Flux européens

“The collective defence of consumers’ rights has come a step closer. Following the agreement reached with the European Parliament in June 2020, the Council today adopted its position at first reading on a draft directive on representative actions for the protection of the collective interests of consumers within the EU.

The directive requires member states to put in place a system of representative actions for the protection of consumers’ collective interests against infringements of Union law. It covers actions for both injunctions and redress measures.

It empowers qualified entities designated as such by member states to seek injunctions and/or redress, including compensation or replacement, on behalf of a group of consumers that has been harmed by a trader who has allegedly infringed one of the EU legal acts set out in the annex to the directive. These legal acts cover areas such as financial services, travel and tourism, energy, health, telecommunications and data protection.

The directive distinguishes between qualified entities entitled to bring actions in the member state where they have been designated (domestic representative actions) and those entitled to bring actions in any other member state (cross-border representative actions). For domestic actions a qualified entity will have to fulfil the criteria set out in the law of its member state of designation, whereas for cross-border actions it will have to fulfil the harmonised criteria set out in the directive.

As a safeguard against abusive litigation, the directive provides clear rules on the allocation of judicial costs in a representative action for redress based on the ‘loser pays’ principle. Furthermore, with a view to avoiding conflicts of interest, it imposes on qualified entities a number of transparency requirements, in particular as regards their funding by third parties.

The directive will apply to representative actions brought on or after the date of its application”.

The text of the directive as of 21 October 2020 is attached to this post.

Source: https://www.consilium.europa.eu/en/press/press-releases/2020/11/04/collective-redress-for-consumers-council-adopts-position-at-first-reading/

collective-redress-21-october-2020Download

“The Council today adopted two recast regulations, one on the taking of evidence and a second on the service of documents, to modernise cross-border exchanges between authorities through digitalisation. After reaching a political agreement with the European Parliament in June 2020, the text will now be submitted to the Parliament for its final adoption.

[…] Changes in both regulations include the mandatory use of a decentralised IT system, composed of interconnected national IT systems, for the transmission of documents and requests between member states.

Regarding the service of documents, under the new rules documents can be served electronically and directly to an addressee with a known address in another member state, when their express consent is given in advance. The service can be performed through qualified electronic registered delivery services or, under additional conditions, by e-mail.

The new rules also promote the use of videoconferencing or other distance communication technology in the taking of evidence which implies hearing a witness, party or expert located in another member state”.

The text of the adopted Evidence and Service Regulations are attached to this post.

evidence-regulation-22-october-2020Download service-regulation-22-october-2020Download

Source: https://www.consilium.europa.eu/en/press/press-releases/2020/11/04/digital-europe-council-adopts-new-rules-to-modernise-judicial-cooperation-in-taking-of-evidence-and-service-of-documents/?utm_source=dsms-auto&utm_medium=email&utm_campaign=Digital+Europe%3a+Council+adopts+new+rules+to+modernise+judicial+cooperation+in+taking+of+evidence+and+service+of+documents

I discussed the first instance judgment in Enka Insaat here and the Court of Appeal’s findings here. The Supreme Court’s judgment, Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38 attempts to settle one of the many issues which choice of law in arbitration provokes, as I first flagged in a post on Sulamerica here: one needs to determine lex arbitri (the law that governs the arbitration agreement; it decides issues such as what issues are arbitrable, and whether the agreement to arbitrate is valid at all); the curial law or the ‘law of the seat’ (the procedural law which will guide the arbitration proceedings; despite the latin curia not commonly referred to as lex curiae); the ‘proper law’, the law that governs the actual contract (lex contractus) of which the agreement to arbitrate is only one part; and the locus arbitri and the lex locus arbitri:  the venue of the arbitration and its laws, which may or may not interact with the proceedings. That 2013 post on Sulamerica contains many further references, including comparative ones. Further case-law may be found by using the search tag ‘Sulamerica’ on the blog.

The Supreme Court held 3-2 in favour of dismissing the appeal, but only on the facts. Lord Burrows dissented in part, Sales dissented. The Supreme Court has now effectively held that unlike the Court of Appeal’s suggestion,  in the absence of express contractual provision there is no “strong presumption” of an implied term for the lex curiae, the law of the seat of the arbitration, to be  the lex arbitri (the law that governs the arbitration agreement), instead pushing the lex contractus (of the agreement of which the arbitration agreement is part) as the lex arbitri.

There has been plenty of analysis since the 9 October judgment and I shall let readers find that for themselves (Google search ‘proper law arbitration Enka v Chubb’ should do the trick). Ex multi I found Peter Ashford’s analysis very useful, including his use of the term ‘host contract’.

As the discussion here shows, with 2 strong dissenters and open discussions on the determination of implied choice of law, I do not think judgment in Enka v Chubb has truly settled the issue. Per inspiratio Steven Barrett’s quote, this might be one of those authorities one can drive a coach and horses through.

Geert.

The UKSC dismisses the appeal in Enka, #arbitration, choice of law https://t.co/1xFtH8Iv9W
Holds there is no such thing as "strong presumption" of an implied term.
3-2 in favour of dismissing. Burrows dissents in part, Sales dissents.
For CA judgment see https://t.co/jkma6VzDRq

— Geert Van Calster (@GAVClaw) October 9, 2020

AG  Saugmandsgaard Øe delivered yesterday (29 October 2020) his opinion in case C‑804/19 (BU v Markt24 GmbH), which is about Brussels I bis and employment contracts in an interesting scenario where no effective work has been carried out. The opinion is currently available in all EU official languages only (save Irish). It is not available 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):

« 1) Une action en paiement de la rémunération convenue dans un contrat de travail, intentée par un travailleur domicilié dans un État membre contre un employeur domicilié dans un autre État membre, relève du règlement (UE) no 1215/2012 […] et, plus spécifiquement, de la section 5 de son chapitre II, et ce même lorsqu’aucune prestation de travail n’a été accomplie, dans les faits, par ce travailleur en exécution du contrat litigieux.

2) Le règlement no 1215/2012 s’oppose à l’application de règles de compétence, prévues dans le droit national de la juridiction saisie, qui permettent au travailleur de saisir le tribunal dans le ressort duquel il a son domicile ou sa résidence habituelle pendant la durée de la relation de travail, ou de saisir le tribunal dans le ressort duquel la rémunération est due.

3) Lorsqu’un travailleur et un employeur ont conclu un contrat de travail et que, pour une raison quelconque, aucune prestation de travail n’a été accomplie, dans les faits, par ce travailleur en exécution du contrat, le « lieu où ou à partir duquel le travailleur accomplit habituellement son travail », au sens de l’article 21, paragraphe 1, sous b), i), du règlement no 1215/2012, correspond, en principe, au lieu de travail convenu dans ledit contrat ».

Source : http://curia.europa.eu/juris/document/document.jsf?docid=233041&mode=req&pageIndex=1&dir=&occ=first&part=1&text=&doclang=FR&cid=10869171

On 29 October 2020, Costa Rica acceded to the HCCH Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in respect of Parental Responsibility and Measures for the Protection of Children, which will enter into force for Costa Rica on 1 August 2021.

Source: https://www.hcch.net/en/news-archive/details/?varevent=762

The Explanatory Report on the HCCH Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters has been officially published in both English and French. Please find attached to this post the English version.

explanatory-report-hague-judgments-conventionDownload

Source: https://www.hcch.net/en/news-archive/details/?varevent=761

The International Commercial Chamber of the Court of Appeal of Paris (France) delivered a few days ago (27 October 2020) a decision (RG 20/01368) on commercial agents.  

Summary:

“The ICCP -CA was seized by an appeal against a decision of the Paris Commercial Court, which ruled that a commercial agent was liable of a serious breach, excluding the termination indemnities provided for in Articles L.134-11 et seq. of the French Commercial Code.

The ICCP -CA overturned this decision, ruling that a serious breach makes it impossible to maintain the contractual relationship; and that cannot be qualified as serious a breach of which the principal was aware well before the termination of the contract and which it tolerated without blaming the agent or warning or advising of the risk that this breach might have on the continuation of the agency contract. 

The Court thus held that the breach allegedly committed by the commercial agent in 2007, relating to the allegedly faulty registration of the disputed trademark in China, discovered in 2013, and followed by a retrocession agreement in 2014, cannot be qualified as serious enough to deprive the termination notified on 22 September 2016 of any indemnity .

The Court also held that the grievances subsequently raised by the principal were admissible even if they were not included in the letter of termination as they predated the termination; but in the present case, their existence and seriousness were not established and did not amount to a general lack of loyalty”.

27-octobre-2020-ccip-ca-rg-2001368Download

Veselības ministrija
Sécurité sociale des travailleurs migrants
Le refus, par l’État membre d’affiliation d’un patient, d’accorder une autorisation préalable pour le remboursement des coûts de soins de santé transfrontaliers lorsqu’un traitement hospitalier efficace est disponible dans cet État mais que les croyances religieuses de l’affilié réprouvent le mode de traitement utilisé instaure une différence de traitement indirectement fondée sur la religion

Commission / Italie e.a.
Aide d'État
L’avocat général Tanchev recommande à la Cour de rejeter le pourvoi formé par la Commission contre l’arrêt du Tribunal relatif aux mesures adoptées par un consortium de banques italiennes pour soutenir l’un de ses membres

Bundesrepublik Deutschland (Détermination des taux des péages pour l'utilisation d'autoroutes)
Fiscalité
Les coûts liés à la police de la route ne peuvent pas être pris en compte pour le calcul des péages pour l’utilisation du réseau routier transeuropéen par les poids lourds

Shenzhen Senior Technology Material Co Ltd v Celgard, LLC [2020] EWCA Civ 1293 concerns an appeal against service out of jurisdiction (the judgment appealed is [2020] EWHC 2072 (Ch)). Celgard allege that the importation and marketing by Senior of battery separator film involves the misuse of Celgard’s trade secrets.

Senior (of China) contend that the judge fell into error in concluding, first, that Celgard (incorporated in Delaware) had established a serious issue to be tried (here part of the jurisdictional threshold) assuming that English law applies to its claims and, secondly, that England is the proper forum to try the claims. As to the latter the core argument is that in limiting its claims to remedies in respect of acts in the UK, Celgard could not establish the requisite degree of connection to England. As for the former, they argue the law applicable to Celgard’s claims is Chinese law, which would count against jurisdiction.

Strategically, Celgard’s case against Senior is not based on breach of the NDA applicable between Celgard and one of its former employees,  Dr Zhang who, when he left Celgard, told its then COO that he was going to work for General Electric in California, which does not compete with Celgard in the field of battery separators. It later transpired that he had in fact joined Senior in China, where he was using the false name “Bin Wang”. This element of the facts triggers the question whether Senior is liable for the acts of another, even if that other is its employee.

The Celgard – Zhang NDA is governed by the law of South Carolina, application of which would also have triggered A4(3)(b) or (c) of the Trade Secrets Directive 2016/943. Celgard do rely on the NDA as supporting its case that the trade secrets were confidential. Rather Celgard claim that Senior’s employee acted in breach of an equitable obligation. This engages Rome II,  specifically Article 6(2) because Celgard’s claims are concerned with an act of unfair competition affecting exclusively the interests of a specific competitor, namely Celgard. In such circumstances, Article 6(2) provides that “Article 4 shall apply”.

Of note is that this is one of those cases that show that Rome II applies to more than just tortious obligations: as Arnold LJ notes at 51, as a matter of English law, claims for breach of equitable obligations of confidence are not claims in tort.

Celgard’s case, accepted by Trowe J at the High Court, is that A4(1) leads to English law because the ‘direct damage’ (per Rome II and CJEU Lazard indirect damage needs to be ignored) caused by the wrongdoing it complains of has occurred (and will, if not restrained, continue to occur) in the UK, that being the country into which the infringing goods (namely the shipment to the UK Customer and any future shipments of the same separator) have been (and will be) imported, causing damage to Celgard’s market here.

Senior’s case is that confidential information is intangible property and that damage to intangible property is located at the time and place it became irreversible (support is sought in extracts from Andrew Dickinson’s Rome II volume with OUP). At 58 ff Arnold LJ gives 7 reasons for rejecting the position. I will not repeat them all here. Of note is not just the (most justifiable) heavy leaning on the travaux but also the support sought in secondary EU law different from private international law (such as the Trade Secrets Directive 2016/943) as well as in the consistency between Brussels Ia and the Rome Regulations [on which Szpunar AG has written excellently in Burkhard Hess and Koen Lenaerts (eds.), The 50th Anniversary of the European Law of Civil Procedure]. This is not an easy proposition however given the lack of detail in Rome I and the need for autonomous EU interpretation, understandable.

The Trade Secrets Directive is further discussed at 65 ff for in A4(5) it makes importation of infringing goods an unlawful use of a trade secret “where the person carrying out such activities knew, or ought, under the circumstances, to have known that the trade secret was used unlawfully within the meaning of paragraph 3”. One of the possibilities embraced by paragraph 3 is (a), the person “having acquired the trade secret unlawfully”. Arnold LJ then asks: what law is to be applied to determine whether it was acquired “unlawfully”? Is A4(5) read together with A4(3)(a) an implicit choice of law rule pointing to the law of the place where the trade secret was acquired? Arnold LJ suggests this is not acte clair and may need CJEU clarification however not at this stage for his provisional view (with an eye on the jurisdictional threshold test) is that the Directive is not an implicit choice of law rule and that per Rome II, English law applies.

Plenty applicable law issues to discuss at the merits stage.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 4, Heading 4.6.2. Third ed. forthcoming February 2021.

 

 

Service out of jurisdiction with core role for applicable law considerations: Article 6 junto 4 Rome II, unfair competition. https://t.co/BUUjFlzY9P

— Geert Van Calster (@GAVClaw) October 9, 2020

This CEPEJ report, published on 22nd October 2020, contains data on the functioning of the judicial systems of 45 European States and 3 Observer States (Morocco, Israel and Kazakhstan). The findings are the following:

“Budget

– In 2018, European States spent on average more than 1 billion Euros for their judicial systems, equal to 72 € per inhabitant (8 € more than in 2016) and 0,33% of GDP. On average, member States allocated 65% of judicial system budget to courts, 24% to prosecution services and 11% to legal aid. Switzerland and Monaco are the countries that spend the most significant amount per inhabitant (220 € and 197 €), while Montenegro and Bosnia and Herzegovina dedicate to judicial system the highest percentage of their GDP (0.88% and 0.72%).

– Countries with a higher GDP per capita invest more per inhabitant in judicial systems, while less wealthy countries allocate more budget as a percentage of GDP, showing a greater budgetary effort for their judicial systems.

– Between 2010 and 2018, the member States and entities have slightly increased the average budget allocated to the judicial system. In 2018, all States and entities have increased the budget allocated to their judicial systems (+8%). The most significant increase (between 2016 and 2018), equal to 13% on average, has been recorded for courts’ budget and it concerns, in particular, investments in new buildings and computerisation.

– Less wealthy countries invest proportionally more on prosecution services (32% on average), while States and entities with higher GDP per capita spend relatively more in legal aid (19% on average).

– The budget allocated to courts seems to be related not only to the wealth of the country, but also to the number of courts. This may seem logical given that 65% of the court budget is spent on salaries.

– In order to rationalise budgetary resources of courts and, at the same time, reinforce specialisation and expertise, an increasing trend to outsource certain services is confirmed.

– Generally speaking, all the countries have implemented a legal aid system in criminal and other than criminal matters (representation by a lawyer before the court or legal advice), in compliance with the requirements of the European Convention on Human Rights and the case-law of the European Court which advocates an appropriate legal aid system to ensure access to justice for everyone.

– Some countries tend to have a low cost per legal aid case and a high number of cases granted legal aid, while others choose to provide a higher amount for a smaller number of cases.

Professionals

– While the number of professional judges remains globally stable, 21 judges per 100 000 inhabitants on average, significant differences are still noticed between States and entities (from 3.1 in UK-England and Wales to 101.8 in Monaco per 100 000 inhabitants). The latter can be partly explained by the diversity of judicial organisations, use of occasional professional judges and/or lay judges. Variations over the years have not led towards harmonisation.

– The number of prosecutors is tending to increase, on average 12 prosecutors per 100 000 inhabitants (in 2018, the number varies from 2.2 in Ireland to 25.1 in Ukraine).

– 31 Member States of 47 declared that public prosecutors are statutorily independent.

– While the number of prosecutors increased, their workload decreased since 2010 from 4.2 to 3.1 cases per 100 inhabitants.

– The trend towards the feminisation of judges and prosecutors is confirmed but the glass ceiling remains a reality: in 2018, at the level of all instances, there was 46% of men and 54% of women judges but 66 % male court presidents as opposed to 34 % of female court presidents; for the prosecutors : 48% of men and 52% of women but 64% of male and 36 % of female head of public prosecution offices. More and more States and entities seem to be focusing on the topic of specific provisions in favour of

– gender parity in the procedures for the recruitment and promotion of judges and prosecutors. Taking measures to promote gender balance in the higher and highest justice functions should be encouraged.

– The ratio between non-judge staff and professional judges is about 4 in 2018, this figure being quite stable through the years, the minimum being 1 in Luxembourg and the maximum 10 in UK – Northern Ireland.16 European States set up Rechtspfleger.

–  Salaries of judges vary widely between States and entities, but also between instances. The changes in salaries in recent years are not uniform and do not lead to harmonisation. The ratio between salaries of judges and national average salary shows significant disparities in Europe: from 0.9/1.6 in Germany (at the beginning /the end of career) to 4.8/31.5 in Ukraine (at the beginning /the end of career).

– Meaningful disparities also persisted in the salaries of prosecutors. The ratio between salaries of prosecutors and national average salary shows significant disparities in Europe: from 0.8 in Ireland and 4.0 in Romania (at the beginning of the career); 1.6 in Germany and 6.4 in Italy (at the end of the career). 

– Prosecutors’ salaries are, on average, lower than those of judges.

– The number of lawyers is also continuing to increase in Europe, with an average of 164 lawyers per 100 000 inhabitants, with important disparities between States (in 2018, from 16 per 100 000 inhabitants in Azerbaijan to 488 per 100 000 inhabitants in Luxembourg). This constant increase between 2010 and 2018 (27%) is mainly due to economic growth.

– Recent developments suggest that the topic of gender balance with regard to lawyers is being taken into account by an increasing number of States and entities. Currently, however, European lawyers are still predominantly male.

Courts

– Between 2010 and 2018 there was a reduction in the number of courts in Europe, both in terms of legal entities (-19% on average for the first instance courts of general jurisdiction) and geographical locations (-10 % on average).

–  For the same period, we can also notice an increase in the specialization of courts (the average share of specialized courts increased from 21% to 26,7% from 2010 to 2018).

– Small claims were only slightly affected by the above-mentioned developments. Only the average amount of what constitutes a small claim has increased (from 4 029 € in 2016 to 4 836 € in 2018).

Court users

– More and more member States provide specific information to users, both on the judicial system in general and on individual court proceedings.

– States address more and more specific information and arrangements to vulnerable categories of users (the complaints procedures regarding functioning of justice exist in 43 States, implementation of compensation systems (the average amount of compensation is 6 353 € in 2018), user satisfaction surveys, establishment of monitoring mechanisms in respect of violations of the European Convention on Human Rights).

– In order to improve further social responsibility and trust in the judicial system, member States should devote additional resources and staff to improvecommunication with the users of justice.

– The analyses and use of data, gathered through quantitative and qualitative research into the satisfaction of court users, increases the legitimacy of judicial systems and helps court leaders and administrations provide a better and more efficient service of justice.

– The use of information systems to support such activities is crucial. However, it is “interactional justice “- the human touch, the treatment of all involved in judicial proceedings with dignity and respect, that substantially helps to provide just decisions and consequently build trust in justice.

Information and communication technology (ICT)

–  ICT has become a constitutive part of justice service provision. States have focused their efforts on court and case management tools, more then on decision support and communication tools. The general ICT index (court and case management, decision support and communication with courts) varies from 1.52 in Cyprus to 9.79 in Latvia.

– European judicial systems are increasingly moving from paper-based procedures to electronic ones. This is true for the activities carried out within the courts, as well as for the communication exchanges between courts and all parties.

– The economic cost of this innovation should be considered with caution as the ICT budget may vary considerably during the development, deployment and maintenance phases.

– Court systems with comparatively higher resources generally tend to invest a higher percentage of the court budget in ICT.

– ICT are an integral component of the judicial systems, which is reflected both in the regulatory and governance choices implemented by the member States.

– Member States and entities have set up various solutions regarding leadership in ICT governance: most States tend to consider both of them equally relevant, with a slight prevalence of the judicial one.

– As basic technologies are now generally fully deployed in member States and entities, this analysis has focused on court and case management tools, decision support tools and tools for communication between courts, professionals and/or court users, showing very high levels of deployment.

– The high levels achieved in the areas of decision support, e-communication and remote proceedings increase the need to monitor the impact of these tools on principles such as fairness, impartiality and judicial independence.

Justice in the context of the Covid-19 crisis

– ICTs have proven to be valuable and even indispensable tools for the continued work of judicial systems during the COVID-19 crisis in Europe.

– In many cases, their use has required not only changes in legislation but also technical improvements, as has been observed in member States and entities.

– Concerns have been expressed about the use of certain ICT tools in court proceedings, but it is still too early to assess their actual impact on the parties’ rights.

– To address these issues, the CEPEJ has adopted on 10 June 2020 a  Declaration on lessons learnt and challenges faced by the judiciary during and after the Covid-19 Pandemic.

Efficiency

– The clearance rates give a generally positive balance sheet (stable and close to 100%) and conclusions can be more usefully drawn from the disposition time analysis. Criminal justice is the most effective at all three levels of court (disposition time at first instance: 122 days; second instance: 104 days ; third instance: 114 days) and the second instance courts appear as the most efficient in all areas (disposition time in civil and commercial cases: 141 days; administrative cases: 209 days; criminal cases: 104 days). It should be noted that although the results are unquestionably positive, they have deteriorated over time in several States and entities analysed.

– Conversely, it is at first instance and in the field of administrative law that the courts have proven to be the least efficient. Administrative cases tend to record the highest DT (241 days at 1st instance, 209 days at 2nd instance, 228 days at 3rd instance) with, however, considerable disparities between States and entities.

– Cases concerning asylum seekers and the right to entry and stay for aliens continue to have a strong impact on European jurisdictions. Many States and entities reported productivity problems related to these case types. In 2018, States received 291 443 cases concerning asylum seekers or 8 % fewer than in 2016. 183 920 incoming cases pertaining to the right to entry and stay for aliens represent an increase of 84 %. The highest number of incoming cases concerning asylum seekers was recorded in Germany, 149 593 cases. The second highest inflow is in France which received 58 671 asylum seekers cases and 79 807 right of entry and stay for aliens cases. Italy, then, received 48 891 asylum seekers cases and 2 224 right of entry and stay for aliens cases.

– The share of cases older than two years is available for a limited set of States and entities. Within these, the shares of cases older than two years do not vary over time.

– A number of States and entities have undergone or are currently undergoing significant justice sector reforms which have influenced the performance of their systems. The results of these States and entities need to be monitored cautiously and with an understanding of the context”.

Source: https://rm.coe.int/link-to-the-presentation-note-en/16809fdc75

For further information, see https://www.coe.int/en/web/cepej/special-file-publication-of-the-report-european-judicial-systems-cepej-evaluation-report-2020-evaluation-cycle-2018-data-

Yesterday, 23 October 2020, the Republic of Serbia ratified the HCCH Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance, which will enter into force for Serbia on 1 February 2021.

Source: https://www.hcch.net/en/news-archive/details/?varevent=757

Another day and another application for a stay on the basis of Article 30 Brussels Ia. Lopesan Touristik SA v Apollo European Principal Finance Fund III (Dollar A) L.P. & Ors [2020] EWHC 2642 (Comm) engages a Sale and Purchase Agreement (SPA) between Lopesan as seller and Spanish company Oldavia as buyer, for Lopesan’s interest in the Buenaventura hotel in Spain. The Hotel is owned by Creative Hotel Buenaventura SAU.

Oldavia is a special purpose vehicle through which Apollo, who are private equity interests, acquired the Hotel for c.€93 million. That funding commitment was reflected in the terms of an Equity Commitment Letter (ECL), under which Apollo promised Oldavia, on the terms and conditions set out in the ECL, to provide it with the funding required to complete the SPA, which obligation was expressly made enforceable by Lopesan under the Contracts (Rights of Third Parties) Act 1999.

The SPA is governed by Spanish law and contains an exclusive jurisdiction clause in favour of the Spanish courts. The ECL is governed by English law and contains an exclusive jurisdiction clause in favour of the English courts.

Completion did not take place, and there are disputes between Lopesan and Oldavia as to whether Oldavia was or is obliged to complete under the SPA.

On 12 August 2020, Lopesan commenced proceedings against Oldavia in Madrid seeking specific performance of Oldavia’s obligation to complete under the SPA. Parties agree that those proceedings will not be determined for at least 12 months. On 20 August 2020, Lopesan wrote to Apollo seeking confirmations and undertakings intended to ensure that, if the specific performance claim against Oldavia succeeded, Apollo would provide the funds to Oldavia to allow completion to occur. Apollo disputed that Oldavia was under any obligation to complete, and as a result that it was under any corresponding obligation to put Oldavia in funds to enable it to complete.

On 15 September 2020 Lopesan then issued proceedings seeking to enforce its rights as a third party beneficiary under the ECL by way of an order for specific performance of Apollo’s obligation to put Oldavia in funds. Lopesan also issued an application for a speedy trial of that action to ensure judgment was delivered before 1 January 2021: there is a potential argument that Apollo’s obligations will lapse on 1 January 2021, even if, before that date, Oldavia came under a legal obligation to complete the SPA.

Apollo seek a stay of the proceedings under A30(1) BIa.

At 47 Foxton J refers to the Privatbank /EuroEco discussion which he summarises as ‘whether actions are related for the purposes of A30 only when the actions can in fact be heard and determined together, or whether actions are related where they would be heard and determined together but for some external factor (such as exclusive jurisdiction agreements or subject-matter limits on the jurisdiction of a particular court) which prevents this.’ Effective v theoretical hearing together, in other words. He sides with Privatbank but also accepts, with reference to Privatbank, that a practical inability to achieve an outcome where both cases are heard and determined together will be a factor which weighs against granting a stay as a matter of the discretion which Article 30 grants the judge, and that “absent some strong, countervailing factor, the fact that proceedings cannot be consolidated and heard together will be a compelling reason for refusing a stay”.

Further, and with reference to The Alexandros and to Generali v Pelagic Fisheries, where the factor which prevents the two actions being heard together is an exclusive jurisdiction clause, that of itself will constitute a powerful (although not insuperable) factor against staying proceedings which have been brought in the parties’ chosen jurisdiction pending the determination of proceedings elsewhere. At 50 he holds that this is a factor even when the other proceedings have themselves not been commenced in breach of contract.

At 57 Foxton J points that neither the relatedness of the actions nor that the Spanish court is first seised, are disputed. Relatedness exists given that any issue arising in the English proceedings which concerns the issue of whether Oldavia was obliged to complete the SPA necessarily arises in Spain. He then holds that the degree of relatedness is high and that the Spanish courts have much closer proximity to the subject matter of the case, involving, as it does, issues as to the effect of Covid-19 and the Spanish government’s response to it on a Spanish hotel, and the legal effects of those and other matters on a contract governed by Spanish law. However, at 58, if the English proceedings are stayed, it will not be possible to hear and determine the claims in the English and Spanish proceedings together, given the conflicting exclusive jurisdiction clauses in the ECL and the SPA. The decision (whether on issues of law or fact) in the Spanish proceedings would not be binding in the English proceedings, although if Lopesan fails in the Spanish proceedings, that will in practice be determinative of the English proceedings. Findings of law in the Spanish proceedings will also have a strong evidential value in the English proceedings.

Nevertheless, the significance of the English jurisdiction clause and the practical impossibility to hear the claims together in the Spanish courts, make him decide at 60 ff against a stay. His judgment displays the characteristic support of the English courts and English law for party autonomy: parties have deliberately structured the transaction so that claims under the ECL would be heard in a different jurisdiction to claims under the SPA. Consider his reasoning at 61:

That choice having been made, no doubt for good commercial reasons, and the events which have transpired being a scenario which must have been squarely within the parties’ contemplation, it would take a very strong case to justify staying proceedings brought as of right here pending the outcome of proceedings in another jurisdiction. The closer proximity of the Spanish courts to the dispute, nor its status as the natural forum to determine issues of Spanish law, are not sufficient to justify a stay, both because this must have been obvious to the parties when they put this arrangement in place, and because the parties expressly agreed not to raise any objections to proceedings in England on the ground that proceedings have been brought in an inconvenient forum. I do not suggest that this last factor is determinative or that it precludes an Article 30(1) stay. There is a public, as well as a purely private, interest in avoiding irreconcilable judgments within the Brussels Recast regime. However, the factor that the parties wanted the dispute to be determined in their chosen forum regardless of whether another court might be a more convenient forum is a factor which weighs in the balance against a stay.

A relevant judgment.

Geert.

(Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2, Heading 2.2.14.5. Third edition forthcoming February 2021

 

I.a. application (dismissed) for a stay under A30(1) Brussels Ia.
Foxton J holding that the proceedings in Spain are related however no risk of irreconcalibility. https://t.co/gAeqYZNeEI

— Geert Van Calster (@GAVClaw) October 8, 2020

On 20 October 2020, the European Parliament adopted a resolution with recommendations to the Commission on a civil liability regime for artificial intelligence. These recommendations include a suggested regulation on liability for the operation of Artificial Intelligence-systems. Article 9 confirms the previous JURI Report (see this blog on 12 May 2020): “Civil liability claims brought in accordance with Article 8(1) shall be subject, in relation to limitation periods as well as the amounts and the extent of compensation, to the laws of the Member State in which the harm or damage occurred”.

Unfortunately, the exact nature of some key provisions such as Article 2, or the relationship between the suggested regulation as a whole and Rome II, remain unclear and different interpretations could usefully be clarified. It remains to be seen whether the European Commission will shed some light on this point when drafting the official proposal for the regulation.

See https://www.europarl.europa.eu/doceo/document/TA-9-2020-0276_EN.pdf

A rather strange ‘amendment’ to the French version of Brussels II ter was published two days ago at the OJEU: Rectificatif au règlement (UE) 2019/1111 du Conseil du 25 juin 2019 relatif à la compétence, la reconnaissance et l’exécution des décisions en matière matrimoniale et en matière de responsabilité parentale, ainsi qu’à l’enlèvement international d’enfants, OJEU L 347, 20.10.2020, p. 52–160 (FR), https://eur-lex.europa.eu/legal-content/FR/TXT/?uri=uriserv%3AOJ.L_.2020.347.01.0052.01.FRA&toc=OJ%3AL%3A2020%3A347%3ATOC

In reality, a new version of the entire Regulation is provided, far from the single amendment the title may suggest. As the readers from this blog will know, a few days ago, a corrigendum to Brussels I bis in some linguistic versions has been published. What’s next and why are the corrections only published now, even if later is better than never?

In Koninklijke Philips NV v Tinno Mobile Technology Corporation & Ors [2020] EWHC 2553 (Ch) Mann J considers the English side of a licence on  ‘FRAND’ (fair, reasonable and non-discriminatory) terms.  In these English proceedings Philips seek inter alia, a declaration that the terms it has offered are FRAND, or alternatively that FRAND terms be determined. Its injunction claim accepts that the injunction will only come into force if a worldwide FRAND licence is not accepted by TCL, one of the defendants who is seeking the licence. TCL have commenced proceedings in France which, inter alia, seem to seek to have FRAND terms determined. Philips attempted to have those proceedings stayed pursuant to Article 29 Brussels Ia, but that attempt failed, as did an application for a stay under Article 30 BIa. In turn, not surprisingly, TCL seek a stay of the English proceedings, including, crucially, the vacation of a trial date in November which is intended to determine FRAND issues, in favour of its French proceedings pursuant to the same Articles 29 and/or 30 Brussels Ia.

Philips’ claim form says it is for infringement of two of its European patents, corresponding injunction (prohibiting further infringement) and damages or an account of profits, and other ancillary relief.

At 49 in assessing the impact of the French judgment and the scope of its res judicata, Mann J justifiable refers to C-456/11 Gothaer, that it is not just the ‘dispositif’ of a judgment which has res judicata, but also the core reasoning: at 40 of the CJEU judgment: ‘the concept of res judicata under European Union law does not attach only to the operative part of the judgment in question, but also attaches to the ratio decidendi of that judgment, which provides the necessary underpinning for the operative part and is inseparable from it …’

His enquiry of the dispositif and the French judge’s reasoning as well as, to a certain extent, the submissions of the parties, leads Mann J to conclude that the French judge did not hold that the French court was first seized of FRAND proceedings. Instead, she held that the proceedings in England and the proceedings in France did not (for the purposes of A29) have the same subject matter. That means that the question of first seised became irrelevant.

Mann J then holds himself that the English court was first seized of the FRAND issue and consequently has no power under A30 BIa to stay its proceedings. It was suggested in vain by counsel for the defendants that Articles 29 and 30 are not acte clair on the point of new actions arising in an existing action, given a distinction between the word “proceedings” in Article 29 and “actions” in Article 30 at least in the English version of those Articles.

The jurisdictional challenge was rejected and the relief granted. Geert. (Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2, Heading 2.2.14.5. Third edition forthcoming February 2021. https://twitter.com/GAVClaw/status/1309481362186031105

A quick note for archival purposes on the French Supreme Court judgment earlier this month in which it upheld the lower courts’ decision (which had been reversed upon appeal) that European Convention rights do not trump the impossibility under English law, which is the law under which the claimant had been adopted, for the adopted to confirm descent from both the adopted parents and the biological father.

It is important to keep in mind the specific circumstances of the case in which the Supreme Court let the stability of family relations prevail over ECHR rights. The adoption went back to 1966 (the UK birth to 1958). The true identity of the father seemingly had always been known to the applicant. The mother (1963) and the suspected biological father (2011)  have passed away, the real issue would seem to be inheritance related.

Geert.

 

Interesting French supreme court judgment upholding finding under applicable English law that descendance following adoption trumps later attempt to establish blood descendance
Preference for stability of family relations found not to infringe adopted's A8 #ECHR rights @ECHR_CEDH https://t.co/Gtht0d8YgH

— Geert Van Calster (@GAVClaw) October 15, 2020

A corrigendum to Brussels I bis in some linguistic versions has been published yesterday (15 October 2020) in the OJEU (L 338). It relates to the Czech, French and Polish versions of the Regulation. Here is the French version:

« Page 23, article 34, paragraphe 1, point c):

au lieu de: «c) la juridiction de l’État tiers concernée est convaincue que le sursis à statuer est nécessaire pour une bonne administration de la justice.»

lire: «c) la juridiction de l’État membre est convaincue que le sursis à statuer est nécessaire pour une bonne administration de la justice ».

It is an alignment with other linguistic versions.

Source : https://eur-lex.europa.eu/legal-content/FR/TXT/?uri=uriserv:OJ.L_.2020.338.01.0013.01.FRA&toc=OJ:L:2020:338:TOC

Case C‑629/19 Sappi Austria Produktions-GmbH & Co. KG and Wasserverband ‘Region Gratkorn-Gratwein’ v Landeshauptmann von Steiermark in which the CJEU held on Wednesday is in my off the cuff view (I did not research it in the recent case-law) the first case where the CJEU specifically mentions the objectives of the circular economy to support its interpretation of the core definition of ‘waste’ in the Waste Framework Directive 2008/98.

Sappi operate a large industrial paper and pulp production plant in Gratkorn (Austria). On that site is also a sewage treatment plant, operated jointly by Sappi and the Wasserverband, which treats waste water from paper and pulp production as well as municipal waste water. During the treatment of that waste water, which is required by national law, the sewage sludge in question in the main proceedings arises. That sludge is therefore made up of both substances from industrial waste water and substances from municipal waste water. Sewage sludge which is produced in the sewage treatment plant is then incinerated in a boiler of Sappi and in a waste incineration plant operated by the Wasserverband, and the steam reclaimed for the purposes of energy recovery is used in the production of paper and pulp.  hat authority found that, admittedly, the majority of the sewage sludge used for incineration, namely 97%, originated from a paper production process and that this proportion could be regarded as having ‘by-product’ status within the meaning of Paragraph 2(3a) of the AWG 2002. However, that does not apply to the proportion of sewage sludge arising from municipal waste water treatment. That sewage sludge remains waste. Since there is no de minimis limit for the classification of a substance as ‘waste’, the authority assumed that all the sewage sludge incinerated in the industrial plants of Sappi and of the Wasserverband must be classified as ‘waste’.

The CJEU first of all holds that there is no relevant secondary law which provides the kinds of qualitative criteria for sewage sludge to meet with the objectives of the WFD. If there were such laws, and the sludge meets their requirements, it would be exempt form the WFD. It then reminds the referring court, of course, of the extensive authority on the notion of waste (most recently C-624/17 Tronex) yet is happy to provide the national Court with input into the application in casu.

In principle, the sludge is waste, the Court holds: it is a residue from waste water treatment and it is being discarded.

However, the referring judge suggests that the sludge may meet the requirements of A6(1) WFD as being fully ‘recovered’ before it is used in the incineration process. It is there that the CJEU refers to the circular economy: at 68:

it is particularly relevant that the heat generated during the incineration of the sewage sludge is re-used in a paper and pulp production process and that such a process provides a significant benefit to the environment because of the use of recovered material in order to preserve natural resources and to enable the development of a circular economy.

Per C‑60/18 Tallinna Vesi, the recovery of sewage sludge entails certain risks for the environment and human health, particularly linked to the potential presence of hazardous substances. For the sludge at issue here not to be waste, presupposes that the treatment carried out for the purposes of recovery makes it possible to obtain sewage sludge with a high level of protection of the environment and human health, such as required by the WFD, which is, in particular, free from any dangerous substance. For that purpose, it is necessary to ensure that the sewage sludge in question in the main proceedings is harmless (at 66). The CJEU concludes, at 67

It is for the referring court to determine whether the conditions laid down in Article 6(1) of Directive 2008/98 are already met before the sewage sludge is incinerated. It must in particular be determined, as appropriate, on the basis of a scientific and technical analysis, that the sewage sludge meets the statutory limit values for pollutants and that its incineration does not lead to overall adverse environmental or human health impacts.

There are as yet no EU standards for the full recovery of sewage sludge, hence the ball of end of waste status is once again in the Member States’ court.

Geert.

(Handbook of) EU Waste law, 2nd ed. 2015, Oxford, OUP, Chapter 1, 1.149 ff.