Agrégateur de flux

Thank you Dechert for flagging Case No. 16-00636 Cuzco v Tera (Chapter 11), in which Faris J with great clarity wades in on a motion to dismiss US Chapter 11 jurisdiction in favour of exclusive jurisdiction for the Seoul courts with respect to a Korean company shareholder derivative action.

The case is relevant to insolvency practitioners. More generally however it highlights the need for a court to keep a level heading when wading through to and fro litigation in various States.

A bit of factual detail is required to appreciate the ruling.

Cuzco USA filed a chapter 11 in Hawaii with its sole asset real property in Hawaii. Tera Resources Co., Ltd. (“Tera”), one of Cuzco Korea’s shareholders asserted that the Debtor and its insiders conspired to deprive Cuzco Korea of the value of the real property. Tera commenced an action for fraud, breach of fiduciary duties, piercing the corporate veil, unjust enrichment and imposition of constructive trust.

The defendants moved to dismiss, in favour of the Korean courts – and failed, both on arguments of forum non conveniens and on arguments of there being exclusive jurisdiction for the courts at Seoul. Defendant Mr Lee is purportedly the manager of Cuzco USA and the representative director of Cuzco Korea. Defendant Ms Yang is  shareholder and creditor of Cuzco Korea and an ally of Mr. Lee.

Cuzco USA had proposed, and the court confirmed, a Third Amended Plan of Reorganization. Briefly summarized, the Third Amended Plan provided that Cuzco USA would transfer the Keeaumoku (Hawaii) Property to Newco, a Hawaii limited liability company of which Mr. Lee is the sole member, that Newco would attempt to raise enough money through a refinancing to repay all of Cuzco USA’s creditors in full, and that if the refinancing did not occur by a date certain, Newco would sell the Keeaumoku Property at auction and distribute the proceeds to Cuzco USA’s creditors.

Tera and others filed motions for reconsideration of the order confirming the Third Amended Plan. Tera is a shareholder of Cuzco Korea. It also holds a judgment, entered by a Korean court, against Ms. Yang, and orders from a Korean court that, according to Tera, resulted in the seizure of Ms. Yang’s interests in and claims against Cuzco Korea.

Cuzco USA then moved to modify the Third Amended Plan and replaced it with a Fourth Amended Plan. Briefly summarized, this Plan eliminates the transfer of the Keeaumoku Property to Newco; instead, Cuzco USA will retain the property and either refinance it or sell it at auction. Tera and others vigorously objected to plan confirmation on multiple grounds. The court confirmed the Fourth Amended Plan.

Tera argued (among other things) that the Third Amended Plan was the product of a fraudulent scheme by Mr. Lee, Ms. Yang, and others to divert the equity in Cuzco USA from Cuzco Korea to themselves and to render Tera’s interests in Cuzco Korea worthless.

 

That Korean law covers governs the right to bring derivative claims on behalf of a Korean corporation is not under dispute between the parties. (It is therefore considered part of the rules on internal organisation which are subject to lex societatis). However Faris J dismissed defendants’ suggestion that the US court should also respect Korea’s jurisdictional rules that such suits be brought in Seoul only.

At B, p.10: US statutes confer subject matter jurisdiction on US courts. Statutes of another nation, such as the South Korean statute on which the moving defendants rely, cannot change the subject matter jurisdiction of a United States bankruptcy court under a United States statute.

Forum non conveniens was dismissed for there is a strong policy that favors centralization of claims against the debtor in the bankruptcy court that outweighs any other interest (at C, p.12). One would have to have strong arguments to push that aside and clearly these were not present here.

Geert.

Thank you Paul Davies for signalling the recent French decree on end of waste – EoW criteria. Such national initiatives are seen by some as being a sign of the failure of relevant provisions of EU Waste law (which suggest the EU should be developing such criteria). An alternative reading may suggest that national initiatives may be better places to read the technical and environmental and pubic health safety requirements at the local level, potentially preparing the way for EU criteria. Relevant procedures under EU law arguably are not the most efficient for the initial development of this type of detailed instrument, as the example of plastics and REACH also shows.

Geert.

Handbook of EU Waste law, 2nd ed. 2015, OUP, 1.166 ff and 1.189 ff.

L’ex-président ivoirien Laurent Gbagbo et son ancien ministre de la jeunesse Charles Blé Goudé étaient poursuivis par la Cour pénale internationale pour crimes contre l’humanité en lien avec la crise postélectorale de 2010-2011, lors de laquelle plus de 3 000 personnes ont perdu la vie. La décision des juges, si elle n’est pas une surprise sur le fond, l’est sur la forme. Et pose des questions sur l’avenir de la Cour.

en lire plus

Servitude

In March 2017, France’s ANSES, the relevant food, environment, and occupational health and safety agency, approved Monsanto’s Roundup Pro 360. That authorisation has now been annulled by the Courts at Lyon – around the same time the story broke of extensive unquestioned copy /pasting by regulators of industry dossiers.

At the beginning of its reasoning the court cites France’s environment charter, to which its Constitution refers. The Charter guarantees everyone in its first Article the right to live in a balanced environment and one with respect for human health. Article 5 entails the precautionary principle, with reference (of course) to scientific assessment and proportionality.

Yet this intro is made for dramatic effect only. The judgment is in fact nothing but a straightforward application of risk assessment requirements on the basis of prevention, not precaution, and a simple observation of infringement of EU law.

At 3 (p.7) the court points out the consequences of the relevant EU authorisation regime. Active ingredients such as glyphosate are authorised (or not; and potentially with conditions) by the EU. Applications in wich these substances are used, by the Member States.

France’s Centre International de Recherche sur le Cancer (CIRC) had classified glyphosate as ‘probably carcinogenic’. Its report on same is referred to by the court as a ‘handbook’, based on peer reviewed studies, the data of which are objectively verifiable as well as replicable. In the other corner, one study referred to by Monsanto (at 7). Relevant EFSA studies only look at the active ingredient and it is these studies upon which ANSES’ decision was based. These studies do not assess the active ingredients’ actual use in preparations such as Roundup Pro 360 which is 41.5% glyphosate. Consequently ANSES quite straightforwardly violates Regulation 1107/2009, particularly its Article 36(6), which prescribes that interaction between the active substance, safeners, synergists and co-formulants shall be taken into account in the evaluation of plant protection products.

The judgment is convincing and straightforward. The road to it was all but easy.

Geert.

EU environmental law (with Leonie Reins), Edward Elgar, soft cover edition 2018, p.28 ff.

Monsieur M. a été condamné en 2015 par le tribunal correctionnel de Paris à une peine de sept ans d’emprisonnement, et à une interdiction définitive du territoire française. Alors qu’il devait être expulsé à l’issue de sa peine, en mars, il a saisi la CEDH en urgence d’un recours suspensif, arguant être menacé par l’État Algérien de traitements contraires à l’article 3 de la Convention, qui interdit les actes de torture, les traitements inhumains et dégradants. La France s’y oppose. À l’avenir, la question risque de se poser à maintes reprises, lorsque des ressortissants algériens condamnés pour terrorisme sortiront de détention.

en lire plus

Professor Ronald Brand has published the second edition of his book, International Business Transactions Fundamentals, with Kluwer Law International. It is designed primarily for use in a course on International Business Transactions, but is suitable as a desk reference on important basic issues raised on cross-border contractual relationships. Unlike some International Business Transactions casebooks which focus on WTO-related aspects of international trade regulation, this book draws extensively on private international law and the ways in which it can be used to structure cross-border commercial transactions. Coverage includes basic commercial law issues including price-delivery terms and letter of credit financing, dispute resolution issues and how to avoid them by proper planning at the transaction stage, the legal framework for import and export regulations planning, contracting with foreign sovereigns, compliance with anti-corruption legislation, legal relationships created by foreign investment, antitrust regulation and compliance, and a chapter on professional responsibility and the unique legal representation issues raised in cross-border transactions.

The second edition incorporates nearly four decades of work by the author to present the fundamentals of the law of international business transactions organized in a manner designed to help the reader identify risks inherent in cross-border transactions; eliminate risks where possible; reduce risks that cannot be eliminated, and reallocate risks through the use of contractual relationships. It provides an organized progression of materials from the simple export-import transaction to complex international investments, all designed to help the reader understand how to avoid risk in transnational transactions through the use of the legal framework available for providing institutional protection; the purchased protection available for transnational transactions; and the ways in which negotiated protection may be provided to build on institutional and purchased protections

Professors interested in considering the book for adoption in a course may contact Laurien Roos at Laurien.Roos@wolterskluwer.com.

Cour nationale de l'incapacité et de la tarification de l'assurance des accidents du travail, 21 décembre 2018

Cour nationale de l'incapacité et de la tarification de l'assurance des accidents du travail, 21 décembre 2018

Cour d'appel de Fort de France, chambre sociale, 11 janvier 2019

Prêt - prescription civile

M.A. e.a.
Espace de liberté, sécurité et justice ASIL
Un État membre ayant notifié son intention de se retirer de l’Union conformément à l’article 50 TUE demeure l’État responsable au sens du règlement Dublin III

Cresco Investigation
SOPO
L’octroi, en Autriche, d’un jour férié payé le vendredi saint aux seuls travailleurs appartenant à certaines églises constitue une discrimination en raison de la religion interdite par le droit de l’Union

In [2019] EWHC 57 (Comm) Cunico v Daskalakis Baker J applies the employment and choice of court titles of the Lugano Convention 2007. Mr Daskalakis and the second defendant, Mr Mundhra, worked for the Cunico group. The group operated in base metals industries and markets. Defendants’ primary jobs were CEO and CFO respectively of Feni Industries AD (‘Feni’), the main industrial operating subsidiary of the group, incorporated and operating in FYR Macedonia. Feni owned and operated a ferronickel production plant in Kavadarci and the Rzanovo iron and nickel mine 50 km or so south of the city.

It is necessary to give a little bit of factual background to appreciate the jurisdictional issues.

Cunico Resources NV (‘Resources’) was incorporated in the Netherlands, to become the group holding company, in May 2007. Marketing was incorporated in Dubai, UAE, in July 2007, and operated in the Jebel Ali Free Zone as the main market-facing trading entity in the group. Resources had no operating activities. It existed as a holding company for the operating subsidiaries as investment assets, with a single dedicated (full-time) employee. Marketing traded by purchasing ore from other Cunico subsidiaries, and bailing the ore to a ferronickel plant within the group under a ‘tolling agreement’, for conversion by the plant to finished ferronickel. Marketing then sold the finished product to the market. Under the tolling agreement, fees for converting Marketing’s ore into finished ferronickel would be payable by Marketing to the operator of the ferronickel plant (e.g. Feni).

The Cunico group was owned, at the time of the events said to give rise to claims against the defendants, as a joint venture between International Mineral Resources BV (‘IMR’) and BSGR Cooperatief UA (‘BSGR’). Latterly, IMR has effectively all but bought BSGR out, via the intervention of proceedings in the Amsterdam Enterprise Chamber, so that today Resources is owned as to c.80% by Summerside Investments S.a.r.l., IMR’s parent company, with 50% of the remainder owned by each of IMR and BSGR.

Now, crucially (at 6): so-called ‘Advisory Contracts’ were signed as between Marketing and each of the defendants, in 2007 and again in 2010, that contained a jurisdiction provision in these words: “In case of disagreements, they shall be solved in the Court of the United Kingdom“. The claimants say that provision gives this court jurisdiction over their respective claims against the defendants under Article 23 of the Lugano Convention. It is common ground that the defendants were domiciled in Switzerland when proceedings were brought and that the claims brought against them are within the material scope of the Lugano Convention, so indeed it governs the question of jurisdiction in this case. It is also common ground that, in this international business context, the reference in the Advisory Contracts to “the Court of the United Kingdom” should be interpreted to mean the courts of England and Wales.

Marketing claims that defendants received bonus payments from Marketing to which they were not entitled and/or to procure payment of which they acted in breach of contractual and fiduciary duties owed to it.

The principal issue is whether the claims made are matters relating to individual contracts of employment so as to engage Section 5 of the Lugano Convention. Any claims that do engage Section 5 cannot be brought in England.

At 23: For each claim advanced by each claimant against either defendant, the question of jurisdiction gives rise to the following issues in this case:

i) Is that claim a matter relating to the employment of the defendant by that claimant, for the purpose of Section 5 of the Lugano Convention?

ii) If not, is that claim within the scope of the jurisdiction provision in either of the defendant’s Advisory Contracts?

iii) If so, for a claim by Resources or Feni, does that jurisdiction provision confer on the claimant an effective benefit? (This is a question under the Contracts (Rights of Third Parties) Act 1999, as each Advisory Contract was a contract only between the respective defendant and Marketing.)

Baker J decides following lengthy overview of the ’employment’ history of defendants that they were indeed employed across the group, and that Lugano’s employment heading therefore points away from jurisdiction in England. Surprisingly he does not refer at all to any CJEU precedent such as Holterman. The employment argument having succeeded, no assessment is made of Lugano’s choice of court provisions.

Geert.

 

Text provided by Laura Carballo Piñeiro – thanks!

A new online journal was born in late 2018: <http://www.rivitsproc.eu/en/>

The Italian-Spanish Journal of Procedure Law (RIEDP) is an editorial endeavour that aims to mainly publish clearly innovative papers, i.e. with the potential of making Procedure Law evolve by providing ideas and approaches that may help reform and enhance both civil and criminal procedures.

Papers written in Spanish, Italian or English are accepted for publication.

The Journal was launched by a group of scholar from Italy and Spain. Professors Jordi Nieva Fenoll, Michele Taruffo, Llorenç Bujosa Vadell, Giulio Illuminati, Rosa Ruggiero, Marien Aguilera Morales, Gina Gioia, and Laura Carballo Piñeiro have joined forces to offer a meeting point for authors that wish to share their innovative research with a wider audience. The essential requirement to be accepted for publication is the academic value of the paper regardless of whether it has already been published elsewhere. An anonymous peer-reviewed publication, RIEDP will publish accepted paper on an open-access basis and immediately after acceptance. In order to learn more about RIEDP, please visit its webpage.