Flux européens

Kühne + Nagel International e.a. / Commission
Concurrence
La Cour maintient les amendes infligées par la Commission à plusieurs sociétés dans le cadre de l’entente dans le secteur des services de transit international aérien

[2018] EWHC 59 (Ch) International Bank of Azerbaijan is an excellent illustration of the practicality v the doctrine of modified universalism in international insolvency law, as well as of the binding force of precedent even in a changing world. Hildyard J first summarises at 2 the question raised as ‘whether the Court has power to grant a permanent moratorium or stay to prevent a creditor exercising its rights under a contract governed by English law in order to prevent that creditor enforcing its rights contrary to the terms of the foreign insolvency proceeding by which all creditors were, under the relevant foreign law, intended to be bound. If it does, the second question is whether in its discretion the Court should exercise that power.’

IBA has fallen into financial difficulties, obliging it to enter into a restructuring proceeding under Azeri law. The Foreign Representative, Ms Gunel Bakhshiyeva (hence also giving her name to the official case-name) had the High Court issue an order  recognising the Restructuring Proceeding as a foreign main proceeding. That recognition order imposes a wide-ranging moratorium preventing creditors from commencing or continuing any action against IBA or its property without the permission of the Court.  The plan proposed by IBA pursuant to the restructuring proceeding has been approved by a substantial majority at a meeting of creditors in Azerbaijan, sanctioned by the relevant Azeri court, and as a matter of Azeri law, the plan is now binding on all affected creditors, including those who did not vote and those who voted against the Plan: a classic cram-down.

Respondents in the case contend that the plan cannot bind them. In each case their relationship as creditor with IBA is governed by English law. They rely on the (1890) rule in Gibbs, which states that a debt governed by English law cannot be discharged by a foreign insolvency proceeding. Reformulating the essential issues at 19, Hildyard J summarises them as

(1) Whether the Court has jurisdiction to extend a moratorium imposed under the CBIR without limit as to time, and in particular, beyond the date on which the foreign proceeding will terminate; and

(2) If so, whether the Court should refuse to lift the continuing moratorium in favour of a creditor whose debt is governed by English law, so as to prevent that creditor from achieving a better return than that enjoyed by all of the company’s other creditors under a restructuring plan promulgated in the jurisdiction in which the company is registered and has its centre of main interests (“COMI”).

At 44 ff Hildyard J excellently summarises the rule, and the critical reception of it in recent scholarship, the latter suggesting it is not just out of touch with a less anglo-centric view of the world, but also inconsistent with the English courts themselves expecting foreign recognition of schemes of arrangement (SAs being of a corporate, not lex concursus nature but nevertheless fishing in the same waters as insolvency proceedings) conducted in the English courts with English law as the lex causae.

Having summed up all the arguments against the rule and yet recent continued application of it, Hildyard J at 58 dryly notes that his place in the hierarchy means that he cannot simply swipe the rule aside: he must apply it and simply assess whether it applies in the current circumstances. More particularly, whether at one and the same time the ‘rule’ may formally be observed by accepting the continuation of the rights which English law confers, and yet also the principles of modified universalism which the UNCITRAL Model Law gives effect to.

Lengthy discussion then follows of the pros and contras, with the High Court eventually finding no persuasive argument to set aside the rule, particularly not by the English application of the UNCITRAL model law. Counsel had argued that qualifying the model law as procedural as opposed to substantive law, would enable the Court effectively to sidestep Gibbs as precedent. However Hildyard J prefered to accept the full force of precedent rather than sweeping it aside by the procedural pretext.

The substantive rule clearly is ripe for reconsideration by the Court of Appeal.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 5, Heading 5.1.

 

I reported on Bobek AG’s Opinion in Schrems v Facebook when it came out last year. The CJEU held this morning (judgment so far in FR and DE only) and largely confirms the AG’s Opinion.

As I noted at the time, the long and the short of the case is whether the concept of ‘consumer’ under the protected categories of Brussels I (and Recast) is a dynamic or a static one; and what kind of impact assignment has on jurisdiction for protected categories.

On the first issue, Mr Schrems points to his history as a user, first having set up a personal account, subsequently, as he became the poster child for opposition to social media’s alleged infringement of privacy, a Facebook page. Each of those, he suggests, are the object of a separate contract with Facebook. FB suggests they are part of one and the same, initial contractual relationship. This one assumes, would assist FB with its line of argument that Herr Schrems’ initial use may have been covered by the forum consumentis, but that his subsequent professional use gazumps that initial qualification.

The Court suffices at 36 with the simple observation that the qualification as a single or dual contract is up to the national court (see inter alia the Gabriel, Engler and Ilsinger conundrum: Handbook, Chapter 2, Heading 2.2.11.1.a and generally the difficulties for the CJEU to force a harmonised notion of ‘contract’ upon the Member States), yet that nevertheless any such qualification needs to take into account the principles of interpretation of Brussels I’s protected categories: in particular, their restrictive interpretation. Whence it follows, the Court holds, that the interpretation needs to be dynamic, taking into account the subsequent (professional or not) use of the service: at 37-38: ‘il y a notamment lieu de tenir compte, s’agissant de services d’un réseau social numérique ayant vocation à être utilisés pendant une longue durée, de l’évolution ultérieure de l’usage qui est fait de ces services. Cette interprétation implique, notamment, qu’un requérant utilisateur de tels services pourrait invoquer la qualité de consommateur seulement si l’usage essentiellement non professionnel de ces services, pour lequel il a initialement conclu un contrat, n’a pas acquis, par la suite, un caractère essentiellement professionnel.’

The Court does add at 39-40 that acquired or existing knowledge of the sector or indeed the mere involvement in collective representation of the interests of the service’s users, has no impact on the qualification as a ‘consumer’: only professional use of the service does. (The Court in this respect refers to Article 169(1) TFEU’s objective to assist consumers with the representation of their collective interest).

On this point therefore the Court unlike the AG attaches more weight to restrictive interpretation than to predictability. (Bobek AG’s approach to the issue of dynamic /static was expressed more cautiously).

As for the assignment issue, the Court sides squarely with its AG: the assigned claims cannot be pursued in the jurisdiction which is the domicile of the assignee. That in my view de lega lata makes perfect sense.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.

 

Perhaps it has been studied already. Perhaps it is more of a PhD chapter, short paper or indeed a case for public interest litigation. Stephanie Bijlmakers and I had a good moan about the lack of access to ISO standards when we wrote on ISO 26000. I now have encountered again how extraordinary it is that the public do not have free access to industry standards with such high societal relevance. The trigger this time round is one of our PhD students enquiring with me about recyclable content in packaging. This has sent me on a goose chase to gain access to a copy without having to fork out £170 each for 5 relevant CEN standards.

So here’s my research starter for two: could and if so under what circumstances can privately developed yet publicly approved standards be considered environmental information under relevant EU and international rules, access to which needs to be granted without charge?

Geert.

 

F
Espace de liberté, sécurité et justice
Un demandeur d’asile ne peut pas être soumis à un test psychologique afin de déterminer son orientation sexuelle

Schrems
Espace de liberté, sécurité et justice
M. Schrems peut engager une action individuelle contre Facebook Ireland en Autriche

F. Hoffmann-La Roche e.a.
Concurrence
L’entente entre les groupes pharmaceutiques Roche et Novartis visant à réduire les utilisations ophtalmologiques du médicament Avastin et à accroître celles du Lucentis pourrait constituer une restriction de la concurrence « par objet »

For background to the Microsoft  Ireland case under the Stored Communications Act (SCA), see here. The issue is essentially whether the US Justice Department may force Microsoft to grant access to e-mails stored on Irish servers.

With a group of EU data protection and conflicts lawyers, we have filed an amicus curiae brief last week, arguing that the Court should interpret the SCA to apply only to data stored within the United States, leaving to Congress the decision whether and under what circumstances to authorize the collection of data stored in other countries.

There is not much point in me rehashing the arguments here: happy reading.

Geert.

 

 

A concise note (I am currently tied up mostly in writing research grants. And and and… I hope to return to the blog in earnest later in the week) to signal prof Hess’ excellent short paper on Brexit and judicial co-operation. Prof Hess focuses on the possibility to use the Lugano Convention. (See here for a draft of Michiel Poesen’s overview). I agree that Lugano would not be a good route if one’s intention is to safeguard as much as possible co-ordination between the  UK’s common law approach to private international law, and the EU’s. Neither evidently if one aims to facilitate smooth cross-border proceedings.

Prof Hess has an interesting side consideration on schemes of arrangements. (Including reference to Apcoa). Again I agree that the English courts’ approach to same is not entirely without question marks (particularly jurisdictional issues in the event of opposing creditors: see here). I do not though believe that they would justify hesitation at the recognition and enforcement stage in continental Europe – even after Brexit. At least: not in all Member States. For of course post Brexit, UK judgments become those of a ‘third country’, for which, subject to progress at The Hague, we have no unified approach.

Geert.

(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 5.

 

Jahin
Libre circulation des capitaux
Selon l’avocat général Bobek, les organismes obtenus par mutagénèse sont, en principe, exemptés des obligations prévues par la directive sur les OGM

Confédération paysanne e.a.
Rapprochement des législations
Selon l’avocat général Bobek, les organismes obtenus par mutagénèse sont, en principe, exemptés des obligations prévues par la directive sur les OGM

EDF / Commission
Aide d'État
Le Tribunal de l’UE confirme la décision de la Commission ordonnant à la France de récupérer 1,37 milliard d’euros dans le cadre d’une aide d’État accordée à EDF

Coman e.a.
Citoyenneté européenne
Selon l’avocat général Wathelet, la notion de « conjoint » comprend, au regard de la liberté de séjour des citoyens de l’Union et des membres de leur famille, les conjoints de même sexe

Thank you Bob Wessels for again alerting us (with follow-up here and also reporting by Lukas Schmidt here) timely to a decision this time by the German courts in Niki, applying the Insolvency Regulation 2015, on the determination of COMI – Centre of Main Interests. Bob’s review is excellent per usual hence I am happy to refer for complete background.

Of particular note is the discussion on the extent of a court’s duty to review jurisdiction ex officio; the court’s correct assumption that in the event of foggy circumstances, the EIR’s presumption of COMI at the place of incorporation must have priority; and finally in my view the insufficient weight the court places on ascertainability by third parties.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 5, Heading 5.6.1.

Western Sahara Campaign
Relations extérieures
Selon l’avocat général Wathelet, l’accord de pêche conclu entre l’UE et le Maroc est invalide du fait qu’il s’applique au Sahara occidental et aux eaux y adjacentes

Interestingly enough the issue of inclusion of foreign victims in class action suits came up in conversation around our dining room the other day. (Our youngest daughter, 15, is showing encouraging signs of an interest in a legal career). In 2017 ONCA 792 Airia Brands Inc v Air Canada is reviewed excellently by Dentons here and I am happy to refer.  (See also here for Norton Rose reporting on related cases – prior to the CA’s decision in Airia Brands).

The jurisdiction and ‘real and substantial connection’ analysis referred to Van Breda (which recently also featured mutatis mutandis in the forum necessitatis analysis in  Cook).

Certification of global classes was part of the classic analysis of developments in international class action suits, which hit us a few years back when many EU states started introducing it. Airia Brands shows that the concerns are far from settled.

Geert.

 

I reviewed the AG’s Opinion in Case C-372/16 here. The Court held late December. Like the AG, it held that  Rome III does not cover divorces which are declared without a constitutive decision of a court or other public authority: it squarely uses the Regulation itself to come tho this view, without any assessment of whether the foreign State’s courts in private sharia divorces, has any impact on that conclusion.

With the first question answered in the negative, the other, very interesting issues covered by AG, became without subject. A judgment not with a bang, but with a whimper.

Geert.

 

 

 

Welcome to this end of 2018.

Thank you Kate Wilford for flagging [2016] EWHC 3161 (Ch) The RBS Rights issue litigation. The litigation concerns a rights issue of shares in the Royal Bank of Scotland (“RBS”) which was taken up in 2008. By the various actions, shareholders in RBS seek to invoke statutory remedies against RBS under the Financial Services and Markets Act 2000 (“FSMA”) whereby to recover substantial investment losses incurred further to the collapse of RBS shares. The prospectus for the Rights Issue was argued not be to accurate or complete.

The case at issue was held December 2016 but has only now come to my attention. Of note to this blog is one of the three issues that were sub judice: whether RBS is entitled to rely on the federal law of the USA as the law applicable to the particular issue, and if so, whether under that law the claim of privilege is maintainable: Hildyard J referred to this as “the Applicable Law Point”. It is discussed under 129 ff.

As Kate notes, the issue was concerned with the availability of legal advice privilege over records of interviews conducted by US lawyers in a fact-gathering investigation. RBS contended that the English court should have applied US privilege rules, which would have afforded the interview records a much broader degree of protection against disclosure.

I reviewed privilege and applicable law in my post on  People of State of New York v. PriceWaterhouseCoopers, albeit that in that case the toss-up was between different States’ law, not federal law. Hildyard J discusses the English 1859 authority Lawrence v Campbell: lex fori applies. Particular attention is paid to the in my view rather convincing arguments of Adam Johnson (who has since taken silk) as to why this 1859 authority should no longer hold, see 145-147.  Yet his arguments were all rejected, fairly summarily. RBS’ lawyers proposed an alternative rule (at 137): “Save where to do so would be contrary to English public policy, the English court should apply the law of the jurisdiction with which the engagement or instructions, pursuant to which the documents came into existence or the communications arose, are most closely connected.”

Rome I or II did not feature at all in the analysis – wrongly I believe for there could have been some useful clues there and at any rate the applicable law rules of the Regulations certainly apply to the litigation at issue and should have been considered.

Now, there seems to have been consensus that the case was Supreme Court material – however RBS did not pursue the point. We’ll have to wait therefore until another suitable case comes along which I imagine should not be too long in the making.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 1.

A post suited to be this year’s last, given the religious context of the current holiday period: Wahl AG advised late November in C-426/16. See my previous posts on the issue. A European Regulation (1099/2009) provides for an unclear, and conditional,  exemption from a requirement of stunning animals for religious slaughter. (Regularly the practise is also called ‘ritual’; including in current Opinion. ‘Religious’ must be the preferred term).

Practised in particular by the Jewish (Shechita; leading to ‘kosher’ meat) and Muslim (Zabihah; with halal meat) faith, a core aspect of the practice is that animals are not stunned prior to slaughter. The science on the effect of stunned or unstunned slaughter is equivocal. What is certain is that neither stunned nor unstunned slaughter, when carried out incorrectly (well documented in the case of stunned slaughter) aids the welfare of the animal.

The Flemish Minister responsible for animal welfare announced that, from 2015 onwards, he would no longer issue approvals for temporary slaughter plants at which religious slaughtering could be practised during the Islamic Feast of the Sacrifice because such approvals in his view were contrary to EU legislation, in particular the provisions of Regulation 1099/2009. The muslim community objects to the discontinuation of temporary slaughter plants.

The Advocate-General’s Opinion is lengthy, and there is a lot to chew on.  There is little point in rehashing all the AG’s points: readers are best referred to the Opinion itself. Of note however is

• Firstly, the AG’s attempt strictly to delineate the issue.

The case he suggests is simply about what material conditions, in terms of equipment and operating obligations, must accompany unstunned slaughter in order for it to comply with the relevant EU rules. He suggests a rephrasing of the referring court’s questions in that direction. Along these lines he also in substance refuses to entertain the questions as to the validity of Regulation 1099/2009 itself, or the exemption from the duty to use approved slaughterhouses under the Regulation’s ‘cultural’ exception. (See footnote 13). In my view the Regulation is very vulnerable on this issue: sporting and cultural events are entirely excluded from its scope of application; religious rites are subject to a qualified exemption. That to me cannot survive a discrimination test.

The Brussels court had given the case a much wider scope: it suggested that the contested Flemish decision creates a limitation on the exercise of freedom of religion and undermines Belgian customs relating to religious rites, since it obliges Muslims to perform the ritual slaughter of the Islamic Feast of the Sacrifice in slaughterhouses that have been approved in accordance with Regulation No 853/2004. In the opinion of that court, this limitation is neither relevant nor proportionate in order to attain the legitimate objective of protecting the welfare of animals and human health (at 20). The AG however sees no limitation of freedom of religion at all, resulting from the general obligation to use approved slaughterhouses.

• Despite the attempt at delineation, the background to the case is undeniable and filters through in the Opinion.

If only because the AG has to complete the analysis should the CJEU disagree with his view that freedom of religion is not being limited, he does review the legality of a total ban on slaughtering other than in plants that have been approved in accordance with the rules established in Annex III to Regulation No 853/2004.

First of all he refers to European Commission audits of the previously approved temporary slaughterhouses to make the point that they protected animal welfare sufficiently. He directly criticises the Regulation for its arguably disproportionate criteria in this respect: see in particular at 127.

Religious slaughter falls squarely within the European Convention of Human Rights Article 9’s freedom of religious expression. It is clear that the AG believes that the ban on unstunned slaughter other than in approved abattoirs, in the name of animal welfare or otherwise,  offends freedom of religious expression to such a degree that it simply must not pass: para 133 and the preceding argumentation is very clear.

The AG’s reasoning holds all the more for a total ban un unstunned slaughter full stop. That is the clear implication of this Opinion and one which must be welcomed.

Guten Rutsch ins neue Jahr!

Geert.

Apologies for late reporting. Bot AG opined end of October in C‑210/16 Fansites. [The official name of the case is Unabhängiges Landeszentrum für Datenschutz Schleswig-Holstein v Wirtschaftsakademie Schleswig-Holstein GmbH, in the presence of Facebook Ireland Ltd, Vertreter des Bundesinteresses beim Bundesverwaltungsgericht. It’s obvious why one prefers calling it Fansites].

The Advocate-General summarises (para 2-3) the case as involving ‘proceedings between the Wirtschaftsakademie Schleswig-Holstein GmbH, a company governed by private law and specialising in the field of education (‘the Wirtschaftsakademie’), and the Unabhängiges Landeszentrum für Datenschutz Schleswig-Holstein, a regional data-protection authority in Schleswig-Holstein (‘ULD’) concerning the lawfulness of an order issued by the latter against the Wirtschaftsakademie requiring it to deactivate a ‘fan page’ hosted on the website of Facebook Ireland Ltd. The reason for that order was the alleged infringement of the provisions of German law transposing Directive 95/46. Specifically, visitors to the fan page were not warned that their personal data are collected by the social network Facebook (‘Facebook’) by means of cookies that are placed on the visitor’s hard disk, the purpose of that data collection being to compile viewing statistics for the administrator of the fan page and to enable Facebook to publish targeted advertisements.’

The case ought to clarify the extent of the powers of intervention of supervisory authorities such as ULD with regard to the processing of personal data which involves the participation of several parties (at 13). I had flagged earlier that this case is relevant to the jurisdictional and applicable law issues involving datr cookies.

Whatever the outcome of the case, its precedent value will be limited by the imminent entry into force of the new General Data Protection Regulation – GDPR. The GDPR clearly introduces a ‘one-stop principle’ with only one lead authority (in FB’s case, Ireland’s data protection agency) having the authority to act (see also the AG’s observation of same in para 103).

As prof Lorna Woods in excellent analysis observes, the issue comes down to the interpretation of the phrase from Art. 4(1)(a), ‘in the context of the activities of an establishment’. Dan Svantesson has most superb analysis of Article 4(1)(a) here, anyone interested in the issue will find his insight most helpful.

Now, the Advocate-General leans heavily on Weltimmo however I would suggest its precedent value for the Fanpages case is constrained. Weltimmo concerned a company set up in Slovakia but with no relevant activities at all in that Member State. Indeed as the Court itself observed (at 16-18) , the company was effectively male fide (my words, not the CJEU’s) moving its servers and creating fog as to its exact whereabouts. In other words a case of blatant abuse. There is no suggestion of abuse in Fanpages. Moreover according to the CJEU in C-230/14 Weltimmo the phrase ‘in the context of the activities of an establishment’ cannot be interpreted restrictively (AG’s reference in para 87), yet that CJEU holding in Weltimmo cross-refers to Google Spain in which the crucial issue was whether EU data protection laws apply at all. That is very different in Weltimmo and in Fanpages. That EU authorities have jurisdiction and that EU privacy law applies is not at issue.

There is sufficient argument to find in the Directive, even before its transformation into the GDPR, that in cases such as these the same processing operation ought to be governed by the laws of just one Member State. It would be good for the CJEU to recognise that even before the entry into force of the GDPR.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.5.