chubb Russia that it is Russian law. It is common ground that the lex contractus is Russian law, but the route to that conclusion is also in issue.

The dispute in this case raises the question of the relative weight to be given to the curial law (that is, the law of the seat, GAVC) of the arbitration agreement and the main contract law, where they differ, in determining the AA law. At 69:  ‘It is a question on which it would be idle to pretend that the English authorities speak with one voice. It would appear that there are also differences of approach between other jurisdictions in international arbitration generally’.

At 109 Flaux J concludes that parties have impliedly chosen that the proper law of the arbitration agreement should coincide with the curial law and be English law, and further, at 119 that ‘there has been no delay by Enka in this case which provides any good reason for not granting injunctive relief. I would treat this as a classic case, like The Angelic Grace, in which the court should grant an injunction to restrain the further conduct of proceedings brought in breach of an English law arbitration agreement.’

Anti-suit therefore granted.

For those interested in choice of law in arbitration, the judgment is required reading.  None of the Rome I (let alone Brussels Ia) issues discussed at the High Court are further discussed here, hence for the purposes of this blog I shall leave the analysis here.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.1.