Agrégateur de flux

England remains a jurisdiction of choice for corporate social responsibility /CSR litigation, in recent parlour often referred to as corporate (human and other rights due diligence. Jalla & Ors v Royal Dutch Shell Plc & Ors [2020] EWHC 459 (TCC) concerns a December 2011 oil spill which claimants allege companies forming part of the Shell group are responsible for. Anchor defendant in the UK is Shell International Trading and Shipping Company Limited – STASCO.

Stuart-Smith J on Tuesday last week upheld jurisdiction against the London-based mother holding on the basis of Article 4 Brussels Ia, and rejected an application for stay on Article 34 grounds. The judgment is lengthy, the issues highly relevant: this post therefore will be somewhat more extensive than usual.

Standard applications in cases like these now take the form of opposing jurisdiction against UK based defendants using Article 34 Brussels Ia (forum non conveniens -light; readers will remember the issues from ia Privatbank (cited by Stuart-Smith J) and other A34 postings on the blog); alternatively, resisting the case go to full trial on the basis that there is no real issue to be tried; abuse of process arguments (against such defendants: based on EU law); and case-management grounds. The latter two are of course disputed following Owusu. And against non-UK (indeed non-EU based defendants), using forum non conveniens; abuse of process; case-management and no real issue to be tried.

[A further application at issue is to amend form claims to ‘correct’ defendant companies, an application which is subject to limitation periods that are disputed at length in the case at issue. This is civil procedure /CPR territory which is less the subject of this blog].

The jurisdiction challenges are what interests us here and these discussions start at 207. The discussion kicks of with core instructions for ‘Founding jurisdiction’ in principle: the five step ladder expressed by Lord Briggs in Vedanta – which of course confusingly include many echoes of forum non as well as Article 34 analysis. Claimant must demonstrate:

(i) that the claims against the anchor defendant involve a real issue to be tried;

(ii) if so, that it is reasonable for the court to try that issue;

(iii) that the foreign defendant is a necessary or proper party to the claims against the anchor defendant;

(iv) that the claims against the foreign defendant have a real prospect of success; and

(v) that, either, England is the proper place in which to bring the combined claims or that there is a real risk that the claimants will not obtain substantial justice in the alternative foreign jurisdiction, even if it would otherwise have been the proper place, or the convenient or natural forum.

For the purposes of current application, Stuart-Smith J focuses on i, ii, and v:

• When considering whether there is “a real issue to be tried” the test to be applied is effectively the same as the test for summary judgment: reference here is made to Okpabi. It may be important to point out that the ‘real issue to be tried’ test must not be confused as a negation of Owusu. The test effectively has a gatekeeping purpose, not unlike the similar test in e.g The Netherlands as shown in Kiobel.
• The second condition, reasonableness to try the real issue, Stuart-Smith J concedes that this condition has been heavily debated for it is not entirely clear. He links the condition to the anchor jurisdiction issue: for Stuart-Smith J, the fact that the anchor defendant is sued for the sole or predominant purpose of bringing the foreign defendant into the action within the jurisdiction is not fatal to an application to serve the foreign defendant out of the jurisdiction. He seems to suggest therefore a light reading of the reasonableness requirement and emphasises (at 215) as Lord Briggs had done in Vedanta, that per C-281/02 Owusu, the effect of the mandatory terms of A4(1) BIa is that jurisdiction that is vested in the English Court by the article may not be challenged on arguments which in other circumstances would be forum non conveniens grounds. (This reinforces his flexible reading of the reasonableness requirement).
• On the fifth condition, Stuart-Smith J at 217 focuses on the scenario of an A4 defendant likely to continue being sued regardless of the English PIL decision (forum non in particular) viz the non-EU defendants (an issue which was quite important in Vedanta, where no A34 arguments were raised). If that is indeed likely then in his view this must have an impact on how the court considers the application of the English rules.

As noted Stuart-Smith J lists these arguments as ‘founding jurisdiction’ and at 227 finds there is a real issue to be tried: a reliable conclusion in the other direction (that STASCO had not retained legal responsibility for the operation of the Northia) cannot be found at this jurisdictional stage.

The Abuse of EU law argument is given short, one para (at 218) shrift, with reference to Lord Briggs in Vedanta (who focused on Article 8(1) CJEU authority for there is little precedent on abuse of EU law).

Turning then to the pièce de résistance: Article 34.  Readers of the blog will have followed my regular reporting on same.

Stuart-Smith’s first discusses authority in abstracto, and his points are as follows:

• BIa’s section 9, ‘lis pendens – related actions’, harbours two twins. At 222: ‘Articles 29 and 33 apply where proceedings in different jurisdictions involve the same cause of action and are between the same parties. Articles 30 and 34 apply where proceedings in different jurisdictions are “related” without satisfying the additional prerequisites for the application of Articles 29 and 33 (i.e. the same cause of action and between the same parties).‘ The twins are of course not identical: in each set, one involves action ex-EU, the other looks to intra-EU scenarios.
• Zooming in on the A30-34 twin: A30 defines ‘related’ and A34 does not. Under A30(3), actions are related where they are “so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from different proceedings.” (at 222) under A34(1)a, the discretion to stay an action under that article does not arise unless “it is expedient to hear and determine the related actions to avoid the risk of irreconcilable judgment resulting from separate proceedings”. Semantically one might suggest the latter therefore is a subset of the former (which would also suggest not all actions that are ‘related’ under A30 are so under A34). Stuart-Smith J however proposes to focus on the commonality of both, which is the presence of expediency, ‘to hear and determine them together to avoid the risk of irreconcilable judgments resulting from <different: A30> <seperate: A34’ proceedings. Again at 222: ‘Although there is a semantic argument that this means that cases falling within Article 34(1)(a) are a subset of “related actions”, I cannot conceive of circumstances where this would matter: the expediency criterion is a pre-requisite for the exercise of the court’s discretion both under Article 29 and under Article 34.’
• At 223 then follows the discussion of “risk of irreconcilable judgments”. ‘Because Articles 30 and 34 do not require the proceedings to involve the same cause of action and to be between the same parties, it is plain that the “risk of irreconcilable judgments” to which Articles 30(3) and 34(1)(a) refer cannot require that there be a risk that one judgment may give rise to an issue estoppel affecting the other.’ In other words, the test of irreconcilability is suggested to be more easily met in A30 (and 34) then it is under A29 (and 33). Nevertheless, with reference to Donaldson DJ in Zavarco, Stuart-Smith J suggests the points of difference between the judgments (whether arising from findings of fact or of law) would have to “form an essential part of the basis of the judgments” before A30 or 34 may be engaged.
• At 225 he then refers to Privatbank, held by the Court of Appeal after proceedings in Jalla had been closed, in which the Court of Appeal held that the fact that actions could not be consolidated and heard together (much as of course such togetherness cannot be imposed upon the foreign courts) is relevant to the exercise of the Court’s discretion and, in the absence of some strong countervailing factor, will be a compelling reason for refusing a stay. At 246, that importance of the impossibility of consolidated hearings is re-emphasised.

At 228 then Stuart-Smith J arrives at the application in concreto. He starts with the defendants’ arguments: ‘In their written submissions the Defendants rely upon a number of claims brought by groups of claimants or communities before various courts in Nigeria and one action of rather different complexion, known as the Federal Enforcement Action [“FEA”]. They submit that the English proceedings against STASCO should be stayed, at least temporarily, in order to avoid the risk of irreconcilable judgments being reached in England and in one or more of the Nigerian proceedings by waiting for the determinations of the Nigerian Courts and then taking proper account of those determinations in disposing of the English proceedings. The Defendants submit that, by the imposition of a stay, the court would avoid “a course of conflict with the courts of a friendly state” and avoid “cutting across executive actions of the Nigerian State in relation to property situated within its territory” which the Defendants submit would be in breach of the act of state doctrine and considerations of comity.‘ He then proceeds to discuss the arguments:

• Firstly he discusses at length the status of the FEA (which counsel for the defendants focused on) as well as a number of other actions pending in the Nigerian courts.
• Of note is his observation at 234: ‘It is a fact material to the exercise of the court’s discretion on these applications that the Defendants in these proceedings rely upon the existence of the FEA as grounds for imposing a stay pursuant to Article 34 while at the same time SNEPCO is maintaining its root and branch opposition to the validity (as well as the factual merits) of the FEA.’
• At 237 he notes the not carbon copy but nevertheless overlap between proceedings, at the level of claimants, defendants, and facts, but not the allegations of negligence and Rylands v Fletcher which are not directed at STASCO in the FEA proceedings. Of note is that he adds in fine that the potential problem of double recovery is simply an issue with which the English and Nigerian courts may have to grapple in due course.
• At 241 he holds obiter that expediency is not met here for a stay would not reduce the risk of irreconcilable judgments. Here, the true nature of forum non (I realise of course A34 is only forum non light) re-emerges: the English proceedings will continue after the stay in all likelihood will have been lifted (there will continue to be a case to answer for STASCO). ‘(A)lthough the English court would afford due attention and respect to the findings of the Nigerian courts, the findings of the Nigerian courts in the FEA and the other actions would not bind the English court to make equivalent findings even on the most basic matters such as whether the December 2011 Spill reached land.’ However ‘in the light of the ruling by the Court of Appeal [in Privatbank, GAVC] that expediency is a theoretical concept, I will proceed on the assumptions (without deciding) that, for the purposes of Article 34, (a) the actions in Nigeria are related actions and (b) it is expedient to determine the related actions together to avoid the risk of irreconcilable judgment resulting from different proceedings.’
• That leaves the question whether a stay is necessary for the ‘proper administration of justice.’
  • At 242 the elements of recital 24 are considered in turn. Stuart-Smith emphasises in particular that while the damage occurred in Nigeria, there is a strong international element that is alleged to give rise to a duty of care owed by STASCO to the Claimants; and he underlines the uncertainty as to the length of the Nigerian proceedings).
  • At 245 he concludes that no stay is warranted: I shall recall the para in full (underlining is mine, as is the lay-out):
    • ‘Balancing these various considerations together, I am not satisfied that a stay is necessary for the proper administration of justice.
    • I start with the fact that jurisdiction is based on Article 4 and that it is contemplated that the proceedings against STASCO may continue after a temporary stay to await the progress of the Nigerian actions.
    • Second, the length of that stay is indeterminate whether one looks at the FEA or the other actions; but on any view it is likely to be measured in years rather than months, thereby rendering these Claimants’ claims (which were issued late) almost intolerably stale.
    • Third, a stay would prevent any steps being taken towards the resolution of the difficult limitation and other issues which the earlier parts of this judgment identify; and it would prevent any other steps being taken to ensure the swift and just progression of the English action if and when the stay is removed. That is, in my judgment, a major drawback: if and to the extent that there are valid (i.e. not statute-barred) claims to be pursued, there is a compelling interest of justice in their being pursued quickly. Otherwise, as is well known, there is a risk that valid claims may fall by the wayside simply because of the exorbitant passage of time.
    • Fourth, although the factual connection with Nigeria is almost complete, the English court’s jurisdiction is not to be ousted on forum non conveniens grounds and, that being so, there is no reason to assume that imposing a stay until after the Nigerian courts have reached their conclusions will either cause the English proceedings to be abandoned or determine the outcome of the English proceedings or eliminate the risk of irreconcilable findings altogether. I am certain that the English court would and will, if no stay is imposed at this stage, remain vigilant to the need to respect the Nigerian courts and their proceedings; and I do not exclude the possibility that circumstances might arise at a later stage when a pause in the English proceedings might become desirable in the interest of judicial comity and respect for Nigeria’s sovereign legal system.
    • Fifth, I bear in mind the fact that the scope of the FEA action is not clear, so that it is not clear what issues will be determined, save that the issue of STASCO’s responsibility and actions will not be as they are not before the Nigerian Court. Turning to the other actions, STASCO is only a party to the HRH Victor Disi Action which, though technically pending, cannot be assumed to be certain to come to trial. The status of the remaining actions, where STASCO is not a party, is as set out above but does not give confidence that one or more of those actions will emerge as a suitable vehicle for determining issues relating to the spill so as to fetter the freedom and resolve of the English court to reach a different conclusion on behalf of different claimants and in an action against STASCO if that is the proper result.
    • Sixth, in my judgment, the proper administration of justice is better served by taking interim steps to bring order to the English proceedings, specifically by addressing the issues of limitation and, potentially, existence and scope of duty, which are disclosed in the earlier parts of this judgment. The outcome of those steps should determine whether and to what extent STASCO is available as an anchor defendant.’

There is an awful lot here which may prove to be of crucial relevance in the debate on the application of Article 34. Most importantly, Stuart-Smith’s analysis in my view does justice to the DNA of A34, which includes a strong presumption against a stay.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.

Highly relevant new CSR, corporate due diligence ruling.
Shell Bonga oil field spill
Reference to ia Privatbank https://t.co/fGnGrVjI7R and Vedanta https://t.co/SsAloPiwc9

A4 BIa jurisdiction upheld. No stay on A34 grounds. https://t.co/wIifRnsWZq

— Geert Van Calster (@GAVClaw) March 3, 2020

On 13 February 2020, the CJEU ruled again on the competence of the court to hear passenger compensation claims under the Flight Compensation Regulation regarding cancelled flights.

Flightright v Iberia concerned a three-leg journey by two passengers from Hamburg to London, then London to Madrid, and finally from Madrid to San Sebastián. The whole trip was reserved in a single booking. Iberia operated the second and the third legs and it eventually cancelled the latter. The two passengers assigned their claims for compensation to the online rights portal flightright. The latter sued Iberia at the local tribunal in Hamburg, the point of departure. The tribunal doubted its jurisdiction and asked the CJEU for a preliminary ruling.

The case turns on the second indent of Article 7(1)(b) Brussels I bis Regulation, which gives jurisdiction in matters relating to the provision of services to the tribunal of the place “where, under the contract, the services were provided or should have been provided”. The Hamburg tribunal had been unsure whether the conditions of this head of jurisdiction were fulfilled, given that Iberia was merely operating the last leg of the flight and was (1) neither the contractual partner of the passengers; nor (2) operating a flight running to or from Hamburg, the place where the suit was brought. 

It is settled law, following the seminal CJEU decision in Rehder, that in the case of air transport contracts, the place of performance is deemed to be located at the points of both departure and of arrival, and that the passenger can choose between the two to bring her claim.

Multistop journeys and the liability of operating carriers were the subject of the decision in Air Nostrum, which also involved flightright, but which must not be confused with the present case. In Air Nostrum, suits were brought at the point of arrival regarding problems that had occurred on the first leg of the journey. The CJEU ruled that, although the carrier operating this leg had no direct contractual obligation with the passenger, it should be regarded as fulfilling an obligation freely consented to by performing a flight for another airline.  The effect of this was that Article 7(1) Brussels I bis applied. The Court of Justice also held that a multistop journey confirmed in a single booking is to be regarded as a single service for the purposes of Article 7(1) Brussels I bis. The Court of Justice therefore concluded that the tribunal at the place of the final destination of the multistop journey had jurisdiction over the carrier operating the first leg of the flight.

In another decision, České aerolinie, a passenger had booked a combined journey with the defendant, which operated the first leg of the journey, while a non-EU carrier performed the second. The latter being significantly delayed, the passenger sued the defendant – who was not involved in the delay – at the place of departure. The CJEU ruled here that indeed the defendant could be sued there because the journey is to be considered as one service (confirming the earlier judgment in Air Nostrum) and that the place of departure is to be considered a place of performance for the whole service under Article 7(1) Brussels I bis.

In flightright v Iberia, the situation was somehow the reverse of Air Nostrum: the carrier operating the last and delayed leg of a multistop flight was sued at the place of departure. Again, the Court of Justice considered that the tribunal at this place had jurisdiction over the claim under Article 7(1)(b), second indent, Brussels I bis. The CJEU considered the journey comprising three legs as one service to carry the passenger from Hamburg to San Sebastián because it was made in a single booking (para. 27 – 29). In the view of the Justices, the tribunal at the place of departure (Hamburg) has a sufficiently close connection to the dispute. Even though it related to the cancelled flight between Madrid and San Sebastián, finding this tribunal competent satisfied the objective of proximity (para. 29 – 31). This solution would also fulfil the principle of predictability, given that the applicant and the defendant both could identify the place of departure and arrival (para. 32).

The new judgment is hardly surprising. The solution reached by the CJEU fully squares with the previous rulings. Indeed, the new judgment merely continues the same logic, the main axioms of which are as follows: (1) multistop journeys are to be regarded as one service for the purposes of Article 7 Brussels I bis where they were made in a single booking; (2) a carrier operating a leg of the journey fulfils an obligation freely consented to, even though it has no direct contractual relation with the passenger; and (3) the passenger can choose to sue such carrier at the point of departure or of arrival of the whole journey.

The novel aspect of the decision is merely that a tribunal at the place of departure can be deemed competent to hear a claim for compensation relating to the final leg of the flight. Therefore, carriers operating parts of multistep journeys may find themselves sued in a court at a place to which or from which they do not fly. One can only warn them to pay particular attention to their arrangements with other airlines and to be cautious when confirming or authorising single bookings.

Pourvoi c/ Cour d'appel de Bastia

Pourvoi c/ Cour d'appel de Grenoble, 6 juin 2019

Tribunal de première instance de Nouméa, 17 février 2020

Tribunal paritaire des baux ruraux de Montpellier, 25 février 2020

Cour d'appel de Paris, 17 février 2020

Pourvoi c/ Cour d'appel de Versailles, 24 octobre 2019

Pourvoi c/ Cour d'appel de Grenoble, 15 janvier 2019

Pourvoi c/ Cour d'appel de Paris, 20 janvier 2020

Pourvoi c/ Cour d'appel de Fort de France, 9 mai 2019

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