Flux européens

As I seem to be in a comparative mood today, consider Hydrodec Group Plc [2021] NSWSC 755, in which a suggestion of COMI in the UK, of a company incorporated there, was dismissed in favour of COMI in the US. Cooper Grace Ward have the relevant background here. The result of the order is that the company will be wound up under Australian law.

Hydrodec Group Plc is the parent company for a corporate group comprised of: subsidiaries located in the UK, Australia and Japan that were not trading; and a sole trading subsidiary located in the United States of America, which owns valuable assets. As CGW report, Hydrodec contended that its COMI was in the UK because, among other things: it has an address in the UK; its affairs are administered in the UK by directors that reside in the UK; its main asset was its shareholding in a subsidiary, in the UK; and the majority of its creditors are in the UK. 

The judge however reportedly (see the CGW overview; I have not been able to locate judgment at this stage) disagreed on the following grounds. COMI must be identified by reference to criteria that are objective and ascertainable by third parties (ditto in the EU under the EIR). The A16(3) UNCITRAL Model Law presumption of COMI in the place of registered office does not apply seeing as the corporation has two of these. The only trading entity within the corporate group controlled by Hydrodec was in the USA.  Hydrodec described the USA as its ‘key market’ and the focus of Hydrodec’s plans for growth. The principal creditor of the corporate group controlled by Hydrodec was in the USA. The administration of the affairs of Hydrodec involved, in substance, the administration of the operations of the USA subsidiary. Finally, Hydrodec’s primary focus was the re-financing of its operations in the USA.

The judgment shows the specificity of determining COMI in the case of a corporation which itself does not have a market focus.

European Private International law, 3rd ed. 2021, 5.65 ff.

A short post for comparative conflicts purposes. Readers might be aware of the minimum contacts rule in US jurisdictional analysis.  Rice J excellently summarises the issues in his order denying a strike-out application (‘motion to dismiss’) on the basis of lack of jurisdiction.

‘Under the Due Process Clause, a court may exercise personal jurisdiction over a defendant only where “the defendant ha[s] certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” [Picot v. Weston, 9th Cir. 2015) (quoting Int’l Shoe Co. v. Wash., [1945])….

Personal jurisdiction over a non-resident defendant may take two forms:
general jurisdiction or specific jurisdiction. General jurisdiction requires connections with the forum “so continuous and systematic as to render the foreign corporation essentially at home in the forum State (Ranza). Specific jurisdiction, by contrast, may only be exercised “when a case aris[es] out of or relate[s] to the defendant’s contacts with the forum.”

Shandong essentially argue that they are kept at arm’s length from US jurisdiction because they are not the one importing the tires into the US: a separate corporation imported, a third distributed. The judge however (in the process dismissing Shandong’s assertion that the goods were shipped FOB – Free on Board), found that Shandong delivered tires into the stream of commerce, was involved, in consequence of its contractual duties, in shipping the tires to Washington ports, and has taken steps for creating tires compliant with state and federal law to arrive in Washington pursuant to the supply agreement.  This echoes the EU jargon of ‘directing activities at’ the state of Washington.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.460, para 4.48 ff.

Comparative law claxon, special jurisdiction, product liability
Court finds Shandong delivered tires into US commerce, was involved in shipping them to WASH ports, has undertaken to comply with US state, federal law per supply agreement with Bridgestonehttps://t.co/AcGzp4hw9D https://t.co/WkGT25CnGM pic.twitter.com/VDcxBGYTEm

— Geert van Calster (@GAVClaw) June 14, 2021

In Perform Content Services Ltd v Ness Global Services Ltd [2021] EWCA Civ 981 the Court of Appeal yesterday dismissed the appeal against the High Court judgment which I discussed here.

Two grounds of appeal were at play [34]:

(1) The Court was wrong as a matter of law to interpret Article 33 to mean that jurisdiction was not “based on” domicile by reason of a non-exclusive English court jurisdiction clause that conferred prorogated jurisdiction on the English Court pursuant to Article 25;

(2) The Court was wrong to conclude that a stay was not necessary for the proper administration of justice within the meaning of Article 33(1)(b). The court wrongly failed to place any or any sufficient weight on the fact that the NJ and English proceedings were mirror image proceedings giving rise to the risk of irreconcilable judgments, the core purpose of Article 33 and a core feature of the concept of the administration of justice under the Article. The court wrongly took account of the non-exclusive English court jurisdiction clause and/or an English governing law clause and/or wrongly took account of its assessment that the centre of gravity was Slovakia and/or failed to place any or any sufficient weight on the material connections between the parties and the United States and/or wrongly placed significant reliance on connections between the parties, the dispute and the UK.

On the first issue Flaux C refers ia to UCP and to Citicorp (the latter had not been referred to by the first instance judge, I suggested it could have been), to hold that choice of court under A25 BIa being exclusive or not has no relevance. Like the first instance judge, he rules that A33-34 cannot apply if choice of court has been made in favour of an EU court, exclusive or not.

He then deals obiter, like the judge had done, with the issue whether an A33-34 stay would have been in the interest of the sound administration of justice. He emphasises [66] the wide catchment area of ‘all the circumstances of the case’ per recital 24, and suggests this must potentially also include the connections which the case has with the EU Member State and indeed the specific court (per the choice of court clause) concerned.

On that he is right. But he is wrong in my view to support Turner J’s analysis at [67] in Municipio, without any nuance.

Turner J and Flaux C are both right that, the fact itself that the factors which a judge considers in holding that the proper administration of justice does not require a stay, might theoretically have also been relevant in a common law forum non conveniens exercise, does not invalidate the judge’s approach under A33-34. However the problem with the judge’s A33-34 analysis in Municipio is,

Firstly, that it is a case of the tail wagging the dog. The proper administration of justice analysis, exclusively populated by forum non criteria indeed with full reference to that forum non analysis, was put to the front without proper engagement with the substantive conditions for A33-34 to apply at all.

Further, the DNA of A33-34 as I have reported before ( I am preparing an overview for publication), is much, much different from the forum non DNA. By cutting and pasting of the criteria indeed by cross-reference to the forum non criteria without further ado, the A33-34 analysis is irreparably broken. It becomes a case of mixing the blank rounds with the live bullets.

It is worth emphasising that the limited A33-34  analysis are obiter findings only.

Geert.

European Private International Law, 3rd ed. 2021, 2.539 ff.

Perform Content Services v Ness Global Services [2021] EWCA Civ 981
Appeal dismissed in an A33-34 BIa, forum non conveniens (light) case
For the High Court judgment see https://t.co/z75qFQafqg
More soonhttps://t.co/CJhGxsamFQ

— Geert van Calster (@GAVClaw) July 1, 2021

AG De La Tour delivered today his opinion in case C‑277/20 (UM), which is about the Successions Regulation. The opinion is currently available in all EU official languages (save Irish), albeit not in English. Here is the French version (to check whether an English translation has finally been made available, just click on the link below and change the language version):

« L’article 3, paragraphe 1, sous b), du règlement (UE) no 650/2012 […] doit être interprété en ce sens que relèvent de la notion de « pacte successoral » les actes de donation entre vifs en vertu desquels le transfert, au profit du donataire, de la propriété d’un bien ou des biens qui constituent même partiellement le patrimoine successoral du donateur n’intervient qu’à son décès ».

Source: https://curia.europa.eu/juris/document/document.jsf?text=&docid=243669&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=23944552

The Court of Justice delivered today its judgment in case C‑301/20 (UE, HC v Vorarlberger Landes- und Hypothekenbank AG, intervening parties: Estate of VJ), which is about the Successions Regulation:

“1. Article 70(3) of Regulation (EU) No 650/2012 […] must be interpreted as meaning that a certified copy of the European Certificate of Succession, bearing the words ‘unlimited duration’, is valid for a period of six months from the date of issue and produces its effects, within the meaning of Article 69 of that regulation, if it was valid when it was presented to the competent authority;

2. Article 65(1) of Regulation No 650/2012, read in conjunction with Article 69(3) of that regulation, must be interpreted as meaning that the effects of the European Certificate of Succession are produced with respect to all persons who are named therein, even if they have not themselves requested that it be issued”.

Source: https://curia.europa.eu/juris/document/document.jsf;jsessionid=4EB7F36D35D24BF4E135A4654D292A60?text=&docid=243642&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=23943665

Commission / European Food e.a.
Aide d'État
Selon l’avocat général Szpunar, le Tribunal a commis une erreur de droit en concluant que la Commission n’était pas compétente pour examiner, à la lumière du droit des aides d’État, l’indemnisation versée par la Roumanie à la suite d’une sentence arbitrale

CB
Fiscalité TVA
Lors de la détermination de la base d’imposition d’une opération dissimulée par des assujettis à la TVA, les montants versés et perçus tels que reconstitués par l’administration fiscale doivent être considérés comme incluant déjà cette taxe

Strategic Lawsuits Against Public Participation – SLAPPs (I look at them comparatively in my Monash Strategic and Public Interest Litigation Unit, LAW5478) are a well-known tool to silence critics. Based on defamation, they (or the threat with them) aim to shut down the voice of opposition. Not many find the energy, financial resources and nerves to fight a protected libel suit in court.

The EP recently published the study led by Justin Borg-Barthet and carried out by him and fellow researchers at the University of Aberdeen. At the substantive level, distinguishing between SLAPPs and genuine defamation suits is not straightforward. As Justin et al point out, there is an important private international law element to the suits, too. Clearly, a claimant will wish to sue in a claimant-friendly libel environment. Moreover, where a deep-pocketed claimant can sue in various jurisdictions simultaneously, this compounds the threat.

The Brussels and Lugano regime is particularly suited to the use of SLAPPs as a result of the CJEU case-law on Article 7(2) forum delicti. The Handlungsort /Erfolgort distinction as such already tends to add jurisdictional gateways. In more recent years this has been compounded by the additional ‘centre of interests’ gateway per CJEU e-Date and Bolagsupplysningen – even if this was recently somewhat contained by the Court in Mittelbayerischer Verlag. As I have flagged before, Brussels Ia’s DNA is not supportive of disciplining abusive forum shopping, as illustrated ia in competition law and intellectual property law cases.

For these reasons, the report (Heading 4, p.33 ff) suggests dropping the availability of Article 7(2) and sticking to Article 4 domicile jurisdiction, supplemented with (unlikely) choice of court.

The European Parliament more than the European Commission has picked up the defamation issues both for BIa and for applicable law under Rome II (from which the issue is hitherto exempt; the report reviews the applicable law issues, too). It remains to be seen whether with this report in hand, Parliament will manage to encourage the EC to pick up the baton.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.431 ff, 4.24 ff.

 

Fondazione Cassa di Risparmio di Pesaro e.a. / Commission
Droit institutionnel
La résolution de Banca delle Marche par les autorités italiennes a été essentiellement déterminée par sa défaillance

The Antwerp court of first instance (criminal section) has held last Friday, 25 June (I have copy of the judgment (in Dutch) on file) in the prosecution against CMB (an Antwerp based shipowner; specifically: Bocimar NV) and a number of individuals for the alleged illegal transport of waste, in the shape of the discarded ship the Mineral Water, destined for beaching at Chittagong, Bangladesh (the same location of relevance in Begum v Maran).

The Mineral Water was built in 1999, bought by CMB in 2007. A decision was made ‘end 2015’ (the judgment does not clarify specific date and /or circumstance of that decision) to sell  her, with a view to recycling. That sale was approved on 19 January 2016 by Bocimar Board Decision, to a cash buyer based on the British Virgin Islands, when the ship was anchored at Fangcheng, China. Actual transfer of the ship happened at Malaysia a few weeks later. The ship’s registry was changed from Antwerp to Niue after the transfer and she was beached at Chittagong in February.

The case is a criminal prosecution which of course carries with it a high burden of proof. Seeing as the ship sailed under Belgian flag, the principled application of Belgian and EU law was not as such disputed. Neither do the original owners dispute that at the time of the January 2016 decision, the ship met with the definition of waste ia per CJEU Shell. However defendants argue the EU Waste Shipments Regulation – WSR does not apply for, they argue, the Mineral Water never sailed in European waters and was not physically exported from the EU with a view to recycling (p.5 in fine).

[The court later (p.8) notes this is not quite correct: occasionally EU ports were used for (un)loading and in 2015 there was rare bunkering at Malta].

The court held for the defence. Core to the decision is Article 2, 30 31 and 32: the definitions of ‘import’, ‘export’, ‘transfer’. The prosecutor seeks support in Article 2.22: ”country of dispatch’ means any country from which a shipment of waste is planned to be initiated or is initiated’. The court however held that neither the place of decision nor the flag State is of relevance to the territorial scope of application of the WSR. (Note the contrast on that point with the Ships Recycling Regulation – SRG 1257/2013, not applicable to the facts at issue).

One imagines more on that issue can and should be said upon appeal.

The countries of dispatch, transfer and destination of the ship are all ex-EU. Importantly, at p.8 the court notes there is no indication that the owners would have gamed the system to ensure the ship lay outside EU territorial waters at the time of the decision to discard.

The case shows the importance of the flag State in the SRG (itself not free of difficulties; the IMO Hong Kong Convention should avoid gaming). Of note is also that the place of decision-making (relevant for conflict of laws: locus delicti commissi, eg under A7 Rome II as discussed in Begum v Maran) did not play a  role. The crucial element was the almost complete lack of physical contact between the ship and the EU.

One assumes the prosecution will appeal.

Geert.

Handbook of EU Waste law, 2015, Chapter 3.

Ships dismantling, beaching in Bangladesh
Update – Belgian court last week reportedly held https://t.co/XFFcwWXqZa #CMB intent to discard only materialised late in the chain, in PRC, making EU rules in force at the time inapplicable.
Am chasing copy of judgment. https://t.co/sT3unlCehg pic.twitter.com/WCn1FvgX6x

— Geert van Calster (@GAVClaw) June 28, 2021

The Department for Communities in Northern Ireland
DISC
Avocat général Richard de la Tour : l’octroi sans conditions de ressources d’un droit de séjour par un État membre à des citoyens de l’Union ne peut avoir pour effet de les exclure systématiquement du bénéfice de prestations d’assistance sociale accordées aux ressortissants de cet État, sauf à constituer une discrimination fondée sur la nationalité

Regione Puglia
Liberté d'établissement
Avocat général Hogan : un État membre n’est pas obligé de limiter l’étendue des aires dans lesquelles un seul et même opérateur est habilité à exercer des activités de prospection, d’exploitation et d’extraction d’hydrocarbures tels que le pétrole et le gaz naturel

Commission / Espagne (Détérioration de l’espace naturel de Doñana)
Environnement et consommateurs
L’Espagne aurait dû prendre en compte le captage d’eau illégal et le captage d’eau destiné à l’approvisionnement urbain lors de l’estimation du captage des eaux souterraines de la région de Doñana

I have reported before on the jurisdictional consequences of CJEU Vereniging van Effectenbezitters v BP. In this post for the European Association of Private International Law, I give my views on the impact for applicable law.

Geert.

Blogged.

My view on applicable law in cases of purely economic damage, following #CJEU Vereniging voor Effectenbezitters. https://t.co/U8lijC8sGB

— Geert Van Calster (@GAVClaw) June 23, 2021

Georgia acceded on 31 May 2021 to the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters and the Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters. The first one will enter into force for Georgia on 1 January 2022, subject to the Article 28 procedure. The second one will enter into force for Georgia on 30 July 2021.

Source: https://www.hcch.net/en/news-archive/details/?varevent=803

Venezuela / Conseil
Relations extérieures
Le Venezuela a bien qualité pour agir contre un règlement qui introduit des mesures restrictives à son égard

Staatssecretaris van Justitie en Veiligheid
Citoyenneté européenne
Un citoyen de l’Union qui a fait l’objet d’une décision d’éloignement ne peut bénéficier d’un nouveau droit de séjour sur le territoire de l’État membre d’accueil qu’après avoir mis fin à son séjour sur ce territoire de manière réelle et effective

Ordre des barreaux francophones et germanophone e.a.
Citoyenneté européenne
Les mesures d’exécution d’une décision d’éloignement d’un citoyen de l’Union et des membres de sa famille pour des motifs d’ordre ou de sécurité publics constituent des restrictions au droit de circulation et de séjour, qui peuvent être justifiées lorsqu’elles sont fondées exclusivement sur le comportement personnel de l’individu concerné et respectent le principe de proportionnalité

Latvijas Republikas Saeima (Points de pénalité)
Rapprochement des législations
Le droit de l’Union sur la protection des données s’oppose à la réglementation lettonne obligeant l’autorité de la sécurité routière à rendre accessibles au public les données relatives aux points de pénalité imposés aux conducteurs pour des infractions routières

YouTube et Cyando
Rapprochement des législations
En l’état actuel du droit de l’Union, les exploitants de plates-formes en ligne ne font en principe pas, eux-mêmes, une communication au public des contenus protégés par le droit d’auteur que leurs utilisateurs mettent illégalement en ligne