Droit international général

(Only) last week, the government of the Netherlands – the depositary of the Convention – has informed the Permanent Bureau of the Hague Conference on Private International Law that Montenegro ratified the 2005 Hague Choice of Court Convention on 18 April 2018, with the Convention entering into force for Montenegro on 1 August 2018. This brings the number of Contracting Parties to 32 (the EU, all member states (since 30 May 2018 including Denmark), Mexico, Singapore, and Montenegro), with three others (China, Ukraine, and the United States) having signed but not ratified the Convention.

Pursuant to its Articles 1(1), 3(a), and 16(1), exclusive choice-of-court agreements designating Montenegro concluded after 1 August 2018 must be given effect under the Convention by all Contracting States (except Denmark, for which it only enters into force on 1 September 2018). Montenegro must give the same effect to all such agreements designating other Contracting States as long as they have been concluded after the Convention entered into force for the designated state (EU and Mexico: 1 October 2015; Singapore: 1 October 2016; Denmark: 1 September 2018).

The Convention has repeatedly been mentioned as an option for the UK to maintain a minimum of cooperation in the area of civil justice with the EU, should a more comprehensive agreement not be reached (see Dickinson ZEuP 2017, 539, 560–62; Rühl (2018) 67 ICLQ 127–28; Sonnentag, Die Konsequenzen des Brexits (Mohr 2017), 89–91). It should be noted, though, that even if the UK ratified the Convention the very day of its withdrawal from the EU on 29 March 2019, it would only enter into force three months later, on 1 July 2019 (see Art 31(1)).

One can say many things about climate change litigation by individuals. (See my earlier piece on the Dutch Urgenda case). Many argue that the separation of powers suggest that governments, not judges, should be making climate policy. Or that international environmental law lacks the type of direct effect potentially required for it to be validly invoked by citisens. Others point to the duty of care of Governments; to binding – even if fluffy – climate change obligations taken on since at least the 1990s, and to the utter lack of progress following more than 25 years of international climate change law.

It is therefore no surprise to see that this type of litigation has now also reached the European Court of Justice: the text of the application is here, see also brief legal (by Olivia Featherstone) and Guardian background.

Like cases before it, colleagues shy of preparation materials for an international environmental law course, with comparative EU law thrown in, can use the case to hinge an entire course on.

As Olivia reports, the legal principles involved are the following:

The claimants state that EU emissions leading to climate change are contrary to:

• The principle of equality (Articles 20 and 21, EU Charter)
• The principle of sustainable development (Article 3 TEU, Article 11 TFEU)
• Article 37 EU Charter
• Article 3 UNFCCC
• The no harm principle in international law
• Article 191 ff TFEU (the EU’s environmental policy

One to watch.

Geert.

EU Environmental Law, with Leonie Reins, Edward Elgar, 1st ed. 2017, part I Chapter 2 in particular.

By the Swiss Association SVIR/SSDI (“Schweizerische Vereinigung für Internationales Recht – Société suisse de droit international“)

The Swiss Association SVIR/SSDI offers since this year a 3,000 CHF grant to support researchers who wish to complete an internship with an international organisation. For the year 2018/19, the award will support a post-graduate student or graduate of a Swiss Law School to undertake a (4- to) 6-month internship at the Permanent Bureau of the Hague Conference on Private International Law (HCCH) by providing a financial contribution to cover the costs of travel to the Netherlands and a contribution towards living expenses.

Applications should be submitted via the SVIR Grant website no later than Friday 31 August 2018. The internship at the Permanent Bureau will commence as of mid-January 2019.

For further details, please refer to the SVIR Grant website at http://www.svir-ssdi.ch/de/svir-preise/svir-grant/ (click “Ausschreibung”, description in English).

Thank you Pawel Sikora for flagging some time back, and subsequently analysing in detail (p.221 onwards) the decisions of the Polish Courts particularly at Reszow, on whether  arbitrated claims can be secured with a European account preservation order under Regulation 655/2014: not something I recall having been discussed elsewhere before. Article 2(2)(e) of the regulation explicitly states that “it does not apply to arbitration”: Brussels I- aficionados will be familiar with the expression.

The Courts discussed C-391/95 Van Uden in particular, with the Rzeszow Appellate Court holding that an EAPO may be granted for arbitrated claims. Using Van Uden language, in the Court’s view provisional measures such as freezing orders (which must be ordered by the courts in ordinary, not the arbitral panels) are not in principle ancillary to arbitration proceedings, but rather they are ordered in parallel to such proceedings and intended as measures of support.

Some might read in the judgment further encouragement for the EU to consider drafting an EU arbitration Regulation.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Heading 2.2.2.10.2.

The proceedings of the conference Crisi transfrontaliera di impresa: orizzonti internazionali ed europei, held in Rome on 3 and 4 November 2017 at the LUISS University (advertised here on this blog) have recently been published, edited by Antonio Leandro, Giorgio Meo and Antonio Nuzzo.

Authors include experts on insolvency, cross-border insolvency and private international law. The contributions – some in Italian, others in English – address international and European policies on business crisis and failure, the innovations brought about by Regulation (EU) 2015/848 and the interplay of that instrument with other European texts relating to judicial cooperation in civil matters.

The book also discusses the challenges faced by the on-going reform of insolvency law in Italy, in light of regional and international developments.

The table of contents is available here.

Reminiscent of the decision in Yukos v Tomskneft, which concerned recognition of an arbitral award in Ireland even though there were no relevant assets to exercise enforcement against, the Irish Court of Appeal earlier this year in [2018] IECA 46 Albaniabeg v Enel upheld [2016] IEHC 139 Albaniabeg Ambient Sh.p.k. -v- Enel S.p.A. & Anor . (See my tweet below at the time – the case got stuck in my blog queue).

Thank you to Julie Murphy-O’Connor, and Gearóid Carey for flagging the case earlier in the year. The High Court had refused to grant plaintiff, Albaniabeg, liberty to serve out of the jurisdiction to seek to enforce a judgment of an Albanian court in Ireland against the two defendants, ENEL S.p.A. and ENEL Power S.p.A. (“ENEL”). The judgment therefore is ex-EU.

Enforcement proceedings were commenced in New York, The Netherlands, Luxembourg, France and Ireland in relation to the Judgment.  [I have not been able to locate outcome in those cases]. Notably no enforcement proceedings were brought in Italy. Presumably plaintiff’s motif is to obtain enforcement in one Member State, to ease the enforcement paths in other Member States (including Italy).

McDermott J at the High Court refused the application on the basis that the defendants had no assets within the jurisdiction and were not likely to have such assets in the near future. As the judge concluded that the plaintiff did not stand to gain any practical benefits if enforcement proceedings were to be commenced within this jurisdiction, he refused to grant them leave to serve such proceedings out of the jurisdiction on the defendants.

Hogan J at the Court of Appeal upheld. At 59 he notes ‘I should state in passing that it was not suggested that if an Irish court were to grant an order providing for the recognition or enforcement under own rules of private international law of the Albanian judgment, this then would be a “judgment” for the purposes of Article 2(a) of the Brussels Regulation (recast) which could then be enforced in other Member States under the simplified enforcement procedure provided for by Chapter III of that Regulation. As this point was not argued before us, it is not necessary to express any view on it.‘

In my Handbook I suggest such order is not a ‘judgment’ within the meaning of the Brussels I Recast Regulation.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.1.1.

Enforcement of an ex-EU judgment. Brussels I Recast does not apply. Had the Irish Court recognised: would that judgment be a judgment under the Recast?
Irish Court of Appeal Decision on Enforcement of Foreign Judgment https://t.co/nL3tSUs3It @MathesonLaw

— Geert Van Calster (@GAVClaw) April 3, 2018

It doesn’t happen too often that a Member State refuses enforcement judgment rendered in another Member State for violation of the ordre public. But in a decision published yesterday exactly this happened: The German Supreme Court (Bundesgerichtshof – BGH) refused to recognize and enforce a Polish judgment under the Brussels I Regulation (before the recast) arguing that enforcement would violate the German public policy, notable freedom of speech and freedom of the press as embodied in the German Constitution. In so doing the highest German court adds to the already difficult debate about atrocities committed by Germans in Poland during WW II.

The facts of the case were as follows:

In 2013, the ZDF (Zweites Deutsches Fernsehen) one of Germany’s main public-service television broadcaster announced the broadcasting of documentary about the liberation of the concentration camps Ohrdruf, Buchenwald and Dachau. In the announcement, the camps Majdanek and Auschwitz were described as “Polish extermination camps”. Following a complaint by the Embassy of the Republic of Poland in Berlin, the defendant changed the text of the announcement to “German extermination camps on Polish territory”. At the same time, the applicant, a Polish citizen and former prisoner of the Auschwitz-Birkenau and Flossenbürg concentration camps, complained to the ZDF claiming that his personal rights had been violated and demanded, among other things, the publication of an apology.

In 2013, the ZDF apologized to the applicant in two letters and expressed its regret. In spring 2016 it also published a correction message expressing its regret for the “careless, false and erroneous wording” and apologising to all people whose feelings had been hurt as a result. At the end of 2016, on the basis of an action he had brought in Poland in 2014, the applicant obtained a second instance judgment of the Cracow Court of Appeal requiring the ZDF to publish an apology on the home page of its website (not just anywhere on the website) for a period of one month expressing its regrets that the announcement from 2013 contained “incorrect wording distorting the history of the Polish people”. The ZDF published the required text of the judgment on its home page from December 2016 to January 2017, however, only via a link. The applicant considered this publication to be inadequate and, therefore, sought to have the Polish judgment enforced in Germany.

The Regional Court Mainz as well as the Court of Appeal Koblenz declared the judgment enforceable under the Brussels I Regulation (Reg. 44/2001). The German Federal Supreme Court, however, disagreed. Referring to Article 45 Brussels I Regulation, the Court held that enforcement of the judgment would result in a violation of the German ordre public because the exercise of state power to publish the text of the judgment prepared by the Cracow Court of Appeal would clearly violate the defendant’s right to freedom of speech and freedom of press as embodied in Article 5(1) of the German Constitution (Grundgesetz – GG) as well as the constitutional principle of proportionality.

The Court clarified that the dispute at hand did not concern the defendant’s original announcement – which was incorrect and, therefore, did not enjoy the protection of Article 5(1) GG, but only the requested publication of pre-formulated text. This text – which the defendant, according to the Cracow court, had to make as its own statement – represented an expression of opinion. It required the defendant to regret the use of “incorrect wording distorting the history of the Polish people” and to apologize to the applicant for the violation of his personal rights, in particular his national identity (sense of belonging to the Polish people) and his national dignity. To require the defendant to published a text drafted by someone else as its own opinion would, therefore, violate the defendant’s fundamental rights under Article 5(1) GG. In addition, it would violate the constitutional principle of proportionality. The defendant had corrected the disputed wording “Polish concentration camps”, which had been available for four days, on the day of the objection by the Embassy of the Republic of Poland. Even before the decision of the Court of Appeal, the defendant had personally asked the applicant for an apology in two letters and also published an explanatory correction message with a request for apology addressed to all those concerned.

The official press release is available here. The full German decision can be downloaded here.

I have reported earlier on the action of MNL Capital against the 2015 Belgian Vulture Fund Act (my EN translation here), on which I have a paper here. I then reported on a related action (where MNL were joined by Yukos).

At the end of May the Belgian Constitutional Court, ruling 61/2018, rejected an MNL challenge to the Act, which was based inter alia on an alleged infringement of the Brussels I Recast Regulation: at A.23.2: MNL argued that Belgium cannot across the board reject vulture funds activities (I agree) based on an absolute ordre public argument against them: MNL suggested this entails a one-sided reading of ordre public in favour of foreign entities refusing to honour their debt.

Due in large part to the peculiarities of constitutional review in Belgium, the Court at B.15.4 looked at the argument purely from a non-discrimination point of view: creditors who have obtained a foreign judgment against a State are no better or worse off than those having obtained such ruling from a Belgian court.

In essence therefore the arguments on the basis of EU law are left entirely unanswered.

Geert.

(Handbook of) EU Private International Law, Chapter 2, Heading 2.2.16, Heading 2.2.16.1.4.

Thank you Brick Court and Stewarts, among other, for flagging Vattenfall et al v Prysmian et al in which the High Court dismissed a call for summary judgment on the grounds of lack of jurisdiction.

A classic case of follow-up damages litigation in competition law, here in the high voltage power cables cartel, fines for which were confirmed by the CJEU early July. Core to the case is the application of Article 8(1)’s anchor defendants mechanism. Only two of the defendants are UK incorporated companies – UK subsidiaries of companies that have been found by the European Commission to have infringed EU competition law.

Authority cited includes of course CDC, Roche Nederland and Painer, and Cooper Tyre (sale of the cartelised products can amount to implementation of the cartel). Vattenfall confirms that for the English courts, ‘knowingly implementing’ the cartel has a low threshold.

At 89 ff the Court refers to the pending case of (what I now know to be) C-724/17 Skanska Industrial Solutions e.a.: Finnish Courts are considering the application for cartel damages against parent companies on acquiring cartelist subsidiaries, had dissolved them. Relevance for Vattenfall lies with the issue of knowledge: the Finnish courts wonder what Article 101 TFEU has to say on the degree of knowledge of the cartelist activities, relevant for the liability of the parent company. An application of fraus, or abuse in other words. Elleray DJ however, did not consider the outcome of that reference to be relevant for the case at hand, in its current stage of procedure.

Geert.

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

What are the consequences of Brexit for Private International Law and International Civil Procedure Law? In the very first monograph in German concerning the legal ramifications of Brexit, Michael Sonnentag discusses these questions (Die Konsequenzen des Brexits für das Internationale Privat- und Zivilverfahrensrecht, Mohr Siebeck, 2017).

In the first part, the author analyses the possible options after Brexit: the Norwegian model (leaving the EU, but re-joining the EEA); the Swiss model (tailor-made solutions in all fields); the Turkish model (staying in the Customs Union); the Canadian model (free trade agreement); and finally the no-deal Brexit. It is also pointed out that with the British exit from the EU, not only will the Treaty of the European Union (TEU) and that of the Functioning of the European Union (TFEU) no longer be in force in the UK, but regulations and directives will also follow suit. Only in the exceptional case where directives have been implemented in UK Law by acts of Parliament, shall they stand after Brexit. In contrast, it is shown that, if directives have been implemented by Statutory Instruments, the SI’s will fall with Brexit, because the European Communities Act 1972 as their legal basis will cease to exist.

Concerning Private International Law, the Rome I as well as the Rome II Regulations will end in the UK after Brexit since they are EU-law irrespective of whether they are kept in force as part of British law. Sonnentag goes on to explain how, in the case of a hard Brexit, there will be an impact on the field of International Company Law: British companies will not benefit from freedom of movement anymore. Therefore, a limited company which had been founded in the UK, but moved its headquarters to Germany – whose courts traditionally apply the so-called seat theory – risks not being recognised in this Member State; consequently, the owner or shareholders could be personally liable for the debts of the company.

In the field of International Civil Procedure Law, the Brussels Ia, the Brussels IIa and the Maintenance Regulations will fall in the UK with Brexit. Sonnentag explains that the Brussels Convention will not be revived after Brexit. Furthermore, the Lugano Convention will not be applicable anymore; the UK could join it, but only as a Member State of EFTA or following an invitation by Switzerland, with support from the other Member States. In contrast, the UK could – and should – join the Hague Choice of Court Convention of 2005. Moreover, the effects on exorbitant jurisdiction, jurisdiction agreements and recognition and enforcements of judgments are described in detail. Not only does the monograph outline which rules will be applicable in Germany, but also in the UK.

Sonnentag evidences that many benefits in the fields of Private International Law and International Civil Procedure Law will end with Brexit. Furthermore, it is demonstrated that all possible Brexit scenarios will have drawbacks in comparison to a no-Brexit situation. Therefore, according to the author, the best solution for both sides would be the avoidance of Brexit altogether.

Motor insurance cases in Ireland keep on giving the CJEU opportunity to refine and re-emphasise the lack of horizontal direct effect of Directives. This time it is C-122/17 Smith v Meade.

I apologise to the readers if this sounds gobbledygook: [EU law tutorial] in short: one of the issues of the penetration of EU law into national legal orders, is whether individuals can, against other individuals (hence ‘horizontal’ relations), call upon rights given to them by EU ‘secondary’ law (as opposed to primary law, which mainly consists of the Treaties), particularly in the case of Directives, which unlike Regulations require Member States’ implementing measures.

The CJEU’s long-standing case-law answers this question in the negative (Marshall): mostly because it argues that any other conclusion would cancel out the Treaty-sanctioned difference between Regulations and Directives. The Court does do it utmost to assist individuals seeking to rely on EU law against national law: Directives can be called upon against the Member State and ’emanations from the state’ and the latter notion is stretched as much as possible (that was also the issue in Farrell); national law needs to as much as possible be interpreted to reflect the intention of the EU Directive, even if this requires setting aside long-standing interpretation of national law (Marleasing) – but this does not extend to interpretation contra legem (ex multi: Dominguez);  and if all else fails, the State owes its citisens compensation (Frankovich).  [EU law tutorial ends].

In the case at hand, the CJEU recalls all of the above succinctly, and confirms the absence of an overall possibility of relying on a directive in the sphere of relationships between private persons. EU law does not oblige a national court (question to EU institutional law experts: may a Member State ‘gold plate’ and do so anyway, even if this route might be unavailable to individuals in other Member States) to set aside in a horizontal relationship, national provisions that are incompatible with the Directive, and the contractual provisions between private individuals as a result of that national law.

The Irish Court’s referral to Luxembourg may seem odd given the established principles. Yet the Court of Justice does stretch its own case-law on these issues, ever so slowly while sticking to the Marshall principle. As a result national courts feel encouraged to ask the Court just where the boundaries lie.

Geert.

The answer of the Court in full:

EU law, in particular Article 288 TFEU, must be interpreted as meaning that a national court, hearing a dispute between private persons, which finds that it is unable to interpret the provisions of its national law that are contrary to a provision of a directive that satisfies all the conditions required for it to produce direct effect in a manner that is compatible with that provision, is not obliged, solely on the basis of EU law, to disapply those provisions of national law and a clause to be found, as a consequence of those provisions of national law, in an insurance contract.

In a situation such as that at issue in the main proceedings, a party adversely affected by the incompatibility of national law with EU law or a person subrogated to the rights of that party could however rely on the case-law arising from the judgment of 19 November 1991, Francovich and Others (C‑6/90 and C‑9/90, EU:C:1991:428), in order to obtain from the Member State, if justified, compensation for any loss sustained.

On 25 June 2015, the Insolvency Regulation Recast entered into force, though it (mostly) became applicable as of 26 June 2017. The series Short Studies on Private International Law, published by Asser Press, will publish an issue focusing on the particular features of this Regulation. Therefore, it welcomes any paper concerning the private international law aspects of the Insolvency Regulation Recast. Topics that may be addressed are possibly, but not exclusively:

– forum shopping for the most favourable insolvency regime;
– characterisation and the Insolvency Regulation Recast;
– detrimental acts and the applicable law;
– consistency of the Insolvency Regulation Recast with insolvency regimes in relation to third states.

Please note that the issue will cover private international law aspects. The editors retain the right to reject publications that predominantly cover matters not related to private international law, such as substantive law.

Please send your abstract (in UK English) of about 350 words by 30 September 2018 to v.lazic@uu.nl (subject: “Short Studies 2018 Insolvency”).

After a pre-selection, the applicants will finally receive their confirmation or rejection by 31 October 2018. When selected, papers should be submitted by 31 December 2018. A language review will not be part of the editorial process; this remains the responsibility of the applicants.

In IM Skaugen SE v MAN Diesel & Turbo SE [2018] SGHC 123, the Singapore High Court had the occasion to discuss and resolve various meaty private international law issues. The facts concerned the alleged negligent or fraudulent misrepresentation by the defendants on the fuel consumption of a specific model of engine that was sold and installed into ships owned by the plaintiffs. The issue before the court was whether the Singapore courts had jurisdiction over the misrepresentation claim. The defendants were German and Norwegian incorporated companies so the plaintiffs applied for leave to serve the writ out of Singapore. This entailed fulfilling a 3 stage process, following English common law rules: (1) a good arguable case that the case falls within one of the heads set out in the Rules of Court, Order 11, (2) a serious issue to be tried on the merits, and (3) Singapore is forum conveniens on applying the test set out in The Spiliada [1987] AC 460. Stages (1) and (3) were at issue in the case.

The judgment, by Coomaraswamy J, merits close reading. The main private international law issues can be summarised as follows:

(a) Choice of law is relevant when assessing the heads of Order 11 of the Rules of Court.

The plaintiffs had relied on Order 11 rule 1(f) and rule 1(p). Rule 1(f) deals with tortious claims and the court proceeded by ascertaining where the tort was committed. According to the court, this question was to be answered by the lex fori. If the tort was committed abroad, the court held that choice of law for tort then came into play: the court must then determine if the tort satisfied Singapore’s tort choice of law rule, ie the double actionability rule. It should be noted that the Court of Appeal in Rickshaw Investments Ltd v Nicolai Baron von Uexkull [2007] 1 SLR(R) 377 had held that the double actionability rule will apply even in relation to local torts (as the flexible exception may displace Singapore law to point to the law of a third jurisdiction). The double actionability rule thus remains relevant when assessing Order rule 1(f) whether the tort is committed abroad or in Singapore.

(b) ‘damage’ for the purposes of Order 11 rule 1(f)(ii) is not limited to direct damage.

Order 11 rule 1(f)(ii) is in these terms: ‘the claim is wholly or partly founded on, or is for the recovery of damages in respect of, damage suffered in Singapore caused by a tortious act or omission wherever occurring.’ The court held that ‘damage’ for the purposes of rule 1(f)(ii) included the increased fuel expenditure and reduction in capital value of the ships due to the fuel inefficient engines suffered not just by the original owners of the ships at the time of the misrepresentation, but also the subsequent purchasers of the ships. On the facts, the court held that the damage suffered by the subsequent purchasers arose directly from the misrepresentation as the misrepresentation was also intended to be relied upon by them. Further, the court held that, even if that had not been the case, direct damage is not required under rule 1(f)(ii). The difference in wording between Order 11 rule 1(f) and the UK CPR equivalent (CPR PD6B para 3.1(9)) makes the decision on this point less controversial than the reasoning in Four Seasons v Brownlie [2017] UKSC 80, [2018] 1 WLR 192.

(c) The test used to ascertain whether ‘the claim is founded on a cause of action arising in Singapore’ for the purposes of Order 11 rule 1(p) differs from the substance test which applies to determine the loci delicti in a multi-jurisdictional tort situation for the purposes of the double actionability rule.

The former test derives from Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458. The court observed that the Distiller’s test is more plaintiff-centric compared to the substance test used for the purposes of the double actionability rule because Order 11 rule 1(p) ‘requires the court to view the facts of the case through the cause of action which the plaintiff has sought to invoke.’ Whereas, the latter test is ‘the more general and more factual question “where in substance did the tort take place.”’ (para [166], emphasis in original). This point will likely be revisited by the Court of Appeal, not least because it had, in JIO Minerals FZC v Mineral Enterprises [2011] 1 SLR 391, cited the Distillers test as authority for the substance test.

(d) Whether Singapore is forum conveniens for the purposes of a setting aside application and whether Singapore is forum non conveniens for the purposes of a stay application should be assessed with reference to current facts.

Norway and Germany were potential alternative fora for the action. After leave had been given to serve out of jurisdiction in the ex parte hearing, the plaintiffs commenced proceedings in Norway as a protective measure. No proceedings were commenced in Germany. This meant that, under the Lugano Convention, the Norwegian courts had priority over the German courts. The court treated this as indicating that the courts of Germany ceased to be an available forum to the parties. This was significant, given that the court had earlier held that the loci delicti was Germany. The defendants argued that the commencement of Norwegian proceedings was to be ignored and the application to set aside service out of jurisdiction was to be assessed solely with reference to the facts which existed at the time when leave to serve out of jurisdiction was granted. The effect of the defendants’ argument would be that the setting aside application would be determined on the basis that Germany was an available forum, while their alternative prayer for a stay would be determined on the basis that Germany was an unavailable forum. The potential for wastage in time and costs is clear on this argument and the court rightly took a common sense and practical approach on this issue.

(e) The possibility of a transfer of the case from the Singapore High Court (excluding the SICC) to the Singapore International Commercial Court (SICC) is a relevant factor in the Spiliada analysis.

This had previously been confirmed by the Court of Appeal in Rappo, Tania v Accent Delight International Ltd [2017] 2 SLR 265. The SICC is a division of the Singapore High Court which specialises in international commercial litigation. Its rules allow for a question of foreign law to be determined on the basis of submissions instead of proof. Further, the bench includes International Judges from not only common law but also civil law jurisdictions. The court held that the specific features of the SICC and the possibility of the transfer of the case to the SICC weighed in favour of Singapore being forum conveniens compared to Norway and Germany.

(f) In a setting-aside application, where the plaintiffs have succeeded in showing that Singapore is the prima facie natural forum in the first stage of the Spiliada test, the burden of proof shifts to the defendants to show why they would suffer substantial injustice if the action were to proceed in Singapore.

In an Order 11 case, the second stage of the Spiliada test usually operates to give the plaintiffs a second bite of the cherry should they fail to establish Singapore is the natural forum under the first stage of the test. The plaintiffs are allowed to put forward reasons why they would suffer substantial injustice if trial takes place in the natural forum abroad. Very interestingly, the court held that where, as on the facts of the case, the plaintiff had already satisfied the burden of showing that Singapore is the natural forum under the first stage of the Spiliada test, the burden then shifts to the defendants to show why they would suffer substantial injustice if trial took place in Singapore.

The case is on appeal to the Court of Appeal. Its judgment is eagerly anticipated.

Michael Douglas and Nicholas Loadsman, The Impact of the Hague Principles on Choice of Law in International Commercial Contracts, Melbourne Journal of International Law, Vol. 19, No. 1, 2018. Also available at SSRN: https://ssrn.com/abstract=3230515  (see there for abstract)

The Russian Supreme Court has published the English translation of the guidelines on Russian private international law, issued in Russian on 27 June 2017 (ruling No 23 ‘On Consideration by Commercial Courts of Economic Disputes Involving Cross-Border Relations’).

The ruling is binding on all the lower courts in Russia: from time to time the Russian Supreme Court gathers in a plenary session to discuss the case law approaches to controversial matters in a particular field of law. It then adopts binding guidelines to ensure a uniform application of law in the future (this role of the Supreme Court is based on art. 126 of the Constitution and arts. 2 and 5 of the law on the Supreme Court of the Russian Federation of 2 February 2014).

The 2017 guidelines are based on more than a decade of case law, as the previous plenary session on private international law was dated 2003.

The guidelines, briefly sketched below, are divided to seven parts, dedicated to the general issues (1), the international jurisdiction of the Russian commercial courts (2), the law applicable to corporation (3), the service of documents (4), the requirements relating to the consular legalisation of foreign documents (5), the application of foreign law (6) and the provisional protective measures (7).

1. In the first part of the guidelines, the Supreme Court explains which disputes have an international character (at [1]). It also recalls the rules on absolute (international) and relative (national) jurisdiction (at [1], further detailed at [8]).

2. Part two is dedicated to the international jurisdiction of Russian commercial courts.
– The Supreme Court lists the matters within the exclusive jurisdiction of the Russian commercial courts (at [5]). If a foreign court accepts jurisdiction in violation of the rules on exclusive jurisdiction of Russian commercial courts, the foreign decision will not be recognised or enforced in Russia (at [4]).

– Several guidelines deal with the choice of court. Parties may choose a court in relation to an existing or a future dispute arising out of any relationship, be it contractual or non-contractual (at [6]). Some substantive and formal requirements relating to the choice of court agreement, including tacit submission, are discussed in detail. Two foreign parties may choose a Russian commercial court. Parties may choose to litigate at the ‘court of the defendant’ or ‘the court of the claimant’ (last four paragraphs of [6], [7]–[9], [11] and [18]). The principle of party autonomy in relation to the choice of court is also emphasised later in the guidelines (at [17]; especially in the third paragraph).

– The guidelines confirm the severability of the court choice clause (at [10]), the survival such clause after the termination of the contract and declaring contract invalid (at [10]), and touch upon the lis pendens with a foreign court (at [11]).

– The Supreme Court recalls the principle of close connection underpinning the rules on the jurisdiction of the Russian courts. It then names a number of factors
factors to be assessed in order to establish a close connection between the dispute and Russia (at [13]–[16]). For this purpose, the concept of activity in Russia is not confined to the registration of an affiliate or a registered office in the Russian trade register. Any activity in Russia should be taken into consideration. It may be, for example, the use of a website with a domain name ‘.ru’ or ‘.su’ to approach the Russian market (at [16]).

3. The third part of the guidelines is dedicated to the law applicable to corporations. After recalling that the Russian conflict of laws rules rely on the theory of incorporation (at [19], third paragraph), the Supreme Court explains which documents should be filed with the court (or consulted by the court of its own motion) to identify the country of a company’s incorporation (at [19]). Failure of the first or second instance court to establish this constitutes a ground for cassation (at [22], last paragraph). The Supreme Court also discusses the law applicable to some aspects of company’s representation (at [20]–[25]).

4. The fourth part of the guidelines deals with the service of documents (at [26]–[28]): the service of foreign documents on a Russian party, the service of Russian documents on a foreign party, and the relevant procedural terms (at [29]–[31]).
Two points are worth noting. First, if several international instruments on international legal cooperation containing requirements relating to the service of documents apply, the instrument allowing the fastest and the most informal service prevails (at [28]).
Second, the awareness of a foreign party of the proceedings is presumed, if the court publishes the information about the time and the place of the hearing on its website (at [37]; let us note, most information on the websites is in Russian). In the meantime, a broad range of evidence may be presented to prove awareness of the proceedings on the part of the foreign party (at [36]).

5. Part five discusses the requirements of apostille and consular legalisation of foreign documents (at [39]–[41]).

6. Part six deals with the application of foreign law. If a dispute is governed by a foreign law, Russian commercial courts have the duty to apply foreign law (at [42]). The parties have no obligation to inform the court on the content of foreign law. However, the court may require a party to do so. If the party does not comply, it may not invoke the court’s failure to establish the content of foreign law later in the proceedings, provided that the court takes reasonable measures to establish the content of foreign law (at [44]). The guidelines contain some general recommendations for the lower courts on the way to take such measures (at [45]–[46]).

7. Part seven is dedicated to provisional protective measures.
– A provisional protective measure can be taken by a Russian court if it has ‘effective’ jurisdiction regarding the measure. The Supreme Court describes situations in which a Russian court has ‘effective’ jurisdiction (at [49]).
– The enforcement of a provisional protective measure granted by a foreign court falls outside the scope of instruments regulating international legal cooperation (at [50]).
– A foreign antisuit injunction cannot prevent a Russian commercial court from hearing the dispute, if the Russian court finds that it has jurisdiction regarding the dispute (at [52]).

I have been posting a series of comments in recent weeks, with more on the way, on cases that caught my attention pre-exam period. They were all candidates for exam questions except much as I would want to, I can only subject my students to that many developments in conflict of laws. Another one in this series of ‘overdue’ postings: [2018] EWHC 335 (Comm) Yukos v Merinson. 

From Salter DJ’s summary of the facts: (excuse their length – this is rather necessary to appreciate the decision)

_____________The defendant was employed by the first claimant under a contract of employment governed by Dutch law. Various proceedings were commenced before the Dutch courts by the defendant and entities within the claimant group in relation to the defendant’s employment. The parties reached terms of settlement of those proceedings, which were embodied in a settlement agreement executed by the parties and subject to the exclusive jurisdiction of the Dutch courts. The settlement agreement was in turn approved by the Dutch courts, with the effect that it became a “court settlement” within the meaning of article 2 of Brussels I Recast. Subsequently, upon certain additional facts as to the defendant’s conduct being learnt by the claimants, they brought a claim against the defendant in England, where the defendant was then domiciled, seeking damages for losses allegedly suffered as a result of the defendant’s breach of duties under his employment contract (“the damages claims”) and a declaration that the settlement agreement did not bar the damages claims, alternatively an order that the settlement agreement should be annulled under Dutch law on the grounds of error and/or fraud (“the annulment claims”). The defendant applied for a declaration that the courts of England and Wales had no jurisdiction to try the claims brought and an order that the claim form be set aside, on the grounds that all of the claims fell within the settlement agreement conferring exclusive jurisdiction on the Dutch courts, which therefore had exclusive jurisdiction by operation of Article 25 Brussels I Recast, and (1) in respect of the annulment claims, Article 25 could not be overridden by Articles 20(1) and 22(1) requiring proceedings to be brought in the courts of the state of the defendant’s domicile at the time of issue of the claim form, since those claims were not “matters relating to [an] individual contract of employment” within the meaning of Article 20(1); (2) in respect of all claims, Article 23(1) allowed the rule in Articles 20(1) and 22(1) to be departed from, since the settlement agreement had been entered into after the dispute had arisen; and (3) the settlement agreement being a juridical act of the Dutch courts, the English courts were precluded by Article 52 from reviewing its substance in respect of the annulment claims and, the settlement agreement also being a court settlement, the English courts were required by Articles 58 and 59 to recognise and enforce it unless it was manifestly contrary to public policy._______________

All in all, plenty of issues here, and as Salter DJ was correctly reassured by counsel for the various parties, not any that the CJEU has had the opportunity to rule on. Four issues were considered:

1. Are the Damages Claims and/or the Annulment Claims “matters relating to [an] individual contract of employment” within the meaning of Article 20(1)?>>>Salter DJ’s Answer: 25 ff: YES. His main argument: the Settlement Agreement set out the terms on which Mr Merinson’s contract of employment came to an end. In so doing, it also varied the terms of that contract of employment. The terms of the Settlement Agreement now form part of the contractual terms on which Mr Merinson was employed, and which govern the rights and liabilities arising out of the employment relationship between him and the Yukos Group. In my view this finding should not have been made without considering the lex causae of the employment contract: Rome I in my view should have been engaged here.

2. If so, is the Settlement Agreement “an agreement .. entered into after the dispute has arisen” within the meaning of Article 23(1)?>>>Answer (on the basis of extensive reference to Brussels Convention and Regulation scholarship):  a dispute will have “arisen” for the purposes of these Articles only if two conditions are satisfied: (a) the parties must have disagreed upon a specific point; and (b) legal proceedings in relation to that disagreement must be imminent or contemplated. Salter DJ correctly emphasises the protective policy which underlies these provisions, however I am not confident he takes that to the right conclusion. Common view on the protective regime is that when parties have had the privilege of legal advice, they can be assumed to have been properly informed: the position of relative weakness falls away.

3. Further, is the English court, in any event, precluded from entertaining the Annulment Claims by Chapter IV of the Recast Judgments Regulation? >>>The issue of court settlements was specifically considered in the Brussels Convention, and the Jenard Report, given their importance in Dutch and German practice. In C-414/92 Solo Kleinmotoren the CJEU (at 17) held ‘to be classified as a “judgment” within the meaning of the Convention, the act must be that of the court belonging to a Contracting State and ruling on its own authority on points in dispute between the parties.’: considering Dutch expert evidence on the issue, the decision here is that despite the limited authority under Title III Brussels I Recast for other Courts to refuse to recognise a court settlement (ordre public in essence), it is not a ‘judgment’. Salter DJ concludes on this point that normal jurisdictional rules to challenge the settlement apply. At 81 he suggests, provisionally, that ‘it would nevertheless be open to this court in those circumstances to case manage the enforcement application and the set-aside action, so that they are dealt with together, the result of the action determining the enforcement application. Fortunately, I am not required to wrestle with those practical complexities in order to determine the present application, and I make no decision one way or another on any of these matters. There is no application before me to enforce the Dutch Court Settlement, merely an application for a declaration that the court “has no jurisdiction to try the Claimants’ claims”.‘

This insight into the case-management side of things, however, does highlight the fact that the findings on the jurisdiction /enforcement interface appear counterintuitive. Particularly in cases where the English courts would not have jurisdiction viz the settlement, but would be asked to enforce it – which they can only refuse on ordre public grounds, the solution reached would not work out at all in practice.

4. And finally what are the consequences, as regards jurisdiction, of the decisions on the first three of these issues?>>>Held: the English court, as the court of the Member State in which Mr Merinson was domiciled at the date this action was commenced, has jurisdiction in relation to all of the claims made in the present action.

There is much more to be said on each of the arguments – but I must not turn the blog into a second Handbook, I suppose.

Geert.

The prospect of Brexit has led a number of countries on the European continent to take measures designed to make their civil justice systems more attractive for international litigants: In Germany, the so-called “Justice Initiative Frankfurt”, consisting of lawyers, judges, politicians and academics, has resulted in the creation of a special chamber for commercial matters at the District Court in Frankfurt which will, if both parties agree, conduct the proceedings largely in English (see here). In France, an English-language chamber for international commercial matters was established at the Cour d’appel in Paris, adding a second instance to the English-speaking chamber of commerce at the Tribunal de commerce in Paris (see here). In the Netherlands, the Netherlands Commercial Court and the Netherlands Commercial Court of Appeal will soon begin their work as special chambers of the Rechtbank and the Gerechtshof Amsterdam (see here). And in Belgium, the government plans to establish a Brussels International Business Court (see here). Clearly: the prospect of Brexit has stirred up the European market for international litigation.

The interesting question, however, is whether the above-mentioned measures will yield much success? Will Germany, France, the Netherlands or Belgium manage to convince internationally active companies to settle their disputes on the European continent rather than in London? Doubts are in order. To begin with, the many national initiatives vary considerably in detail and, thus, send rather diffuse signals to the business community. Moreover, most of the measures that have been taken or are being planned so far, notably those in Germany and France do not go far enough. They focus too much on English as the court language and neglect other factors that contribute to the outstanding success of London as a place for settling international disputes. This includes, for example, a pronounced service mentality that goes hand in hand with a strict orientation towards the special litigation needs of international companies. In any case, it is doubtful whether the withdrawal of London from the European judicial area can be compensated through national initiatives.

So, what can the remaining Member States do to offer European and other companies an attractive post-Brexit forum to settle their disputes? In a soon to be published study for the European Parliament I suggest a package of measures, one of which envisions the establishment of a European Commercial Court. This Court would complement the courts of the Member States and offer commercial litigants one more forum for the settlement of international commercial disputes. It would come with a number of advantages that national courts are not able to offer.

To begin with, a European Commercial Court would be a truly international forum. As such it could better respond to the needs of international commercial parties than national courts which are embedded in existing national judicial structures. In particular, it could better position itself as a highly experienced and neutral forum for the settlement of international disputes: just like an international arbitral tribunal, it could be equipped with experienced commercial law judges from different states. These judges would ensure that the Court has the necessary legal expertise and experience to settle international disputes. And they would credibly signal that the Court offers neutral dispute settlement that is unlikely to favour one of the parties. A European Commercial Court could, therefore, offer commercial parties much of what they get from international commercial arbitration – without sacrificing the advantages associated with a state court.

A European Commercial Court, however, would not only enrich the European dispute settlement landscape and offer international commercial litigants an additional, an international forum for the settlement of their disputes. It could also participate more convincingly in the global competition for international disputes that has gained momentum during the past years and triggered the establishment of international commercial courts around the world: Singapore, for example, opened the Singapore International Commercial Court in 2015 to offer a special court for cases that are “of an international and commercial nature”. Qatar has been running the Qatar International Court and Dispute Resolution Centre (QICDRC) for a number of years by now. Abu Dhabi is hosting the Abu Dhabi Global Markets Courts (ADGMC) and Dubai is home to the International Financial Centre Courts (DIFC). And in 2018 China joined the bandwagon and created the China International Commercial Court (CICC) for countries along the “New Silk Road” as part of the OBOR (One Belt, One Road) initiative. The establishment of a European Commercial Court would be a good and promising response to these developments. The more difficult question, however, is whether the EU would actually be allowed to establish a new European court?

Under the principle of conferral embodied in Article 5 TEU, the EU may only act within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. With regard to the establishment of a European Commercial Code the EU could rely on Article 81 TFEU. This provision allows the EU to adopt measures to improve judicial cooperation in civil matters having cross-border implications. In particular, it allows the EU to adopt measures that improve access to justice (Article 81(2) lit. e) TFEU) and eliminate obstacles to the proper functioning of civil proceedings (Article 81(2) lit. f) TFEU). A European Commercial Court could be understood to do both: improving access to justice and eliminating obstacles to the proper functioning of civil proceedings. However, would it also fit into the overall European judicial architecture? Above all: would the CJEU accept and tolerate another European court?

Doubts are in order for at least two reasons: first, according to TEU and TFEU it is the CJEU that is entrusted with the final interpretation of EU law. And, second, the CJEU has recently – and repeatedly – emphasized that it does not want to leave the interpretation of EU law to other courts.  However, both considerations should not challenge the establishment of a European Commercial Court because that Court would not be responsible for interpreting European law, but for settling international disputes between commercial parties. It would – like any national court and any arbitral tribunal – primarily apply national law. And, as far as it is concerned with European law, the Court should be entitled and required to refer the matter to the CJEU. A European Commercial Court would, therefore, recognize and, in fact, defer to the jurisdiction the CJEU.

The establishment of a European Commercial Court would be a good response to the many challenges international commercial litigation is currently facing. In order to succeed, however, the Court would have to be accepted by the business community. To this end the Court would require staff, equipment and procedures that meet the highest standards of professional dispute resolution. In addition, the Court would have to be fully integrated into the European judicial area and benefit from all measures of judicial cooperation, in particular direct enforcement of its judgments. Ensuring all this would certainly not be easy. However, if properly established a European Commercial Court would enrich and strengthen the European dispute resolution landscape. And it would contribute to the development of a strong and globally visible European judicial sector.

What do you think?

Dear all,
We would like to inform you that an international conference on ‘International Investment and Trade Agreements: Recent Developments and Problems’ is going to be held in Istanbul, Turkey on 25 October 2018. The conference will be jointly organized by Marmara University Faculty of Law and Economic Development Foundation (IKV).
The main goal of the conference is to discuss the recent developments in the field of international investment and trade law. In this regard, it is possible to submit papers regarding various issues such as international investment agreements, international trade agreements, current legal developments regarding the World Trade Organization (WTO), trade quotas and non-tariff barriers, new generation free trade agreements, the trade policy of the European Union and its effects on national laws.
We invite our colleagues wishing to present a paper in this conference to send their abstracts to our email address ikvinvestment2018@gmail.com. We kindly request that the abstracts include the name of the study as well as the name, title, workplace and contact information of the author and consist of 300 to 500 words.
Please note that the deadline for the submission of abstracts is 1 September 2018.
For further information, please see the conference website: http://etkinlik.marmara.edu.tr/en/uluslararasiyatirim
We are looking forward to hosting you in Istanbul.

Dear all,
We would like to inform you that an international conference on ‘Contractual Issues in Private International Law’ is going to be held in Istanbul, Turkey on 11 October 2018 by Marmara University Faculty of Law.
The main goal of the conference is to study and discuss contractual matters in international legal practice within the context of private international law discipline. In this regard, it is possible to submit papers regarding various issues such as applicable law to international commercial contracts, jurisdiction agreements, international commercial arbitration, contract-related matters in international family law, contracts of carriage in private international law and party autonomy in private international law.
We invite our colleagues wishing to present a paper in this conference to send their abstracts to our email address pilcontracts2018@yahoo.com. We kindly request that the abstracts include the name of the study as well as the name, title, workplace and contact information of the author and consist of 300 to 500 words.
Please note that the deadline for the submission of abstracts is 20 August 2018.
For further information, please see the conference website: http://etkinlik.marmara.edu.tr/en/contractsinpil
We are looking forward to hosting you in Istanbul.

Thank you Brodies for flagging [2018] CSOH 25 George Docherty et al a while ago – I was not sure whether I might use the case for exam purposes. C-350/14 Lazar was among the precedents cited by  Lord Tyre to decide the application ratione temporis of the Rome II Regulation.

Article 31 Rome II states that the Regulation applies to “events giving rise to damage which occur after its entry into force”. The date of entry into force, according to article 32, was 11 January 2009. The reference in article 31 to “events giving rise to damage” is not necessarily easy to determine. Lord Tyre at 31 clarifies things by suggesting the Article is ‘clearly linked to the distinction drawn in article 4(1) between three separate concepts, namely (i) the event giving rise to the damage; (ii) the damage; and (iii) the indirect consequences of the event. In the present case, the damage consisted of the deceased’s illness and death. The indirect consequences are the losses suffered by the deceased’s relatives. The event giving rise to all of this was exposure to asbestos’: this occurred before the entry into force of the Regulation.

Had it occurred after, the Court would have applied Rome II for the UK has opted to apply the Regulation’s Article 25(2) provision for Member States with internal conflicts of laws, to apply the Regulation to these conflicts: The Law Applicable to Non-Contractual Obligations (Scotland) Regulations 2008 (SI 2008/404) provide (reg 3) that the Regulation shall apply in the case of conflicts between the laws of different parts of the UK as it applies in the case of conflicts between the laws of other countries. SI 2008/2986 contains an equivalent provision for England, Wales and Northern Ireland.

Accordingly what the applicable law would be under the Regulation is not addressed, neither is the pursuers’ submission that any choice of English law by virtue of article 4(1) should be displaced by applying article 4(3) and holding that the delict is manifestly more closely connected with Scotland.

Residual conflict of laws applies and at 17 ff the judge applies pre-1995 common law, leading to the lex loci delicti. However these rules do not provide a clear identification of the lex loci delicti where the harmful event occurs in one jurisdiction (Scotland) but the harm, consisting of physical injury, occurs in another (England). Reviewing authority, Lord Tyre eventually holds (at 23) that the presence of asbestos dust in an employee’s lungs does not of itself constitute injury, and (subject to the Scottish statutory provisions regarding pleural plaques) no cause of action arising out of negligent exposure arises until it does. At 24:  since injury is an essential ingredient of an actionable wrong, and since injury obviously cannot take place until after the breach of duty has occurred, the place of the harmful event (or locus delicti) is where the injury takes place and not, if different, where the antecedent negligent act or omission occurred.

Conclusion: lex causae is English law. The case is a good illustration of the difficulties that remain in applying what seem prima facie fairly understandable concepts to the average lawyer.

Geert