A quick note on MB and Services Limited and Golovina v United Company Rusal Plc [2020] JRC034 in which Birt C rejected an application for a stay on forum non conveniens grounds. He applied Spiliada of course, with at 139 the reasons for holding on balance that there is a real risk that claimants will not obtain justice in Russia. Note at 7 the specific weight attached to the intimidation of claimants’ attorney in Russia.
Geert.
Application for stay on forum non grounds. Rejected, applying Spiliada principles.
Real risk claimants will not obtain justice in Russia, particularly following attempts at bribing claimants' lawyer. https://t.co/kgEuftBLvW
— Geert Van Calster (@GAVClaw) April 15, 2020
The JURI Committee of the European Parliament has now released its draft report of 27 April 2020 (Draft report with recommendations to the Commission on a Civil liability regime for artificial intelligence, PE650.556v01-00). One notes Article 9 within the suggested Proposal for a regulation on liability for the operation of Artificial Intelligence-systems:
“National provisions on compensation and limitation period
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”.
The Court of Justice delivered last week (7 May 2020) its judgment in Case C‑641/18 (LG and Others v Rina SpA, Ente Registro Italiano Navale), which is about Article 1(1) of Brussels I.
Context and question: “LG and Others — relatives of the victims and survivors of the sinking of the Al Salam Boccaccio’98 vessel in the Red Sea on 2 and 3 February 2006, in which more than 1 000 people lost their lives — brought an action before the Tribunale di Genova (District Court, Genoa, Italy) against the Rina companies — ship classification and certification societies — whose seat is in Genoa.
15 LG and Others claim compensation for the pecuniary and non-pecuniary losses stemming from the Rina companies’ civil liability, arguing that the classification and certification operations for the Al Salam Boccaccio’98 vessel, carried out by the Rina companies under a contract concluded with the Republic of Panama, for the purposes of obtaining that State’s flag for that vessel, were the cause of that sinking.
16 The Rina companies contend that the referring court lacks jurisdiction, relying on the international-law principle of immunity from jurisdiction of foreign States. In particular, according to those companies, the classification and certification operations which they conducted were carried out upon delegation from the Republic of Panama and, therefore, are a manifestation of the sovereign powers of the delegating State.
17 According to LG and Others, by contrast, given that the Rina companies have their seat in Italy and the dispute at issue in the main proceedings is civil in nature, within the meaning of Article 1 of Regulation No 44/2001, the Italian courts have jurisdiction under Article 2(1) of that regulation. In addition, LG and Others submit that the plea of immunity from jurisdiction, relied on by the Rina companies, does not cover activities that are governed by non-discretionary technical rules which are, in any event, unrelated to the political decisions and prerogatives of a State.
18 The referring court raises the question of the jurisdiction of the Italian courts in so far as, while it is common ground that the Rina companies have their seat in Italy, it is claimed that they acted upon delegation from the Republic of Panama”.
Response: “Article 1(1) of Council Regulation (EC) No 44/2001 […] must be interpreted as meaning that an action for damages, brought against private-law corporations engaged in the classification and certification of ships on behalf of and upon delegation from a third State, falls within the concept of ‘civil and commercial matters’, within the meaning of that provision, and, therefore, within the scope of that regulation, provided that that classification and certification activity is not exercised under public powers, within the meaning of EU law, which it is for the referring court to determine. The principle of customary international law concerning immunity from jurisdiction does not preclude the national court seised from exercising the jurisdiction provided for by that regulation in a dispute relating to such an action, where that court finds that such corporations have not had recourse to public powers within the meaning of international law”.
Key points of the reasoning: “the mere fact that certain powers are delegated by an act of a public authority does not imply that those powers are exercised iure imperii” (at 39), “the fact that certain activities have a public purpose does not, in itself, constitute sufficient evidence to classify them as being carried out iure imperii, in so far as they do not entail the exercise of any powers falling outside the scope of the ordinary legal rules applicable to relationships between private individuals” (at 41) and “the fact that, having regard to their objective, some acts are carried out in the interest of a State does not, in itself, result in the operations at issue in the main proceedings being carried out in the exercise of public powers” (at 42).
Source: here
The Court of Justice delivered last week (7 May 2020) its judgment in joined cases C‑267/19 and C‑323/19 (Parking d.o.o. v Sawal d.o.o. (C‑267/19), and Interplastics s. r. o. v Letifico d.o.o. (C‑323/19)). The judgment is available in all EU official languages (save Irish), albeit not in English. Here is the French version :
Question : « Il convient […] de comprendre que, par ses deux questions, qu’il y a lieu d’examiner ensemble, la juridiction de renvoi demande, en substance, si, dans l’hypothèse où les décisions qu’elle rendra relèvent du champ d’application du règlement no 1215/2012, l’article 18 TFUE et l’article 47 de la Charte doivent être interprétés en ce sens qu’ils s’opposent à une réglementation nationale habilitant les notaires, agissant dans le cadre des compétences qui leur sont dévolues dans les procédures d’exécution forcée sur le fondement d’un document faisant foi, à rendre des ordonnances d’exécution qui, ainsi qu’il ressort de l’arrêt du 9 mars 2017, Pula Parking (C‑551/15, EU:C:2017:193), ne peuvent pas être reconnues et exécutées dans un autre État membre ».
Réponse : « L’article 18 TFUE et l’article 47 de la charte des droits fondamentaux de l’Union européenne doivent être interprétés en ce sens qu’ils ne s’opposent pas à une réglementation nationale habilitant les notaires, agissant dans le cadre des compétences qui leur sont dévolues dans les procédures d’exécution forcée sur le fondement d’un document faisant foi, à rendre des ordonnances d’exécution qui, ainsi qu’il ressort de l’arrêt du 9 mars 2017, Pula Parking (C‑551/15, EU:C:2017:193), ne peuvent pas être reconnues et exécutées dans un autre État membre ».
Source : here
I reported earlier on complex enforcement issues concerning SAS Institute v World Programming. In [2020] EWCA Civ 599 SAS Institute Inc v World Programming Ltd Flaux J gives an overview of the various proceedings at 4:
The dispute between the parties has a long history. It includes an action brought by SAS against WPL in this country in which SAS’s claims were dismissed; a decision by WPL, following an unsuccessful challenge on forum non conveniens grounds, to submit to the jurisdiction of the North Carolina court and to fight the action there on the merits; a judgment in favour of SAS from the North Carolina court for some US $79 million; an attempt by SAS to enforce the North Carolina judgment in this jurisdiction which failed on the grounds that enforcement here would be (a) an abuse of process, (b) contrary to public policy and (c) prohibited by section 5 of the Protection of Trading Interests Act 1980 (“the PTIA”); and a judgment from the English court in favour of WPL for over US $5.4 million, which SAS has chosen to ignore.’
A good case to use therefore at the start of a conflicts course to show students the spaghetti bowl of litigation that may occur in civil litigation. There are in essence English liability proceedings, decided in the end following referral to the CJEU (Case C-406/10); North Carolina liability proceedings, in which WPL submitted to jurisdiction after an earlier win on forum non grounds was reversed on appeal and the NC courts came to the same conclusions as the English ones despite a finding they were not (clearly) under an obligation to apply EU law; next, an SAS enforcement attempt in England which failed (with permission to appeal refused): my earlier post reviews it; next, enforcement proceedings of the NC judgment in California. That CAL procedure includes an assignment order and WPL sought an anti-suit injunction to restrain SAS from seeking assignment orders as regards “customers, licensees, bank accounts, financial information, receivables and dealings in England”: it was not given the injunction for there was at the time no CAL assignment order pending which could be covered by anti-suit. Currently, it seems, there is, and it is an anti-suit against these new assignment orders which is the object of the current proceedings.
At 59 ff follows a discussion of the situs of a debt; at 64 ff the same for jurisdiction re enforcement judgments, holding at 72
Applying these internationally recognised principles to the present case, the North Carolina and California courts have personal jurisdiction over WPL but do not have subject matter jurisdiction over debts owed to WPL which are situated in England. That is so notwithstanding that the losses for which the North Carolina court has given judgment were incurred by SAS in the United States. Nevertheless the effect of the proposed Assignment Order would be to require WPL to assign debts situated in England to SAS which would at least purport to discharge its customers from any obligation owed to WPL, while the effect of the proposed Turnover Order would be to require WPL to give instructions to its banks in England which would discharge the debts situated in England currently owed by the banks to WPL. In substance, therefore, the proposed orders are exorbitant in that they affect property situated in this country over which the California court does not have subject matter jurisdiction, thereby infringing the sovereignty of the United Kingdom.
Which is later confirmed at 83. Consequently the earlier order is overturned: at 89: ‘it follows also that the judge’s conclusion that the Assignment and Turnover Orders were not “markedly exorbitant” was based upon a mistaken premise.’
The anti-suit and anti-enforcement applications are dealt with in particular with reference to comity, and largely granted with some collateral notices of intention by SAS not to seek a particular kind of enforcement.
Someone somewhere must have made partner on this litigation.
Geert.
The extensive ruling by Foster J in Roberts (a minor) v Soldiers, Sailors, Airmen and Families Association & Ors [2020] EWHC 994 (QB) is clearly related to Soole J’s 2019 ruling which I reviewed here. Yet exactly how is not clear to me. No reference at all is made to the 2019 ruling (there is reference to an earlier Yoxall M 2018 ruling) in current judgment. Current ruling treats partially related issues of limitation and applicable law, Rome II is not engaged ratione temporis. The English rules’ general lex causae provision (pointing to locus delicti commissi), summarised at 112-113, Foster J finds, should not be displaced with a ‘substantially more appropriate’ rule in the circumstances. However she does find that the implications of the German statute of limitation should be set aside on ordre public grounds, for they would otherwise cause ‘undue hardship’.
Elijah Granet has extensive review here and I am happy to refer.
Geert.
I had already reported in March on the first application of the CJEU C-18/18 Eva Glawischnig-Piesczek v Facebook ruling in an update to my post on the latter. I thought I’ld add a separate post on the ruling for it, well, deserves it: the court held that orders based on Austrian copyright are limited to Austria (given copyright’s territorial limitations), but if they are based on personal rights, the claimant has to specify the requested territorial reach (so potentially global).
IPKat have further analysis here. As one or two of us discussed at the time of the CJEU ruling: the infringement of personality rights angle is an important one.
Geert.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2, Heading 2.2.8.2.5.
A quick note on (thank you, Michael Douglas, for flagging) [2020] NSWCA 82 Inghams v Hannigan, in which the New South Wales Court of Appeal had to untangle a messy alternative dispute resolution (ADR) clause in a contract. I have actually included ‘messy’ as a tag for this post.
The Headnote to the judgment summarises the contractual clauses that needed proper construction. The case is a good illustration of how ADR clauses can lead parties straight into a right pickle, when different obligations to make recourse to mediation and /or (in this case: either /and /or) arbitration and indeed ultimately litigation in the courts at ordinary apply to separate parts of the contract. It forces parties to consider what part of the contract they actually have issue with and for the courts to try and untangle what ADR obligations follow.
A definite case of less can be more and of fancy ADR clauses not always giving wings to contractual interpretation. (The case concerns supplies of chickens. Bad pun. It’s a Saturday morning. I shall keep schtum for the rest of the day).
Geert.
Personal injury cases never make for light reading and Fletcher v Estee Lauder and Clinique is not an exception to that rule. Mrs Fletcher, aged 45, claims that her lifelong use of the Estee Lauder talc and face powder and Clinique loose face powder, starting with puffs of powder purchased by her mother in New York in 1976, followed by regular purchases in the city in later years, caused her to develop mesothelioma.
Thank you Leigh Day, who represent Mrs Fletcher, for reporting on the case. In a preliminary ruling, Justice Mendez rejected a forum non conveniens argument made by the cosmetics giants, who had argued that England is a more natural and suitable forum for the case.
The case is interesting for my readers who follow my reports in the ‘comparative’ binder, for it is not that routine for judges to list arguments against the suitability of England as a forum.
Arguments made pro forum non are on p.2, claimant’s arguments on p.3, and Mendez J’s criteria to dismiss (having earlier established per authority that the burden of proof to dismiss is necessarily high for defendants with a substantial presence in New York) on p.5. Note his reference to the absence of no win no fee (and claimant’s limited resources); absence of jury trial; limited and expensive discovery; and a general hesitation of the legal profession in bringing cases like these (non-occupational exposure claims) against manufacturers.
Most relevant and interesting.
Geert.
In Mastermelt v Siegfried Evionnaz [2020] EWHC 927 (QB), at issue is negative declaratory relief on contractual performance.
Claimant Mastermelt is an English company specialising in the reclamation of precious metals. The defendant, Siegfried Evionnaz SA (“Siegfried”), is a Swiss company. There is a dispute between the parties over the quality of Mastermelt’s performance. Siegfried’s standard terms and conditions of contract (“STC”) include a clause stating that the governing law is Swiss law and that the Swiss courts have exclusive jurisdiction.
Relevant pending proceedings, are: very shortly after Siegfried had informed Mastermelt that it was going to issue proceedings against Mastermelt in Switzerland, Mastermelt issued the present claim in England on 5 February 2019. It seeks negative declaratory relief against Siegfried. Proceedings were subsequently issued by Siegfried against Mastermelt in the Zurich Commercial Court on 23 July 2019. Meanwhile, on 24 May 2019, Siegfried applied to the High Court in London for a declaration that it had no jurisdiction to try Mastermelt’s claim and so the Claim Form and service should be set aside, alternatively stayed. Further, on 29 January 2020 Mastermelt applied to the Swiss court (1) for a stay of those proceedings pending the UK decision, or (2) for the Swiss proceedings to be limited at that stage to a consideration of the court’s own jurisdiction there and nothing else, or (3) an extension of time for service of a response to Siegfried’s claim. By an order of 4 February 2020, the Swiss court rejected all three applications. On 7 February Mastermelt filed an appeal to the Federal Supreme Court of Switzerland which initially suspended enforcement of the Zurich Commercial Court’s decision pending the appeal. However, on 13 February Siegfried objected to any such suspension. The Supreme Court directed Mastermelt to file any response to that objection by 9 March. As far as the English courts know, that has been done but at the moment the Supreme Court has not given its decision on the suspension issue, let alone any substantive appeal, nor has there been any decision yet on the jurisdiction or otherwise of the Swiss court to hear the claim.
Siegfried argues, and has convinced the Swiss courts, that A27 Lugano needs to be applied ‘in harmony’ with A31(2) Brussels Ia: this now provides that regardless of which court was seised first, the court which was the subject of the putative exclusive jurisdiction clause, must decide the question of its jurisdiction first and the other proceedings must be stayed in the meantime. At 13 Waksman J refers to the Swiss court’s reasoning, where it takes an expansionist view of the Lugano Convention‘s protocol no2, that the Lugano States shall take ‘due account’ of each other’s courts decisions. The Swiss court suggests that in principle it should follow CJEU authority in Gasser (which introduced the torpedo mechanism by giving strict interpretation to the lis alibi pendens rule, even in case of choice of court) but that it has reasonable justification to deviate from Gasser given that the judgment has become ‘obsolete’ following A31(2) BIa.
Waksman J is first invited to accept the Swiss court’s reasoning as res iudicata, per CJEU C-456/11 Gothaer. (I did say at the time the CJEU may find its ruling in Gothaer would come back to haunt it). This he finds is a stretch of that authority but also not applicable given the limited findings of the Swiss court at any rate: ‘here the actual and only decision of the Swiss court thus far is simply to refuse to stay its own proceedings’.
He then discusses how A27 Lugano needs to be applied. A first reference is to the Court of Appeal’s most problematic view in Privatbank, to my mind, of applying Article 28 Lugano reflexively to third States. At 23-24 Waksman J distinguishes Privatbank (clearly he cannot hold it no relevant authority should he think so); then holds correctly that Gasser is not entirely obsolete following BIa; and finally at 30 that the harmonised regime per Lugano’s Protocol does not mean that one should now interpret Article 27 Lugano like 31.2 and (b) i Brussels Ia.
I agree most firmly. Note this has Brexit implications: one of the routes post Brexit, as readers know, is for the UK to become part of Lugano. In doing so it will surrender BIa’s forum non-light regime (Articles 33-34) in favour of Lugano which most dedinitely does not have a forum non application – as well as, as is at issue here, re-arming the Italian torpedo.
This leaves the issue of the putative choice of court agreement. England is the forum contractus per Article 5(1)a Lugano, hence will have jurisdiction less choice of court stands. Authority is well-known and recently applied in Pan Ocean, referred to here at 85. After much factual consideration it is accepted to a good arguable case standard that the parties contracted on the basis of the STC for the obligations concerned.
In conclusion therefore the action is stayed.
Quite a few relevant issues here. I for one note the cautious approach of the Court, in handling the Court of Appeal’s Privatbank authority.
Geert.
Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2.
Application for negative declaratory relief on contractual performance.
Jurisdiction.
Lis pendens and choice of court under the Lugano Convention.
Concurrent claim by defendant in Switzerland. https://t.co/F80LoWJvps
— Geert Van Calster (@GAVClaw) April 21, 2020
In SCOR SE v Barclays [2020] EWHC 133 (Comm), claimant SCOR is a reinsurance company incorporated in France. Covéa, a shareholder of SCOR, made an unsolicited offer to acquire a controlling shareholding in SCOR. Barclays was one of Covéa’s financial advisors and prospective lenders in relation to the Offer. The English proceedings, and related French proceedings, all concern French law claims brought by SCOR against Mr Derez, who was one of its directors, Covéa, and Barclays in connection with the Offer. It is alleged by SCOR that Mr Derez disclosed to Covéa and to its advisors, including Barclays, confidential information, which he obtained in breach of duties he owed to SCOR, and that the information was misused in relation to the Offer.
SCOR has commenced three sets of proceedings: On 29 January 2019, direct criminal proceedings in France. On the same day, the proceedings in England against Barclays. On On 6 February 2019, French proceedings against Monsieur Derez and Covéa. Concealment of breach of trust is the running theme in all 3 proceedings.
An application to stay the French Commercial Court proceedings, which had been made by the Claimant, had been dismissed.
Hancock J had two issues to decide under Article 30 Brussels Ia (at 6). The first was whether the French criminal proceedings, which were first in time, were related to the English Commercial Court action. The second was whether the High Court, as the Court second seised, should stay these proceedings, it being accepted that it had the power to do so under A30. The parties were agreed that, although the civil proceedings which formed part of the criminal action were an “adjunct” to the criminal part of the proceedings, they were nonetheless civil and commercial proceedings within the meaning of the Regulation.
Authority discussed includes of course CJEU C-406/92 The Tatry, however quickly attention focussd on the issue of ‘expediency’ in Article 30. Claimant pointed out that there had been a debate in the authorities as to what was meant by “expedient, with some authorities taking the line that this meant possible or capable, and others suggesting that the relevant synonym was “desirable” ‘. The Court of Appeal in Privatbank v Kolomoisky [2019] EWCA Civ 1709, which I discuss here, settled the issue in the direction of ‘desirable’. However Hancock J then discussed counsel’s reference to Euroeco Fuels (Poland) Limited and others v Sczezin and Swinoujscie Seaports and others [2019] EWCA Civ 1932 which at the time (December 2019) I called at most a ‘lukewarm’ application of Privatbank on this issue.
Hancock J leaves the discussion hanging for in his words at 15, ‘it is uncertain whether expediency in this context is to be treated as meaning desirability, or whether it is a jurisdictional requirement of the grant of a stay that the two cases can in fact be heard together: see Privatbank and cases cited therein, on the one hand, but compare the Euroeco decision on the other. I do not need to decide this question in this case, since my decision would be the same whichever test is applied, and I propose to consider the matter by reference to the test as set out in Privatbank.’
Yet at 24-25 he holds ‘on the basis the application of the test in Sarrio, as interpreted in later cases including in particular Privatbank, that the French criminal proceedings and the English proceedings are related. I move on to consider the exercise of my discretion on this basis.’ Yet ‘Of course, if the actual test is that which may be suggested by the Euroeco case, then the proceedings would not be related, and I would have no discretion to exercise.’
Here I do not follow. No proper decision is made on the authority or not of Privatbank or Euroeco (the latter suggested by counsel for the defence (fellow Bruges Stefan Zweig alumnus) to be at most per incuriam).
At 28 ff then follows a most relevant discussion of the wide nature or not of the discretion to issue a stay, once it has been established the cases are related (Hancock J at 31 deciding at that there is no presumption for a stay in favour of the applicant) deciding at 43 that there is no compelling reason for the stay, on the basis of the factors outlined there, with which I agree.
This is again a most relevant case. The relatedness or not of cases is a most, most crucial issue, including of course in an Article 33-34 context.
Geert.
(Handbook of EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.14.
In [2020] EWHC 995 (Comm) Trafigura v Clearlake, Teare J essentially has created a forum necessitatis rule in admiralty, to accomodate the slower availability of the Singapore courts due to Covid19. At 29 ff:
In normal circumstances an Admiralty Court, faced with an application to release a valuable vessel from arrest, would determine whether the security offered was such as to allow the release of the vessel from arrest without delay. In such circumstances there would usually be no need for the court upon which the owner and charterer have conferred jurisdiction to determine disputes between them to find as a fact what security would be judged adequate by the court of the place of arrest to allow the release of the vessel from arrest. For that would in practice be determined by the court of the place of arrest.
But these are not normal circumstances. There is a worldwide Covid 19 pandemic which has disrupted normal life, including the justice system. As a result I was told that the court in Singapore is not able to hear the application to determine the adequacy of the security offered until 18 May 2020. In those circumstances the question arises, or may arise, whether this court should find as a fact whether the security which has been offered to secure the release of the vessel matches that which would be required by the court of the place of arrest or not. That is what this court would have to do, and would have jurisdiction to do, if, unusually, there was no appropriate application before the court of the place of arrest. Those are not the circumstances of this case. There is an appropriate application in Singapore but the result will not be known for almost a month.
At 31 he re-emphasises that comity would ordinarily restrain any jurisdictional temptation. However at 32 he concludes that ‘on the other hand there is a dispute between the owner and charterer. The charterer owes an obligation to the owner to provide security which will secure the release of a valuable vessel from arrest. The owner wishes to enforce that obligation and so to mitigate the losses it is suffering by reason of its inability to trade the vessel. There is therefore a powerful reason for this court, in circumstances where the court of arrest, for understandable reasons, is unable to determine the application for release until 18 May 2020, to exercise the jurisdiction the parties have conferred on it to resolve disputes between owner and charterer.’
Not a jurisdicitional claim out the blue therefore; the choice of court does give England a powerful link to the case.
Geert.
I sincerely continue to be humbled when cited by Advocates-General at the CJEU. Even more so therefore when it happens twice (see also Movic) in one week. In his Opinion in C-253/19 Szpunar AG refers to the Handbook’s analysis of C-341/04 Eurofood. The reference to that judgment is part of his assessment of ‘centre of main interests’ in the context of natural persons not exercising an independent business or professional activity, who benefit from free movement. The CJEU has not ruled on the issue before.
The AG points out that the European Insolvency Regulation (EIR) 1346/2000 (‘EIR 2000’), unlike its successor, Regulation 2015/848 (‘EIR 2015’), did not have time limitations under which the presumptions of COMI apply (see here for my paper on the main changes introduced by EIR 2015). However the EIR 2000 did have such presumption without the time limits, for companies and legal persons, and it generally, like the current EIR, requires courts to check whether COMI for natural persons or otherwise is located on their territory. This requires the court to check against the criteria for rebuttal of any presumptions of COMI. That test runs along the criteria that have repeadtedly featured on the blog (cue search string ‘COMI’): COMI designates the place where the debtor conducts the administration of its interests on a regular basis and is therefore ascertainable by third parties.
‘Habitual residence’ is not defined by the EIR 2015 and I concur with the AG that references to its application in family European PIL are of limited value. At 45: priority should be given not to factors relating to a debtor’s social or family situation but to those relating to a debtor’s financial position. In the case of natural persons not engaged in a self-employed activity, the line separating their financial situation and their family situation is blurred (at 46). The Virgos Schmitt report already discussed the application of of the insolvency regime to natural persons and advised that COMI as applied to natural persons ought to focus on the economic interests.
At 49 the AG suggests that ‘habitual residence’ no longer reflects a natural person’s COMI if does not fulfil its role as the place where a debtor’s economic decisions are taken, as the place where the majority of its revenue is earned and spent, or as the place where the major part of its assets is located. That entails quite a broad scope for rebuttal of course. The AG refines this in the remainder of the Opinion. He refers to national case-law on the issue, and to the importance of free movement rights. He also suggests an important limitation: namely that in his view, the mere presence of a natural person’s one immovable asset (the ‘family home’, GAVC) in another Member State than that of habitual residence, in and of itself does not suffice to rebut COMI.
As in all other scenarios of rebuttal, the ascertainability in particular by (potential) creditors is key. That is a factual consideration which the national courts are in prime position to make.
Geert.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1.
I am most grateful to Hans Baron van Houtte, my predecessor in the conflicts chair at Leuven, for alerting me to the partial award of the Iran-US claims tribunal of 10 March last (case No. A15 (II:A)). Hans is a former President of the tribunal, which was established by the ‘Algiers declarations’ following the 1979 Tehran hostage crisis.
The award (a mere 691 pages) and separate opinions can best be accessed here. In the 10 March award, the Tribunal discussed at length the issue of the applicable law for transfer of title in movable property. In doing so, however, it also gives scholars a most wonderful insight and expose on the private international law /choice of law process in arbitration.
The issue is relevant for under the Algiers Declarations, the US is obliged to transfer to Iran, ‘Iranian properties’ subject to the jurisdiction of the United States on 19 January 1981. Hence what exactly constitutes ‘Iranian properties’?
From p.67 (para 135) onwards of the main award, the Tribunal discusses the general process of choice of law in arbitration, referring to a wealth of scholarship on the issue, going back to the mixed arbitral tribunals of the early 20th century etc. For anyone interested in the issue, this is most compelling reading. Many greats of PIL are cited, including the late prof Francois Rigaux (pictured here at Leuven in 2010 with profs Weizuo Chen, Jacques Herbots, Marc Fallon, and myself).
The Tribunal’s conclusion on the issue is that under the ‘general principles of private international law’, the lex rei sitae of the movable governs the passing of title in movable property.
The Tribunal does not hide the further complexities of this rule, including of course the very determination of that situs, and the role of lex contractus.
Indeed for instance on p.272 ff (para 967 ff) the Award discusses one particular claim concerning a case where, under the default rule of the lex rei sitae —- here, the goods were manufactured by, and in the possession of, Zokor, which was situated in the State of Illinois, United States. The applicable lex rei sitae is therefore the law of Illinois —-property is passed by delivery, and where, under the default rule of the lex contractus –– here arguably Iranian law –– title is already passed by the conclusion of the sales contract or as soon as the goods are manufactured.
At 973 the Tribunal notes the choice of law pro Iranian law, made by the parties, However, it holds ‘the situs was and remained, during all relevant points in time, Illinois. Consequently, according to the general principle of private international law, as identified earlier in this Partial Award, it was for Section 2-401(2) UCC in connection with other contract law of the situs to determine whether the parties had agreed to derogate from the fallback rule.’ (which the Tribunal found, they had not).
That is not entirely crystal clear, and indeed in his separate Opinion prof van Houtte, while generally happy with the Tribunal’s approach, points out some inadequacies:
At 13: ‘The Parties assumed for years that the determination of whether property was “Iranian” as between the seller and the buyer was a contractual issue between those parties governed, inter alia, by the proper law of the contract (lex contractus). It was only at the Hearing session on 9 October 2013 that – in response to a question from the bench – the Parties’ argumentation focused on the lex rei sitae; from that point on, the lex contractus was virtually no longer considered. (…) I regret that the contractual aspects of the transfer of property rights inter partes and the impact of the law of the contract thereupon were not further explored at the Hearing’.
at 15: ‘I observe that the Parties could also have further elaborated on the extent to which the legal situs necessarily coincides with the geographical location of assets in export sales or turn-key contracts.’
And at 18, specifically with respect to the Zokor case that I mention above, ‘One may wonder, de lege ferenda, whether in Claim G-111 (Zokor) it was necessary for the Tribunal to construe and apply its own “general principles of international private law”’ and whether it should not instead adopt the approach which Iranian courts would have applied. These would have had jurisdiction pre the 1979 agreement and the transfer of jurisdiction to the Tribunal, van Houtte argues, does not imply it should settle contractual disputes under different principles than the Iranian courts would have applied’.
A most, most interesting read.
Geert.
On 16 April 2020, the Hague Conference announced that the Guide to Good Practice on the Use of Video-Link under the 1970 Evidence Convention has been published. “The Guide analyses the latest developments in relation to the use of video-link in the taking of evidence under the HCCH 1970 Evidence Convention, including references to internal law and other international agreements. It also outlines good practices to be followed and reflects the information provided by Contracting Parties in their respective Country Profiles”. It may be found here
Source: here
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