Agrégateur de flux

A longer title than readers are used to from this blog. However judgment itself is also an unusually long 163 pages. In Banco Santander Totta, the High Court was asked whether snowball interest rates swaps in loan agreements between a Portuguese Bank and four Portuguese public transport companies, should be declared invalid under Portuguese ‘mandatory’ law, applicable by use of the corrective mechanism of Article 3(3) Rome I.

The Transport Companies do not assert that BST wrongly advised them to enter into the swaps, or misrepresented the swaps to them. Rather,  defences raised by the Transport Companies are that:

(1) under Portuguese law, each company lacked capacity to enter the swaps which are therefore void; this is on the basis (among other reasons) of an assertion that the swaps were speculative transactions; this defence applies regardless of the law applicable to the swaps; it is common ground that, if correct, it is a complete answer to the claim;

(2) although English law governs the Master Agreements, this is subject to Art. 3(3) of the Rome Convention; this provides that where all the elements relevant to the situation at the time of the choice of law are connected with one country only, the choice does not prejudice the application of rules of the law of that country which cannot be derogated from by contract (“mandatory rules”). Portuguese mandatory rules apply to the swaps, giving rise to two defences: a) under rules dealing with gaming and betting and ordre public, the swaps are void for being unlawful “games of chance”, alternatively speculations; b) seven of the nine swaps are liable to be terminated under rules dealing with an “abnormal change of circumstances” (which termination takes effect as though the swaps were void); this is on the basis that since 2009 (following the financial crisis), the reference interest rates relating to the swaps (EURIBOR and LIBOR) have been close to zero (and remain so at the time of this judgment);

(3) in presenting the swaps to the Transport Companies, the bank acted in breach of its duties under provisions of the Portuguese Securities Code which implement relevant European Union legislation; these apply to the bank as a financial intermediary and relate to the protection of the legitimate interests of the Transport Companies as clients, and to conflicts of interest; the breach is said to entitle the Transport Companies to damages thereby extinguishing their liabilities under the swaps.

Knowles J reviews precedent (European (limited, mostly related to the preparatory works), English and Portuguese (likewise limited) and decides against the engagement of Article 3(3). I will not regurgitate all of the analysis: readers are best referred to the judgment, in particular p.65 onwards, and the decision at 411, where Knowles J concludes

because of the right to assign to a bank outside Portugal, the use of standard international documentation, the practical necessity for the relationship with a bank outside Portugal, the international nature of the swaps market in which the contracts were concluded, and the fact that back-toback (sic) contracts were concluded with a bank outside Portugal in circumstances in which such hedging arrangements are routine, the court’s conclusion is that Art. 3(3) of the Rome Convention is not engaged because all the elements relevant to the situation at the time of the choice were not connected with Portugal only. In short, these were not purely domestic contracts. Any other conclusion, the court believes, would undermine legal certainty.  

The latter element is quite important. Referring in particular to Briggs (at 374), the Court holds that the uncertainty of the rule of Article 3(3) should lead to its narrow interpretation. I agree. With party autonomy the core consideration of the Regulation, standard recourse to Article 3(3) [or 3(4) for that matter) under the pretext for instance of a general campaign against fraus legis is most definitely not warranted.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 3, Heading 3.2.8, Heading 3.2.8.1

L’article 30, § 1, de la Convention de Genève du 19 mai 1956 relative au contrat de transport international de marchandises par route, dite CMR, en énonçant qu’en l’absence de réserves ou de constat contradictoire, le destinataire est réputé avoir reçu la marchandise dans l’état décrit par la lettre de voiture, n’institue qu’une présomption simple de livraison conforme, qui peut être combattue par la preuve contraire, et non une fin de non-recevoir.

En carrousel matière:  Non Matières OASIS:  Contrat de transport de marchandises

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Une décision marocaine de divorce prononcée à l’initiative de l’époux a autorité de chose jugée en France, dès lors que l’épouse a comparu devant le juge marocain, que son conseil a conclu au fond et que cette décision n’a pas été rendue en fraude de ses droits.

En carrousel matière:  Non Matières OASIS:  Autorité de la chose jugée (Procédure civile) Jugement étranger (Procédure civile) Divorce (Jugement)

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Pourvoi c/ Cour d'appel de Paris, pôle 5, ch. 12 des appels correctionnels, 1er mars 2016

Pourvoi c/ Cour d'appel d'Aix en Provence, 1re chambre B, 5 février 2015

Tribunal de grande instance de Mulhouse 23 mars 2016

Thank you, Matthias Storme, for alerting me late last night that judgment was issued in Case C-483/13 KA Finanz AG. The CJEU is asked to clarify the ‘corporate exception’ to the Rome Convention and subsequent Regulation on the law applicable to contractual obligations. The two main questions ask whether the ‘company law’ excepted area includes (a) reorganisations such as mergers and divisions, and (b) in connection with reorganisations, the creditor protection provision in Article 15 of Directive 78/855 concerning mergers of public limited liability companies, and of its successor, Directive 2011/35. I have a little more on the background in previous posting and I expressed my disappointment with Bot AG’s Opinion here.

The Court, like the AG, justifiably rejects a great deal of the questions as inadmissible, mainly due to the secondary law, interpretation of which is sought, not applying ratione temporis, to the facts at issue. It then in essence simply turns to European company law, in particular Directive 2005/56, to settle the issue. Why exhaust oneself with analysis of the corporate exception, if a different piece of EU law exhaustively regulates the issue? At 56 ff

It is stated in Article 2(2)(a) of Directive 2005/56 that a merger by acquisition is an operation whereby one or more companies, on being dissolved without going into liquidation, transfer all their assets and liabilities to another existing company, namely the acquiring company.

As regards the effects of such an operation, it is stated in Article 14(2)(a) of Directive 2005/56 that a cross-border merger brings about, from the date when the merger takes effect, the transfer of all the assets and liabilities of the company being acquired to the acquiring company.A merger by acquisition therefore entails the acquisition by the acquiring company of the company being acquired in its entirety, without extinguishing the obligations that a winding-up would have brought about, and, without novation, has the effect of substituting the acquiring company for the company being acquired as party to all of the contracts concluded by the latter. Consequently, the law which was applicable to those contracts before the merger continues to be applicable after the merger. It follows that EU law must be interpreted as meaning that the law applicable following a cross-border merger by acquisition to the interpretation of a loan contract taken out by the acquired company, such as the loan contracts at issue in the main proceedings, to the performance of the obligations under the contract and to how those obligations are extinguished is the law which was applicable to that contract before the merger.

(here: German law).

I appreciate the narrow set of facts upon which the CJEU holds allows one to distinguish. The spirit of the Court’s judgment in my view must however be what I have advocated for some time. Other than for a narrow set of issues immediately surrounding the very creation, life and death of the merged company, for which lex societatis applies, European private international law upholds lex contractus (often: lex voluntatis: the law so chosen by the parties) for the considerable amount of contractual satellites involving a merger and similar operations. Rome I is fully engaged for these contracts, including its provisions on third party impact of a change in governing law (this is relevant where the parties to the merger, decide to amend applicable law of the inherited contracts).

Geert.

 (Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.5, Chapter 3, Heading 3.2.2 .

In a recent order of 14 September 2015 – 1 BvR 1321/13, the German Federal Constitutional Court (Bundesverfassungsgericht) has held that the right to effective judicial protection (Article 2(1) in conjunction with Article 20(3) of the German constitution) is violated if, in a cross-border case, a court fails to investigate the facts of the case by using possibilities that have good prospects of success, in particular if it does not take into account specific institutionalised facilities and measures of judicial assistance, such as those offered by the European Evidence Regulation, the Hague Evidence Convention and the European Judicial Network in Civil and Commercial Matters. In the case before the Court, a Romanian national had sued a widow of Romanian nationality for a share of the inheritance of her deceased husband based on the assertion that the couple had adopted him. Although it remained controversial whether such an adoption had actually taken place in Romania, the Municipal Court (Amtsgericht) did not request the Romanian adoption files for consultation by way of judicial cooperation. According to the Constitutional Court, the Amtsgericht ought to have considered whether the EU Evidence Regulation or the Hague Evidence Convention permit a German court to request the original case files from another Member State. An English abstract of the decision is available here.

Compétence

Conseil de Prud'hommes d'Arras 30 mars 2016

I shall keep this post short for otherwise it risks developing into a book. In a week which also saw the Panama papers blow a hole in the use of tax havens for individuals, the collapse of the Pfizer Allergan merger may be the beginning of the end for the Irish (and similar) corporate tax Nirvana. The US treasury’s new rules on outgoing corporate mobility mean re-incorporation in Ireland has become an awful lot less attractive.

I realise there are caveats and one may be comparing cheese and chalk. Also, tax lawyers no doubt will have to chew over this, yet: may this not also be the moment for the EC to reconsider similar issues in EU law, kicked off some time back by the Daily Mail case?

Geert.

(Handbook of) European Private International Law 2nd ed 2016 Chapter 7.

GS Media
Rapprochement des législations
Selon l’avocat général Melchior Wathelet, le placement d’un hyperlien renvoyant vers un site qui a publié des photos sans autorisation ne constitue pas en soi une violation du droit d’auteur

La Cour européenne des droits de l’homme confirme sa position, sous l’angle de l’article 8 de la Convention européenne des droits de l’homme (droit au respect de la vie privée et familiale) dans le cadre des pouvoirs d’appréciation des juges en matière de droit à l’image.

En carrousel matière:  Non Matières OASIS:  Droit à l'image

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Dans un arrêt du 23 mars 2016, la grande chambre de la Cour européenne des droits de l’homme (CEDH) apporte des précisions sur les obligations découlant pour les États des articles 2 et 3 de la Convention européenne des droits de l’homme (droit à la vie, interdiction de la torture) dans les affaires d’expulsion.

En carrousel matière:  Non Matières OASIS:  Néant

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The following announcement has been kindly provided by Mihail Buruiana, Senior Lecturer, State University of Moldova.

The Faculty of Law of Moldova State University in Chisinau, Republic of Moldova, will host an international conference dealing with “Recent Developments in Private International Law” on Thursday, 20 October, and Friday, 21 October 2016. Prospective speakers are kindly invited to submit abstracts of not more than 500 words (in Word) addressing any aspect of the Conference theme. The abstracts should include the name(s) and affiliation(s) of the author(s) and should be submitted before Saturday, 10 May 2016. The Programme of the Conference will consist of a mix of plenary sessions and parallel sessions. The topics of the sessions will include, inter alia: Theory of Private International Law; Choice of Law and Choice of Law Clauses; Jurisdiction and Forum Clauses; Natural Persons in Private International Law; Legal Persons in Private International Law; Family (Children and Adults); Succession; Contract; Insolvency; Tort; Recognition and Enforcement; Arbitration. The languages at the Conference will be Romanian and English (with simultaneous translation). Further information is available at the Conference website here.

Diffamation et injure