Flux Belges et Lux

I am grateful to Charlotte de Meeûs for her summary below of the most extensive review of TPLF in the EU. It would look to me that the lack of firm support by the study for any of the 3 options it outlines (see below), probably makes it veer towards the first: which one that is, is for readers to find out at the end of this post.

Charlotte inter alia has her own comparative overview here, has also published on the use of TPLF in public interest litigation, and discusses costs recovery (one of the important elements to TPLF) in the context of the ECHR here: I am most happy that as a scholar in the know, she was prepared to write on the study for the blog.

Geert.

*****

European Commission publishes long-awaited study mapping the use and regulation of third-party litigation funding in the EU.

On 21 March 2025, the European Commission published the BIICL study “Mapping Third Party Litigation Funding in the European Union” (the Mapping Study). The Mapping Study provides a comprehensive examination of the legal frameworks, practices, and stakeholder perspectives on third-party litigation funding (TPLF) across EU Member States and selected non-EU countries, including Canada, Switzerland, the United Kingdom, and the United States.

Aims and structure of the Mapping Study

The EC’s initiative was undertaken in response to the European Parliament’s Resolution adopted in September 2022, calling for the Commission to regulate the TPLF market. Upon request of the Commission, the Mapping Study was conducted by the British Institute of International and Comparative Law (BIICL) and Civic Consulting, and supported by various national experts.

 The extensive Mapping Study is divided into two main sections. First, a legal analysis carried out by national experts describing the regulation and practice of TPLF in the selected jurisdictions. Second, the results of the stakeholders’ consultation, gathering the opinions of various stakeholders (e.g., lawyers and law firms, businesses, litigation funders, consumer organisations, academics, public authorities, members of the judiciary) on the possible regulation of TPLF and its practical operation.

Key Findings

On the TPLF regulatory landscape, the Mapping Study finds that within the EU, specific regulation of TPLF is largely absent, except in the context of consumer collective redress following the national transpositions of the Representative Actions Directive – RAD 2020/1828.

This means that TPLF is primarily governed by national contract law and national civil procedure. In jurisdictions outside the EU, such as Canada and the UK, regulation primarily stems from case law, while TPLF in the USA is subject to an interplay of federal and state regulations. Logically, the absence of regulation at national level also means that very few countries have provisions similar or equivalent to provisions laid down in the 2022 Parliament Resolution on TPLF.

On the use of TPLF in the selected jurisdictions, the Mapping Study shows in essence that TPLF practices vary widely depending on the jurisdiction and the sector concerned. TPLF is indeed used in a wide variety of sectors. The selection of funded claims as well as the terms of litigation funding agreements diverge depending on the funder and the claim at hand.

In this context, the Mapping Study emphasises the difficulties arising from the broad diversity in funding practices and from the lack of available data. In the words of the authors of the Study, caution regarding the results of the Study is needed as

“[t]his variety makes general conclusions regarding practices of litigation funders difficult, and it also implies that the results of this consultation are not necessarily a complete picture of litigation funding in the EU, but rather provide a summary of those practices that were observed by the participating litigation funders and other stakeholders” (p. 637).

On the views of stakeholders regarding the use and regulation of TPLF, it is interesting to note that, amongst the 231 stakeholders who took part in the consultation, most views on TPLF were (at least partially) positive. Around 34% of stakeholders indeed viewed TPLF as having only positive effects, 24% considered TPLF to have both positive and negative effects and 17% only perceived negative effects.

Lawyers, litigation funders, and, importantly, consumer organisations generally viewed TPLF as having predominantly positive effects, whereas businesses (excluding lawyers and funders) perceived TPLF more negatively. The main positive effects listed by stakeholders were better access to justice, professionalism and expertise provided by funders in complex cases and filtering effect for non-meritorious cases. Among the four most cited negative effects of TPLF, stakeholders mentioned the reduced compensation for the funded party due to the remuneration owed to the funder; conflicts of interests arising from the involvement of a third-party litigation funder; the control or influence that the funder has on litigation (including on substantive and procedural decisions regarding legal proceedings and settlements); and possible frivolous claims funded by TPLF.

Regarding the question whether regulation of TPFL was needed, the majority (58%) of respondents found that TPFL should be regulated. However, among these 58%, the Mapping Study showed that there was little willingness for regulation exclusively at national level (29% of stakeholders were of the opinion that regulation should take place at EU level and 25% answered that regulation should take place at both EU and national level).

Interestingly, stakeholders also pointed out the issues that were in their view the most in need for regulation, by giving scores of “effectiveness” to the measures proposed in the 2022 Parliament Resolution on TPLF.

The issues that obtained the higher “effectiveness scores” were transparency requirements, conflicts of interests, capital adequacy and responsibility for adverse costs. However, although these issues received the highest “effectiveness score”, none of the measures envisaged in the 2022 Parliament Resolution on TPLF, except for transparency requirements, are considered to be “rather effective”.

Opinions diverged however regarding the type of regulation needed. The Mapping Study identified three possible routes for TPLF regulation namely:

No regulation: this position is based on the argument that there is no evidence that TPLF has negative effects and that overly strict regulation could drive litigation funders away from the EU market. This position adds that the existing national rules (e.g., general contract law and civil procedure, consumer protection, financial and banking rules and collective redress laws) are sufficient and should be used in parallel with courts’ supervision to address some issues linked to TPLF.

Light-touch regulation: this position, adopted by the widest number of stakeholders, is in favour of adopting basic rules governing TPLF without being too specific or too strict so as to drive litigation funders away from the EU market. Regulation would in this scenario not only increase predictability for funders and funded parties but also avoid placing an excessive burden on the courts insofar as regulation of TPFL is concerned. The issues identified as needing regulation include transparency and disclosure of the existence of litigation funding agreements, capital adequacy requirements and consumer protection.

Strong regulation: this position, which focuses on the negative effects associated with TPLF, favours the adoption of a comprehensive regulation of the TPLF market, in line with the approach proposed in the 2022 Parliament Resolution on TPLF. This position contends that while TPLF practices should not be excessively limited, the (negative) impact that TPLF may have on litigation requires some controls through regulation.

Next steps

It is said that information gathered in the context of the Mapping Study will inform the European Commission’s policy decisions regarding TPLF. However, it remains to be seen what steps the European Commission will take following the publication of the Mapping Study and whether and how it will further react to the 2022 Parliament Resolution on TPLF.

The Commission has indeed not explicitly confirmed whether it is inclined to follow one of the three possible routes for TPLF regulation identified in the Mapping Study, nor whether it will take any formal initiative in this respect.

In the meantime, one will therefore have to continue closely to monitor  possible national developments viz the practices of litigation funders, starting with the final report of the UK Civil Justice Council (CJC) reviewing litigation funding and its possible regulation in the UK, which is said to be  expected by summer 2025.

Charlotte de Meeûs.

If you do use the blog for research or database purposes, citation would be appreciated, to the blog as a whole and /or to specific blog posts. Many have suggested I should turn the blog into a paid for, subscription service however I have resisted doing so. Proper reference to how the blog is useful to its readers, will help keeping this so.

Advocate-General Kokott opined last week in Joined Cases C-672/23 and C-673/23 Electricity & Water Authority of Government of Bahrain ea v Prismiian ea .

After her Opinion in Athenian Brewery, where the CJEU itself was less claimant friendly than the AG had opined,  it is the second Kokott AG Opinion on the use of anchor defendant mechanism in follow-on antitrust damages claims in quick succession.

Case C‑672/23 concerns the determination of the joint and several liability of the defendants for damage claimed as arising from an infringement of the prohibition on cartels under EU law in the form of a cartel in relation to underground and submarine cables and related products, works and services.  The claim in the main proceedings is directed not only against the companies mentioned in the relevant Commission Decision but also against other companies that fall into three groups of undertakings. These have at their centre Prysmian Cavi e Sistemi Srl, ABB AB and Nexans France SAS. Of all the defendants, only Draka Holding BV, which is a subsidiary of Prysmian Cavi e Sistemi and itself holds all of the shares in the capital of Prysmian Netherlands BV, is established in Amsterdam, Netherlands. All of the other defendant companies (collectively ‘Draka and others’) each have their registered office in other locations within and outside the Netherlands. Claimants in the main proceedings in this case, the Electricity & Water Authority of the Government of Bahrain and others (collectively ‘EWGB and others’), operate high-voltage networks in the Gulf States. Damage arguably took place outside the EEA.

Case C‑673/23 likewise concerns the determination of the joint and several liability of the defendants in the main proceedings at first instance for damage which is alleged to have arisen as a result of two infringements of the prohibition of cartels under EU law, in this case not established by the European Commission, rather by the Italian national competition authority. The claim in the main proceedings at first instance was directed not only against the companies mentioned in that decision but also against other companies that fall into two groups of undertakings. These have at their centre, on the one hand, Smurfit Kappa Italia SpA, and, on the other hand, Toscana Ondulati SpA. Of those defendants, only Smurfit International BV is established in Amsterdam, Netherlands. All of the other companies (collectively ‘Smurfit and others’) each have their registered office in other locations within and outside the Netherlands.

The questions referred are very detailed indeed (see (17) of the Opinion). They essentially request from the CJEU a roadmap to determine the justifiable use of the anchor mechanism in cases like these. Particularly after Athenian Brewery, national courts arguably have enough material to make that assessment themselves, however the courts at Amsterdam had of course referred these cases prior to Athenian Brewery having been held.

The AG first of all and succinctly recalls

• the principles of an ‘undertaking’ in EU antitrust law [(30):

“in order for it to be found that the parent company and the subsidiary company form an economic unit, the claimant must not only establish the economic, organisational and legal links between these companies, but also prove that there is a specific link between the economic activity of that subsidiary company and the subject matter of the infringement by the parent company”

• and the core application of A8(1) Brussels Ia in the antitrust context (32): (A8(1)’s condition of close relatedness is

“fulfilled where several undertakings that participated in an infringement of EU competition rules, established by a decision of the Commission, are the subject of claims based on their participation in that infringement, despite the fact that they participated in that infringement in different places and at different times” (reference to CJEU CDC); and

” The same is also true of claims based on a company’s participation in an infringement of the EU competition rules which are directed against that company and against its parent company and in which it is alleged that those companies together form one and the same undertaking” (reference to CJEU Athenian Brewery).

The AG then entertains the referring court’s question on whether the prospect of success of the claim against the anchor defendant must be taken into account. ‘Prospect of success’ is a better translation than the translation elsewhere in the Opinion of the questions referred, where the Dutch term ‘toewijsbaarheid’ is translated as ‘admissibility’. The referring court clearly seeks guidance on the relevance of the merits of the claim.

The AG concludes on this section

“account is to be taken of the prospects of success of the claim against the anchor defendant, but only as an indication that the claimant has not artificially fulfilled the conditions for that provision’s applicability, which may be true in the case of a manifestly unfounded claim.”

‘Prospect of success’ must be an echo of common law CPR (a ‘real issue to be tried’), although we do not quite know: the AG, as is her MO, refers to no scholarship in her Opinion.

On this point I do not think the authorities support the conclusions which the AG draws from it.  She writes (37)

“Article 8(1) of the Brussels I bis Regulation must not be abused by bringing a claim against several defendants for the sole purpose of removing one or more of them from the jurisdiction of the courts of the State in which that defendant or those defendants is or are domiciled. That would be the case if there were firm evidence to support the conclusion that the claimant artificially fulfilled, or prolonged the fulfilment of, the conditions for that provision’s applicability.” (references omitted)

References were to CJEU CDC, and what the AG writes (37) is correct.

However the AG then jumps to the claim being ‘manifestly unfounded’: (38)

“For that to be the case, however, it is not sufficient that the claim against the anchor defendant should (possibly) appear to be unfounded. Rather, the claim must be manifestly unfounded or contrived or be devoid of any real interest to the claimant at the time when it is brought.”

In the original German, the Opinion uses ‘unbegründet’, which clearly refers to substantial merit of the case, not procedural or other inadmissability (and indeed this is also how the referring court has intended its question).

In support of her position in (38) the AG refers (other than to her Opinion in Athenian Brewery and to Mengozzi AG in Freeport) to CJEU Reisch Montage para [33]. This CJEU para does not however talk about the claim being unfounded, manifest or not. Rather it is summary of the judgment, right before its operative part and it addresses procedural inadmissability (due to a pending bankruptcy proceeding). In Reisch Montage the CJEU does not address meritorious prospect of success at all.

Whether the likelihood of success of an action against a party before the courts of the State where it is domiciled (some kind of merits review, therefore) is relevant in the determination of whether there is a risk of irreconcilable judgments for the purposes of A8(1), was raised in Freeport but not answered by the CJEU, for such answer was eventually not necessary for the preliminary reference at issue.

The issue was discussed in England, pre Brexit. In the first instance judgment in Sabbagh v Khoury, Carr J’s extensive merits review hinged on the CJEU instruction ‘to take account of all the necessary factors in the case-file’ per CJEU Freeport at [41]. The Court of Appeal on majority confirmed the need for a rather extensive merits review.

I do not think this is what A8(1) either requires or indeed sanctions, and I agree with Lady Justice Gloster, who dissented in the Sabbagh appeal, [178]:

‘the operation of a merits test within Article [8](1) does give rise to risk of irreconcilable judgments, which can be demonstrated by reference to the present facts’,

and [179]

“the overwhelming tenor of the CJEU authorities is to emphasise the fundamental aim of eliminating, rather than simply reducing, a risk of irreconcilable judgments. This aim is achieved if Article [8](1) does not incorporate a merits test and is undermined if it does do so.”

Article 8(1)’s ‘so closely connected’ test clearly requires some appreciation of the facts and the legal arguments, as well as a certain amount of taking into account the defendant’s arguments, however only with a view to assessing relatedness with a view to avoiding irreconcilable judgments. This in my view does not amount to a merits test, whether a wide or a narrow (‘manifestly unfounded’) one and this remains an important difference with the common law ‘real issue to be tried’ requirement.

(40) ff the AG then zooms in on some issues related to the prospect of success (in my opinion the CJEU will not follow on prospect of success and, practising judicial economy, will not entertain these questions).

As she notes, these questions are only raised viz the exercise of jurisdiction, and they are (43) “a complex legal question calling for in-depth examination” – a question which I suspect may be referred again if and when the Dutch courts do exercise jurisdiction. This includes [(44) ff) how attributability of damage to an adverse effect on competition in the internal market, must be interpreted where damage arguably occurred outside of the EEA, and the general issue of territorial scope of A101 TFEU. (In my view the answer may be much more straightforward perhaps than seemingly suggested in the submissions, by focusing on the claims essentially being in compensation for damage following breach of statutory duty). This section also discusses substantive issues of presumption of control in competition law.

(68) ff then returns to the issues of jurisdiction, addressing ia the topic of groups of undertakings, taking into account that in one of the cases it is the  downstream liability of a subsidiary company for an infringement committed by its parent company that is at stake. Intense reference here of course to CJEU Athenian Brewery.

(79) ff addresses the role of the foreseeability of the co-defendant’s being sued in the jurisdiction of the anchor defendant.

I wholly agree with the AG’s view (81) that “foreseeability is not.. an independent criterion that is examined alongside the other elements defining the fulfilment of the provision at issue.” And, (82)

there is no requirement under Article 8(1) of the Brussels I bis Regulation for the co-defendant him or herself to have specifically foreseen that he or she would be sued in the jurisdiction of the anchor defendant. Rather, abstract foreseeability, in the form of the ability of an informed and reasonable defendant to foresee before which courts he or she might be sued outside his or her State of domicile, is sufficient.

(83) a ‘close connection’ with the defendant, such as here through the group undertaking issue, is particularly relevant in this respect.

I have seen many instances recently where opposing counsel banks on lack of predictability to propose rejecting jurisdiction. I would welcome a finding by the CJEU that brings that interpretative rule back to its true nature.

(87) ff then addresses territorial jurisdiction under A8(1). Statutory interpretation as the AG argues, points to a strong yes (reference ia to FTI Touristik) as does linguistic comparison and the report Jenard, despite the CJEU not having yet ruled on the issue viz A8(1) specifically. If there are two anchor defendants in the same Member State, and subject to the effectiveness of EU jurisdictional law not being impaired, national CPR ought to be allowed to join the case against both, but only I assume in one of the courts where the conditions of A8(1) are fulfilled (see (97) “a court which considers itself to lack jurisdiction may take up the option to make a reference to another court available under its national procedural law, provided that the effective enforcement of the Brussels I bis Regulation is not restricted as a result”).

All in all a very relevant Opinion, CJEU judgment is one to watch!

Geert.

EU Private International Law, 4th ed. 2024, 2.516.

https://bsky.app/profile/gavclaw.bsky.social/post/3lm7gymxlkk24

https://www.linkedin.com/posts/geert-van-calster-60abab9_more-on-the-blog-later-after-athenian-brewery-activity-7314912971514662913–mmY?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAHHS6oB7DOA8jUedLLahLDL6cEwepyHYwA

https://x.com/GAVClaw/status/1909147234995782066

If you do use the blog for research or database purposes, citation would be appreciated, to the blog as a whole and /or to specific blog posts. Many have suggested I should turn the blog into a paid for, subscription service however I have resisted doing so. Proper reference to how the blog is useful to its readers, will help keeping this so.] SD Rebel v Elise Tankschiffahrt [2025] EWHC 376 (Admlty) is a classic case to consider the impact of anti-suit injunctions issued post Brexit by the English courts, upon ongoing proceedings in a court in the EU. Defendant did not enter an appearance, having withdrawn legal representation in light of the ongoing Dutch proceedings. The history of the case is summarised [3]: On 14 November 2023 salvage services were provided by the VB REBEL to the STELA at Scheurhaven, which is part of the Port of Rotterdam complex in the Netherlands. At the conclusion of the services, the Master of the STELA signed a “Certificate of Safe Delivery” which stipulated that any dispute arising out of the provision of salvage services would “be settled in London, in accordance with English law”. Notwithstanding that stipulation, on 24 January 2024, Elise Tankschiffahrt KG as owner of the STELA commenced proceedings in the Rotterdam District Court seeking a declaration that the services provided did not amount to salvage and, in the alternative, for the Dutch Court to determine the salvage award. To commence proceedings in Rotterdam was an apparent breach of the jurisdiction agreement in the Certificate of Safe Delivery. The claimants therefore issued these proceedings in England and, on 20 February 2024, applied for an anti-suit injunction. On 21 March 2024, Andrew Baker J granted the application and made an anti-suit injunction against Elise Tankschiffahrt KG. Because neither the charterer of the STELA, Beresina UG, nor the operator of the VB Rebel, Boluda Towage Rotterdam BV, were parties to the jurisdiction agreement, he set aside service of the Claim Form in respect of the claims made by Boluda and in respect of the claims made against Beresina UG. He gave a fully reasoned judgment, reported under the neutral citation number [2024] EWHC 1329 (Admlty). [4]

The remaining defendant has defied the anti-suit injunction. It has continued its claim in the Netherlands. On 23 October 2024, the Rotterdam District Court gave an interim judgment in which it declared its competence to adjudicate upon the claim. I have not been supplied with the judgment itself. But in a witness statement of 4 February 2025 from Mr John Strange of Penningtons Manches Cooper, the claimants’ solicitors, I have been informed that the reasoning was that the jurisdiction agreement was not enforceable on the ground that it was “too vague as it specified the jurisdiction as ‘London’ rather than the English courts”.

Relevant Dutch judgment is Elise Tankshiffahrt AG and Beresina UG v SD Rebel BV and Boluda Towage Rotterdam BV ECLI:NL:RBROT:2024:10435. In that judgment, the Rotterdam court held it has jurisdiction on the basis of Article 4 Brussels Ia despite aforementioned clause in the certificate of safe delivery: “Any dispute arising out of the services performed by the tug, will be settled in London, in accordance with English law.” The Rotterdam court held that this clause is neither valid choice of court in accordance with A8(2) of the Dutch CPR, nor a valid arbitration clause in accordance with A1074 of the Dutch CPR. [4.6] it argued that for both, the clause needs to be ‘sufficiently clear and specific’ and that [4.5] the clause at issue simply refers to a place, not a medium: whether in courts in ordinary or indeed arbitration. I am not privy to submissions in the case and I do not know how extensively the issue was argued. Of note is all lack of reference to either the Hague Choice of Court Convention, Brussels Ia (with A25 arguably not covering choice of court away from the EU) or the 1958 New York Convention. [4.7] The Dutch court holds that the requirement of clarity and specificity is a procedural requirement covered by Dutch CPR as the lex fori, and not a substantive requirement in which English law as the putative lex causae can have a say (the court oddly refers to A3 and 10 Rome I, despite A1(2)e excluding choice of court and arbitration agreement from its scope of application). The court also [4.9] rejects a lis pendens stay on the basis of Dutch residual rules, and, summarily, an A33 Brussels Ia stay, with reference to the English claim form having been issued after the Dutch courts had been seized. At the time of posting the Dutch finding on the merits had not yet been published. Back then to the English judgment: [53] Davison AR like his Dutch colleague seems to have overlooked A1 Rome I’s exclusion of choice of court and applies English law as the putative law to the (alleged) choice of court agreement. [54] he holds Masters of vessels must, in the ordinary course, sign many documents of a commercial nature such as bills of lading, statements of fact, certificates of compliance etc. Mr Soukup would be no exception. The working languages of VTS Rotterdam and VTS Antwerp are English and Dutch. I find it hard to accept (especially without hearing from him and having his evidence tested in cross-examination) that Mr Soukup did not, in fact, understand what he was signing. But if that was the case, he should have made a proper enquiry, not a casual one. And having failed to do so, he and his principal are bound by the content of the document he signed. [55] deals with the alleged lack of certainty in the clause The document is clear (as Andrew Baker J has already found [this is in 2024] EWHC 1329 (Admlty): the interim ASI, GAVC]). It provides for English law and jurisdiction in London. On any reasonable interpretation that means the courts in London, including this court. A final anti-suit injunction is made, as is an award for the salvage services. Clearly the judgment will clash with the eventual Dutch judgment and how that in turn will be resolved, will be one to watch. Geert. https://bsky.app/profile/gavclaw.bsky.social/post/3ljz5hc2xss2j https://x.com/GAVClaw/status/1899016175897510296

[If you do use the blog for research or database purposes, citation would be appreciated, to the blog as a whole and /or to specific blog posts. Many have suggested I should turn the blog into a paid for, subscription service however I have resisted doing so. Proper reference to how the blog is useful to its readers, will help keeping this so.]

In Commercial Bank of Dubai v Al Sari [2025] EWHC 400 (Comm) Foxton J discusses at length the identification of the lex causae in a claim that certain of the defendants maliciously prosecuted two sets of DIFC Proceedings.

The losses claimed are legal fees in respect of various proceedings as well as losses alleged to have been suffered from a delay in recovering certain assets.

Claimants contend that the effect of A4(1) Rome II is that the claims for malicious prosecution of relevant DIFC Proceedings are governed by UAE law, or alternatively involve a series of claims, governed, inter alia, by UAE and English law, and that the claims for malicious prosecution of another set of DIFC Proceedings are likewise governed by English law and/or UAE law. In the alternative, by way of a new argument, they contend that UAE law applies as between some parties by virtue of A4(2) Rome II.

It is common ground that the law of the DIFC does not recognise a tort of malicious prosecution of civil claims.

[14] the judge refers to the need consistently to apply concepts in Rome I/II with the same concepts in  Lugano Convention, Brussels Ia although he also, and much justifiably (as I have repeatedly stated) urges caution in doing so for “the cases disclose consideration in the former context of issues which do not seem to be directly germane to the latter.”

[15] Claimants refers to many authorities

“in which the claimant contended it had made what proved to be a worthless, or at least insufficiently valuable, investment in reliance on negligent advice or inaccurate statements. The obvious tension in these cases is whether the place of damage is where the “defective” transaction is irreversibly entered into, the place from which funds are advanced to make it, or where the flaws in the investment subsequently manifest themselves or crystallise (for example through on-sale of the investment at a reduced value).”

The authorities referred to are Kwok Ho Wan v UBS AG [2022] EWHC 245 (Comm), which in turn cited CJEU Kronhofer, CJEU Kolassa, CJEU Universal Music, CJEU Löber v Barclays Bank Plc, CJEU Vereniging van Effectenbezitters v BP. Cockerill J in Kwok suggested that the overall thrust of the CJEU jurisprudence favoured the place of the manifestation of damage, rather than the place of the transaction which led to the damage, as the relevant place for jurisdiction purposes – this was confirmed upon appeal [2023] EWCA Civ 222 where at [33], Sir Geoffrey Vos MR emphasised that the CJEU authorities which the Judge had said were “not entirely clear” reflected their particular facts, and should not be construed as a statute ([33]). The Court of Appeal doubted that there was “a rule that is universally applicable to financial loss cases”. 

Clearly therefore the ‘fact pattern’ [21] needs to be taken into account and specific consideration is made of “two cases which were not defective investment cases, but cases in which a legal wrong had caused the defendant to incur various heads of costs. Those might be said to be closer to the fact pattern here.”: MX1 Limited v Farahzad, and W Nagel v Pluczenik.

[31] ff the judge concludes, with reference (like Kockerill J in Kwok) to prof Dickinson, both his Rome II contribution in Dicey (with the use of ‘reversability’), and [35] his chapter in the Gedächtnisschrift for Professor Jonathan Fitchen : 

“The central submission of this chapter is that the concept of ‘damage’ within EU private international law is an active one which fixes upon the way in which the relevant event brings about its (claimed) effects upon the victim by adversely affecting a legally protected interest of that person to which the claim relates. This opens up the possibility of classifying different kinds of legally protected interests with a view to developing autonomous approaches for locating interference with them”.

[36] the judge then also links this to a ‘rights based’ approach to applicable law for torts, and for torts generally:

The assistance to be derived from the nature of the legally protected right as a relevant factor when identifying what constitutes direct and immediate damage and where it is suffered, coheres with wider right-based tort scholarship (e.g. Robert Stevens, Torts and Rights (2007)).

[37] “Approached from this perspective, the tort of malicious prosecution addresses the very specific interest of not being harassed by bad faith litigation before the sovereign court of a particular state.”

The judge continues (and readers might want to read those passages in full) with further underpinning of the argument that the legal costs etc suffered, all are indirect, consequential damage, and concludes [40] “Applying Article 4(1) to this singular tort, I am satisfied that the place of the invasion of the protected legal interest (and, in this case, of the primary or direct loss) is the DIFC.”

[41] ff Discussion of the fall-back A4(2) option leads to an interesting discussion of on-shore UAE law as a territorial unit per A25 Rome II and a conclusion [48] that A4(2) is engaged so far as the parties habitually resident in Sharjah and Dubai are concerned. [51] ff recourse to A4(3) is discussed ia with recourse to Owen v Galgay and I think (but have to say the judgment by this stage is not entirely clear) that the judge holds that A4(3) operates to displace the A4(2)  presumption viz those parties where it was engaged (reference to Marshall v MIB), [60] ultimately making DIFC law the applicable law for all claims.

I wonder whether the ‘rights based’ approach to purely economic loss will get much traction. Prof Dickinson’s ‘reversability’ approach seems by now to be firmly anchored in English law.

Geert.

EU Private International Law, 4th ed. 2024, Chapters 2 and 4.

Extensive discussion under the assimilated Rome II Regulation identifying the applicable law (held: DIFC) for tort of malicious prosecutionPurely economic loss claxonCommercial Bank of Dubai v Al Sari [2025] EWHC 400 (Comm) http://www.bailii.org/ew/cases/EWH…

— Geert Van Calster (@gavclaw.bsky.social) 2025-03-10T09:07:52.373Z

 

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https://x.com/GAVClaw/status/1899023760415506565

[If you do use the blog for research or database purposes, citation would be appreciated, to the blog as a whole and /or to specific blog posts. Many have suggested I should turn the blog into a paid for, subscription service however I have resisted doing so. Proper reference to how the blog is useful to its readers, will help keeping this so.]

I earlier reviewed the jurisdictional ruling in the claim brought by ia members of the Brasilian Quilombola community against Norsk Hydro related corporations. The pleadings this month on the merits reminded me to follow-up on the case and introduced me to a judgment of last May, which I had missed. Hence apologies for late reporting.

The judgment is of interest for the application ia of Rome II‘s rules on statutes of limitation and the burden of proof viz aspects of that statute of limitation. The court is most succinct on it [5.29]: (my translation)

Statutes of limitation are governed by the law applicable to the claim, in this case Brazilian law. The court will therefore assess the defense of prescription under Brazilian (substantive) law, also with respect to the burden of proof. This concerns a material aspect of the law of evidence that the court considers is subject to the lex causae, Brazilian law. (emphasis added)

The para caught my attention for corporate defendants have been known to make a spiel about the implication of the evidence and procedure carve-out in Rome II and its interplay with both Article 15’s ‘scope of the law applicable’ and Article 22’s specific provision for the burden of proof. I am not privy to how extensively the issue was argued in the case at issue.

Here, the court held [5.31] that Norsk Hydro had the burden of proof to show knowledge of the damage, its cause and those responsible for it with a view to the statute of limitation beginning to run, leading to a discussion on whether the pollution was a continuous or single event. As a result of the discussion, [5.36] only a few events were held to be past the statute of limitation.

The judgment does not address substantive reversal of the burden of proof issues under Brasilian environmental law: that I imagine might have been at issue in this month’s heairings.

Geert.

The Dutch SC has today held that it is minded to refer to the CJEU on a variety of issues relating to Rome II’s applicable law rule for (follow-on damages claims) related to competition law infringement. The case is related to the air cargo cartel referral which I flag here and is a follow-up to the Opinion of the AG at the SC, which I discuss here.

The decision to refer is not definitive yet seeing as the judgment was held on a (intra-Netherlands) preliminary reference. Parties are now given the opportunity to comment on the intention to refer.

The SC first of all refers to the questions it has today already sent up to the CJEU, namely whether continuous infringement leads to one albeit diverse claim as opposed to various albeit related claims. I briefly discuss these here. [4.2.8] clearly a qualification as one claim much facilitates the determination of applicable law and therefore arguably also the enforcement of EU competition law (reference to C-605/21 Heureka v Google).

It then addresses Rome II’s scope ratione temporis and the consequential conflit mobile which I discuss in my earlier post. Unlike its AG (who opined that there is no material difference in outcome hence no need to request an academic opinion, as it were, from Luxembourg), the SC does feel that this question needs to be referred to the CJEU, seeing as it held on yet another question referred to it that the Dutch residual rules do not lead to the outcome suggested by the AG.

Finally, the court intends to ask the CJEU to clarify Article 6(3) a (‘markets affected’ and b (conditions for claimant’s choice of law) Rome II, part of the complex layer of rules on the lex causae for follow-on (and stand alone) claims: in particular, the meaning of ‘markets affected’ and the conditions for choice of law which claimants may exercise.

As I discuss inter alia in this paper, Article 6 frankly is a mess, flying directly in the face of predictability so coveted by EU private international law.

[4.6.6] the SC refers to a perceived need for consistency between Article 6 Rome II and Article 7(2) Brussels Ia (e.g. in Volvo), a need which in my opinion is neither as established nor as obvious as the SC sees it.

This will be a very important case for the application of Rome II Article 6.

Geert.

EU Private International Law, 4th ed. 2024, 4.53 ff.

Palink.Dutch SC minded to refer to CJEU on the scope ratione temporis of Rome II (conflit mobile arising from continuous infringement of competition law; follow-on damages)ECLI:NL:HR:2025:414lnkd.in/eXyB3JTABackground here lnkd.in/emyQYWpG

— Geert Van Calster (@gavclaw.bsky.social) 2025-03-21T12:26:03.537Z

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https://x.com/GAVClaw/status/1903054432079647053

 

 

 

I discussed Vlas AG (at the Dutch Supreme Court)’s opinion in the Air Cargo case here. The Dutch Supreme Court today has decided to refer to the CJEU. The specific questions referred, concern the (effet utile of) the EU’s rules on effective enforcement of EU competition law and the qualification of continuous infringement of competition law as leading to one claim per victim, with multiple heads of damages, or rather one claim per infringement, each single handedly qualifying as a separate entitlement for damages.

The difference is relevant to conflict of laws given the ‘conflit mobile’. If the claims are separate, Rome II with its complex rule for competition law damages in Article 6, ratione temporis only applies to some of the claims. I discuss in my previous post how that leads to a complicated patchwork of applicable law.

The actual question referred enquires with the CJEU on whether continuous infringement leads to one albeit diverse claim as opposed to various albeit related claims, but adds ‘with a view to determining applicable law’. It will be interesting to see therefore how intensively the CJEU will engage with the Rome II issues on the specific case, which however is likely to be joined with the other case in which the SC is minded to refer and which I discuss here.

Geert.

EU Private International Law, 4th ed. 2024, 4.53 ff.

Lufthansa ea v SCC eaDutch Supreme Court refers to CJEU re qualification of continuous infringement of competition law, follow-on damages claimsWhether one albeit diverse claim as opposed to various albeit related claimsRelevant viz applicable law, Rome II.deeplink.rechtspraak.nl/uitspraak?id…

— Geert Van Calster (@gavclaw.bsky.social) 2025-03-21T11:47:13.510Z

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In IDBI Bank Ltd v Axcel Sunshine Ltd & Anor [2025] EWHC 442 (Comm) claimant is an Indian bank which, at the relevant times, operated outside India via a branch in the Dubai International Financial Centre – DIFC. Defendants are a company incorporated and registered in the British Virgin Islands, and a company incorporated and registered in India.

Second defendant argues ia that a relevant letter of comfort must not be enforced seeing as its performance would contravene Indian law.

Persey J discussed among others therefore whether an English court should disregard a letter of comfort due to A3(3) or A9(3) of the assimilated Rome I Regulation. These are the Articles which in the case of Article 3(3)  give priority to domestic law in a ‘purely domestic’ contract subject to a third country law:

Where all other elements relevant to the situation at the time of the choice are located in a country other than the country whose law has been chosen, the choice of the parties shall not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement.

and in the case of Article 9(3):

Effect may be given to the overriding mandatory provisions of the law of the country where the obligations arising out of the contract have to be or have been performed, in so far as those overriding mandatory provisions render the performance of the contract unlawful. In considering whether to give effect to those provisions, regard shall be had to their nature and purpose and to the consequences of their application or non-application.

In the case of Article 3(3), domestic law trumping lex voluntaris is mandatory, while in the case of Article 9(3), the override is optional, at the discretion of the court.

As for Article 3(3), the judge refers in particular to Banco Santander Totta. It was there held that for Art 3(3) to apply, all elements of a claim needed to be within the other country. [105]

In the present case there are elements with connections to the BVI and Dubai, such that Art 3(3) does not apply. Thus, for example, the CFA was entered into by the Bank’s Dubai branch office, the LoC was addressed to the Bank’s Dubai branch office, Axcel was incorporated in the British Virgin Islands, Axcel was required to repay its loan to an account in Dubai, and the facilities under the CFA were used by Siva to repay the debt owed by WinWind (a Finnish company), and thereby to discharge the WinWind Guarantee and Facility (both contracts being governed by English law). The same discharge was used by Siva to obtain the discontinuance of the WinWind Proceedings (before the English court).

([106] the judge doubts very much whether the contended effect of Indian regulation is what defendant purports it to be).

As for A9(3), [108]

I am satisfied that Article 9(3) also does not apply in this case. It is only applicable where the obligations ‘have to be‘ performed in a country where performance would be unlawful. As I have already observed above, performance under clause 3 ought to have taken place in Dubai, not India. Had performance been required to take place in India, the FEMA Regulations are not regarded by India as crucial to safeguarding its public interests. [the judge refers here to expert evidence]

Moreover, obiter [109] even had Article 9(3) applied, the judge would have used his discretion not to grant priority to the Indian rules:

In circumstances where the Indian Courts would enforce the guarantee and/or a judgment of this Court, I am satisfied that there is no basis for giving Siva relief under Art 9(3).

This judgment is a good illustration of what Articles 3(3) and 9 might lead to – although not on the facts of the case.

Geert.

Handbook of EU Private International LAw, 4th ed. 2024, 3.73 ff.

https://bsky.app/profile/gavclaw.bsky.social/post/3ljz7jp7o7c2j https://www.linkedin.com/posts/geert-van-calster-60abab9_judgment-discussing-ia-whether-english-court-activity-7304791236215795712-tb2M?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAHHS6oB7DOA8jUedLLahLDL6cEwepyHYwA https://x.com/GAVClaw/status/1899025501504651508

In my contribution to the EAPIL online seminar discussing Ekatarina Aristova’s excellent Tort Litigation against Transnational Corporations: The Challenge of Jurisdiction in English Courts (OUP 2024), I flagged the discussion by Dr Aristova in Chapter 6 of the book, of one of the objections to jurisdiction exercised by ‘European’ or by extension courts in the Global North, in cases involving human rights and environmental abuse by business located in the Global South. That is the argument that such exercise of jurisdiction is a form of neocolonialism.

This same argument was used by counsel for defendants in Da Silva & Ors v Brazil Iron Ltd & Anor [2025] EWHC 606 (KB). The case involves mining pollution in Bahia state by Brazil Iron, domiciled at England. Background to the case is here. [71] Bourne J summarises counsel’s argument:

For this Court to accept the Claimants’ attempt to litigate the case in this country would, [counsel] submits, be contrary to requirements of judicial comity and would be an exercise of judicial colonialism. In that regard he referred to Altimo Holdings v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804 PC, where Lord Collins said at [97]:

“Comity requires that the court be extremely cautious before deciding that there is a risk that justice will not be done in the foreign country by the foreign court, and that is why cogent evidence is required.”

Justice Bourne did not directly address the ‘judicial colonialism’ vocabulary yet in accepting jurisdiction for the E&W courts and rejecting the forum non conveniens challenge, he clearly disagrees with it.

Defendants’ attempt at rebuffing jurisdiction of course centres upon the Court of Appeal’s recent application of the test in cases like these in Limbu v Dyson and the approach, as was to be expected, attempts to distinguish Dyson and /or employ the one or two levers to support a forum non challenge, indicated by that judgment.

The judge summarises [100]

“an examination of “connecting factors” leads to the conclusion that Brazil is the forum with which this action has the more real and substantial connection, although there are factors leaning in both directions.”

Emphasis was put by defendants ia on the risk  of irreconcilability of the outcome of the English proceedings with an ongoing Brasilian ‘Civil Public Action’ – CPA, a well as an ordinary civil claim introduced in Brasil.

The judge acknowledges that risk [101]. He refers in this context to Vedanta which flagged it as an important issue.  (See also the extensive discussions on irreconcilability in Municipio viz the then applicable European rules of Brussels Ia (Articles 33-34)).

However he finds it outweighs the fact that the Defendants in England and are served there “as of right” (the actor sequitur forum rei principle). Also, control of  the Brazilian company Brazil Iron Mineração Ltda (“BIML”), which operates the Fazenda Mocó iron ore mine in Mocó that is core to the claim, is held to be an issue which will be important in the proceedings and which heavily leans towards England. [101] Although “the Defendants’ directors may not live in the UK, it would be a logical assumption that a significant amount of evidence about the control issue may emanate from England and be in English.”

Overall, arguments which counted for Brasil are

[103] “the most important issues in the case are likely to concern (1) the operation and regulation of the Mine and (2) its impact on the Claimants. That does not mean that control will not be an important issue, but ultimately the claims concern environmental damage and the relevant environment is in Brazil. Those matters obviously occurred in Brazil and will be the subject of witness evidence and documentary evidence in that country.”

[104] “it is agreed that Brazilian law applies to the dispute. The relevant regulatory framework also is that of Brazil, or Bahia State. It therefore appears highly likely that there will be expert witnesses from Brazil, whether or not there are also experts from any other country. I do not overlook the fact that the English courts are well accustomed to applying foreign law. Nevertheless, there may be significant differences between the applicable systems of law – civil law and common law – and that favours the jurisdiction of the Brazilian courts. There may also be issues about Quilombola status and although I do not place much emphasis on that fact, it would be a theme with which the English courts would be wholly unfamiliar.” The latter refers to the issue of protection of indigenous communities under Brasilian law.

[105] “it would plainly be easier and cheaper for ..evidence to be received in Brazil, in Portuguese.”

However the one strong argument standing out in favour of jurisdiction of the English courts is [106]-[107]

that there is a real risk that the Claimants will not be able to obtain substantial justice in Brazil. That means that Brazil, despite its closer connection with the case, is not the appropriate forum in which it can most suitably be tried in the interests of the parties and for the ends of justice.

The reason, in brief summary, is that the evidence reveals a real risk that the Claimants will not be able to fund, or obtain funding for, legal representation of the kind necessary to litigate these claims to a proper conclusion.

This is not [108] down to any criticism of the Brasilian legal system, nor lack of integrity of that system or delay, neither of which the judge suggests exist. Rather, [110] the relatively small size of the claims, [111] the small number of claimants (implicit reference here by the judge to Municipio), [112] the limited means of the claimants, [113] complexity of the case in terms of both liability and control, [114] despite the judge not accusing the Brasilian system of delay, it has been shown that it does take a long time for Brasilian courts to hold on issues of such complexity.

[115] in England the case will go forward under a conditional fee arrangement – CFA, while [116] ff the expert evidence on balance of the possibility to find appropriate funding in Brasil including via legal aid, on the whole shows that that is unlikely.

[134] Comity is not considered to be an obstacle:

“As I have said, it is not premised on any criticism of the legal system in Brazil. Instead, it is founded on the fact that the economics of litigating this claim in the two jurisdictions are significantly different.”

[146] Lack of representation in a particular forum clearly is the Leitmotiv for the judge’s decision, and it is one based on a detailed consideration of the various options presented to him.

A judgment of note!

Geert.

EU private international law, 4th ed. 2024, Chapter 7.

 

Catarina Oliveira Da Silva ea v Brazil Iron ea [2025] EWHC 606 (KB)High Court applying Limbu v Dyson gavclaw.com/2024/12/13/l… rejects forum non challenge in mining pollution case Reject defendants' suggestion that jurisdiction for E&W courts would amount to 'judicial colonialism'

— Geert Van Calster (@gavclaw.bsky.social) 2025-03-16T10:41:59.200Z

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https://x.com/GAVClaw/status/1901222249807462509

 

I could not quite think of a catchier title conveying both the plus (claim will continue to be heard in England) and the minus (the discussion having already caused considerable delay), without resorting too obviously to football metaphors.

The claim is brought in England by a number of Liverpool fans physically and psychologically damaged by the poor security at the May 2022 Champions League Final at Paris’ Stade de France. Claimants allege that UEFA had organisational responsibilities for the match and that they owed, and were in breach of, contractual and/or tortious duties concerning the safety of the
claimants.

The case illustrates a problem highlighted by Oliver Holland (partner with Leigh Day, the law firm representing claimants however not, as far as I am aware, involved in the claim), last week at a hearing at the UK Parliament’s human rights committee. (Mr Holland did not give current claim as an example and seeing as the hearing focused on forced labour in the supply chain, he likely did not have the claim in mind at his testimony).

Defendants in personal injury claims (whether or not linked to business and human rights) have quite the series of avenues available to them to try and derail the claims in the English courts. These include (Mr Holland discusses some of these)

objections to jurisdiction, including the infamous doctrine of forum non conveniens;

the prospect of (handy for its freezing effect) very considerable adverse costs orders whether or not coupled with security for costs; and (with impact on the costs issue)

a tendency to entertain issues of both jurisdiction and applicable law at considerable length.

Other jurisdictions of course suffer from similar challenges and I for one am not going to complain about a good conflict of laws yarn. Moreover, Lord Briggs denouncing mini-trials at the jurisdictional stage in Vedanta (Turner J in current case refers to this [15]), and the Court of Appeal’s instructions on forum non in Dyson, ought to bring more discipline to at least some of this maneuvering.

Sean Abram and others v UEFA and UEFA Events SA [2025] EWHC 483 (KB) engages with another means to try and bounce the case away from England and Wales: namely the doctrine of foreign act of state.  For an excellent primer and discussion of the future of the principle see Mary Newbury here.

[5] The principal basis for UEFA’s jurisdiction challenge is that the claims would require the English Court to adjudicate on the lawfulness or validity of acts of a foreign state (France) performed within its own territory, which, UEFA argue, would be impermissible under said “Foreign Act of State Doctrine”.

I have posted quite a few times on the doctrine: see among others

Crane Bank Ltd & Ors v DFCU Bank Ltd & Ors [2023] EWCA Civ 886 which [13] defined the doctrine as courts “will not adjudicate or sit in judgment on the lawfulness or validity under its own law of an executive act of a foreign state, performed within the territory of that state” and which entertained a number of exceptions to the doctrine, as well as in my opinion leaving a potential incompatibility of (some of the implications of) the doctrine with Article 6 ECHR underdiscussed;

SKAT [Skatteforvaltningen v Solo Capital Partners Llp [2022] EWCA Civ 234] in which both the Court of Appeal and later the Supreme Court focused on the substance rather than the context of the claim (in my post I flag the echos of the Brussels /Lugano ‘civil and commercial’ discussions);

Reliance v India  [2018] EWHC 822 (Comm) where Popplewell J (as he then was) held on whether the doctrine applies to arbitration tribunals;

Servis-Terminal LLC v Drelle [2025] EWCA Civ 62 which flags the need to seek formal recognition of a foreign judgment before its enforcement with Newey LJ suggesting the similar roots of this requirement as the foreign act of state doctrine.

There is certainly merit in holding on jurisdictional issues separately, before extensive engagement with the merits, at least where these objections are not obviously spurious and cannot be summarily addressed. Even in those States where civil procedure rules (CPR) give defendants a procedural right to hear the jurisdictional objections first (the E&W means is Part 11 of the CPR), and despite Turner J’s appreciation that the matter must be dealt with concisely (and note [17] his rejection of defendants’ request to delay even further and squeeze this jurisdictional objection even more), I think continental rules would not have allowed the discussion in current case to take on the extensive nature that it has, with all the costs and time delay this has already caused. And there is potential for an appeal I imagine.

The foreign act of state element of the discussion at issue, if of any relevance at all, clearly in my view is entirely incidental or ‘contextual’ and not substantial, per UKSC SCAT above and therefore simply cannot lead to rejection at the jurisdictional stage. The summary [65] in my view is poignant:

claimants make no direct allegations of unlawfulness in their Particulars of Claim in respect of the conduct of the French police or any other state entity. The defendants contend, however, that the issue of the lawfulness of such conduct is nevertheless bound to arise as an important issue
in the proceedings if the case were to be permitted to proceed further.

There is no suggestion that the way in which the claim has been formulated is designed as it were to circumvent the Foreign Act of State doctrine and that the real object of the proceedings as it were is to hold on the validity of actions by a French state entity. The pleaded case as is clear from Abram v UEFA [2024] EWHC 1518 and as summarised here [64] focuses genuinely on UEFA and consorts’ (in)actions.

Defendants contend, however, that the issue of the lawfulness of such conduct is nevertheless bound to arise as an important issue in the proceedings if the case were to be permitted to proceed further, ([126] ff they point to issues of French law to support this argument) and (ia [77]) argue that there cannot be a ‘threshold requirement’ below which the assessment of a foreign act of state becomes de minimis and does not engage the doctrine.

The judge, after having made a thorough and clear overview of both the principle (including [82] ff the absence of established authority on what amounts to an act of state) and its exceptions (much more entertained in case-law) as applied by the authorities,

[91] notes that the principle must not extend beyond the natural bounds required to fulfil the aims which it is intended to achieve (international comity, GAVC);

[106] accepts that “some aspects of the conduct of the French government and the other listed public bodies through its higher officials may (and I stress may) amount to acts of state”; however that “the task of determining which, if any, of these acts do engage the Doctrine cannot be confidently carried out on the present incomplete state of the pleadings and evidence”.

[108] ff Two relevant exceptions to the rule are further discussed obiter. The second exception is discussed [122] ff: where challenges to foreign acts
of state are merely ancillary to the claim or by way of collateral aspersion. I know this exception has been so determined by the authorities yet in my opinion would be better formulated not as an exception but as a substantive limitation to the rule.

As a side-note, there appears to be some confusion on the law that will apply to the merits of the case: see [18] ff

18. Until very shortly before the hearing of the application before me,
the claimants had been proceeding under the assumption that
French law applied to the claims of all the claimants. Experts in
French law were duly instructed to report on behalf of the
claimants and defendants respectively.
19. However, it transpires that the position may have been less clear
cut because only some of the claimants had purchased tickets
from the UEFA online ticket portal. Others had bought them
directly from Liverpool FC. Owing to the lateness of the
realisation of the true position, the claimants’ skeleton arguments
deployed for the purposes of the hearing before me had been
drafted on the premise that all of the claims were governed by
French law.
20. The position of the claimants, as now articulated in a letter dated
2 October 2024, is that their claims in tort are subject to French
law regardless of their provenance and so too is any contractual
claim in respect of those tickets purchased from the UEFA online
ticket portal. However, contractual claims brought by claimants
who received their tickets from Liverpool FC involve the
imposition of an English contractual duty to take reasonable skill
and care to be considered in regard to French health and safety
laws and regulations as applicable to the stadium. No purpose
would here be served by articulating their reasons for reaching
this view.

No doubt the cross-over between contractual claims (subject to assimilated Rome I) and non-contractual claims (Rome II, ditto assimilated) and, I imagine, the application of the consumer section of Rome I, will be made clearer in the continuation of the claims.

Geert.

 

I am much pleased that Dr Brooke Marshall has accepted to write on CJEU Lastre for the blog. Dr Marshall has written the guiding volume on the issue (highlights of the book’s launch are here). True to form, her analysis below is as complete as it is on point, and a most excellent addition to the analysis already out there.

Geert.

 

CJEU on substantive validity and on asymmetric clauses: what we now know, and what we (still) don’t.

The background to Case C-537/23 Società Italiana Lastre ECLI:EU:C:2025:120, and commentary on it, has already been expertly provided by François Mailhé, Gilles Cuniberti, and Geert van Calster. It is a privilege for me to contribute to that discussion on this excellent blog.

My post confines itself to the questions that the French Cour de cassation asked and the answers which the CJEU gave (and did not give). My analysis draws heavily from my book on the subject, so pinpoint references to that are given in each section below.

The asymmetric jurisdiction clause in issue said:

‘the court of Brescia [(Italy)] will have jurisdiction over any dispute arising from or related to this contract. [SIL] reserves the right to bring proceedings against the purchaser before another competent court in Italy or elsewhere’.

The preliminary questions of the Cour de cassation, in essence, were:

(1) Is a complaint about a clause’s asymmetric character or imprecision an autonomous (EU law) question or a question of the clause’s substantive validity? Or should substantive validity be interpreted restrictively ‘and regarded as relating purely to the material grounds for invalidity, which are principally fraud, error, deceit, violence and incapacity’?

(2) If it is an autonomous question, is a clause like the one in issue compatible with Art 25 of the Recast?

(3) If asymmetry goes to substantive validity, how does the conflict-of-laws rule in Art 25 of the Recast work? Which court’s law applies and does that law include renvoi?

These were all good questions, each deserving an answer. Regrettably, the Court only answered the first two.

The Court’s decisions on the first question:

I. The phrase ‘null and void as to its substantive validity’ must be interpreted autonomously

The Court begins at [30] by resolving several uncertainties attending the process of characterisation and the substantive validity rule, which are relevant to jurisdiction clauses generally. The first is as to which law applies to the interpretation of the phrase ‘null and void as to its substantive validity’ in Art 25(1). It had hitherto been uncertain whether the meaning of that phrase and the scope of the issues it covers was a question to be resolved by the law of the court seised, by reference to an autonomous interpretation or by reference to the law applicable to substantive validity of the clause itself, as designated by the conflict-of-laws rule in Art 25(1).

Sensibly, and unsurprisingly in my and Gilles Cuniberti’s view, the Court decides that this question is to be resolved by an autonomous interpretation. This ensures that issues of substantive validity, governed by national law, do not overlap with other aspects of Art 25(1) which are governed by an autonomous approach. Several of those other aspects are pointed out by the Court at [35], namely: that ‘the parties … have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship’, which the Court describes as requirements as regards a jurisdiction agreement’s ‘substance’; and that the agreement complies with conditions as to form. In this respect, the Court’s decision coheres with its decision in C- 519/ 19 Ryanair DAC, paras 41, 48– 61. There, the Court observed that it is for the court seised to ascertain first whether a jurisdiction agreement satisfies the requirements of form and consensus under the Recast before turning to the separate issue of substantive validity. So far, so good.

Asymmetric Jurisdiction Clauses (OUP 2023), para 6.35.

 

II. Few issues can be characterized as issues of substantive validity (and asymmetry is not one of them)

At [36] and [37], the Court resolves a second uncertainty of general application, namely as to which kinds of issues can be characterized as issues of substantive validity, adopting a restrictive approach. It rules that ‘that concept covers the general causes of nullity of a contract, namely, in particular, those which vitiate consent, such as error, deceit, violence or fraud, and incapacity to contract’ and that it must be interpreted as ‘referring solely to [a jurisdiction agreement’s] nullity in respect of general causes of nullity of a contract’ (my emphasis). In other words, the issues that we knew were already covered by the substantive validity rule are covered but nothing else.

That nothing else is covered is a surprising result, given that there had been some sign that the CJEU might favour a broad interpretation in C- 519/ 19 Ryanair DAC, para 50. One of the reasons the Court gives for its approach is to reflect the solution taken in the 2005 Hague COCA Convention (at [40]). It does not say anything more, but the Court seems to be insinuating that since there is some support for the view that the null and void rule under Art 5(1) of the COCA Convention should be interpreted restrictively (see the COCA Convention’s Explanatory Report, para 126), so too should the substantive validity rule under the Recast. I, therefore, share Gilles Cuniberti’s view that the Court may seek to align its interpretation of the null and void rule in the COCA Convention and the substantive validity rule in the Recast.

Asymmetric Jurisdiction Clauses (OUP 2023), para 6.37, cf paras 6.38-6.48, 6.52–6.55

 

III. A complaint about asymmetry in a jurisdiction clause is an autonomous question (and only an autonomous question)

In light of the Court’s restrictive approach to the characterization of issues relevant to substantive validity, the Court consequentially rules at [51] that ‘the validity of an agreement conferring jurisdiction in view of its alleged asymmetry must be examined having regard not to criteria relating to the causes of an agreement being ‘null and void as to its substantive validity’, within the meaning of the first sentence of Art 25(1) of the Brussels Ia Regulation, but to autonomous criteria which are derived from that Art 25 as interpreted by the Court.’

Seemingly, to justify that autonomous approach, the Court relies on the fact that the former Art 17(4) of the Brussels Convention expressly provided for clauses to the benefit of one party and that asymmetric jurisdiction agreements which favour consumers, insureds etc, and employees are contemplated and permitted by Recast: [48]–[50], [52]. For cogent criticism on the latter point, see Geert van Calster’s post.

Asymmetric Jurisdiction Clauses (OUP 2023), paras 1.27–1.36 cf paras 6.69–6.82

 

IV. Whether a jurisdiction clause is sufficiently precise is a question to be resolved by applying an autonomous standard

The Court reiterates the requirement that the court or courts on which the agreement confers jurisdiction must be sufficiently precisely identified, and that this applies to Art 25(1) of the Recast, as it did to the Recast’s predecessors: [45]. Any complaint about an asymmetric jurisdiction clause being insufficiently precise must, therefore be resolved autonomously: [47].

Frustratingly, the Court merely repeats the crux of that previous case law without elaboration at [42]:

‘It is sufficient that the clause state the objective factors on the basis of which the parties have agreed to choose a court or the courts to which they wish to submit disputes … Those factors, which must be sufficiently precise to enable the court seised to ascertain whether it has jurisdiction, may, where appropriate, be determined by the particular circumstances of the case being examined by the court.’  (C-387/98 Coreck, para 15; C-222/15 Hőszig, para 43).

Asymmetric Jurisdiction Clauses (OUP 2023), paras 6.05–6.07

 

The Court’s decisions on the second question:

 V. Assessed autonomously, an asymmetric jurisdiction clause is valid under EU law and sufficiently precise where the optional limb can be interpreted as contemplating proceedings only before an EU Member State or EFTA Lugano State court

The Court rules that an asymmetric jurisdiction is in principle valid/admissible under EU law, relying especially on the need to protect party autonomy (recital 19) (see [56], [58], [64], [65]). No surprises there, until one does a double take at [58]: what the Court rules is valid is an asymmetric jurisdiction clause the optional limb of which is limited to courts with jurisdiction under the Recast and the 2007 Lugano Convention. More on that in a moment (see VI).

So far as the requirement of precision of content is concerned, the Court rules at [59] that an asymmetric agreement clause which designates a particular EU Member State or EFTA Lugano State court, on the one hand, and courts which have jurisdiction under the Recast and 2007 Lugano Convention, on the other, ‘satisfies the requirement of precision resulting from Art 25(1) of that regulation and the objectives of foreseeability, transparency and legal certainty, set out in recitals 15 and 16 of that regulation.’ Subject to the reservations I have as to what the Court means by the word ‘designate’ (see VIII below), that seems to me to be a cogent conclusion:  ‘any court with jurisdiction’ is an objective factor that is sufficiently precise, assessed from the perspective of a court seised: any court EU Member State or EFTA Lugano State court which would otherwise regard itself as competent has jurisdiction.

Asymmetric Jurisdiction Clauses (OUP 2023), paras 6.09–6.10

 

VI. Assessed autonomously, an asymmetric jurisdiction clause is not sufficiently precise and contrary to EU law where the optional limb is to be interpreted as contemplating proceedings before a Third State court

The Court rules at [60] that, if, in referring to ‘another competent court … elsewhere’, the agreement ‘must be interpreted’ as meaning that it also designates the courts of one or more Third States, it would be contrary to the Recast. Put another way, the asymmetric clause in issue ‘is incapable of satisfying the requirement of precision, … unless it may be interpreted as designating the court of Brescia and the courts of Member States or States that are parties to the Lugano II Convention as having jurisdiction to resolve disputes between the parties’: [62] (my emphasis). In practical terms, if the words ‘another competent court … elsewhere’ could encompass an English court, for example, because one of the parties has some connection to England, the clause would not be valid under the Recast.

What I find curious about this aspect of the Court’s decision is the lack of clarity in the reasoning it used to get there. It reasoned, at [60], that where the optional limb can be interpreted as contemplating proceedings before a Third State court:

‘that agreement conferring jurisdiction would not be consistent with the objectives of foreseeability, transparency and legal certainty referred to in recitals 15 and 16 of that regulation, to the extent that EU law does not, in itself, make it possible to designate the courts which have jurisdiction, as that designation is, where appropriate, the result of the application of the rules of private international law of third countries.’

While it is true that whether a Third State court is competent is not the result of EU law, it is difficult to see why that matters if the requirement of precision applies to the clause as a whole and is to be assessed only from the perspective of a court seised. Indeed, it is difficult to see why the criterion ‘another competent court … elsewhere’ is not an objective factor or why it is insufficiently precise, assessed only from the perspective of a court seised: any court which would otherwise regard itself as competent has jurisdiction, whether that court is a Third State court or not. Although the optional limb does not, in my view, confer jurisdiction on those courts (only the clause’s first sentence designating the courts of Brescia does that), the optional limb provides a criterion allowing any court that is seised to determine whether it is one of the courts before which the parties had contemplated that the option holder could bring proceedings.

Instead, the Court could have more persuasively justified its decision by elaborating on its previous case law in C-387/98 Coreck and C-222/15 Hőszig to clarify that the requirement of precision applies as much to the parties as it does to the court. Put another way, the Court could have clarified that the requirement of precision is not to be examined purely from the perspective of a court seised; rather, as a result of the ‘objectives of foreseeability, transparency and legal certainty, set out in recitals 15 and 16’ of the Recast,  it also requires that the parties be able to foresee from a jurisdiction clause where they may be called upon to defend proceedings. Reference to C-566/22 Inkreal paras 28–29 would have done the job. There, the court said that an agreement conferring jurisdiction coheres with the aim of legal certainty because it ‘helps the applicant to ascertain the court before which he or she may bring proceedings and the defendant to foresee the court before which he or she may be sued, and enables the national court seised to be able readily to decide whether it has jurisdiction’. (The Court did refer to Inkreal but, unfortunately, not to make this point.)

I had foreshadowed the Court’s decision at [60] and [62] as a possible problem for asymmetric clauses of this kind, albeit on the argument that an aspect of the requirement of precision under EU law ought to be that the agreement should allow a reasonably well-informed defendant to foresee the courts before which they may be sued. I had suggested that since it was uncertain what the CJEU may say, it might be thought prudent for drafters to specify (expressly) that ‘any competent court’ is restricted to those within the EU or to an EFTA Lugano State, if that was their intention. In light of the CJEU’s decision, that suggestion may well warrant some serious consideration.

The Court’s decision may also give cause to reconsider non-exclusive jurisdiction clauses which designate one EU Member State or EFTA Lugano State court, to the extent that these impliedly permit both parties to bring proceedings before any other competent court, including Third State courts.

Asymmetric Jurisdiction Clauses (OUP 2023), paras 2.31–2.33, 5.50, 6.10, 6.14–6.24

 

Unanswered questions

VII. So is the clause in Case C-537/23 Società Italiana Lastre sufficiently precise and compatible with the Recast?

This is not a question for the CJEU to answer and, on my reading, it is not one which the Court did. For a different view, see Gilles Cuniberti’s post. Note that the Court’s careful use of conditional language in [60] and [62] ‘if’ … ‘unless’… One may only speculate on how a French court will now interpret the clause against the backdrop of the CJEU’s rulings.

 

VIII. Which court(s) does an asymmetric clause ‘designate’? And how does the substantive validity rule work for them?

The Court, is to my eyes, vague or perhaps ambivalent as to which court or courts an asymmetric clause typically ‘designates’ (ie confers jurisdiction on/ prorogates the jurisdiction of). Does it designate (1) only the ‘anchor court’ (to use Richard Fentiman’s words), here Brescia, and merely preserve the special or general jurisdiction that other courts have under the Recast or 2007 Lugano Convention for one of the parties? Or (2) does it ‘designate’/confer jurisdiction on/prorogate the jurisdiction of all those courts? The Court’s reasons at [55] suggest the latter and [59] appears to contemplate both possibilities.

This opacity is regrettable for multiple reasons. One reason is that the conflict-of-laws rule in Art 25(1) for determining a clause’s substantive validity presupposes that the clause confers jurisdiction on/designates only one court. That conflict-of-laws rule necessitates the following interpretation for an asymmetric clause of this kind: only the anchor court is ‘prorogated’ and the jurisdiction under the default rules of the courts the subject of the option is preserved but not prorogated. On that argument: if the anchor court is seised by either party, it should apply the law selected by its conflict-of-laws rules to the substantive validity of the clause (assuming renvoi is included – see IX below). If, instead, another court is seised, it should apply the law selected by the anchor court’s conflict-of-laws rules to the clause’s substantive validity. Whether that other court is seised by the option holder, according to the agreement, or by the non-option holder, contrary to it, is immaterial for the purposes of the rule.

Put another way, if that argument is wrong and an asymmetric clause of this kind ‘designates’ more than just the anchor court, the Court will (again) be called upon to explain how the substantive validity rule is supposed to work for a clause that ’designates’ multiple courts. It is a shame that it did not grasp the nettle and do so in this case.

Asymmetric Jurisdiction Clauses (OUP 2023) paras 5.07–5.09, 5.33, 6.58–6.59

 

IX. Is renvoi included in the substantive validity rule?

Also unfortunate is that the Court did not clarify whether the conflict-of-laws rule for substantive validity in Art 25(1) includes renvoi as recital 20 suggests. At [33], as Geert van Calster has highlighted, the Court quotes recital 20 in its entirety but for the crucial words ‘including the conflict-of-laws rules of that Member State’. Alignment of the conflicts rule in Art 25(1) with the COCA Convention, which the Court appears to favour (see II above) would militate in favour of including renvoi. What one should make of the Court’s misleading truncation of recital 20 is, therefore, anyone’s guess.

Asymmetric Jurisdiction Clauses (OUP 2023), paras 6.50–6.51

 

Luxembourg should expect more questions to come…

Brooke Marshall.

Background to Case C-537/23 Società Italiana Lastre SpA (SIL) v Agora SARL, in which the CJEU held yesterday, is here.

The choice of court clause that is the subject of the proceedings reads

the court of Brescia [(Italy)] will have jurisdiction over any dispute arising from or related to this contract. [SIL] reserves the right to bring proceedings against the purchaser before another competent court in Italy or elsewhere.

When I understood late in 2024 that there had been no hearing and that neither would there be an AG Opinion, I suspected this most likely indicated that nothing earthshattering would be held, rather that the CJEU would give the kind of straightforward replies as I flagged in my post on the referral.

I was wrong! : surprisingly in my view the Court has held asymmetry IS covered by BIa and that it is in principle perfectly kosher.

The case deals with asymmetric aka hybrid aka unilateral choice of court, on which readers will find plenty of posts when entering these search strings on the blog.

Article 25’s lex causae rule (which law determines whether unilateral choice of vcourt is valid) reads in relevant part

‘1.      If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State. …. “(emphasis added)

Recital 20 adds

20)      Where a question arises as to whether a choice-of-court agreement in favour of a court or the courts of a Member State is null and void as to its substantive validity, that question should be decided in accordance with the law of the Member State of the court or courts designated in the agreement, including the conflict-of-laws rules of that Member State.’

As I noted in the Handbook and elsewhere, the insertion into the Regulation of the lex fori prorogati rule often does not assist. In particular, where parties expressly make choice of court non-exclusive or where they designate a plurality of specifically identified courts, the lex fori prorogati is not immediately ascertainable. Neither is it in the event of so-called ‘unilateral’ or ‘one-sided’ choice of court. At the very least for these cases which are not solved with the new lex fori prorogati rule, parties are best advised to continue to (or start to) make separate and express choice of law for unilateral and non-exclusive choice of law.

Recital 20, whose status is uncertain anyway on account of it being a mere recital, is in my view extraordinarily unhelpful in conjuring up renvoi to the lex causae mix.

The CJEU first of all and as is standard for BIa, reminds us [30] that the concept of ‘null and void as to its substantive validity’ must be given an autonomous, EU law meaning, “which must be established by reference to the usual meaning of those terms in everyday language, while also taking into account the context in which they are used and the objectives pursued by the legislation of which they form part.”

[31] ‘Substantive’ ordinarily would refer to ‘questions of fact or law which the [national, GAVC] court must decide’ at the merits stage. However [32] here the reference to substantive validity clearly means something else ,namely “that provision indicates which national law applies as regards whether, notwithstanding the fact that all of the conditions of validity laid down in that article are satisfied, such an agreement is null and void on other grounds under that national law.”: in other words ‘that provision is merely a conflict-of-laws rule’.

[33] the Court observes that recital 20 “has wording analogous” to A25. When it cites recital 20 however it quotes incompletely, namely “‘where a question arises as to whether a choice-of-court agreement in favour of a court or the courts of a Member State is null and void as to its substantive validity, that question should be decided in accordance with the law of the Member State of the court or courts designated in the agreement’.”

Leaving out the reference to renvoi is disingenuous imo, and it is not the first time the CJEU completely ignores recital 20’s inclusion of renvoi: see C-519/19 Ryanair v DelayFix where it did exactly the same.

[36] continuing with statements which reveal nothing new to the seasoned conflicts eye, the CJEU recalls that A25 itself only discusses the existence and expression of consent, hence that ‘substantive validity’

“covers the general causes of nullity of a contract, namely, in particular, those which vitiate consent, such as error, deceit, violence or fraud, and incapacity to contract, causes which, unlike the conditions of validity pertaining to the agreement conferring jurisdiction themselves, are not governed by the Brussels Ia Regulation but by the law of the Member State whose courts are designated.

[40] the Court refers to the travaux to point out that A25 was meant to mirror the 2005 Choice of Court Convention on this point: see A5 of that Convention (“The court or courts of a Contracting State designated in an exclusive choice of court agreement shall have jurisdiction to decide a dispute to which the agreement applies, unless the agreement is null and void under the law of that State.”) and A6(a) (“A court of a Contracting State other than that of the chosen court shall suspend or dismiss proceedings to which an exclusive choice of court agreement applies unless – a) the agreement is null and void under the law of the State of the chosen court;…”

Like professor Cuniberti, I am a bit puzzled by the reference to the 2005 Convention seeing as it only applies to exclusive choice of court.

[39] is then the reminder of BIa’s core DNA: reasonable foreseeability of forum for defendant and ease of identification of forum for the claimant (reference here to C-774/22 FTI Touristik which itself had referred to Inkreal.

Now, [42]

the terms ‘have agreed’, …cannot be interpreted as meaning that it is necessary for such a clause to be formulated in such a way that the competent court can be determined on its wording alone. It is sufficient that the clause state the objective factors on the basis of which the parties have agreed to choose a court or the courts to which they wish to submit disputes which have arisen or which may arise between them. Those factors, which must be sufficiently precise to enable the court seised to ascertain whether it has jurisdiction, may, where appropriate, be determined by the particular circumstances of the case being examined by the court…” (reference ia to Hőszig).

Put another way, [44]

the condition that the parties ‘have agreed’ on a court or courts of a contracting State or a Member State includes a requirement of precision in order to be valid.

or [45]

an agreement conferring jurisdiction must, in order to be valid, identify with sufficient precision the objective factors on the basis of which the parties have agreed to choose a court or the courts to which they wish to submit disputes which have arisen or which may arise between them.

This [46] also assists in the attainment of the objectives of foreseeability, transparency and legal certainty, set out in recitals 15 and 16 BIa.

[48] the Court recalls asymmetry of choice of court being specifically dealt with viz the weaker party to an insurance contract, a consumer contract or an employment contract.

[50]

“as regards those contracts, Article 25(4) of the Brussels Ia Regulation, read in conjunction with Articles 15, 19 and 23 thereof, expressly governs the situations in which an asymmetric agreement conferring jurisdiction is valid and those in which it is not.”

[51]

“Therefore, it must be held that the validity of an agreement conferring jurisdiction in view of its alleged asymmetry must be examined having regard not to criteria relating to the causes of an agreement being ‘null and void as to its substantive validity’, within the meaning of the first sentence of Article 25(1) of the Brussels Ia Regulation, but to autonomous criteria which are derived from that Article 25 as interpreted by the Court.”

I do not understand the leap (“therefore”): the Court seems to reason that seeing as BIa for protected categories imposes conditions curtailing asymmetry, such asymmetry is a BIa-covered condition of validity, not one which A25 refers to an applicable national law. The CJEU in my view could just as well have reasoned with reference to the protected categories being an exception to the rules otherwise applicable, that the asymmetry discussed there is an outlier in what is otherwise an area covered by the lex fori prorogati.

Having thus held that the validity of asymmetric choice of court is to be determined using BIa and not using an applicable law causae, the CJEU then goes on to hold whether BIa does or does not allow them.

[55] Party autonomy, protected by BIa, means the parties must not necessarily designate the courts of a single and the same Member State (or [58] Lugano Convention States). [57] The existence of forum shopping possibilities in the application of the special jurisdictional rules of A7, too, supports the room which BIa leaves for proceedings being brought in various Member States.

[60] The wording of the clause at issue: ‘another competent court …elsewhere’ however leads to the possibility of a third State court, neither an EU or Lugano State court, having jurisdiction. This [61] leads an “an increased risk of conflicts of jurisdiction arising which would be detrimental to legal certainty, since the application of those national rules would be likely to lead to divergent answers..”

The Court’s conclusion therefore is

In the light of the forgoing considerations, the answer to the second question is that Article 25(1) and (4) of the Brussels Ia Regulation must be interpreted as meaning that an agreement conferring jurisdiction pursuant to which one of the parties thereto may only bring proceedings before the sole court that it designates whereas it permits the other party to bring proceedings before, in addition to that court, any other competent court, is valid, in so far as, first, it designates courts of one or several States which are either Members of the European Union or parties to the Lugano II Convention, secondly, it identifies objective factors which are sufficiently precise to enable the court seised to ascertain whether it has jurisdiction, and, thirdly, it is not contrary to the provisions of Articles 15, 19 or 23 of that regulation and does not derogate from an exclusive jurisdiction pursuant to Article 24 thereof.

A surprising outcome as far as I am concerned, and one which as I noted, oddly was taken without the benefit of an AG Opinion.

Geert.

EU Private International Law, 4th ed. 2024, para 2.349.

 

The CJEU confirmed this morning in C‑339/22 BSH Hausgeräte GmbH v Electrolux AB (no language versions other than French and Swedish at the time of posting) that in principle Brussels Ia’s exclusive jurisdictional rule for registered intellectual property rights (A24(4) has no reflexive effect. [I suggest below that the reasoning extends to all of A24).

In doing so it did not follow the Opinions of its AG, which I reviewed here for the first one, and here for the second one. (There were two seeing as the case was reassigned to Grand Chamber).

The case in essence concerns two issues: the extent of the exclusive jurisdiction of the Article 24(4) court in infringement claims (as opposed to direct invalidity actions); and the question whether A24 works reflexively: ie whether the surrender of jurisdiction should also be applied in cases where the A24(4) court is not in an EU Member State – previously addressed in  IRNova f FLIR. In current case the CJEU frequently cites IRNova, confirming as it were that judgment’s matter of factly rejection of reflexivity.

The Court did, justifiably in my view, follow the AG on the issue of a stay between EU Member States courts, when the claim is one for infringement of an intellectual property right (‘IPR’), and the defendant raises a defence of illegality.

Like the AG the CJEU opts for a “narrow reading” of GAT v LUK: a stay of the infringement proceedings until the A24(4) court holds on validity, and then continued jurisdiction for the ‘infringement’ court. The CJEU

cites [43] the need for a restrictive interpretation of the exceptions to A4’s principled actor sequitur forum rei jurisdiction.

[44] and referring to the AG, a different interpretation would make full jurisdiction for the A24(4) court the rule rather than the exception (seeing as an invalidity defence is run of the mill in IPR infringement cases).

[46] particularly in Member States where civil procedure rules allow for the invalidity defence to be pleaded throughout the proceedings, it would lead to uncertainty of jurisdiction throughout the proceedings.

The question of extra-EU reflexive effect of Article 24(4) then. This is

kicked off [55] by a reference to the core objectives of Brussels Ia: lubrication of the internal market, and (later in the legislative history), part of the creation of a European judicial area. This is an internal EU objective ([55]: [BIa] est un régime de compétence interne à l’Union européenne.

[56] IRNova had already held that A24(4) does not apply where the patent at issue was granted by a third state; [57] A24(4) does not grant any jurisdiction, exclusive or not, to third States;

[59] BIa kicks in the moment there is an ‘international element’, whether the competition between courts is between EU Member States courts or third State courts (reference to IRNova which however at this point had itself referred to Owusu: Owusu rules! ) and [61] in principle a Member State court may well have jurisdiction on the basis of A4 BIa, like precisely in Owusu[ [67] the Court remarks that the 1974 Munich Patent Convention does not dislodge this jurisdictional finding when a third country patent is involved;

[62] ff A73 BIa may lead to alternative fora, either by way of a multilateral agreement such as the Lugano Convention, or through bilateral agreement entered into force before the Regulation; neither applies in the case at issue.

[65] finally A33-34 may lead to a stay issued by the Member State court under the conditions laid down in those Articles: again: these conditions have neither been met nor applied in the case at issue.

[70] now specifically refers to Owusu, to then [71] ponder whether the public international law principle of non-interference in other States’ domestic affairs (one assumes the English translation will use  the notion of ‘comity’) alters things. [72] ff while the EU Member State seized of the infringement claim, will also have jurisdiction to hold on the validity of the third country’s patent (and will have to exercise such jurisdiction other than in the bi-or multilateral Convention scenario, or within the confines of A33-34), such finding of (in)validity will only have effect inter partes: an erga omnes (in)validity finding can only be issued by the third State’s courts.

Conclusion [76]:

 Il ressort de l’ensemble des considérations qui précèdent qu’il y a lieu de répondre à la troisième question que l’article 24, point 4, du règlement Bruxelles I bis doit être interprété en ce sens qu’il ne s’applique pas à une juridiction d’un État tiers et, par conséquent, ne confère aucune compétence, exclusive ou non, à une telle juridiction en ce qui concerne l’appréciation de la validité d’un brevet délivré ou validé par cet État. Si une juridiction d’un État membre est saisie, sur le fondement de l’article 4, paragraphe 1, de ce règlement, d’une action en contrefaçon d’un brevet délivré ou validé dans un État tiers dans le cadre de laquelle est soulevée, par voie d’exception, la question de la validité de ce brevet, cette juridiction est compétente, en application de cet article 4, paragraphe 1, pour statuer sur cette exception, sa décision à cet égard n’étant pas de nature à affecter l’existence ou le contenu dudit brevet dans cet État tiers ou à entraîner la modification du registre national de celui-ci.

An important de lega lata finding, supported as I had discussed in my earlier posts, by many arguments. Whether the Commission may want to propose de lege ferenda other solutions, is a different call.

The case in principle applies to A24(4) only. Its reasoning however in my view extends across the A24 board.

Geert.

EU Private International Law, 4th ed. 2024, 2.217 ff.

 

https://x.com/GAVClaw/status/1894317278503543192

 

 

 

 

 

A quick note on Hugues Falys, FIAN, Greenpeace and Ligue des droits humains v Total Energies SE (domiciled at France), in which submissions are being exchanged and hearings are scheduled for 19 and 26 November 2025. A summary of the claim is reported here. In essence, the Belgian Farmer is seeking damages for harm done to the farming business due to climate change, and an injunction seeking to prohibit Total form further investing in fossil fuel operations.

The case has been lodged with the commercial court at  Doornik /Tournai, one assumes the territorially relevant court on argued locus damni grounds. Of interest is that an appeal will be heard at the Court of Appeal at Bergen /Mons, which has a specialised environmental chamber.

It is the kind of claim in which one can imagine the corporate defendant trying to outgun the claimant on the private international law issues, here: locus damni /locus delicti commissi jurisdiction under Article 7(2) Brussels Ia, and applicable law under lex ecologia – Article 7 Rome II, cq impact of Article 4 Rome II.

Re the jurisdictional issues see likely Total use of an argument which I flagged here: viz an emerging corporate strategy to deflect A7(2) forum damni jurisdiction, the argument that a causal link between the damage and the alleged shortcoming of the defendant needs to be shown in the claim form itself for it to ground jurisdiction.

Geert.

 

On 12 December 2024 the University of Milan hosted a conference on The Enforcement of the ESG Principles in a Transnational Dimension: Jurisdiction and Applicable Law, under the scientific direction of Stefania Bariatti, Luigi Fumagalli, Zeno Crespi Reghizzi, Michele Grassi, Anna Liebman.

I was asked to address jurisdictional issues for environmental law claims, and promised to upload my speaking notes the next day. Err, that turned out to be a bit later for I entirely forgot – and have now remembered. Here are the notes.

Geert.

 

The CJEU held earlier this morning in C‑393/23 Athenian Brewery SA, Heineken NV v Macedonian Thrace Brewery SA (no language versions available at the time of posting than Dutch and French).

My post on Kokott AG’s Opinion is here. The AG all in all supported a ready acceptance of forum connexitatis in competition law cases – in the case at issue a follow-on damages claim, filed in the mother corporation’s domicile, jointly against the daughter against whom a national competition authority had found a competition law infringement.

The Court is somewhat more cautious.

[26] The finding in CDC that A8(1)’s requirement of ‘same situation of law and fact’ is presumed to be met when various corporations have been held by a Decision of the European Commission to have violated competition law and are now pursued in the A4 court of one of them, also applies [27] when a mother and daughter corporation are pursued on the assumption they are part of one and the same economic unity. Once that unity established, it leads to joint and several liability in EU competition law [29].

[30-31] The risk of irreconcilable judgments  increases in the event of bifurcation of claims against the mother corporation and related undertakings when it is not the EC but rather a national competition authority which has found an infringement seeing [32] as the Damages Directive 2014/104 only instructs national authorities to take a finding of infringement by another Member State as prima facie, not binding evidence of such infringement on their own territory.

[39] ff the economic unit theory in competition law can and ought to be extended to follow-on damages claims so as to preserve the effet utile of EU competition law.

[41] ff focusing then on Brussels Ia, the national court’s jurisdictional assessment in the context of A8(1) is not one of intense engagement with the facts let alone the merits of the claim. [43] The claims by the defendant must be given proper attention however the court seized can presume that the information furnished by the claimant as to the alleged tort, is correct.

[45] all in all, the room for manoeuvre for the court seized in the context of an A8(1) claim aimed at joint and several liability, is limited to assessing whether decisive influence by the mother corporation on the related corporation, is excluded. Hence [46] the defendant corporations must be given the opportunity, at the jurisdictional level, to show only that

either the mother corporation neither directly nor indirectly holds all or almost all of the capital of the related undertaking, or

that it did not hold decisive influence despite holding all or almost all of the capital.

In summary therefore while the court seized in a claim for joint and several liability will not be able to hold a mini trial on the alleged tort, it must engage with the corporations’ arguments on capital control and /or decisive influence.  That is not a large window for extensive delay and argumentation yet neither is it the kind of swift A8(1) check which in my view the AG had in mind in her opinion.

Geert.

EU Private International Law, 4th ed. 2024, 2.516.

 

Servis-Terminal LLC v Drelle [2025] EWCA Civ 62 is an interesting case highlighting the difference between recognition and enforcement, and the circumstances in which one may not need formal recognition of a foreign court’s finding, in order effectively to enforce that finding. 

Can a bankruptcy petition be presented when payment ordered by foreign Court has not been made yet foreign judgment has not been sought to be enforced? The first instance judge had held [Drelle v Servis-Terminal LLC [2024] EWHC 521 (Ch)] that the fact that the Judgment had not been the subject of recognition proceedings in this jurisdiction did not prevent it from being the basis of a bankruptcy petition. 

Newey LJ [40], reversing, confirms that “(p)lainly, a foreign judgment can be determinative on a point even in the absence of recognition or registration.” Referring to Dicey Rule 45, the Court of Appeal recalls that as a general principle a foreign judgment “has no direct operation in England” and [39] “[a] judgment creditor seeking to enforce a foreign judgment in England at common law cannot do so by direct execution of the judgment” but “must bring an action on the foreign judgment”. Lord Justice Newey then uses a sword and shield analogy: [41]

The principle that a foreign judgment “has no direct operation in England” reflects the common law’s aversion to enforcing a foreign exercise of sovereign power. As Professor Briggs has explained, “if a foreign adjudication and judgment is understood as being an act of state sovereignty, … it is regarded as completely effective within the territory of the sovereign, and as completely unenforceable outside it”: see paragraph 21 above. That logic suggests that any use of an unrecognised and unregistered judgment as a “sword”, including presentation of a bankruptcy petition founded on it, is objectionable.

The ‘revenue rule’ (famously and extensively entertained in SKAT) [42]

has a similar root. Professor Briggs referred to it as “a particular manifestation of a more fundamental rule, that an assertion or exercise of the sovereign right of a foreign state will not be enforced by an English court”: see paragraph 21 above. In Solo Partners, Lord Lloyd-Jones thought that the “revenue rule” was to be explained on the basis that “enforcement of a claim for taxes is but an extension of the sovereign power which imposed the taxes, and … an assertion of sovereign authority by one state within the territory of another, as distinct from a patrimonial claim by a foreign sovereign, is (treaty or convention apart) contrary to all concepts of independent sovereignties”: see paragraph 20 above.

Further authorities re discussed however Newey LJ’s mind is firm on the ‘shield and sword’ issue: [55] an unrecognised foreign judgment, which …involves an exercise of sovereign power [similar to a foreign tax not giving rise to a debt that can be the foundation of a bankruptcy petition] cannot form the basis of such petition. Of note! Geert. https://x.com/GAVClaw/status/1886740770033438751

A short note (on the day the UKSC appeal in MSC Flaminia is being heard) on the CJEU judgment in C‑188/23 Land Niedersachsen v Conti  11. Container Schiffahrts-GmbH & Co. KG MS ‘MSC Flaminia’.

The Court essentially followed the Opinion of Capeta AG which I discussed here. The operative part reads

Article 1(3)(b) of Regulation (EC) No 1013/2006 of the European Parliament and of the Council of 14 June 2006 on shipments of waste

must be interpreted as meaning that the exclusion from the scope of that regulation that that provision provides for, pertaining to the waste generated on board a ship following damage sustained by that ship on the high seas until that waste is offloaded in order to be recovered or disposed of, no longer applies to the waste which remains on board that ship in order for it to be shipped, together with that ship, for recovery or disposal, after part of that waste has been offloaded in a safe port in order to be recovered or disposed of, that interpretation being in conformity with Article 1(4) of the Convention on the control of transboundary movements of hazardous wastes and their disposal, signed in Basel on 22 March 1989, approved on behalf of the European Economic Community by Council Decision 93/98/EEC of 1 February 1993.

The CJEU applies the VCLT’s interpretative matrix holding it leads to the Basel Convention having to be applied teleologically, and it also reminds us [58] of the ling-standing CJEU authority that “in interpreting a provision of EU law, it is necessary to consider not only its wording but also its context and the objectives pursued by the legislation of which it forms part”. It then essentially repeats the AG’s lines of analysis that while exemption from notification etc may be justified in the light of the immediate aftermath of an incident at sea, but is no longer justified once the ship had docked and the captain etc can properly assess the various implications of what has happened.

All in all a sensible judgment.

Geert.

Handbook of EU Waste Law, 2nd ed. 2015, Oxford, OUP, Chapter 3, 3.27 ff.

I reviewed the first instance judgment in Clifford Change v SocGen here. Soc Gen have unsuccessfully appealed, see Clifford Chance LLP & Anor v Societe Generale SA (Rev1) [2025] EWCA Civ 14, with Phillips LJ not taking up much space to do so.

Viz the question whether Clifford Change LLP was bound, he holds [46] that the pleaded basis of the core of SocGen’s appeal on this aspect is that the Judge erred as a matter of interpretation (emphasis in the original) of the Framework Agreements, asserting that the Judge failed to give effect to the true intention of the parties (ditto) to those agreements that all Clifford Chance entities would be bound by their terms. [47] ‘However, it is entirely clear that the Judge did not decide the question of whether CC LLP was bound by the Framework Agreements as a matter of interpretation, but on the basis that SocGen did not have a good arguable case that CC LLP was, or became, a party to them.’

In other words SocGen’s appeal was held to be questioning the judge’s factual findings on authority to bind parties, findings which it was not allowed to challenge in the appeal. Entirely obiter, Phillips LJ does review those findings [57] ff, holding obiter [60] that SocGen has failed to demonstrate that that evaluation was plainly wrong.

On Clifford Chance Europe being bound, the grounds of appeal are as follows ([65-66]):

SocGen first challenges the Judge’s assumption that there is no substantive claim against CC Europe. SocGen points out that the letter of claim addressed to CC Europe asserted a claim on the basis that CC Europe was the “dominus litis”, a French law claim based on the concept that CC Europe had a supervisory role in relation to the conduct of the Goldas Litigation by CC LLP. SocGen further emphasises that the Judge did not have evidence of French law in that regard, and that in any event the pleadings in the French proceedings have not closed. SocGen contends that if CC Europe wishes to obtain a negative declaration in respect of its liability for such a claim, it is contractually obliged to do so in France, where proceedings on the same issue are already underway.

The second challenge is to the Judge’s concern that staying CC Europe’s claim in this jurisdiction would lead to a multiplicity and/or a fragmentation of proceedings. SocGen points out that there is already and will continue to be a multiplicity of proceedings, pointing out that (i) that position was caused by the respondents’ decision to seek negative declarations in England when proceedings were being brought in France; and (ii) such multiplicity was foreseeable by the parties when (contrary to SocGen’s case) CC LLP was implicitly retained separately and on different terms as to governing law than had been agreed between CC Europe and SocGen.

However Phillips LJ holds [67] that the Judge was right to find that there are strong reasons not to stay CC Europe’s claim in E&W:

There is no doubt that SocGen’s primary and substantive claim is against CC LLP, being the firm that was retained in relation to the Goldas Litigation and whose actions or inactions are now alleged to have been negligent. That is apparent from the letter of claim addressed to CC Europe, all the faults and negligence alleged being those in the conduct of the Goldas Litigation by CC LLP. The Judge determined that England is the appropriate forum for determination of that dispute. I accept that the Judge may have gone too far in concluding (at this stage and on the evidence before him) that SocGen does not have a genuine claim against CC Europe under French law. But even if there is some parasitic claim against CC Europe based on a “supervisory” role (SocGen having failed to adduce any evidence as to the existence of such a claim, let alone to explain its nature and effect), it is plainly desirable that it be determined in the same proceedings as the dispute between SocGen and CC LLP, namely, in these proceedings in the appropriate forum. There are strong reasons why CC Europe should not be debarred from seeking a declaration together with CC LLP in England, the effect of staying its claim being to require CC Europe to defend itself separately in France in respect of the very actions of CC LLP which will be the subject of these proceedings.

The first hearing in Soc Gen’s French proceedings took place in March 2024. [68] the Court of Appeal suggests a possible course of action for the French Proceedings, both on behalf of SocGen and the French court itself:

It is true that the French proceedings may continue notwithstanding the Judge’s order, and that may be a result of Clifford Chance entities having bifurcated their contractual relations with SocGen and having then initiated proceedings in this jurisdiction. But that is not a sufficient reason to fragment these proceedings before the plainly appropriate forum. There must be a realistic expectation that SocGen, and indeed the French court, will be reluctant to duplicate in France proceedings in England as to the alleged negligent conduct by English solicitors of Commercial Court proceedings in London.

Geert.

 

A quick note on Playtech Software ea v Games Global Ltd ea [2024] EWHC 3264 (Ch) in which Thompsell J discussed ia Rome II in an application for service out (of the jurisdiction). 

As confirmed by Arnold LJ in Shenzhen Senior Technology Material Co Ltd v Celgard, LLC [2020] EWCA Civ 1293 [51]  as a matter of English law, claims for breach of equitable obligations of confidence are not claims in tort: yet that does not rule out that under Rome II, they are non-contractual obligations whose lex causae is determined under that Regulation (see also Autostore).

Thompsell J in casu [100]:

Breach of confidence is a species of unfair competition within Article 6 of the Rome II Regulation and Article 6(2) applies because Playtech’s claims are concerned with alleged acts of unfair competition affecting exclusively the interests of a specific competitor. In these circumstances, Article 6(2) provides that “Article 4 shall apply“. The consequence is that Article 4, which is concerned with the law applicable to a non-contractual obligation arising out of a tort, applies to determine the applicable law. This is despite breach of confidence not being a claim in tort for the purposes of English law.

Note that Article 4 Rome II unlike Article 6, contains an overall escape clause. [103] with reference to Celgard, the judge confirms that under Article 4(1) the connecting factor is the direct damage caused by the wrongdoing. Whether the relevant acts also had an effect, and may be regarded as having been carried out, in the United Kingdom, is not the relevant factor.

The judge [106] upholds claimant’s argument that it is facing competition to its business, which it conducts in the UK, in relation to its sales from at least one game developed by defendant, that has a feature that has relied on its confidential information, allegedly spirited away by a former employee of one of Playtech’s sister companies. The direct damage therefore is held to have been suffered in the jurisdiction and the tort gateway (see also UKSC Brownlie) for jurisdiction satisfied.

Geert.

EU private international law, 4th ed 2024, Heading 4.6.2.

https://x.com/GAVClaw/status/1869462089934450944