Flux européens

Loredas
Libre circulation des personnes
Aménagement du temps de travail : les employeurs domestiques doivent mettre en place un système permettant de mesurer la durée du temps de travail journalier de chaque employé de maison

Caisse d’allocations familiales des Hauts-de-Seine
Espace de liberté, sécurité et justice
Un État membre ne peut exclure du bénéfice d’allocations familiales le travailleur étranger dont les enfants, nés dans un pays tiers, ne justifient pas être entrés régulièrement sur son territoire

Ford Italia
Environnement et consommateurs
Responsabilité du fait des produits défectueux : un fournisseur peut être considéré comme producteur si son nom coïncide avec la marque apposée sur le produit par le fabricant

Kaduna
Espace de liberté, sécurité et justice
Protection temporaire pour les personnes déplacées en provenance d’Ukraine : un État membre qui a étendu cette protection à certaines catégories de personnes, au-delà de ce que requiert le droit de l’Union, peut leur retirer ladite protection sans attendre la fin de la protection temporaire accordée en vertu du droit de l’Union

Halmer Rechtsanwaltsgesellschaft
Libre circulation des capitaux
La participation d’investisseurs purement financiers dans une société d’avocats peut être interdite

Tudmur
Espace de liberté, sécurité et justice
Politique d’asile : la suspension unilatérale des mesures de transferts de demandeurs d’asile par un État membre responsable ne justifie pas à elle seule le constat de défaillances systémiques

Mironovich Shor / Conseil
Relations extérieures
Déstabilisation de la Moldavie : le Tribunal confirme les mesures restrictives adoptées contre M. Shor et Mme Tauber pour l'organisation de manifestations violentes

TP / Commission
Marché publics
Pour exclure une société des procédures de passation de marchés publics et d’octroi de subventions de l’Union, l’ordonnateur doit évaluer le comportement de l’opérateur mis en cause de manière concrète et individualisée

I reviewed and criticised the successful first instance forum non conveniens challenge by Dyson viz a claim allegations of forced labour at Dyson’s Malaysian Supplier, here.

That finding was today resoundly overturned by the Court of Appeal in Dhan Kumar Limbu & others v Dyson Technology Limited and others [2024] EWCA Civ 1564.

The issues at stake were expertly discussed this week in an online EAPIL seminar called by prof Ugljesa Grusic at the occasion of Dr Ekaterina Aristova’s excellent OUP volume Tort Litigation Against Transnational Corporations.

The first instance judge concluded that Malaysia was the more appropriate forum for the claims to be heard and that there was no real risk of the claimants being unable to access justice there.

[4] Popplewell LJ confirms standing authority that the Court of Appeal only interferes in such exercise, necessarily fact and view driven as it is, and absent some procedural unfairness or irregularity, where the lower court has made an error of principle, such as taking into account irrelevant matters or failing to take into account relevant matters, or has reached a conclusion which exceeds the generous ambit within which reasonable disagreement is possible and so is plainly wrong.

[22] Summarises what is needed: for a ‘service in’ case (here: against those defendants with domicile in the jurisdiction), the burden is on the defendant to show that there is another available forum which is clearly and distinctly more appropriate. The burden reflects the fact that in such a case the claimant has served the defendant as of right which is an advantage which will not lightly be disturbed (reference to Spiliada). In a service out case (here against the non-E&W domiciled defendants), the burden is on the claimant to show that England is clearly the appropriate forum. In both cases appropriate forum means that in which the case may be tried more suitably for the interests of all the parties and the ends of justice (reference ia to Lungowe v Vedanta [66]).

The various factors going into this exercise are listed [22-23]

In determining the appropriateness of the forum, the court looks at connecting factors to determine with which forum the action has the most real and substantial connection (Spiliada at p. 478A). These include not only factors affecting convenience or expense, but also other factors such as governing law, the place where the parties reside or carry on business, and where the wrongful acts and harm occurred (Spiliada p. 478A-B, Vedanta at [66]). The risk of multiplicity of proceedings giving rise to a risk of inconsistent judgments is only one factor, although a very important one (Vedanta at [69]). In applying these connecting factors to cases involving multiple defendants, their relative status and importance in the case should be taken into account, such that greater weight is given to the claims against those who may be described as a principal or major party or chief protagonist: JSC BTA Bank v Granton Trade Limited [2010] EWHC 2577 (Comm) per Christopher Clarke J at [28].

23. For both service in and service out cases, if the court concludes that the foreign court is more appropriate by reference to connecting factors, applying the relevant burden of proof, the court will nevertheless retain jurisdiction if the claimant can show by cogent evidence that there is a real risk that it will not be able to obtain substantial justice in the appropriate foreign jurisdiction (Vedanta at [88]). Cogent evidence does not mean unchallenged evidence (Vedanta at [96]). This is often conveniently treated as a second stage in the analysis because it usually calls for an assessment of different evidence, but it does not involve a different question: if there is a real risk of denial of justice in a particular forum it is unlikely to be an appropriate one in which the case can most suitably be tried in the interests of the parties and for the ends of justice: Vedanta at [88]. In this case the parties and the Judge adopted that two-stage approach, labelling the first stage as “appropriate forum” and the second stage as “access to justice”. I will adopt the same structure, whilst keeping in mind that second stage factors may also be relevant to the first stage in what is juridically a single holistic exercise in seeking to identify where the case can most suitably be tried in the interests of the parties and for the ends of justice.

Grounds of appeal are listed [30]. I will not rehash all of the grounds or their discussion (the judgment is succinct yet all of the paras count really), rather highlight the IMO most relevant ones:

[34]: the Judge failed to take any account of the important connecting feature that D1 and D2 are domiciled in England and have been served here as of right. The domicile of the parties was not one of the Judge’s headings and did not feature in his conclusory paragraphs.

This is an important confirmation of the principle as it also exists in EU law: suing a defendant in their domicile as of right, must be given its proper weight in a forum non balancing exercise, and note Popplewell LJ’s reference to EU law:

[34] The reason it is an important connecting factor in relation to jurisdiction is because presence here is the basis for establishing the court’s jurisdiction, and domicile here connotes a degree of permanence and allegiance to the country’s institutions, including its courts, which means that the party can reasonably expect, and be expected, to meet claims against it in such courts in the absence of sufficient countervailing factors. That is why within the EU domicile remains the foundational factor for allocating jurisdiction in civil and commercial matters, subject to derogations.

[36] the argument that the weight placed on the UK domiciled defendants, be neutralised by the non-UK domicile of the other defendants, fails, ! however with in my view important instruction for future challenges: Lord Justice Popplewell holds that “the reality is that Dyson UK is the principal protagonist and Dyson Malaysia a more minor and ancillary defendant to the claim against D1 and D2.”

That evidently may be a factor to take into account where the UK anchor defendant is not the main protagonist.

[38] Viz the ‘centre of gravity’ of the claim (not a separate part of the test, rather a clerical trick as it were to rank arguments), this is held to be

an allegation of a failure occurring amongst the management in England and is alleged primarily to have occurred in England, although it will also focus to some extent on conduct in Malaysia. The complaints made by Mr Hall were made to Dyson UK and the alleged failure to take steps to act on them is primarily a failure of English personnel in England. The unjust enrichment of D1 and D2 ultimately took effect in England at their centre of trading, and the proprietary remedies claimed are of property rights over profits and products located in this country.

This latter element is also a response to TWAIL arguments which I flag here in my review of Dr Aristova’s jurisdictional analysis (she discusses them extensively in her volume).

[42] ff an error of principle was also found in the judge’s finding that there was a real risk of irreconcilable findings in relation to pending [GAVC now discontinued; note [43] the flag that discontinuation may have been motivated by strategic considerations in current appeal] defamation proceedings even if the current proceedings proceed in England on the basis that it was most unlikely that the High Court would case manage the proceedings to avoid or reduce the risk of such a possibility. Plainly, there would have been a plain likelihood of the English courts so coordinating.

[47] The fact that litigation will be coordinated and conducted from one of the two rival fora, irrespective of the forum in which the litigation takes place, is held to be a significant connecting factor with that forum. Note of course that this may give unscrupulous defendants forum management possibilities.

[49] ff the judge’s acceptance of and reliance on material support offered by defendants for the trial in the alternative forum, is frankly demolished, starting with the observation

I start with the Undertakings. In the experience of the court they are unprecedented, and the researches of counsel have not identified anything similar (we were referred to Société Nationale Industrielle Aerospatiale v Lee Kui JAK [1987] AC 871, an anti-suit injunction case, in which the undertakings were not remotely comparable). As a mechanism for ensuring that the impoverished claimants are thereby enabled to meet disbursements necessary to conduct the claims in Malaysia, they seem to me to suffer from six serious flaws….

for these six flaws the reader of this post best read the judgment, starting with the observation of an obvious conflict of interest.

[59-60] considerable emphasis on equality of arms both in legal representation (note the reference to Tesla rather than the ordinarily intuitive ‘Rolls Royce’ comparison) and in terms of witnesses’ online translation needs.

Having found the judge’s approach suffering from serious issues of principle, the Court of Appeal then makes it own brief assessment [63] ff. Funding, domicile of the parties, practical convenience are all found to be in favour of E&W. Applicable law leads to Malaysian law (presumably because parties agree), with the Court holding that is nevertheless not particularly onerous for the English courts to apply.

Overall, a resounding victory for claimants with however as I point out above, one or two risk factors carefully to manage for future reference: if arguably not of such nature as to displace the reconfirmed solid right to claim in the defendant’s place of domicile.

Geert.

EU private international law, 4th ed. 2024, Chapter 7.

https://x.com/GAVClaw/status/1867545272261521803

Nemzeti Földügyi Központ
Libre circulation des capitaux
Droits d’usufruit sur des terres agricoles en Hongrie : le droit de l’Union ne s’oppose pas à la réinscription de tels droits conformément à un arrêt de la Cour de justice, même si leur inscription initiale était illégale

Getin Holding
Liberté d'établissement
La Cour de justice précise les règles concernant l’indépendance d’une autorité de résolution nationale et les recours contre ses décisions à l’égard d’établissements financiers défaillants

In Nanox Imaging PLC v David Schick 2024/GSC/043, Happold J at the Gibraltar Supreme Court dealt with applications for anti-suit, forum non conveniens and case management stays.

Claimant ‘Nanox Gibraltar’ is a Gibraltar registered company which until September 2019 carried on business in the field of medical imaging technology. Defendant is an electrical engineer and a US national resident in California. A Consultancy Agreement between them contains two jurisdiction clauses. The first, Clause 6.5 provides that:

“Both parties agree that any action, demand, claim or counterclaim  relating to this Agreement, or to its breach, shall be commenced in the state of Gibraltar in a court of competent jurisdiction. This Agreement and the validity, interpretation and performance of this Agreement shall be governed by, and construed in accordance with, the laws of Gibraltar without giving effect to conflict of law principles” The second, in Clause 8 of Appendix B, is in different terms. It provides that: “This Agreement shall be governed by and interpreted in accordance with the laws of Gibraltar without giving effect to the rules respecting conflict of law, and the competent courts of Gibraltar shall have sole and exclusive jurisdiction over any dispute between the parties.” Parties disagree as to the relevance of Clause 8 for the interpretation of Clause 6.  On 28 October 2021, Mr Schick brought proceedings before the US District Court for the Central District of California against current claimant, and Nano XImaging Inc. (‘Nanox Israel’), as well as Mr Ran Poliakine (the main beneficiary of the Nano Imaging vehicles) and eleven other defendants. Nanox Israel is a company registered in Israel to whom Nanox Gibraltar sold its assets in 2019, including its intellectual property rights. In July 2020, Nanox Israel IPOed on Nasdaq. Mr Shick argues he is entitled to outstanding fees for consultancy

services under the Consultancy Agreement as well as to a One Time Bonus. The Californian proceedings were dismissed due to lack of jurisdiction. Israeli proceedings are still ongoing with there, too, contestation of jurisdiction. In order to hold in the fate of the Gibraltar proceedings, the first question is whether Clause 6.5 is an exclusive jurisdiction clause. Defendant argues Clause 6.5 is permissive, not mandatory, because it does not expressly refer to “irrevocable” submission to the Gibraltar courts, to those courts having “sole” or “exclusive” jurisdiction, or expressly prohibits proceedings being brought elsewhere; and because the term “shall” is not the language of obligation (that argument summarily dismissed if only on its ordinary meaning; as it should). In addition, Defendant says that Clause 8 of Appendix B is irrelevant to the interpretation of Clause 6. Happold J [15] disagrees and in my opinion he is right. I do think his succinct discussion [17] of Brussels Ia (! which continues to apply by virtue of the European Union Gibraltar Act 2019) could have come before his discussion of the language of the choice of court clause outside the Brussels Ia context. Per A25 BIa, all choice of court clauses are exclusive lest agreed otherwise. Therefore the engagement with the wording of the clause should not focus on whether there is language that indicates its exclusivity; rather, whether there is clear language that suggests it is not exclusive. A further most relevant point of discussion [19] ff is then whether despite Brussels Ia, a forum non conveniens stay might be possible in Gibraltar, despite s33 of the Civil Jurisdiction and Judgments Act 1993. s33. This reads in relevant part Nothing in this Act shall prevent any court in Gibraltar from staying, striking out or dismissing any proceedings before it on the ground of forum non conveniens or otherwise, where to do so is not inconsistent with the 1968 Convention or, as the case may be, the Lugano Convention or the 2005 Hague Convention. The suggestion is that with Brussels Ia not mentioned in that list, it does not stand in the way of a forum non stay. Happold J justifiably as a matter of both statutory construction and the nature of BI and BIa as a directly applicable Regulation, holds [22] that a forum non stay is not possible, neither [23] is a case management stay see ‘otherwise’ in s33, above. In the discussion of anti-suit one would have expected discussion of CJEU Turner (less so: Starlight Shipping (The Alexandros T for that judgment was issued post Brexit). Instead, anti-suit is granted on common law principles despite Brussels Ia still applying. Am I missing something here?: does Gibraltar’s continued use of Brussels Ia exclude any and all CJEU case-law? An interesting case! Geert.

Dexia v Patrimonio del Trentino [2024] EWHC 2717 (KB) echoes Banca Intesa v Venezia  in some of its main issues. It features capacity of foreign corporations to enter into legal transaction, relevance of lex incorporationis, validity of choice of court clause, and the impact of Brexit, with the judge prima facie accepting resurrection of the 1964 bilateral UK-Italy convention. 

Dexia submits that ongoing Italian Proceedings were brought in breach of the English jurisdiction clause in the ISDA Master Agreement between Dexia and Trentino (itself governed by English law), and which Dexia also submits is, on its true construction, an exclusive English jurisdiction clause. There is an extant challenge by Dexia to the jurisdiction of the Italian court in the Italian Proceedings which is due to be heard in January 2025.

By its claim in the English Proceedings, Dexia is seeking declaratory relief in respect of an interest rate swap transaction (the “Transaction”) pursuant to an ISDA Master Agreement dated 7 October 2010 between Dexia and Trentino.

Trentino argue the jurisdiction clause is not valid. It originally sought to do so on two grounds (each relying on Italian law arguments): (1) It argued that the Jurisdiction Clause is void due to an alleged lack of capacity on the part of Trentino to enter into speculative derivatives (the “Speculation Ground”); and 2) It argued that Article 4 of Law No. 218/1995 (Law 218), which applies following the Brexit transition period, prohibits agreements involving so-called “non-disposable rights” from ousting the jurisdiction of the Italian courts (the “Non-Disposable Rights Ground”).

The second ground was abandoned. That leaves the Speculation Ground. As a matter of English (and indeed many a) law, the capacity of a foreign corporation to enter into any legal transaction is governed by the law of the country of incorporation of the entity in question (in this case, Italian law).

[61] The judge holds Any lack of capacity to enter into a particular derivative transaction cannot, and does not, equate to a lack of capacity to enter into an ISDA Master Agreement (see also Vestia). The Master Agreement is not itself a derivative contract and any alleged prohibition in relation to derivatives would not apply to the Master Agreement.

[64] In an attempt to circumvent the difficulty that Trentino did have capacity to enter into the Master Agreement and that the Master Agreement (containing the Jurisdiction Clause) is valid, Trentino then submits that the “single agreement” provision in Clause 1(c) of the Master Agreement means the Master Agreement is not a separate and distinct agreement. [65] This is held clearly to be a bad point, not least in circumstances where the Master Agreement came into place separate from, and long before, any particular transactions. Bryan J agrees on this point with the sentiments expressed by Foxton J in Banca Intesa.

[72] ff the judge obiter discusses the speculation argument. [74] ff he holds the Italian rules on speculative derivatives do not apply to Trentino, both because it is a joint-stock company and because the Province is a Region, which has a greater level of autonomy in such matters than local authorities.

[87] ff it remains open to Trentino to make its Stay Application and submit that the English Proceedings should be stayed on the basis that Italy is the appropriate forum and/or that the Italian proceedings constitute a lis alibi pendens if, but only if, Trentino is right that the Jurisdiction Clause is not an exclusive English jurisdiction clause. Then follows a very lengthy discussion on the meaning of the clause in light of the Brussels (and Lugano) regime ([124] seeing as the clause dates from before Brexit) with the judge concluding the clause is exclusive.

They stay application is discussed obiter [135] ff. [152] Trentino submits that there are two factors which were unforeseeable at the time of concluding the Transaction, firstly the likelihood of parallel proceedings (given that that was impossible under the Brussels I Regulation save in respect of Article 31 protective proceedings), and secondly the risk that an English judgment that would be readily enforceable under the Brussels I Regulation might now be unenforceable in Italy.

Re the first argument, [153] the fact that the Brussels I Regulation lis pendens rules no longer apply to prevent the possibility of parallel proceedings does not make Italy a more appropriate forum than England or vice-versa. Re the second argument, [161] the judge follows Dexia’s expert’s view that Law no. 280/1973 applies following Brexit, which permits reciprocal enforcement of English judgments in Italy pursuant to the 1964 Bilateral Convention between Italy and the UK. The Bilateral Convention was given effect in English law as the Reciprocal Enforcement of Foreign Judgments (Italy) Order 1973, extending the Foreign Judgments (Reciprocal Enforcement) Act 1933 to Italy.

On any view there is a good arguable case that Law no. 280/1973 applies given the views expressed by Professor Rimini and the matters he relies upon in that regard.

I am not so sure there is such a good arguable case, see eg X v Juno Holdings in The Netherlands.

A 168 para judgment on a jurisdiction challenge- yet again a lot of energy, time and money invested.

Geert.

https://x.com/GAVClaw/status/1852327803825373543

There is a gale force wind out there and the girls and I are housebound: so I thought I’ld clear the blog queue a bit. It is generally not good practice to post poorly drafted choice of court provisions yet once in a while it helps illustrate what I often say in class: that even in sophisticated contracts, choice of court and -law provisions can be drafted extremely sloppily.

Tradin Organic Agriculture BV v Gold Grain [2024] EWHC 1562 (KB) is such an example. It is an application for set-aside of a default judgment (I will not focus here on the issue of jumbled papers in the service of the claim form).

On 31 October 2019 Tradin and Gold Grain entered into a five-year exclusive supplier agreement (“ESA”). Tradin made Gold Grain their exclusive supplier of certain products from certain areas. Tradin then entered into a series of loan agreements with Gold Grain, the first to finance the purchase of a processing facility (the Mersin facility) and then five pre-finance loan agreements (“the loan agreements”). The repayments for the loan agreements were made by way of the goods supplied with a backstop that all the sums would be payable within 12 months of the date of the agreement. The goods were supplied under a series of purchase agreements.

The ESA was governed by English law. There is no jurisdiction clause. The Mersin agreement was governed by Swiss law and was subject to an arbitration agreement. The purchase agreements contained a Dutch choice of law clause.

The loan agreements contained the following clauses:

“Governing law: Submission to Jurisdiction

(a) This loan agreement and the obligations of the Borrower [Gold Grain] shall be governed by and construed in accordance with the governing jurisdiction of law in English law with the exclusion of the Vienna Sales Convention…

(b) The Borrower also agrees not to bring any action or other proceeding with respect to this loan agreement or with respect to any of its obligations in any other court unless such courts determine that they do not have jurisdiction in the matter”

(Note the exclusion of the CISG just to be sure: English law does not include it anyways).

Application to set aside judgment in default is brought on three grounds: (i) service was defective because the particulars of claim were not verified by a statement of truth, (ii) Gold Grain has a real prospect of success in challenging the jurisdiction of the English court or alternatively, without prejudice to the jurisdictional challenge, that there is a real prospect of success in defending the quantum of the claim, and (iii) Tradin failed to satisfy the duty of full and frank disclosure in their application for default judgment.

Prima facie, first note the poor title of the clause. There is an amazing amount of contracts with ‘choice of court’ articles which merely contain choice of law, and vice versa, thereby giving the judge a window to hold on express, if implicit, choice of court or law. The second part is simply puzzling: Borrower may only bring claims to a court where such claim will be ineffective due to lack of jurisdiction?

Gold Grain’s position is primarily that they have a real prospect of arguing that the claim should be stayed either on forum non conveniens grounds or through case management powers due to the parallel proceedings in the Netherlands. [20]

In respect of the forum grounds, the argument is that the choice of law clause is choice of governing law not a choice of jurisdiction clause. Clause (b), set out at paragraph 8 above, is confusing and contains a double negative such that it is not possible to understand what the parties intended from the paragraph alone. Even if it does connote forum, it is not an exclusive clause. If it is not an exclusive jurisdiction clause, it is governed by common law. Whilst the English courts will give effect to an agreement to submit to their jurisdiction, the court has a discretion. It is submitted that in this case, the claim proceeding in the Netherlands is inextricably linked to these proceedings which, it is said, gives rise to risks of inconsistent judgments and England is not the proper forum as none of the parties have any connection to England. These arguments mean a forum non conveniens challenge has a real prosect of success or alternatively that the court should grant a stay under its case management powers.

[26] Master Sullivan holds

On the substantive jurisdiction issues, there is no real prospect of success, the title before the relevant clauses in the loan agreements in issue is “Governing law: Submission to Jurisdiction”. It is clear this is a jurisdiction as well as a governing law clause. The drafting is infelicitous but the meaning is clear. It is an asymmetric exclusive jurisdiction clause in favour of English courts.

That in my view is not at all convincing, Reminder, the clause reads

“Governing law: Submission to Jurisdiction

(a) This loan agreement and the obligations of the Borrower [Gold Grain] shall be governed by and construed in accordance with the governing jurisdiction of law in English law with the exclusion of the Vienna Sales Convention…

(b) The Borrower also agrees not to bring any action or other proceeding with respect to this loan agreement or with respect to any of its obligations in any other court unless such courts determine that they do not have jurisdiction in the matter”

The title of the clause is not that relevant and judges must look beyond it. Yet a) surely can only be read as choice of law in favour of English law; and for b) to be read as asymmetric choice of court, it would have to indicate which choice of court the lender is bound to; and it is difficult to overlook the incomprehensible double negative.

All in all this is one of these cases where parties’ fumbling in drafting cannot be rescued by a judge reconstructing what they might have meant. Despite the Etihad v Flóhter instruction that he approach to be adopted to construction is a “broad, purposive and commercially minded approach”, this clause in my view simply cannot be rescued.

Geert.

https://x.com/GAVClaw/status/1806216674548588748

I reviewed Richard de la Tour’s Opinion in C-526/23 VariusSystems digital solutions GmbH v GR Inhaberin B & G here. The CJEU held at the end of November, essentially following it and being very brief in doing so. The operative part of the judgment reads

The second indent of Article 7(1)(b) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters

must be interpreted as meaning that the ‘place of performance’ of a contract for the development and ongoing operation of software designed to meet the needs of a customer established in a Member State other than that in which the company that created, designed and programmed that software is established is the place where that customer accesses the software, that is to say, consults and uses it.

The Court [21] refers in particular to the European Commission’s submission that

With regard to a contract for the provision of software, such as that at issue in the main proceedings, it is necessary to find, in line with what has been set out by the European Commission in its written observations, that the design and programming of software do not constitute the obligation which characterises such a contract, since the service which is the subject of such a contract is not actually provided to the customer concerned until that software is operational. It is only from that moment, when the said software can be used and its quality can be inspected, that that service will actually be provided.

With respect, that is a nonsense. Is a banking service in the form of a loan (see CJEU Kareda) not provided until the money reaches my account and therefore becomes ‘operational’? Is my whisky merchant’s advice on single malt (see CJEU Maison du Whisky) not provided until I taste the malt with my own lips, hence ‘using the advice and inspecting it’?

This reference to use and inspection IMO is something the Court will come to regret: it is of very wide application and will undoubtedly upend the curt reference to BIa’s predictability [15]. The AG’s arguments were more focused and more convincing.

Geert.

EU Private International Law, 4th ed. 2024, 2.425.

https://x.com/GAVClaw/status/1862130498761310273

In Alame & Ors v Shell PLC & Anor [2024] EWCA Civ 1500 Stuart-Smith LJ delivered the unanimous judgment on the appeal against a range of procedural issues which I have previously discussed here. Judgments appealed are [2024] EWHC 510 (KB) and [2023] EWHC 2961 (KB)

The Rome II evidence and procedure issue which I signaled in my earlier post does not feature in the appeal.

Essentially the issue in the case is the extent to which claimants in litigation viz diffuse, often legacy pollution, need to show a causal link between their damage and individual acts of pollution. The stricter that requirement, the stronger the polluter’s get out off jail free card.

The first instance judge had ordered a ‘global claims’ trial. Stuart-Smith LJ [17]:

the concept of “global claims” originates in decisions of the English and Scottish courts concerned with the proof of causation in contractual disputes relating to delay or disruption in the course of building projects. In broadest outline, it allows that causation may be established by showing that a loss is caused by multiple events, for all of which the Defendant is responsible, even if the loss attributable to individual events cannot be identified. … [I]t is inherent in the concept of “global claims” that causation will not be established on this basis if a material contribution to the claimant’s loss is made by an act or event for which the defendant is not responsible: it is in that sense an “all-or-nothing” approach to causation and liability.

As claimants’ solicitors, Leigh Day, put it

Under a Global Claim, the Bille and Ogale communities would have had to prove that Shell was responsible for 100% of the pollution that has impacted their environment. If there were any other sources of pollution for which Shell was not responsible, the claim would fail entirely.

In response to an earlier order, each individual claimant was to advance an SOI or Schedule of Information. [24] each SOI

i) Identifies all of the particular spills that the individual claimant relies upon, with such precision as they are presently able to achieve;

ii) Indicates that they rely upon the VPOCs (the Voluntary Particulars of claim in regard of Causation); or

iii) Identifies one or more spills or possible spills without limiting their claim to those spills and while also relying on the VPOCs.

“Claimants explain their inability to provide further particularisation of their case on causation as being not least because of (a) the difficulties imposed by the migration of oil, which renders the attribution of damage to particular spills “invariably not straightforward and in many instances impossible without specialist expert analysis and assistance”; and (b) the Claimants being “members of a rural Nigerian fishing community with limited resources, a lack of expertise, and the absence of a contemporaneous record of the dates, locations and volumes of all spills which have occurred in Bille.” ” [23] further detail is given on some elements of the particulars of claim (POC): 

“7. For the avoidance of doubt, the Claimants do not advance a “global claim”. The Claimants’ position is that the principles described in construction law cases … have no application to their claims because, inter alia:

a. As a matter of English law, the concept of a global claim is unique to contractual disputes in the context of construction law, and it has no application to common law tort claims concerning environmental damage;

b. The claims are governed by Nigerian law and to the Claimants’ knowledge the concept of a “global claim” has never been referred to in Nigerian case law; and

c. The Claimants do not, and have never purported to, rely upon the concept of a global claim.”

(Point b, nota bene, is where Rome II comes in).

[30] Mr Richard Hermer KC (now attorney-general) had argued that further particulars would be given once the necessary disclosure obtained and once expert evidence procured. [31] the first instance judge, while rejecting Shell’s application to strike out the claims,

“was satisfied that the Claimants’ cases were “not at present sufficiently underpinned by information which enables the court or the parties to link the event(s) to breach and breach to loss, even by inference.” Having expressed concern (at [39]) that the Claimants’ route to selecting cases would not reliably cover all the issues arising on an events-based claim she turned at [41] to the suggestion that the Claimants’ claims should proceed as “global claims”, tracing some of the relevant authorities as she did so. She concluded (at [42]) that there was no relevant distinction to be drawn between construction claims and environmental claims and that “on the present state of the pleadings and associated information” all bar 5 of the Claimants’ cases were “global claims.” “

The Court of Appeal had to hold on a variety of issues advanced by both claimants and defendants, all of them procedural in nature. Arguably the most eye-catching issue is the one on the global claim. [77] Claimants intend to assert and prove a link between their loss and damage and a specific event for which the Defendants are alleged to be responsible. However [78] they

openly acknowledge and assert that they cannot plead (let alone prove) such a case at the moment. That does not mean that they are pursuing a global claim. What it means is that the Claimants cannot progress this very substantial litigation on the basis of the information they have. They assert that there is reason to believe that there is further information in existence that is not at present available to them but which, if they had it and had the benefit of appropriately supportive expert evidence, would enable them to plead and prove a case adopting conventional principles of causation. It may be that they will never be in a position to do so, in which case this litigation will fail. It is easy to see that there are formidable logistical and evidential difficulties for the Claimants to overcome; but that is the route they have chosen.

[79] the Court of Appeal swiftly sets aside the first declaration by the first instance judge that “the Claimants’ claims are to be progressed on the basis that they are “global claims”, i.e. “all-or-nothing” claims.”  It does so on the basis of the continuously pleaded and written assertion by claimants that they are not advancing the claims as such a ‘global claim’. And, [75]

There is a short and direct route to the conclusion that this declaration must be set aside. No judge or court is entitled to require a party to establish their case by a particular method. A party should be permitted to formulate their claims as they wish, not forced into a straitjacket (or corner or cul-de-sac) of the judge’s or their opponent’s choosing. It will be for the trial judge to determine whether the party can establish their claim:

As a result the status of “global claims” in English law and whether such an approach could ever appropriately be applied to environmental claims such as those being brought by the Claimants, is not held on, “Still less would it be appropriate in this judgment to address the question whether such an approach could have validity under Nigerian law.”

[Note [98] Males LJ (who like Bean LJ, is in agreement with Stuart-Smith LJ), flagging the interesting causation issue that will follow at trial:

What the Claimants will need to prove in order to make good their claims must depend on the relevant principles of Nigerian law, including the applicable principles relating to causation. There was some debate before us as to the principles of causation which would apply under English law. We were referred, for example, to an interesting article by Professor Jane Stapleton suggesting that in a case where an indivisible loss is caused by multiple factors, an “extended but-for test” may now apply, so that a claimant need only prove that the factor for which the defendant is responsible made a contribution to the loss (Unnecessary and Insufficient Factual Causes, Journal of Tort Law (2023)). It is, as I understand it, the Claimants’ position that this is all they need to prove in the present case, but whether that position is sound as a matter of Nigerian law remains to be decided.]

The second declaration on which the appeal was allowed, was the first instance judge’s declaration that Claimants’ pleaded case precluded the case management of the litigation being organised by reference to the selection of lead claimants.

Here the Court of Appeal emphasises the inherent inequality of arms in the litigation, despite both parties having excellent counsel throughout: [81]:

Despite the Claimants having the benefit of legal representation of the highest calibre, there is a substantial inequality of arms in the litigation. Two particular aspects of that inequality can be mentioned specifically here. First, there is a major inequality in access to information. The evidence submitted by the Claimants suggests that the Defendants have considerable quantities of relevant information that are not available to the Claimants. The Defendants’ primary response is to shield behind the submission that the Claimants have not particularised their case properly. Ultimately all future case management decisions are for the High Court and not for this Court on these appeals. However, the evidence advanced by the Claimants can be relied on in these appeals as demonstrating significant inequality of arms in access to information. Second, the Claimants cannot fund the litigation out of their own resources and have to rely upon their lawyers being prepared to act on CFA terms. The inequality that flows from this is best illustrated by the £7 million that the Claimants have had to expend on the SOIs. It is a very substantial sum for the Claimants; but it would be relatively (I emphasise the word “relatively”) trifling for the Defendants as part of a global organisation such as Shell.

[82] Stuart-Smith LJ emphasises the importance of disclosure, and [83]

while the Court should always be alert to disallow applications that are nothing more than “fishing expeditions”, in a case such as the present where the case that the Claimants wish to bring has been clearly articulated in their pleadings and associated documents, the Court should scrutinise with care any suggestion that the Defendants do not know the nature of the case they have to meet for the purposes of disclosure because it has not yet been pleaded with sufficient particularity. In principle, at least, the Court’s approach to the Claimants’ assertion that they need further disclosure should be informed more by the explanations they have given about why they need the disclosure before pleading a case with full particularity than by the present state of their pleadings. This is not to cast doubt for a moment upon the equally important principle that, before this litigation or any part of it can be brought to trial, the Claimants will be required to plead their case with sufficient particularity so that the Defendants know what case they have to meet and have a fair opportunity to meet it. That stage has evidently not yet been reached.

and [84]

this is a paradigm example of a case which can only be progressed by reference to lead cases and that the co-operative selection of lead cases by the parties (with the intervention of the Court if required) is an essential step that is required to break the circularity of the present impasse. It is not necessary to refer expressly to the multiple examples of complex litigation with wide-ranging factual and legal issues in many disparate fields that have been successfully case-managed using lead cases as the vehicles for determining important issues. I echo and endorse what was said by the Court in Municipio de Mariana v BHP Group (UK) Ltd [2022] EWCA Civ 951, [2022] 1 WLR 4691 at [139]:

“The courts have developed a wide range of case management tools in group litigation including, importantly, the selection of lead cases, the trial of preliminary issues and the adoption of a staged approach, either in parallel with other progress in the litigation or as a stand-alone procedure. These operate in what is now a digitalised environment which includes sophisticated e-disclosure, data sampling and algorithm mechanisms.”

Finally, Lord Justice Bean [102] emphasises the time issue:

I particularly wish to endorse the observations of Lord Justice Stuart-Smith that, in a case such as this where there is both a substantial inequality of arms and asymmetry of information between the parties, all case management decisions should be informed by the overriding objective, in particular by the court’s obligation to ensure so far as reasonably practicable that the parties are on an equal footing and can participate fully in the proceedings. I also agree that, because of the time taken up by the Defendants’ jurisdictional challenge and the distraction of the global claims issue, there is a compelling need for the litigation to be progressed promptly from now on.

A very important case which emphasises again how, when hopefully one can conclude in a few years time that English courts have been trailblazers in holding business to account for human rights, and environmental abuse, procedural judgments like these will have proven to be pivotal, as will the skill of the lawyers not losing sight of the ‘boring bits’ of such claims (civil procedure rules, claim financing, etc)

Geert.

 

https://x.com/GAVClaw/status/1865056147461284280

On 3 December I held a talk at University College, London, on ‘Muscles from Brussels‘, at the invitation of prof Ugljesa Grusic. The text of that talk is here.

It was an interesting evening! Many thanks to Ugljesa for hosting.

Geert.

 

In Case C-70/23 Mesto Rimavská Sobota the CJEU held on 21 November on an important trigger for many an EU product- and import /export related environmental regulation. In the case at issue the context is the EU Timber Regulation 995/2010 also known as ‘EUTR’. The EUTR in essence aims to prevent illegally harvested timber from being lawfully marketed. [Of note is that the EUTR has been replaced by the EU Deforestation Regulation – EUDR 2023/1115. Entry into force of the EUDR was to be postponed by a year at the time of writing].

The core issue in the case was the concept of ‘operator’. It is the operator who needs to ensure there is an adequate due diligence system in place in the supply chain. Article 2(c) EUTR states that an ‘operator’ means

any natural or legal person that places timber or timber products on the market.

Article 2(b) of the Timber Regulation further explains that ‘placing on the market’ means

the supply by any means, irrespective of the selling technique used, of timber or timber products for the first time on the internal market for distribution or use in the course of a commercial activity, whether in return for payment or free of charge.

In the case at issue a Slovak municipality had tendered access to its wood, including the right to harvest a specified amount of trees. Harvesting was to be carried out under the supervision of employees of the municipality, however they were not actually felling the trees. Was the municipality the ‘operator’? Or  was it the contractor?

The CJEU’s judgment is in essence one of statutory construction. It is settled case-law that to interpret a provision of EU law, one needs to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part.

At para 26 the Court points out that Article 2(c) of the EUTR defines, the concept of ‘operator’ as any natural or legal person that places timber or timber products on the market. Article 2(b) in turn as noted defines the notion of ‘placing on the market’ as covering ‘the supply by any means, irrespective of the selling technique used, of timber or timber products for the first time on the internal market for distribution or use in the course of a commercial activity, whether in return for payment or free of charge’.

At para 28 the Court holds that the term ‘supply’ in Article 2(b) “must, according to its usual meaning, be understood as referring to the transfer of ownership of a quantity of timber or timber products.” That in my opinion is a bit of an interpretative shortcut. Even in its ordinary meaning, ‘supply’ arguably is a broader category than ‘transfer of ownership’. The Court’s take is impacted by the fact that ‘standing trees’ are not included as ‘timber and timber‘ products’ in relevant Annex.

The Court continues some of that focus on ownership and its transfer, this time with emphasis on the first time such ownership is transferred, holding ‘ a natural or legal person must be regarded as being an ‘operator’, ‘placing on the market’ ‘timber and timber products’, within the meaning of Article 2(a) to (c) of Regulation No 995/2010, where, irrespective of the selling technique used, it transfers for the first time and for the purposes of distribution or use in the course of a commercial activity, the right of ownership in wood in the rough or fuel wood to a person who carries out transactions in the internal market.’ (para 31). When that transfer occurs is dependent upon the applicable law: if it already occurs viz the trees still standing, there is no transfer of ownership of timber or timber products and the due diligence requirements are imposed upon a party further down the chain.

The judgment illustrates the continuing need for the legislator to define core regulatory requirements with the specific intentions of the regulation in mind.

Geert.

 

HSBC Holdings e.a. / Commission
Concurrence
Concurrence en matière de produits dérivés de taux d’intérêt libellés en euros : le Tribunal confirme la décision révisée de la Commission à l’encontre de HSBC

Nord Stream 2 / Parlement et Conseil
Énergie
Gazoduc Nord Stream 2 : le Tribunal rejette le recours de Nord Stream 2 contre la directive étendant les règles du marché intérieur du gaz naturel aux gazoducs en provenance de pays tiers