Agrégateur de flux

Popplewell J held in [2018] EWHC 822 (Comm) Reliance v India in April. This post therefore is not a claim to speedy reporting (Allen & Overy have excellent review here). Rather, a quick note on the various implications of the holding in wider context.

The Act of State doctrine (in its narrow sense) essentially holds that courts should not question the validity of acts taken by a foreign government within that government’s territory.

Claimant (at 110) ‘submitted that even if non-justiciable in an English court, (one of the relevant claims, GAVC)…is arbitrable; the basis for the doctrine of foreign act of state, to the extent that it applies, is that one sovereign state should not sit in judgment on the acts of another; unlike a court, an arbitral tribunal is not an organ of a sovereign state; therefore its determination of the validity of the conduct of a sovereign party would not entail one sovereign calling into question the conduct of another; because the rationale for the foreign act of state doctrine does not apply to arbitration, what would in court be a non-justiciable issue can nevertheless be adjudicated upon by arbitrators.’

Popplewell J disagreed in what I understand to be a first formal finding on the subject: at 111 and in discussing relevant authority:

‘whilst some aspects of the foreign act of state doctrine have as their basis the exercise of “judicial self-restraint” (leading to some suggesting it is an expression of comity, GAVC), those are not the aspects of the doctrine which are relevant to the current issue… the principle that the validity and effectiveness of legislative and executive acts of a sovereign state in relation to property within its jurisdiction is not justiciable..is a hard-edged principle of English private international law, and (the majority of authority suggests, GAVC) that its rationale derives from the very concept of sovereignty which recognises the power and right of a state to determine the property rights of those whose property is situate within its territory.’

At 113: ‘there is no good reason why the principle should be any less applicable in arbitration than in litigation before an English court. It does not depend upon the tribunal itself being an organ of a sovereign state or exercising sovereign functions: it depends upon a general principle of English private international law which recognises the sovereignty of nations within recognised spheres, a principle to which arbitration tribunals, no less than courts, are required to give effect when applying English private international law principles.’

The case is an excellent illustration of the now very diverse and not always integrated international dispute resolution landscape. A case like Reliance could have conceivably ended up in BIT arbitration – which as readers will know has its own extensive challenges with domestic regulatory autonomy and the space for investment tribunals to challenge the legality and at the least the proportionate impact of States exercising sovereign regulatory functions.

This leaves two further dispute settlement channels: the use of the courts in ordinary and the use of ‘standard’ commercial arbitration (outside the BIT context), which is what was employed here. As the judgment shows, the former (courts in ordinary) have kept some control over the latter.

Lucia Raimanova and Matej Kosalko signal that classic choice of law rules combined with contractual party autonomy empowers parties to steer the litigation away from issues that a party might wish to avoid: particularly, by opting for the most interesting lex contractus (and, I would add, potentially varying same en parcours de route, to respond to changes in case-law or statutory law), and by having the State concerned sign away its right to invoke the Act of State doctrine (much like the similar contractual surrender of sovereign immunity).

International litigation is seldom confined to singular lines of analysis.

Geert.

An essay about the European narrative. A long read – well worth it.

EU Perspectives

KJ Garnett

Brexit and Trump have opened up a new world of understanding that I hitherto grasped but was unable to define. For the past ten years many, myself included, were aware something was amiss. We knew that media coverage of the EU in the UK was based on lies and misleading information. For years euperspectives has been calling for a new European media to counter the underlying current of resentment, mockery, irrational hate and quite frankly downright ignorance towards the EU at the heart of the British media and in influential political circles. I tried in vain to draw a link between negative media coverage and the potential of great harm to the EU and ordinary citizens. Not very successfully. Like a patient who complains of chronic back-pain but who in the absence of a medical diagnosis is told their symptoms are all in the head so too my…

View original post 5,644 more words

GPA - Etat civil

GPA - Etat civil

La Cour de justice de l’Union européenne se prononce sur la détermination de la loi applicable à l’obligation alimentaire lorsque, à la suite d’une première procédure initiée par le créancier, le débiteur engage une seconde procédure en vue d’obtenir une diminution du montant de la pension.

en lire plus

Pour la Cour de justice de l’Union européenne, commercialiser des cartes SIM sans informer le consommateur des coûts des services qu’elles incluent ni même de l’installation de ces derniers et de leur activation préalable est une pratique commerciale agressive déloyale. L’autorité nationale de régulation de la concurrence peut être compétente pour trancher le litige.

en lire plus

La Cour de cassation se prononce sur la loi applicable à l’organisation des funérailles, dans une affaire où une partie de la famille du défunt invoquait la loi marocaine pour s’opposer à l’incinération décidée par la concubine.

en lire plus

I called Bobek AG’s Opinion in C-337/17 ‘solid’ – by which I also implied: convincing.  Is the actio pauliana by a Polish company against a Spanish company, which had bought immovable property from the former’s contracting party, one relating to ‘contract’ within the meaning of Article 7(1) Brussels I Recast?

Bobek AG Opined it is not. The CJEU today held it is. I disagree.

Firstly, the second chamber, at 29 ff, repeats the inaccurate references in Valach and Tunkers, that (at 30) ‘actions which fall outside the scope of [the Insolvency Regulation] fall within the scope of [Brussels I Recast].’ This oft repeated quote suggest dovetailing between the two Regulations, a view which is patently incorrect: readers can use the tag ‘dovetail’ or ‘arrangement’ (for ‘scheme of arrangement’) for my view on same; see e.g. Agrokor.

Having held (this was not seriously in doubt) that Brussels I Recast is engaged, the Court then takes a much wider view of the Handte formula than advocated by Bobek AG. The Court at 37 refers to Granarolo, merely in fact to emphasise the requirement of strict interpretation of the jurisdictional rules which vary Article 4’s actor sequitur forum rei’s rule. At 43 follows the core of its reasoning: ‘By [the pauliana] the creditor seeks a declaration that the transfer of assets by the debtor to a third party has caused detriment to the creditor’s rights deriving from the binding nature of the contract and which correspond with the obligations freely consented to by the debtor. The cause of this action therefore lies essentially in the breach of these obligations towards the creditor to which the debtor agreed.’

The Court does not refer to Ergo, let alone to Sharpston AG’s ‘centre of gravity’ test in same, however it would seem that this may have influenced it. Yet in my view this is way too extensive a stretch of the Handte or Sharpston AG’s Ergo formula. Litigation in the pauliana pitches the creditor against the third party. It would take really quite specific circumstances for Handte to be met in the relation between these two. That a contractual relation features somewhere in the factual matrix is almost always true.

For a comparative benchmark, reference can be made to Refcomp where the Court took a very limiting view on subrogration of choice of court.

The Court’s formulation at 45 is entirely circular: were the creditor not able to sue in the forum contractus, ‘the creditor would be forced to bring proceedings before the court of the place where the defendant is domiciled, that forum, as prescribed by Article 4(1) of Regulation No 1215/2012, possibly having no link to the place of performance of the obligations of the debtor with regard to his creditor.’

The Court then quite forcefully and seemingly without much hesitation identifies a specific forum contractus (unlike the AG who had suggested that that very difficulty supports his view that there simply is no forum contractus to speak of): at 46: ‘the action brought by the creditor aims to preserve its interests in the performance of the obligations derived from the contract concerning construction works, it follows that ‘the place of performance of the obligation in question’ is, according to Article 7(1)(b) of this regulation, the place where, under the contract, the construction services were provided, namely Poland.’

The initial contractual obligation between creditor and debtor therefore creates crucial jurisdictional consequences vis-a-vis third parties whose appearance in the factual matrix presents itself only very downstream. That, I would suggest, does not at all serve the predictability which the Chamber (rightly) emphasises at the very outset of its judgment as being the driving principle behind its interpretation.

I am not convinced by this judgment.

Geert.