Flux Belges et Lux

The precise application of the Brussels I Recast’s exclusive jurisdictional rules, remains a balancing exercise. Being an exception to the Regulation’s’ overall preference for the domicile of the defendant, they have to be given a narrow reading. On the other hand, they serve what the Regulation sees as being important purposes of preference of one particular jurisdiction over another, hence the exception cannot be so narrowly construed as to lose purpose. In C-341/16 Hanssen, the CJEU held last week and confirmed Saugmansgaard ØE AG’s Opinion of the summer.

Does an action seeking an order requiring the person formally registered as proprietor of a Benelux mark to make a declaration to the OBPI that she has no entitlement to the mark and that she waives registration as the proprietor of that mark, fall within the scope of Article 24(4) of Brussels I Recast? No, it does not:  the main proceedings in this case do not relate to the validity, existence or lapse of the trade mark or an alleged right of priority by reason of an earlier deposit. They are solely concerned with whether the proprietor of the contested mark is Ms Prast-Knipping or Hanssen Beleggingen, which must be determined on the basis of the legal relationship existing between the parties concerned: Hanssen Beleggingen submits that, as a result of a chain of transfers of the contested mark, it has become the actual proprietor of the rights to the contested mark. Existence etc. of the trademark is not at issue.

The question of the individual estate to which an intellectual property right belongs is not, generally, closely linked in fact and law to the place where that right has been registered (at 37): hence the raison d’être of Article 24(4) is not engaged.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.6, Heading 2.2.6.7

I have often argued that the European Commission and by extension the EU’s Insolvency Regulation is wrong in taking as a starting point that forum shopping in insolvency matters as a rule needs to be discouraged. This aversion towards forum shopping is one of the main reasons for the UK and other Member States to keep Schemes of Arrangement and other restructuring devises well out off the reach of the Regulation. (The Brussels I recast for instance allows for much more strategic choice of court use).

Thank you Debra Dandeneau for flagging the US Bankruptcy Court, Southern District of New York’s decision in Ocean Rig. The Court essentially argues that to use forum shopping in a restructuring /insolvency case is absolutely acceptable provided it is done in good faith, particularly with a view to maximizing chances of survival and /or maximal recovery by the creditors. Note that the Court, in determining COMI for the various companies in the group, pays specific attention to the ascertainability, by third parties, of COMI.

A judgment to be applauded. And this posting, incidentally, is the 500th on this blog. To 1000 and beyond!

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.1, Heading 5.4.6.

Twitter injunctions – Twinjunctions if you like, rather like Facebook or Google Removal orders, provide classic scenarios for the consideration of the territorial scope of injunctive and enforcement proceedings. Michael Douglas has great review of [2017] NSWSC 1300 X v Twitter. On 28 September 2017, the Supreme Court of New South Wales awarded its final injunction with global reach, directed towards Twitter Inc (based at CAL) and its Irish counterpart, Twitter International Company.

Plaintiff requested removal of tweets and accounts, and also requested ia that Twitter disclose information relating to the identity of a troll, flagging a potential action against that person for breach of confidence. Twitter refused, appealing to its privacy policy. The eventual injunction went very far indeed, as Michael details. Of the issues under discussion, of interest to this post are the jurisdiction to grant injunctive relief against foreign defendants who do not appear; and the appropriateness of injunctions expressed to operate ‘everywhere in the world’.

Now, what is refreshing about Pembroke J’s review of the issues is his non-doctrinal analysis of the issue of jurisdiction. He emphasises that there is a long history of courts of equity making in personam orders that are intended to operate extra-territorially (the Court’s jurisdiction is one in equity); (at 40) that Twitter unlike other defendants may disagree with the ruling but will not seek to avoid its social responsibility; that there is a public interest in issuing the worldwide order (and in enforcing it: Pembroke J flags that there are Australia-based assets against which enforcement may be sought); and that given his experience with Twitter, it can be expected to use its best endeavours to give effect to the proposed orders, despite its objection that it is not feasible to pro-actively monitor user content.

Eventually of course the trouble with such an assessment, without consideration of wider issues of public and private international law, is that the issuing, or not, of orders of this kind by the courts, depends on the defendant’s attitude towards compliance. That is hardly a solution serving equal access to the law or indeed equity.

Geert.

Thank you Stephen Pittel for alerting me to 2017 SCC 34 Google Inc. v Equustek Solutions Inc. – alternative review ia here, and apologies for my late reporting: the case came to my attention late June. I have of course posted before on various aspects of worldwide removal and other orders, particularly in the context of the EU’s ‘right to be forgotten’.

Equustek sued Datalink for various intellectual property violations and found alleged insufficient co-operation from Google in making it difficult for users to come across Datalink’s offerings. Google seemingly did not resist jurisdiction, but did resist the injunction and any ex-Canada effect of same.

The majority in the case however essentially applied an effet utile consideration: if as it found it did, it has in personam jurisdiction over defendant, an extraterritorial reach is not problematic if that is the only way to make the order effective. An order limited to searches or websites in Canada would not have addressed the harm: see Stephen’s verbatim comment (referring to para 38 of the judgment).  Google was ordered to de-index globally.

Dissenting opinions suggested Datalink could be sued in France, too, however this I suppose does not address the effet utile consideration of the majority.

Geert.

As Bot AG put it, Joined Cases C-24 and 25/16 Nintendo v Big Ben gave the Court an opportunity to  determine the territorial scope of a decision adopted by a court of a Member State in respect of two co-defendants domiciled in two different Member States concerning claims supplementary to an action for infringement brought before that court.

The case concerns the relation between Brussels I and Regulation 6/2002 – which was last raised in the recent BMW case, particularly as for the former, the application of Article 6(1) (now 8(1))’s rule on anchor defendants. And finally the application of Rome II’s Article 8(2): the identification of the ‘country in which the act of infringement was committed’. In this post I will focus on the impact for Brussels I (Recast) and Rome II.

The Landgericht held that there had been an infringement by BigBen Germany and BigBen France of Nintendo’s registered Community designs. However, it dismissed the actions in so far as they concerned the use of the images of the goods corresponding to those designs by the defendants in the main proceedings.

The Landgericht ordered BigBen Germany to cease using those designs throughout the EU and also upheld, without territorial limitation, Nintendo’s supplementary claims seeking that it be sent various information, accounts and documents held by the defendants in the main proceedings, that they be ordered to pay compensation and that the destruction or recall of the goods at issue, publication of the judgment and reimbursement of the lawyers’ fees incurred by Nintendo be ordered (‘the supplementary claims’).

As regards BigBen France, the Landgericht held that it had international jurisdiction in respect of that company and ordered it to cease using the protected designs at issue throughout the EU. Concerning the supplementary claims, it limited the scope of its judgment to BigBen France’s supplies of the goods at issue to BigBen Germany, but without limiting the territorial scope of its judgment. It considered the applicable law to be that of the place of infringement and took the view that in the present case that was German, Austrian and French law.

BigBen France contends that the German courts lack jurisdiction to adopt orders against it that are applicable throughout the EU: it takes the view that such orders can have merely national territorial scope. Nintendo ia takes the view that German law should be applied to its claims relating to BigBen Germany and French law to those relating to BigBen France.

Taking into account the objective pursued by Article 6(1) of Regulation No 44/2001, which seeks inter alia to avoid the risk of irreconcilable judgments, the existence of the same situation of fact must in such circumstances — if proven, which is for the referring court to verify, and where an application is made to that effect — cover all the activities of the various defendants, including the supplies made by the parent company on its own account, and not be limited to certain aspects or elements of them. If I understand this issue correctly (it is not always easy to see the jurisdictional forest for the many IP trees in the judgment), this means the Court restricts the potential for the use of anchor defendants in Article 8(1).

As for the application of Article 8(2) Rome II, at 98 and following inter alia analysis of the various language versions of the Article, the CJEU equates the notion ‘country n which the act of infringement is committed’ with the locus delicti commissi:  ‘it refers to the country where the event giving rise to the damage occurred, namely the country on whose territory the act of infringement was committed.‘ At 103: ‘…where the same defendant is accused of various acts of infringement falling under the concept of ‘use’ within the meaning of Article 19(1) of Regulation No 6/2002 in various Member States, the correct approach for identifying the event giving rise to the damage is not to refer to each alleged act of infringement, but to make an overall assessment of that defendant’s conduct in order to determine the place where the initial act of infringement at the origin of that conduct was committed or threatened.’

At 108 the Court rules what this means in the case at issue: ‘the place where the event giving rise to the damage occurred within the meaning of Article 8(2) of [Rome II] is the place where the process of putting the offer for sale online by that operator on its website was activated’.

At 99 however it warns expressly that this finding must be distinguished as being issued within the specific context of infringement of intellectual property rights: Regulation 6/2002 as well as Rome II in its specific intention for IP rights, aims to guarantee predictability and unity of a singly connecting factor. This is a very important caveat: for while this approach by the CJEU assists with predictability, it also hands means for applicable law shopping and, where the Court’s approach for locus delicti commissi in IP infringement extended to jurisdiction, for forum shopping, too.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2; Chapter 3.

Hang on a minute. Were not the EU and its Member States supposed to be precaution obsessed? Don’t the EU and its Member States alike adopt bans on all things GMO for no other reason than that they simply do not want them? How then can the CJEU hold in C-111/16 Fidenato that Member States do not have the option of adopting, in accordance with Article 54 of Regulation 178/2002, the EU’s general food safety law, interim emergency measures solely on the basis of the precautionary principle?

The reason lies in pre-emption, aka exhaustion, and in the balance between EU and national risk management which EU law strikes in the specific field of GM cultivation. Of note is that in the meantime most biotech companies have given up on cultivation of GM varieties in the EU.

As extremely well summarised by Bobek AG in his Opinion in the case, the formulation of the relevant EU legislation is such as to provide that post EU authorisation (here: of genetically modified maize MON 810) Member States may only take emergency measures where the continued cultivation of the approved products is ‘likely to constitute a serious risk’. While the precautionary principle may play its role fully at the level of the EU’s risk management preceding authorisation, and indeed post such authorisation, too, Member States are given less leeway in their national emergency measures. In prescribing these rules, the EU safeguards the harmonised approach to the GM varieties at issue.

(Mr Fidenato nb is something of a cause celebre among the GM community). Please note, again, that the case concerns the growing (‘cultivation’) of GM crops. Not the import, export or use of products containing GM.

Finally it is important to point out that the Court does not equate precaution with the absence of science. It is the degree of scientific certainty here which is relevant, not the absence ‘v’ presence thereof.

Geert.

Under the leadership of prof Hess, MPI Luxembourg have collated a treasure chest of data on what, in practice, continues to hold up recognition and enforcement of judgments in the EU Member States. The Study, released last week, was conducted for the European Commission. Its main conclusion suggests that in particular the service of documents could do with streamlining.

That all in all modest recommendation suggests that the very variety of civil procedure rules in the EU Member States in and of itself is not the main obstacle in recognition and enforcement. I insert a big caveat here for I have so far only read the exec summary and the main recommendations, however if they are anything to go by, the study in effect has to serve as a strong argument against more harmonisation of civil procedure rules at the EU level.

Debate no doubt to be continued.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.

When I cannot add anyting sensible to others’ analysis, I let theirs speak for itself. Enjoy.

Corporate Finance Lab

On September 14th 2017, the CJEU ruled on the Panayi Trust case (Case C-646/15), to which we have already referred in an earlier blog post. The CJEU’s ruling in the Panayi Trust case will provide ample opportunity for debate and reflection in the near future, especially with Brexit coming into view.

However, in this blog post we will restrict ourselves to a brief presentation of the case and some first observations regarding the question whether trusts can indeed come under the scope of the freedom of establishment.

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Sabbagh v Khoury at the High Court was the subject of a lengthy review in an earlier post. The Court of Appeal has now considered the issues at stake, in no lesser detail.

In line with my previous post (readers unfamiliar with it may want to refer to it; and to very good Hill Dickinson summary of the case), of particular consideration here is the jurisdictional test under (old) Article 6(1) Brussels I, now Article 8(1) in the Recast, in particular the extent of merits review; and whether the subject matter of the claim comes within the succession exception of Article 1(2)(a) of the Brussels I Regulation.

As for the latter, the Court, after reviewing relevant precedent and counsel argument (but not, surprisingly, the very language on this issue in the Jenard report, as I mention in my previous post) holds in my view justifiably that ‘(t)he source of the ownership is irrelevant to the nature of the claim. ..The subject matter of the dispute is not whether Sana is an heir, but whether the defendants have misappropriated her property.‘ (at 161).

With respect to the application of Article 6(1) – now 8(1), the majority held in favour of a far-reaching merits review. Lady Justice Gloster (at 166 ff) has a minority opinion on the issue and I am minded to agree with her. As she notes (at 178) the operation of a merits test within Article 6(1) does give rise to risk of irreconcilable judgments, which can be demonstrated by reference to the present facts. She successfully, in my view, distinguishes the CJEU’s findings in Kolassa and in CDC, and the discussion at any rate one would have thought, merits CJEU review.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.12.1

I am in Wuhan 2 1/2 days this week, where I am pleased to be engaging in three of my favourites: a class on environmental law, at Wuhan University’s unparalleled Research Institute of Environmental Law; a session on best practices for PhD research at same; and a conference presentation on conflict of laws at the solidly A+++ ‘Global Forum’ of the Chinese Society of Private International Law and Wuhan University’s Institute of International Law.

Anyways, on my way I inter alia wrote following intro to a volume on Waste to Energy, edited by Harry Post. I thought would share.

The European Union purports to be moving towards a Circular Economy (CE). If recent experience in environmental and energy law is anything to go by, the rest of the world will look with interest to its progress. It is fashionable to say that in the CE ‘waste’ will no longer exist. This is however not relevant beyond semantics. What really matters is how the EU and others after or before it, create the economic and regulatory environment that enables the innovation which a CE requires.

Regulatory circles have ample sympathy for business implementing and bringing to market the many exciting ideas which engineers continue to develop. At the same time one must not be blind to the excess which unchecked engineering imagination does have on society, in all pillars of sustainable development: social, economic and environmental. We must not compromise on a robust regulatory framework which looks after what public health and environmental protection require: two Late Lessons from Early Warnings reports tell us that we would do so at our own peril. However we do have to question continuously whether our existing laws are best practice in reaching that desired outcome. It would be a particular affront if innovative products and services that truly may boost environmental protection, were not to be rolled-out because of anxiety over their legal status.

In an innovative environment, legal certainty is an important driver for success. Lack of clarity over the legal framework and /or the regulators’ implementation of same, leads industry either to seek out and concentrate development on those States with lax or flexible regulators only; or to stick to old and trusted products.

The European Union is particularly suited to providing that clarity. On the scientific front, by investing in research and development, especially at SME and specialised spin-offs level. On the regulatory front, it would do well to work out a regime which enables innovators to query enforcement agencies about the legality of a new product or service line without the fear of subsequently being disciplined for it.

This volume is a scholarly effort to assist with both strands of the exercise. It is to be much commended for that effort and I for one am sure both industry and legal scholars will find its content encouraging.

Geert.

I discussed this case with my students the day the judgment came out. Copy of the judgment has travelled with me far and wide. Yet I only now find myself getting round to posting on Anas v Facebook, at the courts at Würzburg back in February. Mr Anas came from Syria as a refugee and took a famous selfie with Frau Merkel. The photo later came to haunt him as fake news sites used it in connecting with accusations of terrorism. Mr Anas thereupon sued Facebook, requesting it to act more swiftly to remove the various content reporting on him in this matter. The Würzburg court obliged. I understand that in the meantime Mr Anas has halted further action against FB which I am assuming includes the appeal which FB must have launched.

Now, the interest for this blog lies not in the issue of fake news, but rather the jurisdictional grounds for the ruling. Mr Anas sued Facebook Ireland, not Facebook Inc. The latter, I would suggest, he might have done on the basis of the Brussels I Recast’s provisions on consumer contracts – albeit that the conditions for that title might not be fulfilled if Mr Anas became a FB user in Syria.

The court did not entertain the consumer title. It did uphold its jurisdiction on the basis of Article 7(2) of the Recast, as lex loci damni. (But without consideration of the Shevill limitation). Awkwardly, it then lest my German fails me, goes on to determine its internal jurisdiction on the basis of German civil procedure law. Plaintiff was domiciled in Berlin; not Würzburg. The judgment therefore turns into the proverbial cake and eating it: Article 7(2) does not just lay down jurisdiction for a Member State: it also identifies the very court in that MS that has jurisdiction. It cancels out internal rules of jurisdiction. With Mr Anas’ domicile in Berlin, Wurzburg as locus damni is not immediately obvious.

German speakers, if I am not reading this right please do comment.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.

In Case C-372/16 Sahyouni SAUGMANDSGAARD ØE Opined Friday last (Opinion not yet available in EN at the time of writing of this post; the curia press release on the case helps). The case concerns the scope of application of Rome III, Regulation 1259/2010 (on enhanced co-operation Regulation on divorce and legal separation), as well as the application of its Article 10.  This Article inserts the lex fori for the lex causae, where the lex causae as identified by the Regulation makes no provision for divorce or does not grant one of the spouses equal access to divorce or legal separation on grounds of their sex.

In the previous Sahyouni Case C‑281/15, the request was considered inadmissible for lack of factual beef to the bone to allow the Court to apply its Dzodzi case-law (Joined Cases C‑297/88 and C‑197/89). In that case, the Court had held that the authors of the Treaty did not intend to exclude from the jurisdiction of the Court requests for a preliminary ruling on a provision of EU law in the specific case where the national law of a Member State refers to the content of that provision in order to determine rules applicable to a situation which is purely internal to that State and that, on the contrary, it is manifestly in the interest of the EU legal order that, in order to forestall future differences of interpretation, every provision of EU law should be given a uniform interpretation irrespective of the circumstances in which it is to be applied.

In the case at hand, Rome III is not generally applicable to decisions on divorce and legal separation issued by the authorities of third States. German residual private international law on the matter, however, makes it so applicable.

SAUGMANDSGAARD ØE first of all opines that the national court now does give the CJEU enough information for it to rule on the case. Contrary to what the German legislature
assumed, however, the AG suggests Rome III does not cover divorces which are declared without a constitutive decision of a court or other public authority, such as a divorce resulting from the unilateral declaration of a spouse which is registered by a religious court. Note that the AG for this purpose employs lex fori in the sense of EU law (the Regulation and its preparatory works), to determine whether such divorce is ‘private’ or not; not as might be considered an alternative in the case at hand, Syrian law. Those of us with an interest in Vorfrage may find this interesting.

Next, the AG does complete the analysis should the Court disagree with his view on scope of application. The question whether access to divorce provided for by the foreign law is discriminatory (this is the test of the aforementioned Article 10) must, in the view of the AG, be assessed in the abstract, and not specifically in the light of the circumstances of the case. Therefore, it suffices that the applicable foreign law be discriminatory by virtue of its content for it to be disapplied. This AG suggests that the EU legislature considered that the discrimination at issue, namely that based on the sex of the spouse, is so serious as to warrant unqualified rejection, without the possibility of exception on a case-by-case basis, of the entirety of the law which should have been applied in the absence of such discrimination. This interpretation differs from the standard application of another well-known mechanism, that of ordre public, where any assessment needs to be based on a case-by-case basis.

Finally, the AG examines whether the fact that the spouse discriminated against
possibly consented to the divorce allows the national court not to disapply the foreign law despite its discriminatory nature, and therefore to apply that law. He suggests that question be answered in the negative. The rule set out in Article 10 of the ‘Rome III’ Regulation, which is based on compliance with values considered to be fundamental, is mandatory in nature and therefore, as a result of the intention of the EU legislature, does not fall within the sphere in which the persons at issue can freely waive the protection of their rights.

A judgment to look out for.

Geert.

I reported earlier on Saugmandsgaard ØE’s opinion in Cases C‑168/16 and C‑169/16, Nogueira et al and Osacar v Ryanair. The CJEU yesterday held and as I put it in immediate comment on the case reported in the FT, the Court’s view clearly resonates with the current mood against social dumping.

The case here ostensibly concerns jurisdiction only, however the Rome I Regulation includes mandatory protection of the employee guaranteed by the laws of the same place where (s)he habitually carries out his /her work. Hence a finding in the context of the Brussels I Recast inevitably has an impact on applicable law, too.

Firstly the Court has no mercy for the limiting choice of court agreement in the relevant contracts (at 53): in the case of employment contracts, a jurisdiction clause cannot apply exclusively and thus prohibit the employee from bringing proceedings before the courts which have jurisdiction under the protective regime of the Brussels I Recast.

The Court then essentially reiterates its AG: The concept of ‘place where the employee habitually carries out his work’ must be interpreted as referring to the place where, or from which, the employee in fact performs the essential part of his duties vis-à-vis his employer (at 59). Referring to its earlier case-law, the Court reiterates that national courts must, in particular, determine in which Member State is situated (i) the place from which the employee carries out his transport-related tasks, (ii) the place where he returns after his tasks, receives instructions concerning his tasks and organises his work, and (iii) the place where his work tools are to be found. (at 63). The place where the aircraft aboard which the work is habitually performed are stationed must also be taken into account (at 64).

The CJEU’s judgment then zooms in particularly on the notion of ‘home base’, a term used in relevant EU civil aviation law. The concept of ‘place where, or from which, the employee habitually performs his work’ cannot be equated with any concept referred to in another act of EU law (at 65).  However that does not mean that it is irrelevant to determine the place from which an employee habitually carries out his work. In fact, the Court held, the concept is likely to play a significant role in the identification of place of habitual employment in cases as these (at 69). In fact, taking account of the facts of each of the present cases, it would only be if applications, such as those at issue in the main proceedings, were to display closer connections with a place other than the ‘home base’ that the relevance of the latter for the identification of ‘the place from which employees habitually carry out their work’ would be undermined (at 73).

Nationality of the aircraft is summarily dismissed at 75, as being of any relevance at all.

At 62, the Court, importantly, also wars against fraudulent forum shopping: ‘That circumstantial method makes it possible not only to reflect the true nature of legal relationships, in that it must take account of all the factors which characterise the activity of the employee (see, by analogy, judgment of 15 March 2011, Koelzsch, C‑29/10, EU:C:2011:151, paragraph 48), but also to prevent a concept such as that of ‘place where, or from which, the employee habitually performs his work’ from being exploited or contributing to the achievement of circumvention strategies (see, by analogy, judgment of 27 October 2016, D’Oultremont andOthers, C‑290/15, EU:C:2016:816, paragraph 48 and the case-law cited).‘

The case now goes back to Mons howeer as has been reported, it is almost inconceivable for that court not to find Charleroi to be the place of habitual employment. Despite Ryanairs bravado, it is clear this judgment blows a hole in its regulatory strategy.

Geert.

(Handbook of) EU Private International Law, 2nd ed 2016, Chapter 2, Heading , Chapter 3, Heading 3.2.5.

Michael Broeders and Ulrike Verboom have excellent overview of the decision back in May by the Amsterdam Court of Appeal not to recognise the Russian liquidation order of 1 August 2006 regarding OAO Yukos Oil Company. The refusal to recognise is based on ordre public: in particular, a finding was made that the Russian order contravenes the principles of due process hence also ordre public. Reference was made in extenso to decisions by the European Court of Human rights against Russia in related cases in 2011 and 2014.

Michael and Ulrike also refer to previous case-law of the Dutch Supreme Court which held that on the basis of the lex concursus (here: Russian), there is no principled objection to the Russian trustee in bankruptcy to exercise his powers as such trustee in The Netherlands.

Geert.

Yummie: Dutch High Court asks the European Court of Justice for assistance in qualifying anti-avoidance /fraudulent conveyance mechanisms. (Guest blog in Dutch).

Corporate Finance Lab

De Nederlandse Hoge Raad stelde op 8 september het Europese Hof van Justitie enkele interessante prejudiciële vragen over de Peeters/Gatzen-vordering (ECLI:NL:HR:2017:2269). Voor hen die er het raden naar hebben wie die Peeters of Gatzen dan wel zijn, eerst een korte toelichting. De andere lezers kunnen gelijk naar de navolgende alinea’s scrollen.

In eerdere posts wezen we al op de actio pauliana als techniek van schuldeisersbescherming. Ze laat schuldeisers, en na faillissement de boedel, toe om handelingen niet-tegenwerpelijk te laten verklaren, mits voldaan is aan bepaalde voorwaarden. We noemen hier omwille van de bondigheid enkel de voornaamste twee:

• de ene voorwaarde is verhaalsbenadeling: het beslag op het schuldeisersvermogen wordt bemoeilijkt of uitgehold, bijvoorbeeld omdat de schuldenaar goederen wegschenkt aan vrienden;
• de andere voorwaarde is het zogenoemde subjectief element: de schuldenaar heeft de bestreden handeling verricht met “wetenschap van benadeling” of zelfs “bedrieglijke intentie”.

Soms is de pauliaanse niet-tegenwerpelijkheid…

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For your second conflicts reading of the day I thought I should serve something more substantial. In A (an Austrian company) v M (a company located in Luxembourg) the Austrian Supreme Court (Oberster Gerichtshof) had to decide on the determination of the locus delicti commissi in the event of infringement of copyright. M had effectively siphoned off to its website, some of A’s satellite broadcasts. Plenty of CJEU precedent is referred to (Hejduk; Austro Mechana; to name a few).

Thank you very much indeed Klaus Oblin for providing me with copy of the judgment – back in early June. Effectively, at issue was  the infringement of a duty to pay.  Klaus has excellent overview of the issues, of which the following are definitely worth highlighting. The Supreme Court justifiably of course emphasises autonomous interpretation of Article 7(2) Brussels I Recast. Yet autonomous interpretation does not provide all the answers. There are plenty of instances where locus delicti commissi is not easily identified, such as here.

The Oberster Gerichtshof seeks support in the Satellite Directive 93/83, but notes that the Directive includes no procedural clauses, let alone any regarding international jurisdiction (at 2.4.2. It refers to the German Bundesgerichtshof’s decision in Oscar). It then completes the analysis by reference to national law:

Section 42b(1) of the Act on Copyrights and Related Rights to classify breach of copyright as a tort (CJEU Kalfelis would have been a more correct reference) ; and

Section 907a(1) of the Civil Code) to identify the locus of the delicti commissi: because monetary debts in acordance with that section must be discharged at the seat of the creditor, the domestic courts at the Austrian seat of the collecting society have jurisdiction. In coming to its conclusion, the court (at 3.2) refers pro inspiratio to Austro Mechana, not just the CJEU’s judgment but also the ensuing national judgment.

Now, lest I am mistaken, in Austro Mechana the CJEU did not identify the locus delicti commissi: it simply qualified the harm arising from non-payment by Amazon of the remuneration provided for in Austrian law, as one in tort: at 52 of its judgment: it follows that, if the harmful event at issue in the main proceedings occurred or may occur in Austria, which is for the national court to ascertain, the courts of that Member state have jurisdiction to entertain Austro-Mechana’s claim. (emphasis added)

Given its heavy reliance on national law, I would suggest the judgment skates on thin ice. Reference to the CJEU seemingly was not contemplated but surely would have been warranted. Kainz is a case in point where locus delicti commissi was helpfully clarified by Luxembourg, Melzer one for locus damni.

Geert.

(Handbook of) European Private international Law, 2nd ed. 2016, Chapter 2, heading 2.2.11.2.

As I turn my attention to clearing the blog queue, a light posting to begin with. Kind of light, that is, because for the plaintiffs at issue of course the issue is not at all a laughing matter. I am assuming readers will be somewhat aware of the Duke and Duchess of Cambridge having taken action against ‘Closer’ (more precisely, the publishers, SAS Mondadori), for invasion of privacy after photos appeared of the couple relaxing poolside in a French private residence. The photos were taken with sniper lenses some distance away. Like everyone else, I have not seen the photos.

Following an earlier injunction the couple have now been awarded damages. I have not managed to locateactual text of either injunction (going back to 2012) or last week’s judgment on the substance of the matter. If any reader can assist, I would be most obliged.

I often use the case in my very introductory class of private international law for it illustrates a wide plethora of conflicts issues: why did the couple decide to sue in France rather than England where it easily would have standing; how do the injunction proceedings in particular illustrate enforcement issues; where do Gleichlauf, forum shopping etc. come in. I will not reveal all the ifs and buts here for it would spoil the fun for future classes. Conflicts buffs will see the attraction of the case for teaching purposes.

Geert.

Tobias Gosch has excellent overview of T v O (why o why do States feel the need the hide the identity of companies in commercial litigation) in which the Austrian Supreme Court (Oberster Gerichtshof) ruled on whether potential claims under the Austrian Commercial Agents Act (Handelsvertretergesetz) can be brought before an Austrian court even if the underlying agency agreement contains an arbitration clause and is governed by the laws of New York.

The contested part of the litigation, as Tobias writes, concerns the following: the Agent conducted the procurement of sea freight business in Austria and other countries of the European Union for the Principal. Whilst the territorial scope of the Agent’s activities complies with the conditions for the international overriding mandatory applicability of the compensation provisions of the Directive as set out by the ECJ in Ingmar, the procurement of business is not covered by the relevant definition in the Directive, which only refers to the sale or purchase of goods. Including the procurement of business therefore is a form of gold-plating and the national law’s decision to do so does not uncontestedly fall under the protection of overriding mandatory law. In other words it does not necessarily override parties’ choice of law and ensuing choice of court.

The judgment refers inter alia to Unamar to justify its direction. Rather like, as I reported at the time, the Belgian Supreme Court, the Austrian Supreme Court, too, fails properly to assess whether the Austrian legislator intended the Austrian provisions to be of overriding mandatory law character per Rome I: “1. Overriding mandatory provisions are provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under this Regulation.

The European Court of Justice’s general statement in Unamar that gold-plated provisions may fall under overriding mandatory law, looks set by national courts to be turned into a matter of fact priority.  That surely at some point ought to be disciplined by the CJEU.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 3, Heading 3.2.8.3.

Bobek AG opined mid July in C-194/16 Bolagsupplysningen OÜ on the application of the Shevill rule, as supplemented by e-Date advertising, to infringements of a company’s personality rights over the internet.  This is one of those Opinions where summaries fall much, much short of the contents of the original document and I should urge readers to consult the Opinion in full.

An Estonian company operating in Sweden was blacklisted for its allegedly questionable business practices on the website of a Swedish employers’ federation. The Advocate General dryly notes ‘(a)s inevitably happens in the era of anonymous internet bravery, universally known for its genteel style, subtle understanding, and moderation, the website attracted a number of hostile comments from its readers. The Estonian company brought an action before the Estonian courts against the Swedish federation. It complained that the published information has negatively affected its honour, reputation and good name. It asked the Estonian courts to order that the Swedish federation rectify the information and remove the comments from its website. It also requested damages for harm allegedly suffered as a result of the information and comments having been published online.

Can the Estonian courts assert jurisdiction to hear this action on the basis of the claimant’s ‘centre of interests’, a special ground of jurisdiction that the Court previously applied to natural persons, but so far not legal persons? If they can, then second, how should the centre of interests of a legal person be determined? Third, if the jurisdiction of the Estonian courts were to be limited to situations in which the damage occurred in Estonia, the referring court wonders whether it can order the Swedish federation to rectify and remove the information at issue.

The Advocate General suggests there are two novelties in the questions referred: a legal person (not a natural one) is primarily asking for rectification and removal of information made accessible on the internet (and only secondarily for damages for the alleged harm to its reputation). This factual setting, the AG suggests, leads to the question of how far the seemingly quite generous rules on international jurisdiction previously established in Shevill with regard to libel by printed media, and then further extended in eDate to the harm caused to the reputation of a natural person by information published on the internet, may be in need of an update. At the real root of course of the generous rules on jurisdiction for tort, lies the Court’s judgment in Bier. Bobek AG joins Szpunar AG in severely questioning the wisdom of the Bier rule in the age of internet publications.

Now, human rights scholars will enjoy the Advocate General’s tour d’horizon on whether and to what extend companies may enjoy human rights. On the whole I believe he is absolutely right in suggesting that there ought to be no difference between legal persons and natural persons when it comes to the very possession of personality rights (such as the right not to be libelled) and that neither is there any ground to distinguish between natural persons and legal persons when it comes to the jurisdictional consequences of upholding these rights.

Then, to the jurisdictional consequences (para 73 onwards): the AG suggests that ‘putting Shevill online’ (the AGs words) essentially means granting the forum to a large number of jurisdictions simultaneously, 28 within the European Union. That is because allegedly false or libelous information on the internet is instantly accessible in all Member States. Bobek AG suggests such multiplicity of fora stemming from the distribution criterion is very difficult to reconcile with the objective of predictability of jurisdictional rules and sound administration of justice enshrined in recital 15 of the Brussels I Recast Regulation, and does not serve the interests of claimant (although the AG concedes that in litigation practice, sending the defendant on a goose chase throughout the EU may be an attractive proposition). Now, in Bier the CJEU upheld jurisdiction for both locus damni and for locus delicti commissi on the grounds that this was attractive from the point of view of evidence and conduct of proceedings: this gives both the ‘special link’ which the special jurisdictional rules require. Whether the Court will be swayed by the argument that in the internet context, neither is of relevance, remains to be seen. It is true that number of clicks, which presumably is the relevant criteria to establish ‘damage’ in the context of Article 7(2), can be established just as well outside the jurisdiction as inside it (Google Analytics being used in a variety of national proceedings). It is also true however that Bier and Shevill are dogma for the Court and it is unlikely that it will simply abandon or even vary them.

Variation is all the more unlikely in the direction of the alternative suggested by the AG: locus delicti commissi relates to whoever is in charge of publishing and altering the content of the online information. So far so good: this is a useful clarification of Shevill in the internet age and one that has as such been so applied by national courts. Harm then would in the AG’s view have to be defined as where the reputation of the claimant was most strongly affected. That is the place of his centre of interests. The AG further suggests (at 104 ff) that in the case of a profit-making legal person, that is, a company, the jurisdiction is likely to correspond to the Member State where it attains the highest turnover. In the case of non-profit organisations, it is likely to be the place where most of its ‘clients’ (in the broadest sense of the word) are located. In both cases, such a Member State is likely to be the one where the damage to reputation and therefore to its professional existence is going to be felt the most. However in all cases, assessments needs to be fact-specific, and moreover, more than one centre of interests could potentially be established (at 116); that latter concession of course is not likely to endear the AG to the Court, given the requirement of predictability.

Answering then the query re injunctions (under the assumption that is an injunction sought by way of final remedy, not an interim measure), the AG employs the possibility of conflicting directions issued by courts with jurisdiction as to the merits of the case, as further argument to support his view on locus damni. This issue could raise interesting discussions on the usefulness of directions to remove internet content from particular websites only.

All in all, there is an awful lot of to the point analysis by the AG in this opinion. However the Court’s repeated reluctance to vary Bier and Shevill, a formidable obstacle.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2.

Thank you Francesca Petronio, Fabio Cozzi & Francesco Falco for flagging the Italian Supreme Court’s judgment no. 16601/2017 of 5 July last. I have tried to locate the judgment in relevant databases but failed – however Francesca et al’s posting gives great overview.

In what is suggested to be a Copernican revolution, the Supreme Court has dropped the Italian legal order’s fundamental objection to punitive damages, which made it near-impossible to obtain recognition and enforcement of in particular US judgments containing such damages. The judgment not surprisingly contains a number of conditions in particular on the excessive nature of such damages.

The judges seem to have been swayed by developments both in Italy (statutory law in places allowing for more than simple compensation of material loss) and US law (truly excessive punitive damages having been reigned in).

Punitive damages are the one example always identified as one of the core applications of ordre public in European recognition and enforcement law. After the Italian example surely this may now be less obvious in many jurisdictions.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.