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Written by Ekaterina Aristova, PhD in Law Candidate at the University of Cambridge. She is currently working towards preparing for submission her thesis on the tort litigation against English-domiciled parent companies and their foreign subsidiaries for the human rights violations arising in the subsidiaries’ operations.

On 10 April 2019, the UK Supreme Court passed its long awaited decision in Vedanta v Lungowe confirming that Zambian citizens, who have suffered from the environmental pollution caused by mining operations in Zambia, can pursue in England claims against Vedanta Resources Plc, an English-domiciled parent company, and Konokola Copper Mines plc, its foreign subsidiary and the owner of the mine (“Vedanta” and “KCM”). The decision, which has been an object of intense interest in the last weeks, sets important guidelines on the appropriate jurisdictional limits of pursuing claims against English-based transnational corporations (“TNCs”) in the English courts and the substantive standards of parent company liability. In 2015, Zambian villagers commenced proceedings in the English courts against Vedantaand KCM alleging personal injury, damage to property, loss of income, and loss of amenity and enjoyment of landcaused by the toxic emissions from a mine operated by KCM in Zambia. The jurisdiction of the English courts was obtained by virtue of Article 4 of the Brussels I Regulation recast (“Brussels I”). KCM – the owner and operator of the mine – was brought in the English courts under the ‘necessary or proper’ party gateway. In 2016, the High Court allowed claims against both companies to be heard in England (see author’s previous blog for further details). The Court of Appeal later has entirely upheld a High Court ruling (also analysed by the author). The Supreme Court has also confirmed jurisdiction of the English courts to try the case on the merits arguing that claimants will not obtain substantial justice in Zambia. The judgement addressed four principal issues which are summarised below.

Abuse of EU law

Corporate defendants argued that claimants’ attempt to litigate the case in Englandamountsto an abuse of EU law since they have brought ill-founded claims before the English courts against English-domiciled parent company as a local defendant solely for the purposes of joining a foreign-domiciled subsidiary as a co-defendant. So far, an abuse of EU law argument in the context of Brussels I has been only made in relation to Article 8(1) of Brussels I (former Article 6(1)), which permits the joining of connected claims against persons domiciled in different Member States in one jurisdiction to avoid the risk of irreconcilable judgments resulting from separate proceedings. Uncertainty remained, however, over whether the exercise of mandatory jurisdiction under Article 4 of Brussels I could ever be challenged on the grounds that it amounts to an abuse of EU law. The Supreme Court acknowledged the possibility of using the abuse of EU law principle in cases, where Article 4 is used as a means of circumventing or misusing another EU principle or (as was the case in Vedanta) the English common law rules of jurisdiction over foreign defendants. The narrow scope of an abuse of EU law test was also confirmed. In particular, the Supreme Court relied on the factual findings made by the lower courts that (i) the claimants established that there was a real issue to be tried against Vedanta; and (ii) the claimants had a genuine desire to obtain a judgment for damages against Vedanta and not merely KCM. Consequently, the abuse of EU law issue was resolved in favour of the claimants.

Parent company’s duty of care

The Supreme Court has also made several important findings on the scope of the duty of care of the English-domiciled parent companies in relation to the operation of its foreign subsidiaries. First, it was unequivocally held that intervention of the English-domiciled parent companies in the management of the subsidiaries’ operations and their human rights and environmental performance may give rise to a duty of care to third parties, such as local communities. Second, tort litigation against legal entities of TNCs does not involve assertion of a new category of common law negligence liability or amount to novel disputes (as was argued by the corporate defendants). Third, the Supreme Court refused to stick all the cases of parent company liability into specific categories based on the fact that organisational and management structures of corporate groups vary significantly. Fourth, issuance by the parent company of the group-wide policies may give rise to a duty of care, if the parent company takes active steps to their implementation in the subsidiaries’ operations by training, supervision and enforcement. Finally, the Supreme Court claimed that omissions to supervise subsidiaries’ operations contrary to the public statements made by the parent company may also lead to the breach of duty of care.

England as a proper forum

The Supreme Court was also faced with the necessity to identify whether England was a proper forum for litigating the case. This question forms part of the forum conveniensinquiry for exercising discretion to permit service on a foreign subsidiary as a necessary or proper party. Both the High Court and the Court of Appealconcluded that the existence of an arguable claim against Vedanta made England the most appropriate place for trying the claims against KCM. The courts’ reasoning was grounded on the desire to avoid parallel proceedings on similar facts in two jurisdictions. The Supreme Court has, however, took a different view and argued that the purpose of avoiding irreconcilable judgements should be balanced against other connecting factors which link the case with the foreign forum. The Supreme Court further held that – in light of Vedanta’s consent to submit to the jurisdiction of the Zambian courts – the claimants have a choice of whether or not to sue Vedanta in England at the risk of irreconcilable judgments. In other words, the risk of irreconcilable judgments ceases to be a “trump card” and decisive factor in determining the appropriateness of the forum. Overall, Zambia was identified as the proper forum for pursuing claims against both co-defendants on the basis of several factors (the alleged acts and omissions primarily occurred in Zambia; the claimants are Zambian citizens; the mine is located and operated in Zambia; the damages were sustained by the claimants in Zambia; the majority of the witnesses and the evidence are likely to be based in Zambia, etc).

Access to justice considerations

Even though the Supreme courtconcludedthat the natural forum for the dispute was not England, that wasnot the end of the matter. Under the second limb of forum conveniens test, the English courts consider if they should nevertheless exercise jurisdiction in cases when the claimants would be denied justice in the foreign forum. There is no exhaustive list of factors that can be taken into account in this analysis. In Vedanta, the Supreme Court acknowledged that there is a real risk that substantial justice will be unobtainable in Zambia based on two principal grounds. First, securing funding for pursuing proceedings in Zambia was a serious problem for the rural villagers. Second, the “unavoidable” complexity of the case means that it would be litigated in Zambia on a simpler and more economical scale than in England. As a result, the Supreme Court allowed claims against both defendants to be tried in England on the substantial justice issue.

Practical implications of the Supreme Court decision

The ruling of the Supreme Court in Vedanta has been already called the“the most important judicial decision in the field of business and human rights since the jurisdictional ruling of the United States Supreme Court in Kiobel v Royal Dutch Petroleum in 2013”. Indeed, it will undoubtedly have several important implications in litigating cases on the human rights performance of TNCs. First, the Supreme Court’s unequivocal acknowledgement of the existence of duty of care by the parent companies is an important step towards enhancing corporate accountability for human rights violations. Although there are concerns as to whether the ruling will be a disincentive for parent companies to get actively involved in the supervision of the subsidiaries’ operations, the risk of liability for the English-based multinationals is topical more than ever and will (hopefully) result in the concrete steps by businesses and their lawyers in identifying the risks of human rights violations in their foreign operations. Second, allowing claims against Vedanta and KCM to be heard in England is a promising move towards increasing access to justice for the underprivileged claimants coming from the jurisdictions with weak governance. In light of the most recent study on access to legal remedies for victims of business-related human rights abuses conducted for the European Parliament, it is pivotal to ensure that home state courts continue to remain an available forum for commencing proceedings in relation to the worldwide operations of the TNCs.

The Supreme Court’s approach to the identification of the proper forum, however, raises reasonable concerns about the future of litigating negligence claims against English-domiciled parent companies in the English courts. Until recently,claimants from the host states have relied heavily on the mandatory nature of Article 4 of Brussels I to bring claims against English-based parent companies as anchor defendants so as to allow the joinder of a foreign subsidiary under common law. The policy of avoiding parallel proceedings in both states resulting in duplication of cost and the risk of inconsistent judgments hadmore force in the jurisdictional analysis than the existence of any territorial connections between England and claims against the foreign subsidiary. It washighly unlikely that a claim against the foreign subsidiary will be stayed on forum conveniensgrounds if the courts have already decided that there is an arguable claim against an English-domiciled parent company and the foreign subsidiary is a necessary or proper party to the English proceedings. In effect, thejurisdiction over an arguable claim against the parent company also resolved the issue of jurisdiction over the foreign subsidiary. Following, the Supreme Court decision this practice will change and the English courts will look at the balance of connecting factors to decide where the proper forum for litigating claims against the foreign subsidiary is. Overall, the rules of jurisdictional will remain a hurdle for the claimants seeking recourse in the English courts and the outcome of the jurisdictional inquiry will now depend on whether or not the access to justice is available in the host states.

[2019] EWHC 792 (Pat) Ablynx and VUB v Unilver engages similar discussions as Eli Lily v enentech and Chugai v UCB with the additional element of now, under Brussels Ia, the application of Artile 31(2). This Article makes safe the torpedo previously used to gazump choice of court, by giving the courts of the States in whose favour choice of court has been concluded, a first go at discussing the validity and application of the choice of court agreement.

Here: does Article 31(2) mean that the Brussels courts, to whom jurisdiction has been assigned in a licence agreement, get to decide first on the engagement of Article 24(4)’s exclusive jurisdictional rule re the validity of patents?

It is worth quoting Hacon J in full: at 17 ff

’17. Ms Lane (for the defendants, GAVC) submitted that the position is clear: art.31(2) is engaged and therefore these proceedings must be stayed. Art.24 could never make a difference in this court because it cannot override art.31(2). That is because art.31(2) is expressly stated to be without prejudice to art.26 but not art.24. The consequence is that all issues arising in these proceedings must be ceded to the Brussels courts, including the question whether art.24(4) is engaged and if so, what should be done about it. It is not the concern of this court.

18. I disagree. To my mind art.25(4) explains why there is no mention of art.24 in art.31(2). Art.31(2) is necessarily without prejudice to art.24 since an agreement relied on for a stay under art.31(2) can carry no legal force if it purports to exclude the courts having exclusive jurisdiction under art.24. Even on the assumptions I have stated, art.31(2) cannot apply if art.24(4) is engaged. Art.24(4)’s engagement depends on whether these proceedings are ‘concerned with’ the validity of the Patents UK within the meaning of art.24(4). I must resolve this last question before I can decide whether the (assumed) agreement carries legal force and therefore whether art.31(2) is engaged.

19. I also note that art.26 is itself made subject to art.24. This reinforces my view that the recasting of Brussels I has not altered the hierarchy of provisions awarding jurisdiction, with art.24 at the top. Arts.24 and 25 both speak of ‘exclusive jurisdiction’, but that conferred by art.24 is the more exclusive.’

Having held that Article 31(2) is not engaged, the Court still has to assess whether the claim is essentially a decleration of non-infringrement or rather ‘concerns’ the validity of the patents. Defendants argue that the validity of the Patents UK would form only an incidental part of this action, since it is really a dispute about the scope of defendant’s licence.

Here, Hacon J discussed CJEU authority at length (GAT v LUK, BVG, Gasser etc.) and summarises at 53

(1) When a stay is sought under art.31(2), if an argument is raised that the court before which the stay is sought has exclusive jurisdiction under art.24, that court must decide whether the argument is correct.

(2) If the court has exclusive jurisdiction under art.24, art.31(2) is not engaged. There will be no stay.

(3) If the court does not have exclusive jurisdiction under art.24, it must decide whether at least prima facie there is an agreement which satisfies art.25 and which confers exclusive jurisdiction on courts of another Member State. If so, provided the defendant has not entered an appearance in a manner which satisfies art.26, there must be a stay of the proceedings.

EPLaw helpfully summarise the lenghty review of testimony and pleadings as follows: taking into account the usual practice in relation to patent validity proceedings in the UK, and the arguments which are typically run, the Court concluded that there was no real doubt that if the proceedings progress to trial they will be concerned with the validity of the Patents within the meaning of art.24(4). Art.24(4) was therefore engaged.

The case raises again the interesting issue of the degree to which the court may rely on parties’ submissions in particulars of claim when examining jurisdiction, or alternatively need to look beyond these stated arguments into what might and will be argued.

Leave to Appeal has been granted and a further order has already dealt with service issues.

Geert.

(Handbook of ) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.7, Heading 2.2.9.5.

The latest issue of the „Praxis des Internationalen Privat- und Verfahrensrechts (IPRax)“ features the following articles:

R. Wagner: Twenty Years of Judicial Cooperation in Civil Matters

With the Treaty of Amsterdam entering into force on 1 May 1999 the European Union has obtained the legislative competence concerning the judicial cooperation in civil and commercial matters. This event’s 20th anniversary gives ample reason to pause for a moment to briefly appreciate the achievements and to look ahead. This article follows the contribution of the author in this journal in regard to the 15th anniversary of the entry into force of the Treaty of Amsterdam (IPRax 2014, 217).

E. Jayme/C.F. Nordmeier: The Freedom to Make a Will as a European Human Right? – Critical Considerations on the West Thrace Decision of the European Court of Human Rights

The article critically examines the decision of the ECHR of 19 December 2018, Molla Sali v. Greece, which deals with the special legal regime applicable to Muslims in West Thrace, a region in northern Greek. The Court considers Art. 14 ECHR in conjunction with Art. 1 of the Additional Protocol No. 1 to be violated if the will of a Muslim testator of this region, drawn up according to Greek state law, is measured against religious law. The authors are of the opinion that a human rights-protected election to state law is not permissible for individual areas of law or single legal questions. It opens up an arbitrary mixture of state and religious law, which can lead to inconsistent overall results. This is particularly the case when legal positions of third parties are affected. In addition, overarching political aspects of the protection of minorities, especially in Western Thrace, are not sufficiently taken into account in the decision.

J. Schulte: A Wii bit illegal? International jurisdiction and applicable law for the infringement of a Community Design by several tortfeasors (ECJ C-24, 25/16 – Nintendo)

On 27 September 2017 the European Court of Justice decided on the international jurisdiction and applicable law with regards to the infringement of a unitary Community intellectual property right, when Nintendo Inc. sued a mother and a daughter company for replicating, advertising and selling Wii console accessories. The Court’s judgement clarifies many important issues ranging from the member state courts’ scope of competence in case of several defendants, to the difficult relationship between Rome II’s conflict of law rules and the ones in the regulations on Community intellectual property rights as well as to the applicable law for infringing acts via the internet. Most notably, the ruling establishes a central act theory in case of multiple places of acts of infringements in the sense of Art. 8(2) Rome II.

P. Mankowski: Choice of law clauses in the Standard Terms and Conditions of airlines

Choice of law clauses in the Standard Terms and Conditions of airlines are commonplace in international air travel. Art. 5 (2) subpara. 2 Rome I Regulation “limits” freedom of choice in passenger contracts. Yet the CJEU’s Amazon judgment has raised questions whether choice of law clause in Standard Terms and Conditions might also be challenged under the aegis of the Unfair Contract Terms Directive.

B. Heiderhoff: Jurisdiction based on Art. 12 (3) Brussels IIbis and its consequences

The Saponaro judgment concerns the judicial authorisation for a renouncement of succession by the parents of a minor heir whose habitual residence is not within the state of the succession proceedings. The Court confirmed that this issue falls within the scope of the Brussels IIbis Regulation and gave details on the prerequisites of jurisdiction under Art. 12 (3) Brussels IIbis Regulation. In particular, the ECJ needed to clarify the meaning of the requirement of having been “accepted expressly or otherwise in an unequivocal manner by all the parties”. As Greek law, in order to secure the rights of the child, provides that a prosecutor is a party to the proceedings, the ECJ held that the acceptance of the prosecutor is necessary. The Court does not, however, even mention the necessity of the agreement of the child, an omission which must be criticised. This contribution additionally raises the question of the applicable law. Here, we see a number of difficulties. Firstly, the prorogated jurisdiction under Art. 12 (3) Brussels IIbis Regulation poses problems for the synchronous operation of the Brussels IIbis Regulation and the 1996 Hague Convention. Secondly, the approval procedure is a constellation where the distinction between protective measures (under Article 15 of the 1996 Convention) and the exercise of parental responsibility (under Article 17 of the 1996 Convention) becomes necessary. Thirdly, the strong interlinkage between the substantive law of parental responsibility and the procedural measures to protect the child make it very complicated to combine the approaches that the different legal systems take. All in all, it generally seems easier to institute the judicial authorisation in the state of the child’s habitual residence.

U.P. Gruber: The habitual residence of infants and small children

The ECJ has stressed in several decisions that for the purpose of Article 8(1) of Regulation No 2201/2003, a child’s place of “habitual residence” has to be established by considering all the circumstances specific to each individual case. However, in a new case, the ECJ has opted for a more conclusive weighing of selected criteria. The ECJ based its assessment on the fact that the child was permanently resident in Belgium. Furthermore, the ECJ pointed to the fact that the mother, who – in practice – had custody of the child, and also the father, with whom the child also had regular contract, both lived in Belgium. Other circumstances were expressly deemed to be “not decisive”, especially the stays of mother and child in Poland in the context of leave periods or holidays, the mother’s cultural ties to Poland and her intention of settling in Poland in the future. In summary, it can be said that for a rather typical fact pattern, the ECJ has given valuable guidance as to where the habitual residence of children is located.

U.P. Gruber/L. Möller: The admissibility of a custody order after the return of the child under the Hague Abduction Convention

The Convention of 25 October 1980 on the Civil Aspects of International Child Abduction seeks to provide a rapid procedure for the return of the child to the country of the child’s former residence. Pursuant to Art. 16 of the Convention, a court in the state of refuge is not permitted to decide on the merits of any custody issue until it has been decided that there exists a reason for not ordering the return of the child, or the application for the return of the child is not lodged within a reasonable time. This provision is based on the assumption that a procedure dealing with custody issues in the state of refuge might delay or otherwise impair the procedure on the return of the child in that state. The OLG Bremen had to decide whether Art. 16 of the Convention was still applicable when the conclusive order to return the child had already been carried out, i.e. the child had been given back to the holder of the right of custody and had returned to its state of residence prior to its removal. The court concluded that in this situation the prohibition in Art. 16 of the Convention had ceased and that therefore German courts could decide on the rights of custody. The decision is correct: When the status quo ante has been fully restored, the objectives of the Convention have been reached; therefore, there is no more need to protect the procedure on the return of the child against influences of parallel proceedings on custody issues. Subsequently, the court also assumed jurisdiction as, under German law, jurisdiction can be based solely on the German nationality of the child. At closer look, the case illustrates that German jurisdictional rules are not well-suited for child abduction cases and there is need for reform.

K. Siehr: International jurisdiction of German courts to take measures in order to enforce the right of access of the mother to meet her children living abroad

A German couple had two sons. The couple divorced and the father got custody for the two children and moved with them to Beijing/China. The Magistrate Court of Bremen (Amtsgericht Bremen) awarded to the mother, still living in Germany, rights of access to the children and obliged the father to cooperate and send the children from Beijing to Germany in order to visit their mother. The father did not cooperate and did not send the children to Germany. The Magistrate Court of Bremen fixed a monetary penalty (Ordnungsgeld) of e 1000,00 in order to sanction the father’s misbehavior. The father lodged an appeal against this decision and the Court of Appeal of Bremen (Oberlandesgericht Bremen) vacated the decision of the Magistrate Court because of lack of international jurisdiction. The Federal Court for Civil and Criminal Matters (Bundesgerichtshof) corrected the Court of Appeal of Bremen and upheld the order for monetary penalty awarded by the Magistrate Court of Bremen. German courts are allowed to sanction their decision by awarding monetary penalties against a party living abroad.

P. Kindler/D. Paulus: Entry of Italian partnerships into the German land register

Under German law, following a judgment of the Federal Court of Justice (BGH) of 29 January 2001, even non-commercial partnerships (the „Gesellschaft bürgerlichen Rechts“, GbR) under certain circumstances – and without being regarded a legal entity – have an extensive legal capacity. On 4 December 2008, in a second step, the Federal Court of Justice held that a GbR can not only acquire ownership of land or other immovable property or rights but may also be entered in the German land register (Grundbuch – „formelle Grundbuchfähigkeit“). Subsequently, as of 18 August 2009, the German legislator implemented a new § 899a to the German Civil Code (BGB) as well as a new section 2 to § 47 of the German Land Register Code (GBO), stating that if a GbR is to be registered, its partners must also be entered into the land register. In its judgment of 9 February 2017 concerning an Italian società semplice, the

German Federal Court of Justice held that also foreign non-commercial partnerships can be entered into the German land register. Prerequisite for this is not a full legal capacity but only that the respective partnership, according to its company statute, at least has a partial legal capacity with regard to the acquisition of real estate („materielle Grundbuchfähigkeit“). In order to determine this, a judge has to investigate foreign law ex officio. This includes not only the determination of the law itself but also of its concrete application in the respective foreign legal practice. To this end, the judge must make full use of the legal sources available to him. The authors share the position of the German Federal Court of Justice but point out that the applicable Italian law of business associations even provides for a full legal capacity of non-commercial partnerships.

K. Duden: Jurisdiction in case of multiple places of performance: preparatory work vs. its implementation on site

In the case of a contract for the provision of services, Art. 7 (1) (b) of the Brussels Ibis Regulation establishes jurisdiction at the place where the service is provided. In light of a decision of the Austrian Supreme Court on an architect’s contract this paper analyses how jurisdiction at a single place of performance can be identified if the performance actually is provided in several places. In doing so, it is argued that a distinction should be drawn between services that have an internal as opposed to an external variety of places of performance. Regarding architects’ contracts the author agrees with the Austrian Supreme Court that the courts at the building site have jurisdiction as the courts at the place of the main performance. Furthermore, the paper discusses where jurisdiction generally should be located for services that consist of extended preparatory work at one place that culminates in its implementation at another place, but where those services do not necessarily have a comparatively strong link with the place of implementation. Finally, cases will be considered in which the place where the service is mainly provided cannot be determined. It is argued that amongst the approaches taken in such cases by the ECJ it is more convincing to grant the claimant a choice amongst the places which could be considered as the place of main performance, rather than give preference – amongst various potential places of main performance – to the jurisdiction at the seat of the characteristic performer.

L. Hübner: Existential disputes as a case for Art. 24 no. 2 Brussels 1a Regulation – the doctrine of fictivité in the European law of jurisdiction

The decision of the Cour de cassation deals with the exclusive jurisdiction for company-related disputes in Art. 24 No. 2 Brussels 1a Regulation. The Cour de cassation confirms the strict interpretation in accordance with the parameters of the ECJ. The subject-matter of the action is not a dispute regarding deficiencies in resolutions, which frequently is the subject-matter of action in connection with Art. 24 (2) Brussels 1a Regulation, but a so-called existential dispute arising from the French doctrine of fictivité.

P. Schlosser: Prescription as Lack of jurisdiction of an arbitral tribunal

In view of the expropriation of gold mines the claimant instituted arbitral proceedings on the basis of the Bilateral Agreement between Canada and Venezuela according to the Additional Facility Rules of the Word Bank Centre. The Canadians were successful. The Cour d’Appel de Paris, however, invalidated the calculation of the award, but not the further elements of the ruling. The reason therefor was a term in the Bilateral Investment Treaty, that the tribunal had only competence to consider events no more than three years prior to the institution of arbitral proceedings. In validating the damage of the Canadians, however, the tribunal had taken into consideration events of a prior occurrence. Normally the claimant had to institute new proceedings because in France the case cannot be referred back to the arbitrators. But since the parties had found a settlement agreement no further proceedings were necessary.

Advocate General Szpunar opined end of March in C‑172/18 AMS Neve. The case concerns in essence, in the AG’s words, whether and, if so, under what circumstances, pursuant to Article 97(5) of Regulation 207/2009 on a Community Trade Mark, the person responsible for an alleged infringement, consisting in the advertising and offer for sale of goods bearing a sign which is identical to an EU trade mark on a website, may be sued in the courts of the Member State on whose territory the traders and consumers targeted by that website are situated.

It is clear from the rules on jurisdiction in Regulation 207/2009 on Community trade marks that the EU legislature decided to derogate in part from the rules on jurisdiction in Brussels Ia (these are fully applicable in the case of actions relating to national trade marks).

CJEU authority is varied (Case C-324/09, L’Oréal, which concerns the territorial scope of the EU’s trademark laws and revolves around websites ‘targeting’ consumers as opposed to merely being accessible to them, is a clear precedent; as is Wintersteiger; Hejduk; Pinckney; Football Dataco) but difficult to apply for all of them are so easily distinguishable: various intellectual property rights are at issue; some of them EU-wide granted, others only local; precedent on online activity generally such as Pammer /Alpenhof, ‘G’ etc. do not have the IPR context,….

The Advocate General does a highly commendable job (in my classes I tend to make things easy for myself on this section by mumbling something like ‘it’s complicated’; ‘you need to know your intellectual property rights’; and ‘there are so many rules in the secondary law on IPR’) in distinguishing and untangling authority, and he focuses his analysis on the issue of ‘targeting’. Those with an interest in IPR litigation had best read the Opinion in full.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Heading 2.2.8.2.5; Heading 2.2.11.2.4 (quoted by the AG in current Opinion).

On 8 February 2019 the Belgain Court of Cassation decided the case Happy Flights v Ryanair. The Dutch version of the decision is available here.

At issue was the validity of the clause in Ryanair’s general terms and conditions that the Irish courts have jurisdiction over disputes. The Court of Cassation quashed the decision of the Commercial Court of Brussels, which had considered only the formal validity of the choice-of-court clause.

The Court of Cassation confirmed that the consumer protection provisions of Brussels Ia do not apply (the contracts concern transport). It further found that according to Art. 25(1) of Brussels Ia the substantive validity of the clause (in a non-negotiated contract) was subject to Irish law (specifically the Irish implementation in Act 27/1995 of Directive 93/13/EEG on unfair terms in consumer contracts). The Court did not explicitly refer to Irish private international law (according to Consideration 20 of Brussels Ia), but directly to Act 27/1995.

It sent the case back to the Commercial Court of Leuven for a new assessment.

Thank you to Veerle Van den Eeckhout for the tip-off.

On 10 April 10 2019, the UK Supreme Court handed down its much anticipated judgment in the “Vedanta” case (see here). The judgment is currently raising many comments and discussions on Corporate Social Responsibility (CSR), including from the perspective of Private International Law.

The PowerPoint (in French) of a presentation by Veerle Van den Eeckhout in March 2017 explains some Private International Law aspects of CSR, including the state of the Vedanta proceedings at that time and its context.

A Legislative initiative procedure which started nearly a year ago, is coming now to the next level: The European Commission has recently stated its position on the European Parliament non-legislative resolution with recommendations to the Commission on expedited settlement of commercial disputes. The response is featured in a document titled ‘Follow-up to the European Parliament non-legislative resolution with recommendations to the Commission on expedited settlement of commercial disputes’. The main issues addressed may be summarized as follows:

Creation of a European Expedited Civil Procedure (EECP)

The Commission will take the resolution as further inspiration to analyse simplifications to cross-border litigation, but not necessarily by a specific European Expedited Civil Procedure.

Possible changes to the Rome I, the Rome II and the Brussels Ia Regulations

The Commission will, as appropriate, consider issues concerning choice of law agreements and choice of court agreements within the framework of the review of the relevant instruments (the Rome I and the Brussels Ia Regulations).

Other measures – building competence in commercial law in Member States

The Commission will continue to support training and research in commercial law and to facilitate access to information on foreign law in the framework of non-legislative actions, including financial programmes.

Other measures – analysing establishment of the European Commercial Court

At this stage, it does not seem appropriate to engage in preparatory action concerning the establishment of a European Commercial Court. However, the Commission will consider the question of the desirability of further studies in this field.

The full text of the doc. document is available here.

Once there, scroll down to Documentation gateway, and open the European Commission box.

In C-464/18 ZX v Ryanair, the CJEU last week succinctly held on branch jurisdiction (Article 7(5)) and on voluntary appearance under Article 26.

The Court first reminds readers of the exclusion of simple contracts of transport (as opposed to combined tickets /package travel) from the consumer title of the Regulation: aee Article 17(3): the consumer title ‘shall not apply to a contract of transport other than a contract which, for an inclusive price, provides for a combination of travel and accommodation’.

Surprisingly perhaps (and /or due to lobbying), this did not come up for amendment in the recent Recast, despite the massive increase on travel tickets bought online in particular since transport was first carved out from the consumer title in the Brussels Convention. At 160 the Jenard Report explains the carve-out by reference to international agreements – yet these too could probably do with a refit – but I am straying.

The Court also reminds us that the flight compensation Regulation 261/2004 does not contain conflict of laws rules – these remain subject to the general instruments.

To the case at hand then: ZX purchased a ticket online for a flight operated by Ryanair between Porto (Portugal) and Barcelona (Spain). Applicant  is neither domiciled nor resident in Spain, defendant has its registered office in Ireland, and has a branch in Girona (Spain). ZX, the passenger, did not justify jurisdiction pro Girona on the basis of forum contractus. Per C‑204/08 Rehder, this would have been place of arrival or departure.

Branch jurisdiction per Article 7(5) featured most recently in C-27/17 flyLAL, and is quite clearly not engaged here: the ticket was purchased online. There is no element in the order for reference indicating that the transport contract was concluded through that branch. Furthermore, the services provided by the branch of Ryanair in Girona appear to be related to tax matters.

That leaves Article 26: how and when may it justify the international jurisdiction of the court seised by virtue of a tacit acceptance of jurisdiction, on the ground that the defendant in the main proceedings does not oppose that court having jurisdiction? The case-file reveals that following the invitation from the registry of that court to submit observations on the possible international jurisdiction of that court, Ryanair failed to submit written observations. The Court finds this does not amount to tacit acceptance.

Article 26 requires that the defendant enter an appearance. However what exactly this requires hitherto I believe to quite a degree has been subject to lex fori – particularly the local procedural law. One might have expected a more extensive CJEU consideration e.g. revisiting 119/84 Capelloni v Pelkmans.

A missed opportunity.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.7.

The two volumes of the Luxembourg Reports on European Procedural Law were published early this month. They are the fruits of an evaluation study of national procedural laws and practices in terms of their impact on the free circulation of judgments and on the equivalence and effectiveness of the procedural protection of consumers under EU consumer law.

The volumes present a comparative examination and empirical evaluation of national procedural rules and practices as regards mutual trust and the free circulation of judgments on the one hand, and consumer protection on the other, in light of relevant EU and national legislation and European Court of Justice and domestic case law.

The publication was edited by Burkhard Hess, Stephanie Law & Pietro Ortolani. The Report was prepared by a Consortium of European universities led by the MPI Luxembourg for Procedural Law as commissioned by the European Commission [UST/2014/RCON/PR/CIVI/0082].

For more information, check here.

Chapter 15 is the typical entry gate for a foreign insolvency practitioner to engage in US bankruptcy proceedings – it is also the general jurisdictional gateway for US courts viz international insolvencies, COMI and insolvency tourism discussions etc. By way of example see Norton Rose’s 2017 overview here.

In Ema Garp Fund v. Banro Corp., Case No. 18-01986 Law360 summarise the outcome as it stands (I understands motion to appeal has been filed) as follows: ‘Canada’s Banro Corp. won’t face a suit in New York federal court alleging the mining company lied to investors about its operations in the Democratic Republic of Congo after a judge ruled (..) that those claims were resolved last year in bankruptcy proceedings in Canada.’

Kelly Porcelli excellently reviews the issues here, with justified emphasis on comity considerations – I am happy to refer.

One for the comparative litigation ledger.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.5, Heading 5.6.

The European Law Institute is calling for submissions for its 2019 ELI Young Lawyers Award. Candidates must be law students (undergraduate or postgraduate) at a European university. The call is for a unique and original paper which has not previ­ously been published and which deals with a European legal issue that is ripe for reform. Papers must be submitted by April 30, 2019, 20:00 CET in any of the EU official languages along with an English translation. Further details can be found here.

To celebrate its 150th birthday, the Société de législation comparée is organizing a comparative law essay competition. It is open to all lawyers, of all nationalities, regardless of their speciality. Membership of the Society is not required to participate.

Entrants will compose, on a subject of their choice, an essay which is supported by comparative legal reasoning.

The submitted text must be unpublished, never formally examined and contain at least 100,000 characters. It can be written in French or English. Entrants must send a print and an electronic version of the text to the Société de législation comparée, 28 rue Saint-Guillaume, 75007 Paris, France and emmanuelle.bouvier@legiscompare.com no later than October 15, 2019. The application form must be attached to the text.

The selection committee will present the results of its deliberations at the Society’s birthday colloquium in December 2019. First prize will be the publication of the text by the Society in the form of a book. Other awards may be given to distinguished candidates by the committee. Other forms of publications may also be proposed.

To download the application form, please click here.

The Editors of the Melbourne Journal of International Law (‘MJIL’), Australia’s premier generalist international law journal, are now inviting submissions for volume 20(2). MJIL is a peer-reviewed academic journal, based at the University of Melbourne.

The deadline for submissions is July 1, 2019. Submissions and inquiries should be directed to law-mjil@unimelb.edu.au. For more information, please visit https://law.unimelb.edu.au/mjil#submissions.

As previously reported on Conflicts of Laws, the ECtHR was requested an advisory opinion by the French Court of Cassation.

On April 10th, the ECtHR delivered its first advisory opinion. It held that:

“In a situation where a child was born abroad through a gestational surrogacy arrangement and was conceived using the gametes of the intended father and a third-party donor, and where the legal parent-child relationship with the intended father has been recognised in domestic law,

1. the child’s right to respect for private life within the meaning of Article 8 of the European Convention on Human Rights requires that domestic law provide a possibility of recognition of a legal parent-child relationship with the intended mother, designated in the birth certificate legally established abroad as the “legal mother”;
2. the child’s right to respect for private life does not require such recognition to take the form of entry in the register of births, marriages and deaths of the details of the birth certificate legally established abroad; another means, such as adoption of the child by the intended mother, may be used”.

For a brief summary of the advisory opinion and the case background see the Press Release.

For further details see the Advisory Opinion.

The fifth edition of the annual conference of the Carlos III University of Madrid devoted to private international law will take place on 25 and 26 April 2019. This year’s topic is surrogacy.

Speakers include Javier Carrascosa González (Univ. Murcia), Cristina González Beilfus (Univ. Barcelona), Iván Heredia Cervantes (Univ. Autónoma Madrid), Ilaria Pretelli (Swiss Institute of Comparative Law), and Fabrizio Marongiu Buonaiuti (Univ. Macerata).

See here for the full programme and further information.

The e-Codex Plus project and the ERC project team Building EU Civil Justice of the Erasmus School of Law are jointly organising the conference ‘e’ meets justice: building bridges in cross-border procedures. On 2 and 3 May 2019, academics, IT and legal professionals will meet in Lisbon to discuss how to improve the collaboration between these communities in cross-border civil procedures. The aim of the conference is to offer a platform for different stakeholders to meet, engage in discussions and exchange ideas in order to find a meeting point between the legal world and the digital world, arriving at ‘e-justice’. Focusing on e-CODEX as a potential tool to improve the current situation, participants will be encouraged to propose ideas, engage in discussions and develop a mind-set to foster the future of e-Justice in the EU.

In recent years, cross-border (e-)commerce has increased rapidly. In particular, e-commerce enabled consumers to engage in online transactions with traders from outside their jurisdictions. This development resulted in a growing number of cross-border (online) disputes. While the number of disputes surges, there is a lack of suitable redress mechanisms for consumers, posing challenges to access justice. Consumers encounter obstacles to find a remedy for their cross-border claims, due to differences in language, increased costs, longer procedures, and various diverging legal procedures. It is important that justice embraces technology in order to support online and offline consumers. For a smooth functioning of the Internal Market, it is essential that the consumer has trust and confidence to make (online) cross-border purchases. Therefore, the European Union has been active in creating consumer protection legislation, both in substantive law and more recently in procedural law. Cross-border procedures exist, but their accurate functioning requires that infrastructure must be interlinked and coherent, and should enable more dialogue between stakeholders. In this regard, e-CODEX can be a valuable tool to provide the digital exchange of case related data, connecting parties and courts in a single interface.

You can find more information on the programme on: https://www.e-codex.eu/e-meets-justice-conference. Do you want to be part of this lively and thought-provoking dialogue? You can register now by sending an email to: aanmelden@minvenj.nl.

On 15 April 2019 eleven international publishing will host an event on “Choice of Law in International Contracts” to honor the publication of Dr Gustavo Moser’s book Rethinking Choice of Law in Cross-Border Sales. The event will take place from 1 to 5 pm in the  Salon Franz Josef, Hotel Regina, Rooseveltplatz 15, 1090 Vienna, Austria. Topics will include:

• Choice of Law and Brexit
• Drafting Choice of Law Clauses
• CISG Status and Prospects 

1:00 pm – 3:00 pm| Roundtable Lunch with the Stakeholders

Speakers: Professor Ingeborg Schwenzer; Louise Barrington; Dr Patricia Shaughnessy; Michael McIlwrath; Luca Castellani; Dr Florian Mohs; and Dr Sabrina Strassburger

Moderator: Dr Gustavo Moser

3:30 pm – 5:00 pm| Coffee & Tea Talk

Speakers: Professor Ingeborg Schwenzer; Professor Petra Butler; Professor Andrea Bjorklund; and Dr Lisa Spagnolo

Moderator: Dr Gustavo Moser

An interesting comparison may be made between [2019] SGHC 53 Re Zetta Jet Pte Ltd and [2018] EWHC 2186 (Ch) Videology on which I reported here. Both concern recognition of foreign main (or not) proceeding under of the UNCITRAL Model Law on Cross-Border Insolvency (“the Model Law”). Zetta Jet came to me courtesy of my former student Filbert Lam, and has now also been analysed to great effect by Tan Meiyen and colleagues here.

The judgment is a master class on COMI determination, but also on comparative legal analysis re time of filing etc.: best read judgment and Tan’s note for oneself. Of particular note are

• the expression of sympathy by Aedit Abdullah J for forum shopping in insolvency law; compare also with Ocean Rig, and Kekhman; here this took the particular form of following the US approach to selecting the date on which the application for recognition is filed, as relevant to COMI determination (friendlier to forum shopping than te EU’s and England’s date of commencement of the foreign insolvency proceedings);
• the emphasis on the basket of criteria required to identify COMI;
• the narrow approach to ordre public despite Singaporean court order having been defied; yet also the relevance of the fact that these orders post defiance had been varied.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1 et al.

Prof. Dr. Marc-Philippe Weller and Markus Lieberknecht, Heidelberg University, have kindly provided us with the following blog post which is a condensed abstract of the authors’ article in the Juristenzeitung (JZ) 2019, p. 317 et seqq. which explores the topic in greater detail and includes comprehensive references to the relevant case law and literature.

In one of the most controversial German judgments of 2018, the Higher Regional Court of Frankfurt held that the air carrier Kuwait Airways could refuse transportation to an Israeli citizen living in Germany because fulfilling the contract would violate an anti-Israel boycott statute enacted by Kuwait in 1964. The Israeli citizen had validly booked a flight from Frankfurt to Bangkok with a layover in Kuwait City. However, Kuwait Airways hindered the Israeli passenger from boarding the aircraft in Frankfurt. According to the judgment of the Frankfurt Court, Kuwait Airways acted in line with the German legal framework: specific performance of the contract of carriage was deemed to be impossible because of the Kuwait boycott statute.

This judgment is wrong. Hence, it is not surprising that the decision sparked reactions in German media outlets which ranged from mere disbelief to sheer outrage.

The case demonstrates that the seemingly ‘neutral’ domain of Private International Law is not exempt from having to deal with delicate political matters such as the current global rise in anti-Israel and anti-Semitic sentiments. However, Private International Law is not as ill-equipped as the Frankfurt judgment seems to suggest. In fact, both Private International Law and (German) substantive law offer a wide range of instruments to respond to anti-Semitic discrimination.

First, the article explores the term anti-Semitism in order to carve out a workable definition for legal purposes. Based on this concept and on the available empirical data, we identify three scenarios which appear particularly relevant from a private law perspective: these include, first, encroachment on the personal honor and dignity of Jewish persons; second, attempts to alienate Jewish persons economically, one example being the Kuwait Airways case; third, physical attacks on Jewish persons or their property.

When addressing such behavior, private law operates under the influence of a superseding framework of anti-discriminatory provisions contained in international Law, European Law and constitutional law. We attempt to show that the protection of Jewish identity constitutes an overarching paradigm of Germany’s post-war legal order, a notion which finds support in the Jurisprudence of the German Federal Constitutional Court.

On a Private International Law level, this basic value of Germany’s post-war legal order shapes the domestic public policy (ordre public). Moreover, it translates into a twofold use of overriding mandatory provisions. First, under Art. 9(3) Rome I Regulation German courts are precluded from applying foreign overriding mandatory provisions with an anti-Semitic objective, such as Kuwait’s boycott statute. Although the ECJ’s reading of Art. 9(3) Rome I Regulation in Nikiforidis does leave room to take such provisions, or their effects, into account within the applicable substantive law as purely factual circumstances or as foreign data, we argue that the result of this process must not be that provisions which violate the ordre public are inadvertently given effect through the ‘back door’ of substantive law.

Applying our findings to the case, we conclude that Kuwait Airways lacked grounds to invoke both legal and factual impossibility. Whereas the former is precluded under Art. 9(3) Rome I Regulation for constituting a normative application of the Kuwaiti law, the latter requires a more intricate reasoning: We argue that the passenger’s right to specific performance had to be upheld under German contract law, while any purported intrusion of the Kuwaiti authorities into the performance is best dealt with at the enforcement stage. This approach is in line both with the result-driven desire to avoid granting the Kuwaiti law any effect within the German legal order and with the doctrinal structures of German law. One could reach the same conclusion by relying on a fact pointed out by Jan von Hein (Freiburg University): Kuwait Airways is a state enterprise owned by Kuwait, i.e. the very creator of the legal impediment (the boycott statute). Hence, it should not be allowed to rely on a self-created obstacle to refuse performance.

Conversely, overriding mandatory provisions contained in German law, e.g. anti-discrimination statutes, can be used to ward off or modify anti-Semitic effects of a foreign lex causae governing the legal relation in question. We then go on to discuss the necessity, or lack thereof, of adopting a Blocking Statute specifically designed to subvert the effectiveness of foreign legislation with an anti-Semitic agenda.

Lastly, we demonstrate that, in addition to securing the right to specific performance of Israeli citizens, the substantive law provides a host of legal grounds which can serve to empower victims of anti-Semitic discrimination. These instruments range from contractual damages to possible claims based on anti-discrimination law and the law of torts, addressing all of the relevant scenarios outlined above.

Kindly shared by Marta Pertegás Sender, Professor at the University of Maastricht

The University of Maastricht Law Faculty is offering two post-doc positions in the area of private law (including private international law), with focus on digital legal studies and globalisation respectively. The job descriptions and requirements are available hereunder:

– Assistant Professor Digital Legal Studies

– Assistant Professor Private Law and Globalization