Droit international général

My review of Kokott AG’s Opinion C-25/18 Brian Andrew Kerr v Pavlo Postnov and Natalia Postnova (Kerr v Postnov(a)) discussed, as did the AG, the application of Brussels I Recast’s Articles 24(1) and (2) exclusive jurisdictional rules, cq the application of Article 7(1) jurisdictional rules on contracts, and applicable law consequences of same. The Court ruled on 8 May.

Coming to the first issue: Article 24(1)  – this is not properly answered by the Court.

I signalled the potential for engineering even in Article 24 cases: particularly here, the prospect of adding an enforcement claim to an otherwise contractual action. At 37-38 the Court deals most succinctly with this issue: ‘in so far as the action which gave rise to the dispute in the main proceedings does not fall within the scope of any of those actions, but is based on the rights of the association of property owners to payment of contributions relating to the maintenance of the communal areas of a building, that action must not be regarded as relating to a contract for a right in rem in immovable property, within the meaning of Article 4(1)(c) of Regulation No 593/2008.’: ‘in so far as’ – ‘dans la mesure où’: the Court would seem to dodge the issues here which the AG did discuss, in particular vis-a-vis the enforcement accessory: that discussion I feel is not over.

Note also the straight parallel which the Court makes between lex contractus under Rome I and Article 24. 

The discussion of Article 24(2) does lead to a clear conclusion: the forum societatis is not engaged, neither therefore is the lex societatis exception in Rome I. The Court follows the AG here, with specific reference to the Lagarde report (at 33-34).

As for Article 7(1) forum contractus: at 27 usual authority going back to Handte assists the Court in its conclusion that ‘even if membership of an association of property owners is prescribed by law, the fact remains that the detailed arrangements for management of the communal areas of the building concerned are, as the case may be, governed by contract and the association is joined through voluntary acquisition of an apartment together with ownership shares of the communal areas of the property, so that an obligation of the co-owners towards the association of owners, such as that at issue in the main proceedings, must be regarded as a legal obligation freely consented to’ (at 27). At 28: ‘the fact that that obligation results exclusively from that act of purchase or derives from that act in conjunction with a decision adopted by the general assembly of the association of the owners of property in that building has no effect on the application of Article 7(1)(a)’.

At 39-40 the Court then swiftly comes to the conclusion of ‘services’ under Article 4(1)(c) Rome I, without much ado at all. The AG had opined that the non-uniform nature of the contributions leads to non-application of the service rule of Article 7(1)b and therefore a resurrection of the classic Tessili formula: the CJEU itself went for the acte clair route.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.6, 2.2.11.1

Contracts for the International Sale of Goods: A Multidisciplinary Perspective is set to be released by Thomson Reuters (Hong Kong) Limited at the end of July 2019. Edited by Dr Poomintr Sooksripaisarnkit, Lecturer in Maritime Law, Australian Maritime College, University of Tasmania, and Dr Sai Ramani Garimella, Senior Assistant Professor, Faculty of Legal Studies, South Asian University, this book has the following unique features:

• On the 30th anniversary of the implementation of the CISG (in the year 2018) and almost the 40th anniversary of the adoption of the text of the CISG (in the year 2020), this title at the right time provides value added content for students and practitioners alike considering CISG and its intersection with public domestic and international law;
• Unique and jurisdictionally relevant thought-leadership content – presents national perspectives;
• Providing fresh critiques on core principles as well as forecasting on potential areas for reform or improvement
• Multi-country author team providing perspectives from across diverse global jurisdictions as well as contributions from members of the Permanent Court of Arbitration (The Hague) and The Secretariat of the United Nations Commission on International Trade Law (UNCITRAL)

Contributors include:

Poomintr Sooksripaisarnkit – Lecturer in Maritime Law, Australian Maritime College, University of Tasmania

Sai Ramani Garimella – Senior Assistant Professor, Faculty of Legal Studies, South Asian University

John Felemegas – Senior Lecturer, Faculty of Law, University of Technology Sydney

King Fung Tsang – Associate Professor, Faculty of Law, The Chinese University of Hong Kong

Daniel Mathew – Assistant Professor, National Law University, Delhi

Lijun (Liz) Zhao – Senior Lecturer, School of Law, Middlesex University

Ernesto Vargas Weil – Assistant Professor for Private Law, University of Chile

Ngoc Bich Du – Dean, Faculty of Law, Open University of Ho Chi Minh City

Julian Bordaçahar – Legal Counsel, The Permanent Court of Arbitration, The Hague

Juan Ignacio Massun – Legal Counsel, The Permanent Court of Arbitration, The Hague

Benjamin Hayward – Senior Lecturer, Department of Business Law and Taxation, Monash Business School, Monash University

Rosmy Joan – Assistant Professor, Faculty of Law, National Law University Jodhpur

Andre Janssen – Chair Professor, Radbound University Nijmegen, The Netherlands

Luca Castellani – Legal Officer, The Secretariat of the United Nations Commission on International Trade Law (UNCITRAL)

Navin G. Ahuja – Doctoral Candidate, City University of Hong Kong

Dharmita Prasad – Assistant Professor, UPES School of Law

Details of the book shall be available soon from the publisher’s website: www.sweetandmaxwell.com.hk

To order:

Tel: +852 2847 2000

Fax: +852 2520 6954

E-mail: legal.hk@thomsonreuters.com

Mailing address: Sweet & Maxwell, Thomson Reuters Hong Kong Ltd, 15/F Cityplaza 3, Taikoo Shing, Hong Kong

Promotion code: CISG2019 – valid on or before 31 July 2019

For more information about the book, you can contact Dr Poomintr Sooksripaisarnkit (poonmintr@icloud.com) or Dr Sai Ramani Garimella (ramani@sau.ac.in)

PROGRAM COORDINATOR:
Prof. Marco Torsello

VENUE:
University of Verona, School of Law, Via C. Montanari 9, Verona (VR), Italy
INSTRUCTORS:
Ronald A. Brand (University of Pittsburgh, School of Law, Pittsburgh, PA, USA)
Tim W. Dornis (Leuphana University, Lüneburg, Germany)
Nevena Jevremovic (IACCM – International Association for Contract and Commercial Management, Bosnia-Herzegovina)
Tyler Ochoa (Santa Clara University, School of Law, Santa Clara, CA, USA)
Marco Torsello (Univ. of Verona, School of Law).

Pennsylvania lawyers participating to the course will obtain Continuing Legal Education (CLE) credits: additional information and registration instructions will be posted on-line at: www.law.pitt.edu/Verona

Dr. Alexia Pato (Senior Research Fellow at the University of Bonn) has authored a book on jurisdiction and cross-border collective redress (Hart Publishing). You may pre-order it online. A discount voucher is available here.

Summary:

Widespread law violations, such as massive data breaches, the use of unfair terms, and financial fraud, may affect numerous victims around the globe. Those violations are on the rise, stimulated by globalisation and digitalisation. Unfortunately, the development of effective procedural vehicles enabling victims to obtain redress is comparatively slow. As a result, a private enforcement gap persists, which can be characterised by a difference between the theoretical possibilities to obtain redress drafted by the legislator and the reality experienced by victims in daily life. Collective redress represents an interesting instrument, which may have the power to fulfil that gap. The US experience regarding the class action is a telling example in that regard. On the other side of the Atlantic, European Member States have adopted collective redress mechanisms, the features of which often differ from their American homologue. As a result, issues regarding their effectiveness have arisen and legal reforms have started in an attempt to solve them.

The adoption of collective redress certainly generates complex legal issues. The present book specifically analyses the allocation of jurisdiction in cross-border collective redress cases, inasmuch as it directly impacts access to justice. To that effect, several collective redress mechanisms, including the Dutch WCAM, the test case procedure, the class action, and the representative model involving intermediaries, are studied (ch 2). Their structure, functioning and goal(s) are explained and a comparative law table containing information on more than 20 collective redress instruments summarises those elements (annex II). The book takes full account of the US law on class actions in order to enrich the comparative law study (ch 1).

Then, difficulties in applying private international law rules on jurisdiction to selected collective redress models are highlighted and analysed. The most relevant case law is examined as well. Notably, the Shell decision issued by the Amsterdam Court of Appeal, the recent CJEU’s ruling in Schrems (C?498/16), and the VW scandal are thoroughly studied. Chapter 3 of the book highlights the current mismatch between European private international law rules on jurisdiction (BIa) on the one hand, and collective redress procedures on the other. As a result, the centralisation of claims protecting either general or collective interests in a unique forum is often difficult – not to say impossible. Besides, significant obstacles, such as costs of proceedings, lack of financing, and language barriers, further deter access to justice. The unprecedented empirical study included in this book confirms that statement (annex III).

In light of this, the EU has presented several policy papers; drafted a Recommendation in 2013; and enacted Article 80 of the General Data Protection Regulation dealing with the representation of data subjects. Besides, the Directive on representative actions is in the pipeline. A comprehensive analysis of those documents is provided in chapter 2 of the book. Although those legislative efforts are welcome, this book contends that EU measures have not satisfactorily lowered barriers to access to justice. Therefore, the creation of a new head of jurisdiction for international collective redress cases is proposed, the content of which is presented in chapter 4 of the book.

A table of contents is available here.

Written by Michele Angelo Lupoi, Civil Procedural Law and European Judicial Cooperation, University of Bologna

The Department of Juridical Sciences of the University of Bologna, Ravenna Campus, has organized a Summer School on Transnational Tort Litigation: Jurisdiction and Remedies, to be held in Ravenna, on July 15-19, 2019.

The Summer School deals with transnational jurisdiction, private international law and remedies available in tort cross-border litigation, with both a theoretical and a practical approach. The Faculty includes experts from US and EU in order to provide a comparative perspective to the participants.

The US perspective will be centered on procedural remedies for mass-torts (class actions) and on the assumption of jurisdiction in transnational toxic tort litigation (e.g. asbestos and tobacco tort disputes). The EU part of the programme will address the Brussels I-bis Regulation as regards jurisdiction in tort claims, and the Rome II Regulation, in relation to the law applicable to transnational tort disputes.

The Summer School is aimed at law students as well as law graduates and lawyers who want to obtain a specialised knowledge in this area of International Civil Procedure.

Deadline for inscriptions: 28 June 2019. Programme and further information can be found here

For those who read Portuguese, here is a round-up of books published in Portugal and Brazil in the last year or so. Abstracts in English hereunder provided when available.

Rui Dias, Pactos de Jurisdição Societários, Almedina, 2018

“This study is dedicated to an analysis, from the point of view of both private international law and company law, of company-law related choice-of-court agreements under Regulation (EU) No. 1215/2012 of the European Parliament and of the Council, of 12 December 2012, on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Ia).

After an introductory framing that emphasizes the intersection of EU private international law applicable to companies and Portuguese national corporate law, we begin by analysing the jurisprudence of the Court of Justice of the European Union in Powell Duffryn, where it has been established that «when the company’s statutes contain a clause conferring jurisdiction, every shareholder is deemed to be aware of that clause and actually to consent to the assignment of jurisdiction for which it provides if the statutes are lodged in a place to which the shareholder may have access, such as the seat of the company, or are contained in a public register».

The European Court’s reasoning raises issues, when confronted with the most common understanding of the choice-of-court agreement as a contract. That justifies an inquiry on the role of consent and agreement in its conclusion, and, in the end, the search for a comprehension of its legal nature, with the Brussels Ia legal framework in mind. By asserting the logical-legal antecedence of private autonomy, as put in motion by the conclusion of a jurisdictional agreement, vis-à-vis a so-called statutory ordinance of competence instituted by a given positive-legal regime situated in time and space, we see advantages in the delineation of a framework that considers illegitimate the allegation of existence and the exercise of a jurisdictional clause, whenever there is not an indispensable minimum of correspondence between the contents of such clause and a person’s consent — be it a realconsent, or rather one that is to her reasonably imputable, given that the person was in the position to be able to know, or ought to know, the content of such clause, included in a contract or statutes that bind her.

With these elements in mind, we undertake an analysis of the conditions of admissibility, validity and effectiveness of a choice-of-court-agreement under Brussels Ia. After referring to the scope of application of such rules, as well as to the general framework regarding the «external» and «internal» limits of the binding effects of such agreements, we draw attention to the particular situation of the extension of such binding effects, beyond a strict understanding of consent, in statutes of companies.

We then tackle some situations of particular uncertainty, where company-legal and conflicts-of-law and conflicts-of-jurisdiction aspects are, more or less inextricably, simultaneously at stake, namely: the law applicable to jurisdiction agreements and the scope of its application (especially regarding the recast version of now Article 25 of Brussels Ia); the relevance of statutes and generally corporate-related regulation; the limitations imposed by the latter to jurisdictional undertakings; the possible safeguards against an abusive invocation or exercise of the jurisdiction agreement; and the need to set and analyse choice-of-court agreements within the framework of rules applicable to agreements related to corporate liability suits — thus crossing the borders of national and European law, and of corporate and jurisdictional law.”

Dulce Lopes, Eficácia, Reconhecimento e Execução de Actos Administrativos Estrangeiros, Almedina, 2018

“The recognition of foreign administrative acts has gained again – after more than a century – a striking importance in doctrinal and legislative terms. In a world were distances are rapidly overcome and new forms of private and public interaction develop, the exercise of sovereignty is reconceptualised.

Now, with more importance and frequency, foreign administrative acts — originally or subsequently – aim at being recognised and executed in/by other States (the receiving, host or destination States, distinct from the issuing or home authorities), raising once again, but in a quite different manner, the challenging questions of extraterritoriality and jurisdiction.

However not always greater attention means better regulation. And this is a field were, unlike what should be expected (or desired), plurality and fragmentation are still the rule and the need for clarification of recognition procedures is crucial.

Indeed, beyond the recognition demands resulting from international and European Union law demands and from a few specific legislative provisions, there is no general framework on recognition and enforcement of foreign administrative acts, nor in what regards their possible effects, neither in what concerns the requirements and procedures from which they can or should be drawn.

Our proposal rests in the identification of three types of foreign administrative acts. While supranational administrative acts,despite their various origins, have an immanent and immediate aptitude to be applied to areas under State influence, transnational administrative actshave as a normal – but not always immediate – characteristic the extension of their effects to States that are under a recognition obligation. Foreign administrative acts in a strict sense, constitute a third category that doesn’t have the same coherence as the former two. In principle, these acts only produce effects within the limits of the issuing State, because they do not have a qualified title to recognition, but this can also be altered.

A relevant part of our efforts was centred in the definition of the substantial and procedural criteria for recognition and enforcement of suchforeign administrative acts, criteria that – varying according to the type of foreign act and respective effects – constitute the basis of a structured, however plural, proposal for recognition.”

Afonso Patrão, Hipoteca e Autonomia Conflitual, Gestlegal, 2018

“Considering statistical data suggesting national compartmentalisation of mortgage markets (land security rights are essential for internal credit but less than 1% of all international credit involves mortgages) and acknowledging the failure of the proposals of building a European mortgage single market (unification of mortgage laws; introduction of Eurohypothec as an additional optional legal regime; securitisation of granted mortgage loans), this text studies the feasibility of introducing party autonomy in mortgage law, allowing the parties to choose the applicable law to this property right.

The choice of law to land security rights is in harmony with the tendency of dépeçage of private international law on property rights and with the purpose of European integration. Provided that adequate precautions are taken, the author aims to show there is no reason for the mandatory application of lex rei sitae to mortgages.” 

Dário Moura Vicente, Direito Internacional Privado – Ensaios, vol. IV, Almedina, 2018

This is a collection of essays published by the Professor of the University of Lisbon, now in its fourth volume.

Luís de Lima Pinheiro, Direito Internacional Privado, Volume III – Tomo I – Competência Internacional, AAFDL, 3rd edition, 2019

A new edition of the first part – on jurisdiction – of Volume III of the handbook on Private International Law by the Professor of the University of Lisbon.

—

André de Carvalho Ramos / Nádia de Araújo (org.), A Conferência da Haia de Direito Internacional Privado e seus Impactos na Sociedade – 125 anos (1893-2018), Arraes Editores, 2018

A collection of essays celebrating the 125thanniversary of the Hague Conference on Private International Law.

Jean Eduardo Nicolau, Direito Internacional Privado do Esporte, Quartier Latin, 2018

A PhD thesis on the Private International Law of Sport.

Mariana Sebalhos Jorge, A Residência Habitual no Direito Internacional Privado, Arraes Editores, 2018

A Masters thesis on the habitual residence connecting factor in Private International Law.

Alexandre Jorge Carneiro da Cunha Filho et al. (coord.), Lei de Introdução às Normas do Direito Brasileiro – Anotada, Volume I,Quartier Latin, 2019

This is an article-by-article commentary to the Brazilian law containing rules on Private International Law.

Gustavo Ferraz de Campos Monaco, Conflitos de Leis no Espaço e Lacunas (Inter)Sistêmicas, Quartier Latin, 2019

Thesis recently presented by the Author to achieve full professorship at the University of São Paulo.

Written by Gustavo Becker*  

During the 26th Willem C. Vis Moot, Dr. Gustavo Moser, counsel at the London Court of International Arbitration and Ph.D. in international commercial law from the University of Basel, coordinated the organization of a seminar regarding choice of law in international contracts and international arbitration. The seminar’s topics revolved around Dr. Moser’s recent book Rethinking Choice of Law in Cross-Border Sales (Eleven, 2018) which has been globally recognized as one of the most useful books for international commercial lawyers.

On April 15th, taking place at Hotel Regina, in Vienna, the afternoon seminar involved a panel organized and moderated by Dr. Moser and composed of Prof. Ingeborg Schwenzer, Prof. Petra Butler, Prof. Andrea Bjorklund, and Dr. Lisa Spagnolo.The panel addressed three core topics in the current scenario of cross-border sales contracts: Choice of law and Brexit, drafting choice of law clauses, and CISG status and prospects.

The conference started with a video presentation in which Michael Mcllwrath (Baker Hughes, GE), addressed his perspectives on how Brexit might impact decisions from companies regarding choice of law clauses in international contracts, its effects on the recognition of London as the leading seat for dispute resolution, and the position of English law as the most applicable law in international contracts.

In Mr. Mcllwrath’s perspective, in spite of Brexit, London will still remain a significant place for international dispute resolution as it adoptsglobally recognized commercial law principles, is an arbitration friendly state and enjoys a highly praised image as a safe seat for international cases. However, in order to try to predict the impact of Brexit in international dispute resolution, Mr. Mcllwrath collected data released by arbitral institutions and found that in the years leading up to the Brexit vote, London did not grow as a seat of arbitration significantly. Considerable growth nonetheless has been seen outside the traditional centers of international arbitration. Therefore, the big issue involving Brexit, in Mr. Mcllwrath’s view, is the uncertainty that companies will face with the UK’s unsettled political future. For this reason, the revision of contract policies is now likely to be undertaken and the choice of English law in international contracts might be affected.

Prof. Schwenzer pointed out that the whole discussion about Brexit and its effects on international dispute resolution depends primarily on the type of Brexit that will be chosen and the agreements between Europe and Great Britain. In her point of view, one of the main questions is whether the UK will join the Lugano Convention, which would make the enforcement of English court decisions easier in European State-members. Prof. Schwenzer also highlighted that, in terms of choice of law, there will be uncertainty issues regarding the regulations that have been imported from Europe and are now part of the English legal system. The problem might be how these rules will be developed further as the Court of Justice of the European Union will no longer be responsible for interpreting this part of English law.

Furthermore, Prof. Bjorklund stated that, whilst the choice of English law will require more caution after Brexit, the well-recognized security related to arbitration in the UK is likely to continue as long as the New York Convention, the English Arbitration Act, and the arbitration friendly character of English commercial courts will not likely change. However, in the point of view of an international arbitration counsel, certainly, the “risks of arbitrating in the UK” will leave some room for parties to choose arbitration in other places rather than in London or – at least – to start rethinking the classic choice for English-seated arbitration.

Concerning the choice of English law, Prof. Butler reminded the audience of two important regulations which should be analyzed in the context of Brexit: Rome I for deciding which contract law is applicable in international cases, and the Brussels Regulation to define which court is entitled to decide a case and how to enforce and recognize foreign decisions within the EU. According to Prof. Butler, under the first Brexit bill, the statutes signed within the EU regime would still apply. However, subject to confirmation from the English government, the development of these laws might no longer be applicable.

Dr. Spagnolo added that whether a country joins an international instrument sometimes has little to do with rational factors and are often “emotional”. In this sense, one of the arguments that the political environment seems to emphasize nowadays under the notion of nationalism is the maintenance of sovereignty. According to Dr. Spagnolo, this is a dangerous consideration to be emphasized in an environment that relies on commercial sense and needs basic guarantees of international harmonization, such as the enforcement of foreign awards or the application of a uniform law.

Regarding the topic “drafting choice of law clauses”, Mr. Mcllwrath highlighted the “emotional” features involving the choice of law. In his opinion, as Dr. Moser has demonstrated in his book, many choices of law decisions are driven by factors such as how many times a specific law had already been applied by a law firm or what law the attorneys involved in that contract were already familiar with. Considering this, Mr. Mcllwrath understands that Brexit can make lawyers rethink the application of English law, even though this might be dependant upon whether financial institutions and companies currently based in London will or will not move away from the UK.

Prof. Schwenzer highlighted that what Dr. Moser has found in his research regarding the emotional aspect of the choice of law is a proving fact of what she has experienced in practice: choice of law decisions are mostly emotionally charged and seldom rational. One example is that even though Swiss law is arguably the second most chosen law in international contracts, in Prof. Schwenzer’s view, Swiss law is not predictable: in core areas of contract law, such as limitation of liability, Swiss law is not advantageous for commercial contracts in her opinion. Prof. Schwenzer added that this shows that lawyers seldom analyze the pros and cons of laws deeply before applying them in international commercial contracts.

Concluding the panel discussions, Dr. Moser brought up the topic “CISG status and prospects”.  While discussing this matter, all the panelists agreed upon the urgent need of global initiatives to increase awareness and improve knowledge of the CISG for both young lawyers who are sitting for the bar exam, and for judges who will face international commercial cases and might not be familiar with the CISG or even prepared to apply its set of provisions.

*With contributions from Gustavo Moser

In January 2017 I reported that Ms Kiobel, following failure to convince the USSC of jurisdiction under the Alien Tort Statute, subsequently initiated proceedings in the Dutch courts to try and sue Shell over the case. (Evidently unrelated to the pursuit of Shell in The Netherlands on environmental grounds – a case which is still pending upon appeal).

The court in first instance at the Hague on 1 May accepted jurisdiction against

• both the mother holding. That was not at all under discussion: this is done via Article 4 Brussels Ia’s domicile rule. Use of Article 33 /34’s forum non conveniens-light mechanism was not suggested;
• two English-incorporated Shell daughters using Article 8(1) of the Brussels I a Regulation; and
• the Nigerian daughter company. Against the Nigerian daughter company, jurisdiction needs to be anchored unto the Dutch mother holding using Article 7 of the Dutch CPR, which is a near carbon copy of Article 8(1) Brussels Ia, whose CJEU authority is followed by Dutch courts in the interpretation of the Dutch residual rule.

Coming so soon after the UKSC in Vedanta the Dutch case has received quite a bit of attention. After first not considering an English translation (not surprisingly; these are the Dutch courts, not a World Service), the clerks have now announced that there will be one, coming up some time soon.

Readers of the blog will expect me to hold the judgment against a clear jurisdictional and conflict of laws lens – in doing so, I fear I have to be a little bit less optimistic than media soundbites following the case.

Jurisdictional issues were in the end dealt with fairly summarily. Most attention went to issues of evidence and discovery, as well as a first review of the substance of the case.

Of note is:

• At 4.3: acceptance by all parties of of Nigerian law as the lex causae; if need be, choice of law by all parties for Nigerian law as the lex causae. Rome II is not applicable ratione temporis. The case has this in common with the Milieudefensie case against Shell. This being a civil law jurisdiction, ius novit curia applies. The court has taken into account parties’ submissions on Nigerian law yet has also conducted its own research. Foreign law is ‘law’ in the civil law; not ‘fact’ as in the common law.
• Claimants suggest that in the events in Ogoniland Shell acted as one organisation and treated the issue as one engaging the Shell concern as a whole (4.7 in fine);
• Claimants purposedly do not wish their claim to be qualified as one engaging piercing of the corporate veil; duty of care; shareholders responsibility; or tort of negligence. Rather, as one engaging the Shell concern directly in a suit on infringement of human rights included in the African Charter on Human and Peoples Rights (ACHPR) and the Nigerian constitution. Tort is only suggested as an alternative should the court not follow the arguments on the basis of human rights (4.8).
• At 4.12 the Court accepts the horizontal direct effect of human rights under Nigerian law, referring for that finding to Nigerian case-law. At 4.19 the Court notes the absence of statutes of limitation for human rights violations under Nigerian law: thus qualifying this as an issue of substance (lex causae), not procedure (lex fori). It revisits the statute of limitation issue at 4.47 ff (holding that under Nigerian law the suits can still be brought).
• At 4.26 the court applies A8(1) BIa and A7 Dutch CPR in globo, given the same lines of interpretation, and finds succinctly that all conditions (Kalfelis; Roche Nederland; The Tatry) are met. It remarks at 4.26 in fine that given the same situation of law and fact, it was predictable for all parties that they might end up being sued in any of their corporate siblings’ domicile.
• At 4.27 the court discussed summary dismissal. As seen in Vedanta, despite Owusu European courts are within their rights to reject the case in summary judgment if there is no ‘real issue’ to be tried against the anchor defendant. However this only applies against non-EU based defendants. Application of Article 8(1) does not allow such summary dismissal for EU-based defendants (see also C-103/05 Reisch Montage). The Hague court reviews summary dismissal only vis-a-vis the Nigerian defendant but finds succinctly that the suit is not prima facie without merit. There is a serious issue to be tried.
• At 4.28 interestingly the Court rejects relevance of the High Court and the Court of Appeal‘s dismissal of jurisdiction in Okpabi, arguing that these courts employed ‘English law’. This underscores the argument I have made elsewhere, that there is a serious blank in the discussion on lex causae for the duty of care or, depending on the case, the piercing issue. The Dutch court here notes without hesitation that the English courts apply lex fori to that test, and so therefore, I am assuming, should they (meaning Dutch law in their case)?
• At 4.29 it looks as if the Court considers some kind of reflexive argument which defendants seem to have made. Namely that the Dutch courts should respect the exclusive jurisdictional head under the Fundamental Rights (Enforcement Procedure) – FREP Rules, for the Federal High Court in cases involving alleged infringement of human rights. However the Dutch court considers this a mere internal jurisdictional distribution rule, which does not hinder the Dutch courts in their assessment of the claims. There is no written or unwritten rule in Dutch private international law which suggests such deference to a Nigerian civil procedure rule.

Importantly, a great deal of attention at 4.30 ff  goes to the debate on the use of documents obtained in US discovery, in the Dutch proceedings. A fair amount of these had to be returned following a confidentiality agreement in the US proceedings. Claimants make recourse to Article 6 ECHR to regain access for use in the Dutch proceedings however the Dutch court curtails much of that. Civil law discovery rules are notoriously more claimant friendly than those of the common law (a comment also made by Marsh CM in Glaxo v Sandoz. It leads to Shell not having to turn over quite a large part of the documents claimants had hoped to use.

At 4.58 ff the Court then turns to the substance of the case for case management reasons, with a view to determining which parts of the claim may be made subject to further proof. It holds in a way which I imagine must have been very disappointing for claimants. Only limited claims (of the Nigerian daughter’s involvement in the bribing of witnesses) will be allowed to continue.

The court held that claims of controlling meddling in the Nigerian court proceedings were not proven with sufficient force for these claims to continue – instead it held that Shell’s policy of silent diplomacy, in line with its business policies, had been consistently carried out.

All in all I would suggest claimants have scored clear points on jurisdiction, minor points on discovery and a disappointing outcome for them on substance. Albeit that the witness bribe leg may still lead to a finding of human rights infringement.

Geert.

(Handbook of) European private international law, second ed. 2016, Chapter 8, Headings 8.3.1.1., 8.3.2.

I tweeted it earlier yet was asked to put a review up on the blog (which also suits my archiving purposes) of ECLI:NL:GHAMS:2019:192 X v Y (I know that does not help much) at the Amsterdam Court of Appeal, 29 January 2019. The case came to me courtesy of Freshields who have review here.

The case illustrates some of the issues involving online alternative dispute resolution, including those manned by artificial intelligence (albeit the latter was not directly at stake here).

Using an online trading platform, X provided three loans to Y, all in bitcoins at an interest rate of 5% per month. To borrow these bitcoins, Y had to agree on the conditions of the online bitcoin-trading platform applicable to the loans. These conditions included the following dispute resolution mechanism clause:

If you fail to pay principal and/or interest on the date on which the loan falls due, you will be considered in default of the Registration Agreement… Should your loan become 90 days past due (“Defaulted”) the loan will be sent to Dhami Law Firm (“Arbitrator”), an independent, international arbitration firm whose awards are recognized internationally under The United Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

I understand that in the event that I want to appear in the arbitration by email to contest the potential issuance of an award in favor of the lenders, I must send a written request to support@btcjam.com and pay a $ 99.00 fee. Such request must be within 7 calendar days from the date of the Notice of Default. The Arbitrator’s decision shall be final and legally binding. In the event that the Arbitrator issues an award in favor of the investor, an investor may enforce that judgment in a court of competent jurisdiction.

The conditions further contained the following arbitration clause:

All claims and disputes arising under or relating to this agreement are to be settled by binding arbitration in the state of California or another location mutually agreeable to the parties. An award of arbitration may be confirmed in a court of competent jurisdiction.

Default ensued, as did ADR, and Y sought enforcement in The Netherlands. The Courts have now refused proprio motu (Y had signalled he had no objection), for the following reasons summarised by Freshfields: First, the court took issue with the circumstance that – in its view – online arbitral proceedings automatically become pending after 90 days. Second, a defendant wishing to defend itself in these arbitral proceedings had been required to write an email within seven days from receiving a notice of default. Third, the arbitral tribunal had failed to inform Y that a dispute was pending against him or of the legal grounds of the action.

At 3.5 is it is clear that the principle of audi alteram partem is the main stumbling block for the Dutch Courts. Ordre public violated. A clear flashpoint for ADR, including of the algorithmic variety.

Geert.

The Centre for European Policy (CEP) in Freiburg (Breisgau) is the European-policy think tank of the German non-profit foundation “Stiftung Ordnungspolitik”. It has just released its policy brief on the Proposal COM(2018) 96 of 12 March 2018 for a Regulation of the European Parliament and of the Council on the law applicable to the third-party effects of assignments of claims. The CEP’s main conclusion reads as follows:

“The general rule, that the applicable law is that of the assignor’s habitual residence, strengthens legal clarity and thus legal certainty. However, it increases transaction costs and complexity. For syndicated loans, an exception to the general rule should be added to avoid the application of various laws. To avoid legal uncertainty, the Regulation must clarify what is meant by the habitual residence ‘at the material time’ and should only allow overriding mandatory provisions of the law of the Member State in which the assignment has to be or has been performed. The Regulation’s rules on conflict of laws overlap with those of other EU directives and regulations. This results in inconsistencies.”

The full text of the policy brief is available here. See also the earlier posts on this topic by Robert Freitag and by Leonhard Hübner.

The Centre for Notary and Registry Studies (CENoR) of the Faculty of Law, University of Coimbra, will host a conference on 6 and 7 June, co-organized with the Spanish Colegio de Registradores de Propiedad, dealing with registration aspects of Regulation (EU) 2016/1103 on matrimonial property regimes.

More information and enrolment here.

On 10 and 11 May 2019, the 2nd Dialogue on International Family Law took place at the University of Marburg (Germany). The dialogue serves as a forum for the exchange between high-level practitioners and academics active in the field of international family law; it is organised on an annual basis by Professors Christine Budzikiewicz (Marburg) and Bettina Heiderhoff (Münster), Dr. Frank Klinkhammer, a judge at the German Federal Supreme Court and an honorary professor in Marburg, and Dr. Kerstin Niethammer-Jürgens, a renowned family lawyer in Potsdam/Berlin. This year’s meeting focused on the well-being of the child in international family law, the pending revision of the Brussels IIbis Regulation and conflict of laws with regard to matrimonial property.

The conference was opened by Professor Rüdiger Ernst, a judge at the Kammergericht (Court of Appeals of Berlin), who described and analysed the various standards regarding the procedure to hear a child in international cases, with a special focus on the current state of play concerning the Brussels IIbis Regulation. The second presentation on the well-being of the child in the procedural law of the EU (the Brussels IIbis and the Maintenance Regulation) was given by Bettina Heiderhoff, who, in light of an intense scrutiny of the case-law, posed the critical question as to whether judges actually give weight to the well-being of the child in determining jurisdiction or whether they merely pay lip-service to this overarching goal. In particular, Heiderhoff focused on the question to which degree concerns for the well-being of children had an influence on determining their habitual residence. The second panel was started by Professor Anatol Dutta (University of Munich), who dealt with issues of lis pendens and annex jurisdiction in international family procedures – apparently, this is another area where more coherence between the various European regulations would be highly desirable. Then, Dr. Andrea Schulz (European Commission) analysed the new system of enforcement of judgments in the framework of the revised Brussels IIbis Regulation, which, by abolishing exequatur, shows a discernible influence of the paradigm shift already achieved by Brussels Ibis. At the moment, the English text is being finalised; it is to be expected that the revised version will be adopted by the Council of Ministers at the end of June 2019.

On the second day of the conference, Professor Dirk Looschelders (University of Düsseldorf) gave a presentation on the substantive scope of the Matrimonial Property Regulation (and the Regulation on Property Aspects of Registered Partnerships). The fact that there is no common European definition of the concept of “marriage” leads to numerous difficulties of characterisation; moreover, European courts will have to develop autonomous criteria to draw the line between matrimonial property regimes and adjacent legal areas (contracts, partnerships) not governed by the Regulation. Subsequently, Dr. Jens Scherpe (University of Cambridge) talked about forum shopping before English courts in matrimonial property cases. He focused on determining jurisdiction, calculating alimony and maintenance under English law and the thorny issue of under which circumstances English courts will accept matrimonial contracts as binding. Finally, Frank Klinkhammer gave a survey on recent case-law of the Federal Supreme Court in cases involving international agreements on surrogacy, in particular regarding the Ukraine. In a recent decision of 20 March 2019 (XII ZB 530/17), the Court had decided that a child who, after being born by a Ukrainian surrogate mother, was then brought to Germany as planned by all parties did not have its first habitual residence in the Ukraine, but in Germany, which, in effect, leads to consequence that the German designated mother has no other option but to adopt the child if she wishes to establish a family relationship. This led to an intense discussion about the principle of recognition and the determination of habitual residence (again). The conference proceedings will be published by Nomos. The next dialogue will take place on 24-25 April 2020 in Münster.

The latest issue of the Zeitschrift für Europäisches Privatrecht (ZEuP 2/2019) features a very interesting article by the former president of the Groupe Européen de Droit International Privé (GEDIP), Christian Kohler, on “Comparative Law in Action at the Court of Justice of the European Union – European Conflict of Laws in Theory and Practice” (p. 337). In this autobiographical essay, Kohler traces his professional career from studying at the Free University of Berlin under the supervision of his academic teacher, the legendary Wilhelm Wengler, to becoming General Director at the European Court of Justice while also being part of European academia as an honorary professor for private international law, European civil procedural law and comparative law at the University of Saarbrücken. In particular, Kohler elucidates the practical working of the CJEU and the very important role that comparative legal research plays in preparing the Court’s rulings. Although, seen from the outside, the influence of comparative considerations is frequently not discernible in the Court’s decisions themselves – which, following the French style in this regard, contain neither footnotes nor lengthy doctrinal discussion –, Kohler vividly describes the enormous amount of work that was put into building a world-class legal library in Luxembourg and the intense use that the Advocates General and their scientific staff make of its resources. A fascinating read – highly recommended!

In the editorial of the same issue (p. 249), Alexandre Biard and our fellow conflictoflaws.net co-editor Xandra Kramer (Erasmus University Rotterdam) give a critical comment on “The EU Directive on Representative Actions for Consumers: a Milestone or Another Missed Opportunity?”. This article intends to contribute to ongoing policy discussions at the EU level by pointing out several loopholes in the current Commission’s proposal. After highlighting a few key elements of the proposed representative action, the authors focus on selected issues. They submit that first, in view of the ever-increasing globalisation of goods and services, a revision of European private international law rules is urgently needed for resolving cross-border mass claims. Secondly, they argue that the Commission’s proposal fails to fully consider new actors and new forms of mass litigation that are now emerging, in particular the rise of mass dispute entrepreneurs who are using online platforms and digital tools to structure and to create mass claims. Thirdly, the authors elaborate that the Commission’s proposal leaves several questions relating to the financing of mass litigation still unanswered.

In addition, the issue contains three case-notes on recent important decisions:

Wolfgang Hau (University of Munich) analyses the decision of CJEU in the case C-467/16, ECLI:EU:C:2017:993 ? Brigitte Schlömp ./. Landratsamt Schwäbisch Hall, in which the Court decided that Articles 27 and 30 of the Lugano Convention must be interpreted as meaning that, in the case of lis pendens, the date on which a mandatory conciliation procedure was lodged before a conciliation authority under Swiss law is the date on which a “court” is deemed to be seized (p. 384).

Anton S. Zimmermann (University of Heidelberg) deals with the ruling of the CJEU in the case C-210/16, ECLI:EU:C:2018:388 – Wirtschaftsakademie Schleswig-Holstein GmbH ./. Unabhängiges Landeszentrum für Datenschutz Schleswig-Holstein, in which the Court decided that European data protection rules must be interpreted as meaning that the concept of “controller” within the meaning of those provisions encompasses the administrator of a fan page hosted on a social network. In addition, the Court gave further guidance on the applicability of European data protection rules to international cases (p. 395).

Finally, Kasper Steensgaard (University of Aarhus) comments on a judgment of the Danish Supreme Court of 6 December 2016, case no. 15/2014 (p. 407). In this judgment, the Danish Supreme Court reaffirmed an interpretation of § 2a of the Danish Law on salaried employees (LSE) that the CJEU had found to be precluded by EU law. Whereas the CJEU had instructed the Danish Supreme Court to either change the interpretation or to disapply the provision as barred by the general principle of non-discrimination on grounds of age, the Danish judges found it impossible to change the interpretation, and the majority decided to apply the controversial understanding of § 2a LSE, despite the CJEU’s ruling to the contrary.

For the further content of the same issue of the ZEuP, see last week’s selection of other no less interesting articles here.

In [2019] EWHC 1095 (Ch) Media Saturn Holding v Toshiba et al, Barling J is concerned with stand-alone damages suits following the European Commission decision in COMP/39437 – TV and Monitor Tubes. None of the Defendants was an addressee of the Decision (some of their parent companies were). The claims are, therefore, “standalone” rather than “follow-on” actions, and the Decision is not binding on the court so far as the claims against the Defendants are concerned, as it would have been had the Defendants been addressees. Nevertheless, Claimants place considerable reliance upon the evidential effect of the Decision.

Claims are strike out and summary judgment application, intertwined with challenges to jurisdiction. These essentially relate to there being no arguable claim against the “anchor” defendants, particularly Toshiba Information Systems UK ltd – TIS.

At 114: Claimants refute the suggestion that the claim has been brought against TIS on a speculative basis in the hope that something may turn up on disclosure and/or simply to provide an anchor defendant for jurisdictional purposes. They point to the Commission’s finding, at Recital 595, that the cartel was implemented in the EEA through sales of cartelised CPTs that had been integrated into the finished products.

The substantive law issue of implementation of the cartel therefore is brought in not just to argue (or refute) summary dismissal, but also to shore (or reject) the jurisdictional claim under Article 8(1) Brussels 1a.

Barling J establishes as common ground (at 90) that ‘as a matter of law an entity can infringe Article 101(1) TFEU and Article 53 EEA if it participates in relevant cartel activity, in the sense of being a party to an agreement or concerted practice which falls within that Article, or if it knowingly implements a cartel to which it may not have been a party in that sense. [counsel for defendants] submitted that there is no arguable case that TIS had the requisite knowledge. However, what is sufficient knowledge for this purpose is not common ground’.

At 300 ff the most recent CJEU authority is discussed: C-724/17 Vantaan kaupunki v Skanska of March 2019.

This leads to a relevant discussion on ‘implementation’ of the cartel, which mutatis mutandis is also relevant to Article 7(2) (locus delicti commissi). At 117-118:

‘TIS [similar arguments are discussed viz other defendants, GAVC] was involved in activities which were important to the operation of the cartel from the Toshiba perspective. These included the manufacture of CTVs using the cartelised product acquired from an associated company which itself was one of the established cartelists, and the onward sale of the transformed product. TIS also had direct commercial dealings with the Claimants relating to bonuses on sales of, inter alia, the transformed products. In my judgment there is an arguable case that those activities amounted to the actus reus of participation in and/or implementation of the cartel. The available material is sufficient to preclude the summary disposal of that issue.’ 

At 139 ff much CJEU and national authority is discussed, viz a variety of the defendants, on the issue of ‘implementation’ for summary dismissal on substantive grounds, a discussion which then at 259 ff is applied to the jurisdiction issue. Reference is made to Brownlie v Four Seasons, to C-103/05 Reisch Montage and of course to C-352/13 CDC. At 273 Barling J distinguishes excellently in my view between predictability as part of the DNA of CJEU Brussels Ia case-law on the one hand, and its treatment (and rejection) as a stand-alone criterion on the other hand:

‘[argument of counsel] is in danger of treating the statement of the CJEU in Reisch Montage as adding a free-standing and distinct criterion of foreseeability to the preconditions of application expressly set out in Article 8(1). If that criterion were to be applied generally, and without reference to those express pre-conditions, there would be a risk of the EU law principle of legal certainty being compromised, instead of respected as Reisch Montage expressly requires. That case states that the special rule in Article 8(1) must be interpreted so as to ensure legal certainty. The special rule’s express precondition is that “the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments…” Therefore, by virtue of Reisch Montage, it is those words that must be interpreted strictly so as to respect legal certainty and thereby ensure foreseeability. In other words, foreseeability is inextricably linked to the closeness of the connection between the two sets of claims, and the criterion will be satisfied if a sufficiently close connection of the kind described in Article 8(1) exists.’

And at 276

‘It is correct that the anchor defendants were not addressees of the Decision and that there were no UK addressees. However, there is no reason why this should be significant. Article 8(1) is capable of applying in a competition claim regardless of whether a Commission infringement decision exists. What matters is that there is a claim that the anchor defendant is guilty of an infringement, and that the case against the non-anchor defendant is sufficiently “closely connected” to that claim within the meaning and for the purposes of Article 8(1). The fact that neither entity is an addressee of a Commission decision (if there is one) and that neither is the subject of any other regulatory process or civil claim relating to the cartel, is, if not immaterial, then of marginal relevance.’

For all anchor defendants the conclusion is that there is an arguable claim that they participated in and/or knowingly implemented the cartel. That strongly militates against the sole purpose of the (two sets of) proceedings being to oust the jurisdiction of the other EU courts. No abuse has occurred.

At 316 a final postscript is added suggesting summarily that the Supreme Court’s Vedanta might have an impact on the ‘abuse’ issue. The judgment concerned inter alia an alleged abuse of EU law in the context of the predecessor provision to Article 8(1). The Court gave consideration to the test for the “sole purpose” issue. At 317: Barling J: ‘I can see no basis on which my conclusions in that regard are affected by this decision.’

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.12.1.

Thank you to everyone who responded to the call for paper. For those who were not yet ready, the deadline has been extended to May 17.

This year’s Forum Conveniens Annual Lecture at the University of Edinburgh will be held on Wednesday, 29 May 2019, 5.30 – 7 pm. The speaker is Prof. Marta Pertegás Sender, Maastricht University/ University of Antwerp , on the topic: “A New Judgments Convention in Times of Decaying Multilateralism?”.

The venue is Raeburn Room, Old College, South Bridge, Edinburgh, EH8 9YL.

The event is free but registration is required at https://forumconveniens2019.eventbrite.co.uk

The Mexican Academy of Private International and Comparative Law (AMEDIP) will be holding its XLII Seminar entitled “Towards an International Judicial Law ” at the Escuela Judicial del Estado de México in Toluca (Mexico) from 13 to 15 November 2019.

The seminar will focus on the draft National Code of Civil and Family Procedure and the draft National Law on Private International Law. The latter is an initiative of AMEDIP and has been drafted by professors Dr. Leonel Pereznieto Castro, Dr. Jorge Alberto Silva and Lic. Virginia Aguilar. These are two significant pieces of legislation and the seminar will analise how they would interact if they were passed by the Mexican Congress.

Potential speakers are invited to submit a paper in Spanish, English or Portuguese by 5 July 2019. Papers must comply with the criteria established by AMEDIP and will be evaluated accordingly. Selected speakers will be required to give their presentations preferably in Spanish as there will be no interpretation services but some exceptions may be made by the organisers upon request.

The final programme of the seminar will be made available at the end of October.

There is a registration fee of 300 Mexican pesos (approx. 14 Euros) for students and 800 Mexican pesos (approx. 37 Euros) for the general public. For speakers, the organisers will provide transportation from Mexico City and will cover hotel costs in Toluca.

For more detailed information (incl. convocation), see www.amedip.org.   Any queries, as well as registration requests, may be directed to asistencia@amedip.org.

Many thanks to the staff at Leuven’s law library for writing up six extremely useful Google ‘hacks’ for legal research, which I am pleased to post as a guest blog.

As law librarians of KU Leuven, we help students and professionals with their research on a daily basis. A big part of research is – of course – Google, but for some topics and broad searches, Google will come up with 2 million relevant results, making it hard to see the forest for the trees. These six hacks will help you Google more efficiently and find what you’re looking for quicker.

The most commonly known hack – but also one of the most useful ones to alleviate research frustration – is the ‘search within a site’ hack. By typing site:[the website you want to search in] before or after your keywords, you will only get results from within that particular site. This is especially useful for websites with limited or difficult native search tools.

As for our second hack, we would like to remind you of the wildcard: *. Using the asterisk to find missing words is useful if you would like to look up a quote but do not remember the exact wording. The wildcard has another great use: you can easily include words in two different spellings in your search results by searching, for example, organi*ations.

Another way to look up quotes, this time if you do have the exact wording and are trying to find out the source, is by putting your words between quotation marks. This hack will make sure you only get results that quote the exact phrase you’re searching.

Our fourth Google hack is one to help you filter out particular words. By using the – or hyphen symbol directly in front of said word, you will get results that do not include it. The hyphen symbol is essentially the same as the Boolean “NOT”.

Let’s say you know a specific file is available online, but your basic keyword search does not turn it up? To solve this problem, use our fifth hack: the filtype:[filetype you’re looking for, eg. doc] string in combination with your keywords.

Last but not least, our final hack will make it easier to search for different aspects of law from a specific country. By using the site:[country code] string, you only turn up results with URL’s that have the specific country code you are looking for as a domain extension. This works, for example, to help you search more efficiently for fields of law in the Netherlands vs Belgium.

These six hacks are easy tricks to level up your research skills and make sure you do not spend as much time combing through pages of Google results. There is definitely more where this came from! For specific questions, involving Google or not, the librarians at the KU Leuven Libraries Law are always at your service.

(These hacks were originally posted in the context of a “Google hacks week” on the KU Leuven Libraries Law’s different social media platforms: Twitter, Instagram and Facebook.)

The latest issue of ZEuP has just been released. It features the following articles:

Christoph Teichmann/Andrea Götz: Metamorphosen des Europäischen Gesellschaftsrechts: SUP, Company Law Package und SPE 2.0

So far, European initiatives aimed at facilitating the regulatory framework for limited-liability companies, such as the SPE-Regulation and the SUP-Directive, have failed. Their failure, however, has fostered a deeper understanding of the regulatory issues. The authors illustrate this achievement by analysing the long and winding road of the SUP proposal. It paved the way for the “Company Law Package” (regarding digitalization) and it may even contribute to an updated SPE version (“SPE 2.0”).

Christian Schmitt/Julia Bhatti/Christian Storck: Die neue europäische Prospekt-Verordnung – ein großer Wurf?

The new EU Prospectus Regulation attempts at solving the conflict between investor protection and the opening of the capital market. It is an attempt to provide investors with clearer prospectus information, while making access to the capital markets easier for companies. However, new requirements will also create additional liability risks. The overall picture shows that although the Regulation does not represent a revolution, it does offer potential for an evolution of the EU prospectus regime.

John Bowers/ACL Davies/Ruth Dukes/Mark Freedland/Birke Häcker: Sir Otto Kahn-Freund QC (1900–1979): A Retrospective

The present contribution contains the presentations delivered at a symposium held in honour of Sir Otto Kahn-Freund QC at the University of Oxford. Kahn-Freund was a German labour lawyer from a Jewish family who emigrated to the United Kingdom in 1933. He became a founding father of modern British labour law and held professorships at the London School of Economics and the University of Oxford. 2019 marks the fortieth anniversary of his death.

Rosa Miquel Sala: Das Sechste Buch des katalanischen Zivilgesetzbuches: neues Kaufrecht unter europäischem Einfluss

The Sixth Book of the Catalan Civil Code has been in force since the 1st of January 2018, a decision of the Spanish Constitutional Court is pending. The new Book contains an exhaustive regulation of sales contracts following the European models. A modernisation of the law of obligations in the Spanish Civil Code taking into consideration the existing projects and maybe also the new Catalan rules should follow. Equally urgent is an amendment of the rules on intra-state conflicts of laws.

As noted, I have come up for some air after a few hectic weeks – next case to report on is [2019] EWHC 879 (Comm) Ramona v Reliantco, held 12 April. (A similar case is pending with the CJEU against Reliantco as Case C-500/18).

Defendant (‘Reliantco’) is a company incorporated in Cyprus offering financial products and services through an online trading platform under the ‘UFX’ trade name. Claimant, Ms Ang, is an individual of substantial means who invested in Bitcoin futures, on a leveraged basis, through the UFX platform. She claims, essentially and primarily, that Reliantco wrongfully blocked and terminated her UFX account and should compensate her for the loss of her open Bitcoin positions, or at a minimum should refund her cash value invested. She also makes claims for relief in respect of what she says have been breaches of data protection obligations owed by Reliantco in connection with her UFX account.

The judgment does not concern the merits of Ms Ang’s claims but rather an application by Reliantco challenging jurisdiction. Reliantco contends that Ms Ang is bound by its standard terms and conditions, clause 27.1 of which provides that the courts of Cyprus are to have exclusive jurisdiction over “all disputes and controversies arising out of or in connection with” her customer agreement. Reliantco therefore relies on Article 25 Brussels Ia.

Ms Ang says that clause 27.1 is ineffective to require her to bring her claim in Cyprus, either because she is a consumer within Section 4 of Brussels (Recast) or because clause 27.1 was not incorporated into her UFX customer agreement with Reliantco in such a way as to satisfy the requirements of Article 25. Ms Ang says, in the alternative, that her data protection claims may be brought here notwithstanding Article 25 Brussels Ia even if Article 25 applies to her primary substantive claims.

All in all a nice set of jurisdictional issues and no surprise to have prof Jonathan Harris QC involved as counsel.

At all times material to her claim, Ms Ang was not employed or earning a living in any self-employed trade or profession (unless, which is contentious between the parties and considered below, her activity as a customer of Reliantco via the UFX platform is itself to be so classified). Ms Ang worked in money markets for two months as a trainee, observing US$/DM currency swaps. Other than that, she has no professional currency trading or money market experience (again, that is, unless her use of the UFX platform to invest in Bitcoin futures itself counts as such).

At 9, s little bit of Bitcoin drame enters the scene: Ms Ang’s husband, Craig Wright, is a computer scientist with cybersecurity and blockchain expertise who works as Chief Scientist for nChain Ltd, a blockchain technology company with a corporate vision “to transform how the world conducts all transactions – using the blockchain’s distributed, decentralised ledger that chronologically records transactions in an immutable way“. As a researcher, he publishes prolifically and has developed innovations for which patent protection has been sought. He is the same Craig Wright who has identified himself publicly as being ‘Satoshi Nakamoto’, the online pseudonym associated with the inventor (or a co-inventor) of Bitcoin. Baker J holds that he need not consider whether that claim is true, and on the evidence for this application I would not be in any position to do so.

Was Ms Ang a ‘consumer’? At 52 ff the arguments of Reliantco are summarised; at 55 ff those of Ms Ang.

CJEU precedent discussed by Baker J is C-89/91 Shearson; C-269/95 Benincasa; C-464/01 Gruber; C-498/16 Schrems; and the pending cases C‑208/18 Petruchová [I reviewed the AG’s Opinion (issued a day before the High Court’s judgment) yesterday] and C-500/18 Reliantco Investments and Reliantco Investments Limassol Sucursala Bucureşti.

Baker J concludes at 34 ‘the ECJ/CJEU has not decided whether contracts entered into by a wealthy private individual for the purpose of investing her wealth, or particular types of such contract, are not (or can never be) consumer contracts.’

Reference is then made to English precedent along the very lines of the precedent dismissed by Tanchev AG in Petruchová: including AMT Futures v Marzillier, and at 35 ff Standard Bank London Ltd v Apostolakis both through the English and the Greek courts – with differing results. At 44: ‘the disagreement between the English and Greek decisions in Apostolakis turns upon and is constituted by a difference of view as to whether investing private wealth for gain, if it takes the form of buying and selling foreign currency, is by nature a business activity so that an individual investing their wealth in that way cannot when doing so be a ‘consumer’ under Brussels (Recast). Longmore J thought there was no such proposition of law; the Greek court took the contrary view.’ German case-law is also discussed.

At 63 Baker J comes to the core of his reasoning: ‘In my judgment, the investment by a private individual of her personal surplus wealth (i.e. surplus to her immediate needs), in the hope of generating good returns (whether in the form of income on capital, capital growth, or a mix of the two), is not a business activity, generally speaking. It is a private consumption need, in the sense I believe intended by the ECJ in Benincasa, to invest such wealth with such an aim, i.e. that is an ‘end user’ purpose for a private individual and is not exclusively a business activity. That means, as was also Popplewell J’s conclusion in AMT v Marzillier, that it will be a fact-specific issue in any given case whether a particular individual was indeed contracting as a private individual to satisfy that need, i.e. as a consumer, or was doing so for the purpose of an investment business of hers (existing or planned).’

And at 65 in fine: the ‘question of purpose is the question to be asked, and it must be considered upon all of the evidence available to the court and not by reference to any one part of that evidence in isolation.’

At 68 he concludes ‘the purpose of her contract with Reliantco therefore was outside any business of hers’.

Baker J notes that he was not asked to defer any decision in C‑208/18 Petruchová. I believe it would have been of help to determine the issue before him. Tanchev AG (as noted, in an Opinion not available to Baker J at the time of his drafting his judgment) suggests that ‘to determine whether a person must be regarded as a consumer, reference must be made to the nature and objective of the contract, not to the subjective situation of the person concerned.’ 

Obiter, he then reviews Article 25, where CJEU authority discussed is ia Colzanni and Cars on the Web. Ms Ang contended that she was not able to access the standard terms web page at the time she opened her account, and therefore clause 27.1 did not comply with Article 25 B1a. At 78 extensive technical detail is discussed and at 80 Baker J finds that the Cars on the Web criterion of accessibility and durability were met; and at 81 that in any case, the current issue is not one of a click-wrap agreement for a signed hard copy of the GTCs with choice of court in it, had also been sent.

Equally obiter, at 83 ff Baker J summarily discussed the GDPR jurisdictional arguments which would have been more relevant had he not accepted jurisdiction under the consumer title. The brief discussion entirely fulfills my summer 2018 prediciton here: Article 79 GDPR will create a lot of issues at the level of jurisdiction.

A very relevant case.

Geert.

(Handbook of) EU private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.