Many thanks Sofja Goldstein for alerting me a while back to the Hoge Raad’s decision to refer to the CJEU and what is now known to be Case C-186/19. The case concerns SHAPE’s appeal to a Dutch Court to lift the attachment aka ‘garnishment’ of a Belgian NATO /SHAPE escrow account by Supreme Services GmbH, a supplier of fuel to NATO troops in Afghanistan. As Sofja reports, in 2013, Supreme and Allied Joint Force Command Brunssum (JFCB), the Netherlands-based regional headquarters of NATO, set up an escrow bank account in Belgium with the goal of offsetting any contingent liabilities on both sides at the end of Basic Ordering Agreements (BOAs). Supreme Services in 2015 initiated proceedings against SHAPE and JFCB in the Netherlands arguing that the latter parties had not fulfilled their payment obligations towards Supreme. It also attached the account in Belgium.
SHAPE and JFCB from their side seized the Dutch courts for interim relief, seeking (i) to lift the attachment, and (ii) to prohibit Supreme from attaching the escrow account in the future.
The Supreme Court acknowledges the Dutch Courts’ principle jurisdiction at the early stages of the procedure on the basis of Article 35’s rule concerning provisional measures, yet at this further stage of the proceedings now feels duty-bound firstly under Article 27 of Brussels Ia to consider whether Article 24 paragraph 5 applies (Belgium being the place of enforcement of any attachment should it be upheld); further and principally, whether the Brussels I a Regulation applies at all given that SHAPE and NATO invoke their immunity (it is in my view unlikely that the invocation or not of an immunity defence may determine the triggering or not of Brussels Ia), this immunity interestingly being the result of a Treaty not between The Netherlands and NATO but rather resulting from the headquarter agreement between NATO and Belgium.
An interesting example of public /private international law overlap.
Geert.
Like quite a few of the Opinions and Judgment in my recent blog posts, Szpunar AG’s recent Opinion in C-555/18 KHK v BAC (*mutters his usual rant on the idiocy of the parties’ anonimisation rule*) was issued just before many of us took a short summer break. Carlos Santaló Gorisseemingly did not and I am happy to refer in the main to his analysis.
The Advocate General refers first of all to the infamous decision in 125/79 Denilauler, excluding ex parte provisional or protective measures from enforcement under the then Brussels Convention. The European Account Preservation Order Regulation 655/2014 was intended to fix this particular chink in the European civil procedure armour. Which national decisions fit with its definition of ‘authentic instrument’ is the subject of current proceedings, and Szpunar AG as Carlos reports takes a balanced approach between facilitating free movement without assisting abuse.
Of note is that the EAPO Regulation hitherto has received very little practice. Clarification of its precise scope is crucial.
Geert.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.15, Heading 2.2.16.1.1.
Szpunar AG Opined in C-468/18 R v P that in the absence of formal provisions to that effect, the Maintenance Regulation 4/2009 cannot be interpreted to include a forum non conveniens rule.
The referring court is asking, in essence, whether Article 3(a) and Article 5 of Regulation 4/2009 must be interpreted as meaning that they preclude a court of a Member State with jurisdiction to hear an action relating to a maintenance obligation brought against a defendant who is habitually resident in that Member State or who has entered an appearance before that court from declining to exercise that jurisdiction on the grounds that such a claim is ancillary to a claim relating to parental responsibility, within the meaning of Article 3(d) of that regulation, and that the court with jurisdiction to hear the latter claim would be better placed, having regard to the best interests of the child, to adjudicate on those claims.
The Court’s first Advocate-General clearly and succinctly lays out the relevant principles and reference is best made to the Opinion. It is particularly at 83, including in relevant footnote, that he points out the consequences of the EU’s approach to distribution of jurisdiction: unless a Regulation (such as in Brussels IIa; or now also Brussels Ia) includes a forum non rule, forum non must not apply.
Geert.
In C-451/18 Tibor v DAF Trucks the CJEU has confirmed its CDC case-law on locus damni for end-users affected by a cartel. Truck distribution arrangements were such that Tibor (of Hungary) could not buy directly from DAF Trucks NV (of The Netherlands), one of the truck manufacturers held by the EC to have infringed Article 101 TFEU. Rather, it had to go via local Hungarian dealers (and leasing companies).
Tibor-Trans claims that the Hungarian courts derive their international jurisdiction from Article 7(2) Brussels Ia per CDC according to which, in the case of an action for damages brought against defendants domiciled in various Member States as a result of a single and continuous infringement of Article 101 TFEU and of Article 53 of the EEA Agreement, which has been established by the Commission, in which the defendants participated in several Member States, at different times and in different places, each alleged victim can choose to bring an action before the courts of the place where its own registered office is located.
DAF Trucks submits, first, that the collusive meetings (hence the locus delicti commissi) took place in Germany, which should entail the jurisdiction of the German courts and, second, that it never entered into a direct contractual relationship with Tibor-Trans, with the result that it could not reasonably expect to be sued in the Hungarian courts.
The Court dismisses the latter argument: those infringing competition law must expect to be sued in markets affected by anti-competitive behaviour (at 34, with reference to fly-LAL). That Tibor did not have a contractual relation with DAF Trucks is irrelevant as the increase in price clearly has been passed on by the frontline victims of the cartel: the dealers (at 31).
The case does leave open the unresolved issue of the CJEU’s identification of registered office as locus damni (see my comments in my review of CDC). Given that Tibor Trans would seem to have purchased all its trucks in Hungary, neither does not the judgment shed light on the distributive impact of locus damni or my suggestion that for competition law, markets where the anti-competitive behaviour is rolled-out should qualify as locus delicti commissi (alongside the place of the meetings where infringement of competition law is decided).
Geert.
(Handbook of) European Private International Law. 2nd ed. 2016, Chapter 2, Heading 2.2.12, Heading 2.2.12.1
In C-421/18 Saugmansdgaard ØE opined (Opinion a yet available in a handful of languages only, not including English) on the issue of ‘civil and commercial’ (last reviewed by the Court in Buak) and ‘contract’ (within Article 7(1) Brussels Ia.
At issue was the relationship between a France-domiciled practising lawyer, registered with the Dinant (Belgium) Bar, and that Bar. Maître JN, now a very occasional practitioner it seems, had been refusing to pay his Bar Membership fees even after the Bar council had reduced them to the level of insurance premiums paid by it to the insurance company running the collective professional insurance scheme.
The referring court at Namur had not in fact asked the CJEU about the interpretation of ‘civil and commercial’. It was the EC’s comments which triggered Saugmansdgaard ØE’s review of that issue (albeit he insists the final call is up to the referring court). He refers to the public interest duties carried out by the Bar Council (in particular, ensuring the public’s trust in the proper representation before the judicial authorities), and the authority entrusted to the Council by Belgian’s code of civil procedure (particularly at 34). At 35 ff he then considers whether in its collection of the Bar fees set by and due to it by the registered lawyers, the Council acts in the exercise of that authority, and decides it does not: the fees are determined by the general council of the Bar and in the main represent the professional insurance fees. That is all the more made clear by the fact that in the case of maître JN the Bar had reduced the fees to the exact amount paid to the insurance company.
The dispute therefore he advices is about pennies, not power.
Turning to the issue of ‘contract’ reference is made ia to the recent CJEU decision in Kerr. Particularly at 81 ff the Advocate General emphasises the specificities of the case: the solicitor in question had effectively retired yet chose to continue to pay Bar membership fees. In contrast to for instance Austro-Mecana and more in line with Kerr (and in contrast also one could argue with fully practising lawyers) the voluntary character of the relationship is core.
Geert.
i reviewed [2017] EWCA Civ 1609 Koza v Akcil in my post here. The case concerns the application of Article 24(2) of the Brussels I Recast Regulation, which assigns exclusive jurisdiction to the Courts of the Member State of the seat in matters relating to the life and death of companies and of the validity of decisions made by their organs:
in proceedings which have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or of the validity of the decisions of their organs, the courts of the Member State in which the company, legal person or association has its seat. In order to determine that seat, the court shall apply its rules of private international law;
Referring particularly to C-144/10 BVG and to C-372/07 Hassett, the Court of Appeal found that the case as a whole fundamentally concerns one and the same issue of the validity of decisions of the organs of the company, Koza Ltd, an English subsidiary of a Turkish company.
At 33, Lord Sales writes for the consensus opinion:
the Court of Appeal held that article 24(2) of the Recast Regulation required the court to “form an overall evaluative judgment as to what the proceedings are principally concerned with” (para 46). But this approach had the effect of expanding the application of article 24(2) (ex article 22(2) of Regulation No 44/2001), contrary to the guidance in the Hassett case and the BVG case, rather than narrowing its application, as the Court of Justice had been at pains to do in its judgments in those cases.
At 34:
it is the guidance in paras 22-25 of the Hassett judgment which is relevant, to the effect that a mere link between a claim which engages article 24(2) and one which does not is not sufficient to bring the latter within the scope of that provision
Further authority was sought in particular from Schmidt v Schmidt (C-417/15) which I reviewed here, and EON Czech Holding AG v Dědouch (C-560/16), my review here. Acte clair – no reference to the CJEU required. Conclusion, at 43: ‘the English courts cannot assert jurisdiction over Koza Altin [Turkey] and the trustees in relation to that claim in the present proceedings on the basis of [A24(2)], and their appeal in that regard should be allowed.’ However: at 44: given that Turkey is not an EU Member State, the English courts may be able to assert jurisdiction over them by means of a provision in residual English PIL.
Geert.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6, Heading 2.2.6.5.
The Nyrstar business was created on 31 August 2007 by combining the zinc and lead
smelting and alloying operations of Zinifex Limited and Umicore NV/SA. Nyrstar is a global multi-metals business, with a market leading position in zinc and lead, and growing positions in other base and precious metals. It is one of the world’s largest zinc smelting companies based on production levels. The Nyrstar business has mining, smelting and other operations located in Europe, the Americas and Australia and employs approximately 4,200 people. The ultimate group Parent is incorporated in Belgium and has corporate offices in Zurich, Switzerland.
Its debt is now being restructured using an English scheme of arrangement, with a variety of new companies being formed as corporate vehicles for same. Readers of the blog will not be surprised: this is a classic example of regulatory (restructuring) competition, which I regularly report on the blog (most recently: New Look, with further references there).
In [2019] EWHC 1917 (Ch) re NN2 Newco limited and Politus BV, Norris J applies the now estblished jurisdictional test, with one or two points of attention. Against the scheme company jurisdiction is straightforward: this is England incorporated. Against the scheme creditors, English courts apply the jurisdictional test viz the Brussels Ia Regulation arguendo: if it were to apply (which the English Courts have taken no definitive stance on), would an English court have jurisdiction?
At 11: viz the Notes:
They are now governed by English law (in place of New York law). Clause 12.06 of the governing Indenture now reads:- “The courts of England and Wales shall have jurisdiction to settle any disputes that arise out of or in connection with the Indenture, the Notes and the Guarantees, and accordingly any legal action or proceedings arising out of or in connection with the Indenture the Notes and the Guarantees (“Proceedings”) may be brought in such courts. The courts of England and Wales shall have exclusive jurisdiction to settle any Proceedings instituted by [NNH or NN2]… in relation to any Holder or the Trustee on behalf of the Holders (“Issuer Proceedings”). [NNH and NN2], each of the Guarantors, the Trustee and each Holder (each, “a Party”) irrevocably submit to the jurisdiction of such courts and agree that the courts of England and Wales are the most appropriate and the most convenient courts to settle Issuer Proceedings and accordingly no party shall argue to the contrary. Notwithstanding the foregoing, this section 12.06 shall not limit the rights of… each of the Holders to institute any Proceedings against [NNH and NN2] in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of proceedings in any other jurisdiction….”
This is an asymmetric jurisdiction clause. The English Courts have jurisdiction over all disputes and the parties agree that they are the most convenient forum and submit to the jurisdiction of the English courts. NNH and NN2 are bound to use the English courts if they sue the Holder of a Note, because the English courts have exclusive jurisdiction in such a case. But the Holder of a Note can also sue NNH and NN2 in any Court that otherwise has jurisdiction, so the English courts have a non-exclusive jurisdiction in such a case.
At 13:
The original governing law of the Existing Bonds was English law. But the holders voted to amend the jurisdiction clause in the Trust Deed to provide: “The courts of England and Wales shall have exclusive jurisdiction to settle any disputes that arise out of or in connection with the Trust Deed and the Bonds, and accordingly any legal action or proceedings arising out of or in connection with the Trust Deed and the Bonds (“Proceedings”) may be brought in such courts. [NNV and NN2] and the Trustee (in its own capacity as such and on behalf of the Bondholders) irrevocably submit to the jurisdiction of such courts and waive any objection to Proceedings in such courts whether on the ground of venue or on the ground that the Proceedings have been brought in an inconvenient forum. Notwithstanding the foregoing, Belgian courts have exclusive jurisdiction over matters concerning the validity of decisions of the Board of Directors of NNV of the general meeting of shareholders of NNV and of the general meeting of Bondholders.”
This is a symmetrical jurisdiction clause with a “carve out” for specific proceedings.”
At 18 ff the details of the scheme are outlined. It involves Trafigura financial instruments, Trafigura now being Nyrstar’s controlling shareholder. At 31 ff jurisdiction is discussed. There is no abusive forum shopping (per Codere; which I reference here). The usual Article 8 and Article 25 routes are discussed. With respect to Article 25, the English jurisdiction clauses in the Existing Notes and the Politus Facility are asymmetric; however Norris J at 41 (with reference to authority) does not see that as an obstacle seeing as Article 25 covers both symmetric and asymmetric choice of court.
A final hurdle is whether any order sanctioning the scheme is likely to be effective or whether it is apparent even at this stage that the scheme will not be recognised in other relevant jurisdictions even if sanctioned: this will eventually be settled at the sanctioning hearing however Norris J already indicates that it is unlikely that expert evidence will yield surprising (objectionable) results.
Scheme meetings may therefore be convened.
Geert.
(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 2, Chapter 5.
In [2019] EWHC 1661 (Comm) ED&F Man Capital Markets v Come Harvest Holding et al claimant, MCM, entered into a Master Commodities Sale and Purchase Agreements with two Hong Kong companies, Come Harvest and Mega Wealth. The Master Agreements contained English exclusive jurisdiction agreements. Subsequent agreements were then entered into for the sale and purchase of nickel. The dispute between the parties turned on whether payments had been made by MCM to Come Harvest and Mega Wealth based on forged warehouse receipts. Those receipts had been issued by a warehouse operator, Access World, to the initial order, in most cases, of a Singaporean company, Straits.
In May 2017, MCM commenced pre-action disclosure proceedings in Singapore against Straits and in December 2017 it commenced English proceedings against Come Harvest and Mega Wealth. In September 2018 MCM sought to join Straits to the English proceedings and obtained an order granting permission to serve Straits out of the jurisdiction in Singapore. Straits challenged the jurisdiction of the English court.
There is sometimes an advantage to not immediately follow-up a Tweet with a blog post: the two preceding paras are the summary of the factual and procedural background by Herbert Smith.
Of particular note is the discussion at 43 ff on the impact of the UKSC’s Vedanta ruling: particularly, the ‘multiplicity’ issue which in my review of Vedanta, I discuss at 5. At 45:
Straits contended that MCM should not be able to rely as a “trump card” on the multiplicity point and the risk of irreconcilable judgments so as to create a single forum for all claims against all parties in England, in circumstances where that outcome was the result of choices which MCM had made along the way. Straits claims that MCM exercised a choice at the outset to commence the OS 533 action against Straits in Singapore and thereby intended that any substantive proceedings would be brought there too. Straits says that MCM should be held to this choice which it says exerted and continues to exert a “gravitational pull” towards Singapore. Straits also says that MCM could have attempted to engineer a single composite forum for all claims against all parties in Singapore by requesting that Come Harvest and Mega Wealth did not insist on their rights under the English court exclusive jurisdiction clauses in the Master Agreements or by commencing proceedings against those parties in Singapore in breach of the exclusive jurisdiction clauses and then contending that strong reasons existed as to why no anti-suit injunction should be imposed against the continuation of those proceedings.
At 46 Teledano DJ dismisses the suggestion.
In Vedanta, and leaving aside the substantial justice issue, the claimants had a straightforward choice between Zambia and England for all claims against all parties. The dispute was overwhelmingly Zambian in focus and nature. Yet the claimants chose to pursue their claims in England. In the present case, MCM has never had a straightforward choice of this kind that would have enabled it to sue all parties in Singapore (or some other jurisdiction apart from England). MCM has at all material times been bound by the exclusive jurisdiction clauses in the Master Agreements to sue Come Harvest and Mega Wealth in England. There is no evidence to suggest that, had either of these parties been approached, they would have been willing to give up their rights under those exclusive jurisdiction clauses. Nor do I accept that the concept of choice as referred to by the Supreme Court can be stretched so as to require a party to act in breach of contractual promises as to jurisdiction and then to fall on the mercy of the Court so as to avoid the grant of an anti-suit injunction. MCM is entitled to say that it had no choice but to sue Come Harvest and Mega Wealth in England. Having done so, there is real force in the submission made by MCM that England is the proper place for all claims against all parties because it is the only jurisdiction where a single composite forum can be achieved.
Turning then at 59 ff to applicable law, the issue is particularly how to define ‘direct damage’ (Article 4 Rome II) in the case of unlawful means conspiracy. Straits contends that the direct damage occurred where MCM was unable to obtain the metal it had purchased. That would be at the warehouses in Singapore, Malaysia and South Korea. By contrast, MCM contends that the direct damage occurred in England. This was the place from which MCM paid out funds to purchase the metal and it is also the place in which MCM received the Receipts that it alleges were forged. Teledano DJ at 62:
The key to ascertaining where the direct damage occurred in the present case is to keep in mind that, under the Master Agreements, MCM was only required to make payment upon receipt of the Receipts. MCM suffered direct damage when it made payment upon receipt of what are alleged to have been forged Receipts. Both the payment out, and the obtaining of the Receipts, occurred in England. If the Receipts were forged, the warehouse operators will not have been required to hand over metal from the warehouses upon presentation of the Receipts. However, it seems to me that this is a consequence of the damage that on MCM’s case it had already suffered rather than the direct damage itself.
English law, therefore, applies, as it does (at 70 ff) to the knowing receipt and equitable proprietary claims (see discussion re Article 4 cq 10 (unjust enrichment) Rome II, at 70 ff).
Geert.
(Handbook of) European private international law, second ed. 2016, Chapter 8, Headings 8.3.1.1., 8.3.2; Chapter 4, Heading 4.4.
When I reported [2019] EWHC 466 (Fam) V v M, I suggested that forum non considerations there, moot given that eventually jurisdiction of the English courts was upheld, would resurface in further cases. They have. [2019] EWHC 1995 (Fam) W v L eventually went much the same way as V v M.
The Brussels BIIa Regulation applies when determining the question of jurisdiction regardless of whether there is an alternative jurisdiction in a non-member state (Re A (Jurisdiction: Return of Child) [2014] 1 AC 1 , later confirmed in CJEU UD v XB C-393/18 PPU [2019] 1 WLR 3083 ). Brussels IIa has an intra-EU forum non conveniens regime (applied in C‑428/15, Child and Family Agency, on which I report here).
Art 8(1) of BIIa provides that the courts of a Member State shall have jurisdiction in matters of parental responsibility over a child who is habitually resident in that Member State at the time the court is seised.
MacDonald J at 30 posits that where the English court does have jurisdiction under Art 8 BIIa but there are proceedings also in a third party non-member state (here: Jordan) the issue becomes one of forum conveniens – which he subsequently discusses following the Spiliada criteria. In V v M to which current judgment refers at 34, Williams J reflected on whether forum non at all has calling following (he held it does; not convincingly). MacDonald J in current case first at 30 simply seems to accept such application. Then at 38 holds he need not decide this issue here (counsel had suggested the issue was in fact covered by Brussels Ia and the precedent value of Owusu therefor clear) for even if forum non conveniens has to be decided, it clearly points to England.
In conclusion, therefore: the issue still has not been settled and will, again, return.
Geert.
In [2019] EWHC 1793 (Ch) Paul Holgate v Addleshaw Goddard (Scotland) the claim is for damages for breach of contract, negligence and/or breach of fiduciary duty in connection with and arising out of the defendant’s acceptance and performance (and/or non-performance) of instructions to act as solicitor for and to advise Arthur Holgate & Son Limited (then in administration, now in liquidation) in relation to a dispute between the Company and Barclays Bank.
The application concerns the allocation of jurisdiction within the UK. The rival forums are England and Scotland. The claim is not time-barred in England, but may, at least in part, be time-barred in Scotland, where the relevant period of ‘prescription’ (the Scottish equivalent of ‘limitation’) is 5 years.
The Civil Jurisdiction and Judgments Act 1982 allocates jurisdiction within the devolved regions of the UK and, for civil and commercial matters, has opted to apply the (now) Brussels I Recast Regulation mutatis mutandis. At issue is first of all the insolvency exception of Brussels Ia (extended here as noted to the UK Act) interpreted per CJEU C-133/78 Gourdain: at 4:””[I]t is necessary, if decisions relating to bankruptcy and winding-up are to be excluded from the scope of the [Brussels] Convention, that they must derive directly from the bankruptcy or winding-up, and be closely connected with the proceedings for the liquidation des biens or the règlement judiciaire .” (Reference to the French procedure given the French origins of the case). This provision of course in the meantime has a mirror image in the Insolvency Regulation known as the vis attractiva concursus: the forum concursus can hear not just the very insolvency action but also those closely connected to it. CJEU C-111/08 SCT Industri v Alpenblume also features heavily in the discussion.
(Note Clark M makes the oft-repeated mistake of suggesting Brussels Ia and Insolvency Regulation dovetail. I have emphasised on various occasions that they do not).
Following discussion, at 50 Clark M holds that the claim does not relate to the internal management, of the administration or the conduct of the Joint Administrators (JAs) of the insolvency: the defendant’s purely advisory role meant it was not responsible for either of these. This is insufficient for the claim to be “closely linked” to the administration.
Next is the application of the anchor proceedings: these, too, follow EU language and precedent entirely and at 79ff Clark M discusses the interesting question whether a claim providing the anchor, issued after the claim which anchors unto it, is capable of conferring jurisdiction. He held that it does, provided the other requirements of the anchor provisions are satisfied: in particular the desirability of avoiding irreconcilable judgments. The sequence of claims did lead to some procedural oddity which could however be rectified and there was no suggestion of abuse.
At 89 ff follows discussion of the forum contractus: ‘place of performance of the obligation in question’. At 129 Master Clark concedes that the relevant statutory instrument deliberately did not instruct this part of the UK’s residual rules to be interpreted in line with EU rules, however given the exact same wording, there is no reason for not doing so. At 132 follows then the oddity of the consequences of CJEU De Bloos (and now the language of the Regulation) with respect to ‘the obligation in question’: the determination of the principal obligation is carried out by analysing the particulars of claim. He finds at 136 that the Company’s complaints flow essentially from the primary complaint that the defendant was in breach of its fiduciary duty by continuing to advise and act for the Company (and not advising it that it could not properly do so), thereby putting the Bank’s interests (and its interests) before those of the Company. At 139: the place of performance of that obligation, is held to be in England.
Finally, forum non conveniens is briefly discussed and the right forum held to be England.
Quite a jurisdictional goodie bag.
Geert.
(Handbook of) EU Private International Law, 2nd ed. 2016, much of Chapter 2.
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