Flux Belges et Lux

A posting that is long overdue but over at GAVC law  we have lots of things coming our way and the inevitable consequence is a bit of a queue on the blog. Open Rights Group & Anor, R (On the Application Of) v Secretary of State for the Home Department & Anor [2021] EWCA Civ 1573 was held end of October and discussed remedies for breach of retained EU law, that is in essence, EU law which has force in law in the UK by virtue of the Government’s copy /paste exercise following Brexit.

In April 2021 the CA had held that that the “Immigration Exemption” (which disapplies some data protection rights where their application would be likely to prejudice immigration control) of the UK Data Protection Act 2018 is contrary to Article 23 GDPR and Article 23 of the UK GDPR: [2021] EWCA Civ 800.  However in that judgment the CA had not specified at that stage what form of relief should be granted. It does now.

The claim form sought a declaratory order, the effect of which would be to “disapply” the Immigration Exemption. The Government argue it be granted a grace period to make regulations adding to or varying the provisions. The complicating factor is that even retained EU law enjoys supremacy (not by virtue of EU law but by virtue of the Government’s choice to do so). That means that any conflict between the GDPR and domestic legislation (including primary legislation) must be resolved in favour of the former: the domestic legislation must be overridden, treated as invalid or, in the conventional language, disapplied.

[15] A quashing order would not meet with the UK constitutional understanding and its limits to the rule of judges. However must supremacy, post Brexit, mean the courts must inevitably make an immediately binding order? Warby LJ sets out the principles of EU retained law as they follow from domestic legislation (the ‘EUWA’) at [23]:

(1) A UK court must now decide any question as to the validity, meaning or effect of any retained EU law for itself: it is no longer possible to refer any matter to the CJEU: EUWA s 6(1)(b).

(2) But the general rule is that the court must decide any such question in accordance with any retained case law and any retained general principles of EU law that are relevant: EUWA s 6(3). “Retained EU case law” and “retained general principles” mean principles laid down and decisions made by the CJEU before IP completion day.

(3) When it comes to principles laid down or decisions made by the CJEU after IP completion day, the court is not bound (EUWA s 6(1)) but “may have regard” to them (EUWA s 6(2)).

(4) The position is different in a “relevant court”, which includes the Court of Appeal. Subject to an exception that does not apply here, a relevant court is not absolutely bound by any retained EU case law: EUWA s 6(4)(ba) and Regulations 1 and 4. It can depart from that law; but the test to be applied in deciding whether to do so is “the same test as the Supreme Court would apply in deciding whether to depart from the case law of the Supreme Court”: EUWA 6(5A)(c) and Regulation 5.

(5) The test the Supreme Court applies is the one laid down by the House of Lords in its Practice Statement [1966] 1 WLR 1234, when Lord Gardiner LC said

“Their Lordships regard the use of precedent as an indispensable foundation upon which to decide what is the law and its application to individual cases. It provides at least some degree of certainty upon which individuals can rely in the conduct of their affairs, as well as a basis for orderly development of legal rules. Their Lordships nevertheless recognise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law. They propose, therefore, to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears right to do so. In this connection they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal law. This announcement is not intended to affect the use of precedent elsewhere than in this House.”

Relevant CJEU authority is Liberty: La Quadrature, A v Gewestelijke Stedenbouwkundige Ambtenaar van het Department ruimte Vlaanderen (Case C-24/19) (“Gewestelijke”), and B v Latvijas Republikas Saeima Case C-439/19, EU-C-2021-504 (“B v Latvia”). [24] Gewestelijke was decided before IP completion day. We are not absolutely bound by them, but we should decide this case in accordance with the principles they set out, unless we think it right to depart from those cases for the reasons set out by Lord Gardiner. B v Latvia was decided after IP completion day, so we can “have regard” to it.

[26] Warby LJ suggests 3 options:

One is to hold that since the power to suspend relief in respect of substantive laws that is identified in Gewestelijke is one that can only be exercised by the CJEU, it cannot be exercised at all in E&W. This is rejected [27] as an unduly mechanistic and literal approach, tending to subvert rather than promote the legal policy that underlies this aspect of the CJEU jurisprudence: it would remove from the judicial armoury a power that is, by definition, essential. 

An alternative would be what Warby LJ called “the Regulation 5 approach”: to apply the principles laid down in the 1966 HoL Practice Statement and depart from the CJEU case-law, holding that the power which, in that jurisprudence, is reserved to the CJEU should now be treated as available to at least some UK Courts. This [28] enable a court to perform one of its essential tasks: averting legal disorder and is an option which Warby LJ suggests is open to the Court of Appeal.

A third option is to follow and apply the CJEU jurisprudence as to the existence and limits of the power to suspend, but not that aspect of the case-law that reserves the exercise of that power to the European Court. That [31] is Warby LJ’s preferred route however he decides (and the other LJs agree) that there is at this time no need to choose between both options for in essence they lead to the same result in the case at issue. The Court concludes that the Government were given time until 31 January 2022 for the Data Protection Act 2018 to be amended so as to remedy the incompatibility. Whether the Government have done so, I leave to data privacy lawyers to verify.

Underhill LJ emphasises one point [57] ‘that, as Warby LJ says at para. 13 of his judgment, our power to suspend our declaration – in practice, to suspend the disapplication of the Immigration Exemption – derives entirely from retained EU law. It was not argued that the Court had any equivalent power at common law.’

This is an important judgment viz the application of retained EU law but also wider, viz the consequences of judicial review which is a hot topic at the moment in more than just the UK.

Geert.

Important Court of Appeal judgment on retained EU law and its effet utile (here: in the context of the 'UK' #GDPR).
What kind of remedies are available under UK law after a finding that retained EU law has been breached?
Open Rights Group https://t.co/4QVGVNA1NJ pic.twitter.com/p74inLB6MT

— Geert Van Calster (@GAVClaw) October 29, 2021

I reviewed the first instance judgment in Skat v Solo Capital Partners here and concluded that it endangered the effet utile of Brussels Ia (and Lugano). Justice Baker had concluded that all SKAT’s claims were inadmissible as a consequence of Dicey Rule 3. The Court of Appeal has now largely reversed, [Skatteforvaltningen v Solo Capital Partners Llp [2022] EWCA Civ 234] thereby resurrecting a £1,4 billion claim.

SKAT (Danish customs and excise) seeks the return of amounts it says it was wrongly induced to pay out as tax refunds. SKAT is not seeking to recover due and unpaid dividend tax or indeed any tax, because the foundation of its argument is that in the case of the alleged fraud defendants there was no liability to pay tax, no shares, no dividends, no tax and no withholding tax. There was never a taxpayer/tax authority relationship between the Solo etc Applicants or the alleged fraud defendants and SKAT. The mere fact that the alleged fraud is committed in the context of taxation or against a foreign tax authority is insufficient to bring the matter within the rule [SKAT’s counsel arguments, [30]-[31]). To allow the defendants to escape their liability, not in a tax fraud but in a general conspiracy, would also run counter the fraus omnia corrumpit principle [ditto, 62], a point which Flaux C agrees with obiter [146] in a case of a major international fraud..

Flaux C is much less verbose than the submissions before him. Yet again a jurisdictional point was allowed to be litigated to great length – albeit one may appreciate counsel and clients’ energy on those issues given the value of the claim.

[127] the basis of the claim is fraudulent misrepresentation. It is not a claim to unpaid tax or a claim to recover tax at all. It is a claim to recover monies which had been abstracted from SKAT’s general funds by fraud [128]. Even though SKAT may be an emanation of the Danish state, the Dicey revenue rule does not apply [128], neither does the wider sovereign powers rule within Dicey Rule 3:

‘In bringing a claim to recover the monies of which it was defrauded, SKAT is not doing an act of a sovereign character or enforcing a sovereign right, nor is it seeking to vindicate a sovereign power. Rather it is making a claim as the victim of fraud for the restitution of monies of which it has been defrauded, in the same way as if it were a private citizen.’ [129]

This latter reasoning falls short I find of proper criteria to guide its future application, although more is said at [130]: the claim to recover the money is at the core of the Chancellor’s reasoning here and that claim is a straightforward money claim, and [133] ‘the claims are ones which could just as well be brought by a private citizen’. That is the kind of argument which echoes CJEU authority on civil and commercial and to my mind the Court of Appeal could have helped us all by pointing out more specifically to what degree Dicey Rule 3 be informed by CJEU authority on ‘civil and commercial’, regardless of Brexit.

That there would be a detailed examination of the Danish tax regime and possible criticism of it and of SKAT’s systems and control, does not somehow convert the claim into one to enforce that tax regime. Recognition of foreign revenue laws is permissible under Dicey Rule 3 [138].

The position of one of the defendants, ED&F Man, is different in the sense that there is no allegation that they were implicated in a fraud. Although it is alleged that misrepresentations were made by them, the misrepresentations are said to have been negligent.

SKAT has to accept that as against those defendants the claim is inadmissible by virtue of Dicey Rule 3 unless it can satisfy the Court: (i) that the claim is a “civil and commercial matter” not a “revenue matter” for the purposes of Article 1(1) of the Brussels Recast Regulation; and (ii) that the operation of Dicey Rule 3 is precluded because, contrary to the judge’s analysis, it would impair the effectiveness of the Brussels Recast Regulation.

Contrary to the conclusion the judge reached the Court of Appeal finds that the claim against ED&F Man is a “revenue matter” falling outside the Brussels Recast Regulation. Here the Court of Appeals applies parity of reasoning with its assessment of the other claims: [150]:

Whilst the test for the application of Dicey Rule 3 may not be identical to that for determining what is a “revenue etc matter” for Article 1(1) of the Brussels Recast Regulation, it can be seen that its application leads to the same answer. If Dicey Rule 3 applies (as SKAT has to accept it does in relation to the claim against ED&F Man) then by the same reasoning, the basis for the claim by SKAT against those defendants is either a right which arises from an exercise of public powers or a legal relationship characterised by an exercise of public powers, from which it necessarily follows that the claim is a revenue matter outside the Brussels Recast Regulation.

Unfortunately therefore the effet utile argument (that application of Dicey rule 3 impairs the effectiveness of BIa /Lugano, as I had argued in my earlier post) is not discussed [153].

The title of this piece of course hints at the relevance of claim formulation. It is also exaggerated: SKAT cannot conjure up fraud elements out of nowhere to reinvent a tax claim as one in mere tortious and fraudulent misrepresentation. However it is clear that in cases that are somewhat murky, claim formulation will be crucial to navigate Dicey Rule 3.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.28 ff.

Thank you Ali Malek QC (successful for defendants) for bringing this AM's CA's judgment in SKAT to my attention.
Dicey rule 3, foreign public law, revenue matters
Appeal only partially succeedshttps://t.co/UQwg8caiGf
Review of the first instance judgmenthttps://t.co/r7WXwAoaXl

— Geert Van Calster (@GAVClaw) February 25, 2022

Hill v Generali Zrt [2021] EWHC 3381 (QB) is an appeal from the County Court and discussed whether a subrogated claim by an insurer (Admiral) can be brought in the name of an English motorist in an English court together with his claim for uninsured losses against a Hungarian insurer (Generali) in respect of a pre-Brexit accident in Germany. The county court judge held that it could not but acknowledged that the question was not free from doubt and granted the motorist permission to appeal. Upon appeal the opposite conclusion was reached.

The case once again therefore concerns Brussels Ia’s insurance title which was recently at play at the CJEU in Betty Tattersal aka Seguros Catalana Occidente. Pepperall J summarises the ordinary application of the insurance title as follows [8]

Re the insured losses (the repair costs): __Generali can be sued in Hungary, being its place of domicile, or Germany, being the place of the accident: A4(1), 7(2), 11(1)(a) and 12 BIa___As the insured, Mr Hill can also sue Generali in England & Wales, being his place of domicile: A11(1)(b).___ As the insurer, and subject to being permitted to join an action already proceeding in another jurisdiction, Admiral cannot take advantage of the more favourable rules as to jurisdiction available to the policyholder, the insured and beneficiaries. 

There is therefore no dispute as to Mr Hill’s right to sue for his uninsured losses (the devaluation of the car) in England & Wales. The issue is whether Admiral’s subrogated claim:  is a claim brought by the insured such that it may be pursued in England & Wales under Article 11(1)(b); or is a claim that must be treated as brought by the insurer such that it cannot, subject to questions of joinder, be pursued in E&W.

Relevant recitals echo the general principles with which the CJEU approaches the issue: [10]:

“15 The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile. Jurisdiction should always be available on this ground save in a few well-defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor …

16 In addition to the defendant’s domicile, there should be alternative grounds of jurisdiction based on a close connection between the court and the action or in order to facilitate the sound administration of justice. The existence of a close connection should ensure legal certainty and avoid the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen …

18 In relation to insurance, consumer and employment contracts, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules.

21 In the interests of the harmonious administration of justice it is necessary to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in different Member States. There should be a clear and effective mechanism for resolving cases of lis pendens and related actions …”

Part of the challenge is the different way in which claims are assigned /and or subrogated across jurisdictions [23]. In many European legal systems insurers take an assignment of the insured’s claim and sue to recover their outlay in their own names. In the common law’s approach the claim for insured losses remains vested in the insured.

CJEU Sovag is discussed for the joinder elements of the case and CJEU Kabeg is said not to be a right fit for in that case the insurer was the assignee of the claim for insured losses and able to sue in its own name.

The judge reaches his conclusion that the subrogated claim may be brought in E&W on the echo of SOVAG, hence underlining [34] the policy of minimising multiple proceedings and ensuring that irreconcilable judgments are not given but also in demonstrating practicality. The CJEU arguably in Betty Tattersal (the judge did not have the benefit of that judgment) took a different direction  on related issues and I find them both equally persuasive. It is time the insurance section be sorted out and the current EC evaluation of BIa would be a good trigger for same.

Geert.

1/2 Hill v Generali Zrt [2021] EWHC 3381 (QB)#travellaw, Brussels Ia, insurance
Subrogated claim by insurer can be brought in name of EN motorist in E&W court together with his claim for uninsured losses against a Hungarian insurer in respect of pre-Brexit accident in Germany

— Geert Van Calster (@GAVClaw) December 17, 2021

Many thanks Bruno Hardy, counsel at Liedekerke, for reconnecting me with a case I had seen in passing and then lost track off. Bruno also reports on the issues here; there is also a mainstream media report and a more specialised report.

On 18 January the Lithuanian Supreme Court held that the France-Lithuania BIT is no obstacle to Lithuania seizing the Lithuanian courts of a claim that Veolia and consorts unlawfully took over control of heating businesses in a dozen Lithuanian municipalities in 1993-2003, and excessively profited from same. The claim was initially formulated as a counterclaim in ongoing ICSID proceedings (note there are also ongoing commercial arbitration proceedings relating to the case under Stockholm Chamber of Commerce rules) and is now pursued in the courts in ordinary, using Article 7(2)’s locus damni gateway.

The SC first of all rejected Veolia’s claim that the case should at the least be stayed until the ICSID ruling has been issued. For the SC, CJEU Achmea (which declared dispute settlement via ISDS in intra-EU BITs incompatible with EU law) implies that the arbitration procedure under the BIT has now lapsed (and this ab initio, hence making the later entry into force of the EU Member States’ BIT termination agreement irrelevant) meaning Lithuania not merely may but indeed it must drop its claims in the ISDS procedure.

From what I understand, the SC did not hold on whether A7(2) BIa is a possible gateway, focusing instead on the fate of Lithuania’s involvement in the ISDS procedure. In a perhaps unexpected ruling, as Bruno reports, the Vilnius Regional Court subsequently found that it lacked international jurisdiction seeing as in its (prima facie unconvincing) view the Lithuanian claim falls under acta iure imperii, hence cancelling out Brussels Ia, instead making the claim subject to residual Lithuanian private international law rules. These seem to direct the suit to France, the domicile of the defendant.

This is where there is a final twist in the tail. What I assume to be the reason for the court to find acta iure imperii (that the claim’s origin and DNA are actions taken by a state in its sovereign capacity) may well result in the French court refusing to entertain the claim as well (potentially leading to the need for a Lithuanian forum necessitatis). Indeed as Bruno points out, under the French SC Guatemala rule, French courts do not rule on cases necessarily involving the application of foreign public law (this echoes some of the issues in Skatteforvaltningen, currently under appeal). The 1975 Institute of International Law’s Resolution on same comes to mind.

The judgment shows very clearly the urgency for a proper debate on the relationship between EU law, the CJEU, ISDS and other forms of international dispute settlement. I fear the rather unnuanced CJEU statements in cases like Komstroy do little to resolve many of the underlying issues.

Geert.

In Soriano v Forensic News LLC & Ors [2021] EWCA Civ 1952 the Court of Appeal end of December allowed the claimant’s cross-appeal on the territorial reach of the GDPR. I reported the decision at the time but had not yet gotten round to post on it. I reviewed the High Court’s judgment here and readers may want to refer to that post to help them appreciate the issues. Like in my review of the first instance judgment I focus here on the GDPR’s jurisdictional gateway ([75] ff), not the libel issue.

Claimant’s case on A3 (2)(a) GDPR is set out as arguing that Defendants, to the extent that they are data controllers, offer services to readers in the UK irrespective of payment. As for A3.2(b), it is contended that the website places cookies on readers’ devices and processes their personal data using Facebook and Google analytics for the purpose of targeting advertisements, with Facebook Ireland Ltd and Google Ireland Ltd operating as the registered joint data controller. Further, it is submitted that Defendants were collecting and obtaining data about the Claimant and were monitoring his behaviour within the UK and the EU with a view to making publishing decisions.

CJEU authority discussed, on the meaning of ‘establishment’, is Weltimmo, Google Spain and Verein fur Konsumerenteninformation. At [78] ff Warby LJ relies to my taste somewhat excessively on the European Data Protection Board’s Guidelines 3/2018 on the Territorial Scope of the GDPR, holding [97] that defendants’ offer and acceptance of subscriptions in local currencies (Sterling cq Euros) is a “real and effective” activity that is “oriented” towards the UK and EU – that the effort only yielded 6 UK and EU subscriptions in total is irrelevant: defendants did more than merely making their journalism accessible over the world wide web. 

The result is that jurisdiction in E&W under the GDPR gateway is upheld – as is therefore, the potential which I predicted for extensive splintering of private GDPR enforcement, in contrast with the EU’s stated intent to have one-stop shop public GDPR enforcement.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.9.2.5, para 2.258 ff.

Service out, 'establishment' and 'services', territorial reach of the #GDPR https://t.co/iyVsTQcUvo
For review of the High Court judgment see https://t.co/KBZ4s4VHVz https://t.co/cLi12uuFk7

— Geert Van Calster (@GAVClaw) December 21, 2021

In Kwok & Ors v UBS AG (London Branch) [2022] EWHC 245 (Comm) Cockerill J holds on forum damni (Article 5(3) for purely economic loss, and branch jurisdiction (Article 5(5) for the English courts under the Lugano Convention. Defendant is Switserland based and the proceedings clearly were initiated prior to Brexit.

On A5(3) locus damni, all parties and the judge agree that CJEU authority is not easy to disentangle and does not unequivocally point into one direction: see eg [84] ‘the authorities are not entirely pellucid on what they do say.’

The bank, defending, argues ia that a rule of thumb under (limited) English authority is that in a case of negligent misstatement the damage will occur where the misstatement is received and relied upon. Cockerill J distinguishes the authority from current case and also points out [82] that all cases concerned predate the CJEU authority particularly in Lober and Vereniging van Effectenbezitters, and that ‘the tide of authority is against the proposition that loss is suffered wherever a claimant ultimately feels it’ [85]. Having summarised the lines of interpretation following from CJEU authority, she concludes [113]

Once the focus is on actual manifestation (of damage, GAVC) the most natural analysis is to view the damage as occurring where and when the Acquired Shares were liquidated.

here, London, where the shares claimants had invested in were held and where the funds they had invested were depleted; the loss crystallises, manifests, becomes certain and irreversible with the sale of shares and that loss of claimants’ Monetary Contribution which had merged into the shares  [115].

The account, where the damage was first “registered” or “recorded” was in London with the defendant itself (as in CJEU Kronhofer) [117]. The Universal Music-instructed ‘special circumstances’ cross-check also points to London: [118]

London was the place at which it had been agreed by all parties that the Acquired Shares would be held, and all of the contractual documents UBS entered into (albeit for a transaction at one remove from the Claimants) were to be in English and governed by English law. It was therefore entirely predictable and foreseeable from November 2014 that the parties might sue or be sued in London in relation to the Investment and dealings with the Acquired Shares.

Branch jurisdiction under Article 5(5) is dealt with obiter [120] ff. Cockerill J holds [138] that was is needed inter alia per CJEU flyLAL is ‘sufficient nexus’, sufficiently significant connection does not require involvement in the tortious acts [140]. This is supported, Cockerill J holds [148] by the fact that UBS London’s thoughts and actions will be relevant to the trial. There will be a need to investigate UBS London’s conduct and intentions both (i) at the time of the representations and advice given by UBS and (ii) late events and the loss resulting therefrom.

A good judgment to assist with the economic loss jigsaw.

Geert,

Tort jurisdiction (purely economic loss) and branch jurisdiction, A5(3) and (5) #Lugano Convention, both upheld

Kwok & Ors v UBS AG (London Branch) [2022] EWHC 245 (Comm) https://t.co/ev68gReQzx

— Geert Van Calster (@GAVClaw) February 9, 2022

In C-595/20 Sharewood, the CJEU last week held on the extent of Rome I’s rei sitae exception to consumer contracts. In essence, as a result of Article 6 Rome I, for consumer contracts, choice of law is free (in the case at issue this lex voluntatis was Swiss law) except the consumer may always fall back on the mandatory laws of his habitual residence (here, Austrian law).

For a limited selection of contracts, including (A6(4)c) ‘a contract relating to a right in rem in immovable property or a tenancy of immovable property other than a contract relating to (timeshares)’, party  autonomy is restored in full under the terms of Articles 3 and 4 Rome I, hence the consumer loses his protection.

The contract at issue is a tree purchase, lease and service agreement. The trees at issue are grown in Brasil. The ground rent for the lease agreement, which granted the right to grow the trees in question, was included in the purchase price of those trees. The service agreement provided that ShareWood would manage, administer, harvest and sell the trees and would remit the net return on the timber to UE, the (anonymised) consumer. The difference compared to the gross return, expressed as a percentage of the return, was retained by ShareWood as its fee for the provision of those services.

The question in the case at issue is essentially how intensive the link to (foreign) soil needs to be for it to fall under the rei sitae carve-out for consumer contracts. The CJEU does refer to some of its Brussels Ia case-law, including Klein and Kerr, for the ‘tenancy’ element of the question, but not for the ‘rights in rem’ part of the discussion, where it more straightforwardly concludes on the basis of the contractual arrangements that the trees [28]

must be regarded as being the proceeds of the use of the land on which they are planted. Although such proceeds will, as a general rule, share the same legal status as the land on which the trees concerned are planted, the proceeds may nevertheless, by agreement, be the subject of personal rights of which the owner or occupier of that land may dispose separately without affecting the right of ownership or other rights in rem appertaining to that land. A contract which relates to the disposal of the proceeds of the use of land cannot be treated in the same way as a contract which relates to a ‘right in rem in immovable property’, within the meaning of Article 6(4)(c) of the Rome I Regulation

and [37]

the main purpose of the contract at issue in the main proceedings is not the use, in the context of a lease, of the land on which the trees concerned are planted, but… to generate income from the sale of the timber obtained following the harvest of those trees. As is apparent from the order for reference, the lease provided for in that agreement, which includes only the right to allow those trees to grow and has no purpose other than the acquisition of those trees, is intended merely to enable the sales and services elements provided for in the contract to be carried out.

Not caught therefore by the rei sitae exception.

I often refer my students to Harry, in A Bug’s Life, to make the point that both for jurisdictional and for applicable law purposes, the mere presence of real estate does not lead to the rei sitae jurisdictional and governing law implications being triggered. CJEU Sharewood is a good illustration of same.

Geert.

CJEU last week In Share Wood on lex rei sitae, applicable law A6 Rome I.
Contract of sale, including lease and service agreement, re trees planted on leased land for sole purpose of being harvested for profit, is not a contract relating to a right in remhttps://t.co/tlKVHl2xYX

— Geert Van Calster (@GAVClaw) February 14, 2022

The CJEU held (first Chamber, which includes the  CJEU President Koen Lenaerts) in C‑499/18 P Bayer Crop Science v European Commission a few months back. Here at GAVCLaw the judgment was firmly on our minds – but my analysis not yet put to paper.

The case centres around the legality of the conditions imposed by the EU for the approval of the active substances clothianidin, thiamethoxam and imidacloprid (these are neonicotinoids), and prohibiting the use and sale of seeds treated with plant protection products containing those active substances. The act challenged by Bayer is Commission Implementing Regulation 485/2013 and the justification for the measures are the documented losses of honeybee colonies as a result of the use of the substances.

The application follows a tried and tested path of applicants in the chemical and related sectors. Firstly and preferably, find some holes in the (often extensive) documentary trail of preparatory and advisory paperwork relied upon by the Institutions in their measure, and claim these devastate the legality of the eventual measure. A typical example would be ‘the studies relied upon reported testing of the substances on small ponies while the eventual regulation cites concerns for both small and medium-sized ponies’. Secondly, try and tempt the CJEU into finding fault with the application of core principles of EU law (such as subsidiarity, proportionality, ultra vires, attributed powers etc) and /or EU sectoral policy (such as in particular the precautionary principle), or confuse the Court with at best esoteric but usually sophistic discussions on eg ‘new and scientific knowledge’.

The General Court had found against Bayer. Much of the appeal before the CJEU discusses the first type of arguments and, like the General Court, dismisses them.

On the suggested infringement of the precautionary principle, the Court first of all rejects that precaution cannot be relied upon until an ‘exhaustive’ scientific assessment is made: [81]: ‘an exhaustive risk assessment cannot be required in a situation where the precautionary principle is applied, which equates to a situation in which there is scientific uncertainty.’ The point is NOT that precaution does not engage with science. It does. That is also where its weakness may lie: it desperately speaks the language of data, science and numbers yet as the saying goes, “Data is like a spy – if you torture it long enough, it will tell you anything you want to know.” The point is rather (see eg [78]) that for one to have to wait for every single new potential sub-study into a sub-issue, would hand industry the golden ticket for delay tactics; [82] that studies are underway which may call into question the available scientific and technical data, is not an obstacle to application of the precautionary principle.

Bayer put essentially the same argument to the CJEU with slightly differing angles (eg suggesting that for already approved active substances, precaution must be applied to a higher threshold than for new to be approved substances) and the Court rejected them at each turn.

A good judgment.

Geert.

EU environmental law (with Leonie Reins), Edward Elgar, 2018, p.28 ff.

The CJEU held yesterday in C-20/21 LOT Polish Airlines, on the place of performance (hence creation of jurisdiction in an application for flightdelay compensation) of a flight consisting of a confirmed single booking and performed in several legs by two separate air carriers. That the claim came within Article 7(1)’s gateway for contracts is a result of CJEU flightright. The Court also held in that case that both the place of departure of the first leg of the journey and the place of arrival of the last leg of the journey were forum contractus.

In the case at issue, jurisdiction is sought for the place of landing of the first leg of the journey. In CJEU Zurich Insurance, on multimodal transport, place of dispatch was added as forum contractus, with the CJEU refraining from holding explicitly whether other legs of the journey could count as such forum (Tanchev AG had opined they should not). In current case, the CJEU would seem to confirm my feeling that in Zurich Insurance it implicitly sided with a limitation of fora. Indeed it holds that the place of arrival of the first leg is not forum contractus under A7(1), however, there is a caveat: [24]:

the referring court does not indicate the elements of the contract which could justify, with a view to the efficacious conduct of proceedings, the existence of a sufficiently close link between the facts of the dispute in the main proceedings and its jurisdiction.

The CJEU’s dictum is formulated in more absolute terms:

The second indent of [A7(1) BIa] must be interpreted as meaning that, in respect of a flight consisting of a confirmed single booking for the entire journey and divided into two or more legs on which transport is performed by separate air carriers, where a claim for compensation, brought [under the flightdelay Regulation 261/2004] arises exclusively from a delay of the first leg of the journey caused by a late departure and is brought against the air carrier operating that first leg, the place of arrival for that first leg may not be classified as a ‘place of performance’ within the meaning of that provision

However given the caveat [24] it is not to be excluded that contractual terms could distinguish the finding of lack of forum contractus.

Geert.

EU Private International Law, 3rd ed. 2021, 2.399 ff.

#flightdelay Regulation, place of arrival of first flight is no 'place of performance' granting jurisdiction under A7(1) Brussels Ia #CJEU C‑20/21 LOT Polish Airlineshttps://t.co/5R4YKF3ShL

— Geert Van Calster (@GAVClaw) February 3, 2022

The appeal in The Public Institution for Social Security v Banque Pictet & Cie SA & Ors [2022] EWCA Civ 29 has been dismissed. I reviewed the first instance judgment here. I conclude that review writing ‘Those criticising the intensity of jurisdiction squabbles will find ammunition in this 497 para judgment.’ The Court of Appeal judgment is another 152 paras and as Andrew Dickinson also notes, Carr LJ, too, is critical: [12]

There will of course be cases where a novel and/or complex point of law needs to be debated fully and decided and, as foreshadowed above, this litigation raises some new, albeit relatively short, legal issues. Further, the sums involved are substantial and the allegations made are serious. However, these features did not create a licence to turn a jurisdictional dispute into an extensive and essentially self-standing piece of litigation. The costs incurred below ran to many, many millions of pounds: the interim payment orders in respect of the Respondents’ costs amounted to £6.88 million against a claimed total of some £13.5 million.

The issues on appeal are listed [41] ff and they of course reflect the discussion I summarised in my post on the first instance findings. I list them below and summarise the Court’s findings.

Article 23 formal requirements (involving Banque Pictet and Mr Bertherat only):

i) For the purposes of the requirement in Article 23(1)(a) that a jurisdiction agreement must be in or evidenced in writing, was the Judge right to conclude that it was unnecessary for the GBCs containing the EJCs (‘exclusive jurisdiction clauses, GAVC) actually to have been communicated to PIFSS?

ii) If so, was the Judge right to find that Banque Pictet did not have the better of the argument that the GBCs were communicated to PIFSS prior to 2012?

Lady Justice Carr is right in my view e.g. [67] that CJEU authority does not require material communication of GTCs etc which contain EJCs. Rather, the judge needs to establish ‘real consent’,  in the spirit of the Raport Jenard with a rejection of excessive formality.

Article 23 material validity (involving all Pictet and Mirabaud Respondents (save for Pictet Asia, Pictet Bahamas and, for the avoidance of doubt, also Mr Amouzegar and Mr Argand)):

i) Was the Judge right to conclude that the “particular legal relationship(s)” in connection with which the EJCs were entered into for the purpose of Article 23 was the totality of the legal relationships between the parties forming part of the banker/customer relationship between them?

ii) Was the Judge right to conclude that the relevant Respondents had the better of the argument that the disputes relating to (a) the Pictet/Mirabaud bribery claims; (b) the Pictet/Mirabaud accessory claims “ar[o]se out of” those “particular legal relationship(s)”?

The term ‘material validity’ is employed both in first instance and at the Court of Appeal although it is not quite correct; what is really meant is what Henshaw J called the ‘proximity’ requirement: which ‘disputes’ ‘relate to’ the matters covered by the EJCs? Here, Carr LJ sides eventually [98] with the judge mostly as a matter of factual analysis: neither CJEU Apple nor CDC require a restrictive approach where parties have formulated the EJC very widely. The judge carefully considered the wording of the clause and on contractual construction was right to find that the disputes at issue fell within it.

Scope of EJCs (as a matter of the relevant domestic law) (involving all Pictet and Mirabaud Respondents (save for Pictet Asia and Pictet Bahamas and again, for the avoidance of doubt, Mr Amouzegar and Mr Argand)):

i) Was the Judge right to find that PIFSS had the better of the argument that, on the true construction of the relevant EJCs, the disputes relating to the wider accessory claims fell outside the scope of the applicable EJCs?

ii) (Mr Mirabaud only): Was the Judge right to conclude that PIFSS had the better of the argument that claims against Mr Mirabaud relating to events after 1 January 2010 fell outside the scope of the relevant EJCs?

This issue relates to whether the EJCs, as a matter of construction under Swiss (or Luxembourg) law – which the judge had discussed obiter, did not extend to cover the wider accessory claims. [101]: in summary the relevant parties suggest that, having correctly recognised that what was alleged by PIFSS were unitary schemes arising out of continuing courses of conduct, the Judge was then wrong to conclude that they did not have the better of the argument that the wider accessory claims also fell within the EJCs.

Carr LJ deals rather swiftly with these discussions, again I feel finding mostly that the judge’s analysis was mostly factual (albeit seen from the viewpoint of Swiss and /or Luxembourg law) and not incorrect.

Article 6: (the number of Respondents to whom the Article 6 challenge is relevant will depend on the outcome of the appeals on the issues above, but on any view the issue of principle arises in relation to Mr Amouzegar and Mr Argand):

i) Was the Judge right to conclude that, for the purpose of Article 6, the Court was not required to consider solely the risk of irreconcilable judgments between the claim against the anchor defendant and the claim(s) against the proposed Article 6 defendant(s) but rather was permitted to consider other relevant circumstances including, in particular, the risk of irreconcilable judgments between the claims sought to be made against the proposed defendant and other claims in other member states?

ii) Did the Judge apply the test correctly in relation to each relevant Respondent?

This I find is the most important part of the judgment for it is in my view the one which most intensely deals with a point of law. Readers may want to refer to my earlier post for a summary of the A6 (Lugano) issues. The judge had found against A6 jurisdiction, also following Privatbank‘s ‘desirability’ approach. Parties upon appeal argue [110] that the Judge’s interpretation results in exclusive jurisdiction clauses having practical effects well beyond the scope of their application, with the collateral effect of conferring on them a “gravitational pull” which is inconsistent with the proper interpretation of A23 Lugano. PIFSS submits that it undermines the drive for legal certainty that motivates the strict approach to A6 identified in the authorities. They also suggested (in oral submission) that for A6 purposes only actual, and not merely potential, proceedings are properly to be taken into account. 

The CA however [112] confirms the relevance of future as well as extant claims and generally supports the flexible approach to A6. Carr J concedes [131] that this approach can be said to give “gravitational pull” to A23 and suggests ‘(t)here is nothing objectionable about that, given the respect to be accorded to party autonomy.’

I do not think this is correct. Including broadly construed ‘related’ claims in choice of court would seem to deny, rather than protect party autonomy: for if parties had really wanted to see them litigated in the choice of court venue, they ought to have contractually include them.

The issue of desirability per Privatbank is not discussed and therefore remains open (compare EuroEco Fuels).

Forum non conveniens: Pictet Asia and Pictet Bahamas:

i) Depending on the outcome of the issues above, was the Judge right to conclude that PIFSS had not shown that England was clearly the appropriate forum for the resolution of the claims against Pictet Asia and Pictet Bahamas?

Here the swift conclusion [143] is that the judge’s finding that PIFSS had not shown that England was clearly the proper forum is unimpeachable.

A lot is riding on this jurisdictional disagreement.  Permission to appeal to the Supreme Court was refused by the CA but may still be sought with the SC itself.

Geert.

EU Private International Law, 3rd ed. 2021, big chunks of Chapter 2.

Choice of court and anchor defendants, Lugano Convention, Brussels Ia.
Appeal dismissed. For the 1st instance judgment see https://t.co/7d1LGpleY4
Public Institution for Social Security v Banque Pictet & Ors [2022] EWCA Civ 29 (26 January 2022)https://t.co/WvbXbk1o59

— Geert Van Calster (@GAVClaw) January 26, 2022

In Easygroup Ltd v Beauty Perfectionists Ltd & Ors [2021] EWHC 3385 (Ch) defendants argue that even though the proceedings were initiated prior to IP completion day (31 December 2020), the English courts no longer have jurisdiction to grant a pan-EU injunction or other remedies in respect of alleged infringement of EU trade marks (“EUTMs”).  The suggestion is that lack of such jurisdiction post 1 January 2021 is a consequence of the relevant statutory UK instrument, the Trade Marks Amendment etc (EU Exit) Regulations 2019.

The jurisdictional impact  of the EU Trademark Regulation 2017/1001 was previously considered i.a. in another Easygroup case which I discuss here. In current case, defendants argue that as a result of (potentially an omission in) the 2019 UK Statute, the High Court no longer is an ‘EU Trade Mark Court’ and, that EU Regulation 2017/1001 was not part of EU retained law under section 2(1) of the EU Withdrawal Act 2018. Their submission is based entirely on statutory construction, involving ia reading of the EU Withdrawal Agreement Act 2020 and its alleged impact on Withdrawal Agreement rights.

[48] ff Flaux C takes a much shorter approach to siding with claimants, holding [50] that the clear intention of Article 67 of the Withdrawal Agreement, which has full legal effect, is that the High Court should retain the same jurisdiction under EU Regulation 2017/1001 as it had before IP completion day. He finds support in a more common sense reading of the various Statutes in the context of Brexit with arrangements (as opposed to the potential of a no-deal Brexit).

The application for strike-out was therefore dismissed.

I do not know whether appeal has been sought. The case is a good illustration of the many layers of complexity provoked by the presence of the Withdrawal Agreement (with UK commitment to provide direct effect in the same circumstances as would apply under EU law), the Trade and Co-operation Agreement, and all the statutory provisions designed to cater for both a deal and a no-deal Brexit.

Geert.

Easygroup v Beauty Perfectionists [2021] EWHC 3385 (Ch) (17 December 2021)
Status of retained EU law post #Brexit
Held E&W courts continue to have jurisdiction to grant pan-EU injunction or other remedies viz alleged infringement of EU #trademark https://t.co/NmaoqaGfjC

— Geert Van Calster (@GAVClaw) December 17, 2021

Khalifeh v Blom Bank SAL [2021] EWHC 3399 (QB) is the second High Court judgment in the space of a few weeks to involve Lebanese Banks and the application of the protective regime for consumers in EU private international law. (See earlier Bitar v Banque Libano-Francaise).

Foxton J explains why there is such activity: difficult financial conditions faced by Lebanese banks and their customers at the current time, and the practical impossibility of transferring foreign currency out of Lebanon, caused acute anguish for those with foreign currency accounts in Lebanese banks. Understandably they have explored every avenue open to them in an effort to access their hard-won savings.

Jurisdiction would seem not to be in dispute (presumably given the presence of non-exclusive choice of court in a general agreement), applicable law is. Even in consumer contracts, Article 6 Rome I allows parties to the contract to chose applicable law – except such choice must not deprive the consumer of the protection of the mandatory elements of the law that would apply had no choice been made: that ‘default law’, per Article 6(1) Rome I, is the law of the consumer’s habitual residence.

Whether choice of law has been made is to be determined in accordance with Article 3, which proscribes that choice of law must be  either nominatim, or ‘clearly demonstrated’ by the circumstances of the case. The latter is often referred to as ‘implicit’ choice of law although there is nothing truly implicit about it: choice of law cannot be made happenstance, it must have been made clearly (even if not in so many words). [47] ff the judge considers whether ‘implicit’ choice has been made, referring to Avonwick,  and holds [66] that there was, namely in favour of Lebanese law. He concludes this as a combined effect of

a jurisdiction clause in a related, general agreement which he found to be exclusive [63] in favour of Beirut; I have to say I do not think the judgment engages satisfactorily with the argument that this hybrid clause itself is questionable under the lex causae (including consumer law) that would have to apply to it;

the express reference to an agreement to comply with and facilitate the enforcement of identified provisions of Lebanese law; and

the express choice of Lebanese law in a closely related and interwoven contract.

Clearly some of this analysis is fact-specific and subjective however in my view the lex causae element of hybrid choice of court has more beef to the bone.

As for the issue of ‘activities directed at’ the UK, this is discussed [68] ff. First up is an interesting discussion on the relevant time at which the habitual residence of the consumer has to be considered. In light ia of CJEU Commerzbank, which presumably was not available at the time of the discussion, I would suggest the conclusion [73] that the temporal element needs to be fixed at the very beginning, to avoid see-sawing and dépeçage, may need revisiting.

In terms of the actual directing of activities, Pammer /Alpenhof of course is discussed as is Emrek. Having discussed the evidence, the conclusion [105] ff is that there was no direction of activities.

As a result, the remainder of the judgment deals with the substantive issues under Lebanese law.

I do not know whether permission to appeal has been sought. There are sections in the judgment that in my view would merit it.

Geert.

EU private international law, 3rd ed. 2021, Heading 2.2.9.2.7, 2.270 ff; Heading 3.2.4, Heading 3.2.5.

Khalifeh v Blom Bank SAL [2021] EWHC 3399 (QB) (17 December 2021)
'Implied' choice of (Lebanese) law under A3 Rome I, held no consumer contract under A6 Rome I (contrast with https://t.co/cCLpRV7EGphttps://t.co/3pGSujhBYQ

— Geert Van Calster (@GAVClaw) December 17, 2021

Many thanks Haco van der Houven van Oordt for flagging an (anonymised) judgment by the Den Bosch Court of Appeal, in which it refused to recognise the punitive damages element of a US (Tennessee) judgment. Damages had been awarded after a horse trainer based in The Netherlands, who had been tasked to look after and train the horse of the US based claimant, had subsequently been tasked to sell the horse and in doing so hid part of the sale price from the owner. Half a million dollar was awarded, of which exactly half in punitive damages.

The judge follows the Gazprom criteria for recognition and enforcement in The Netherlands and only objected to the punitive damages element. A bid by claimants (heirs of the meanwhile deceased owner) to argue recoverability of a chunk of the punitive damages slice, arguing that it was compensation for lawyers’ fees in the US proceedings, failed: the Dutch held that costs compensation are not ordinarily part of the punitive element of the damages and that transcripts of the US judgment and proceedings certainly did not reveal any trace of that argument.

Not an extraordinary judgment. But an instructional one.

Geert.

Kazakhstan Kagazy Plc & Ors v Zhunus & Ors [2021] EWHC 3462 (Comm), sees Henshaw J unpicking the follow-up to a trial of applications and claims made by the Claimants for the purpose of enforcing an unsatisfied judgment for approximately US$300 million, handed down in December 2017.

The relevant part of the complex judgment, for the purposes of the blog, is a ‘tracing claim’: claimant argue that monies stolen from them by one of the defendants can be traced or followed into a variety of assets said to be held by companies within Cypriot trusts structures for the benefit of said defendant and his family. What is being traced are shares in Exillon, an oil company which Mr Arip developed after he fled Kazakhstan for Dubai. The proceeds of the shares went partially into the purchase of real estate, with another (substantial) part remaining liquid in a Swiss bank account.

Defendants submit that the tracing claim is governed by Kazakh law, and that that law does not recognise the concept of tracing. The judge, with respect, and perhaps he was echoing submissions, takes a rather unstructured approach to the conflict of laws analysis from which the judgment subsequently never recovers. Many first instance judgments in the UK intuitively start by quoting a relevant section from Dicey (whose 16th ed I am told might be out end of 2022), and then somehow engineer the analysis around it. In the case at issue, the Dicey rule that is zoomed in on [85], is disputes over real property, which are subject to lex situs (lex rei sitae). At [88] the judge then refers to Akers v Samba in which the Supreme Court, albeit at the jurisdictional level, held “the situs or location of shares and of any equitable interest in them is the jurisdiction where the company is incorporated or the shares are registered”. [89]:

It would follow that, insofar as relevant, questions of title to the Exillon shares, whose proceeds (a) were used to purchase the Properties and (b) remain in the form of the £72 million in the BJB account in Switzerland, would be likely to be governed by Manx law, Exillon having been incorporated in the Isle of Man.  A possible alternative would be English law on the basis that the shares were traded on the London Stock Exchange.  The parties have in any event agreed that, so far as relevant to these claims, Manx law is the same as English law.

[91] some role for Kazakh law is suggested to still exist when considering whether the English law preconditions for a tracing claim are met.  ‘It is generally a pre-condition of tracing in equity that there be a fiduciary relationship which calls the equitable jurisdiction into being’. [92] The law applicable to a cause of action or issue determines whether a person is required to hold property on constructive or resulting trust, hence it is necessary to consider whether duties imposed by the relevant foreign law are to be regarded as fiduciary.

Only in an afterthought [94] does the judge consider the lex causae governing unjust enrichment, equitable claims and negotiorum gestio, per Rome II as retained in UK law (and in Dicey). [The judgment is not in fact clear on when the claim was introduced and therefore might be subject to acquired as opposed to retained EU law].

The lex causae for the qualification of the current claims (proprietary restitution) as one of these entries in Rome II [96] is matter of factly presented as English law. [99] the judge dismisses the relevance of the succinct Rome II analysis for, harking back to his first reference to Dicey, the fundamental nature of the Claimants’ claim in the present case is held to be a proprietary one hence Dicey’s lex situs rule is said to apply without a need to consider Rome II.

Surely the right order is to qualify the claim, using autonomous EU interpretation, under (retained) Rome I cq Rome II and with reference to CJEU authority- with of course some of the recent qualification issues following CJEU Hrvatske Sume thrown in. Subsequently to only consider the English common law to the extent statutorily retained EU law does not govern the issue. The approach in the judgment is unsatisfactory and in that respect joins Fetch.AI Lrd & Anor v Persons Unknown Category A & Ors [2021] EWHC 2254 (Comm) , which Amy Held and Matthias Lehmann discuss critically this morning.

Geert.

Kazakhstan Kagazy Plc & Ors v Zhunus & Ors [2021] EWHC 3462 (Comm) (21 December 2021)
Includes somewhat fuzzy discussion of applicable law to (share) tracing and ownership claims, as well as unjust enrichment etc and Rome IIhttps://t.co/6GCjwBJCqY

— Geert Van Calster (@GAVClaw) December 22, 2021

I am hoping to tackle some of the pre-Christmas queue this week, kicking off with the Opinion (no English version available) of Pikamae AG in C-568/20 J v H Limited. The case concerns the enforcement of a 2019 decision of the England & Wales High Court [I believe that judgment is Arab Jordan Investment Bank Plc & Anor v Sharbain [2019] EWHC 860 (Comm). The dates do not quite correspond (6 days of) but the amounts and line of argument do].

Clearly the UK were still a Member State at the time. The English decision was based, in turn, on two Jordanian judgments of 2013. It had rejected, on the basis of the English common law (judgments issued outside the EU are not subject to EU recognition and enforcement rules), the arguments against enforcement in the UK. The judge subsequently issued an Article 53 Brussels Ia certificate.

The issue is not whether a judgment merely confirming a non-EU judgment, may be covered by Article 53 Brussels Ia. CJEU Owens Bank has already held they cannot (see Handbook, 3rd ed. 2021, 2.573). The issue is rather whether, exequatur having been abandoned in Brussels Ia, arguments as to whether the judgment in the State of origin be at all covered by Brussels Ia, may be raised by way of an Article 45 objection to recognition and enforcement.

CJEU Diageo Brands, among others, has confirmed the narrow window for refusal of recognition on the basis of ordre public. The AG suggests wrong decisions on the scope of application of BIa, leading to incorrect A53 certificates, may fall within that category. Far from upsetting the principle of mutual trust, he suggests it is a necessary ‘safety valve’, a “soupape de sécurité » (40) which assist with said mutual trust. The AG qualifies the opinion by suggesting the issuing of an A53 certificate for a judgment that merely enforces an ex-EU judgment, is a grave error in the scope of application of the Regulation.

Should the CJEU confirm, discussion of course will ensue as to what are clear errors in the scope of application, or indeed in the very interpretation of Brussels Ia.

Geert.

EU Private International Law, 3rd ed 2021, Heading 2.2.17.1.

Opinion Pikamae AG yday, #CJEU C-568/20
Member State court may refuse recognition of other MS (UK, pre #Brexit) High Court judgment if said judgment merely enforces judgment from a third State, Jordan. Brussels Ia Title 3 'judgments' must emanate from a MShttps://t.co/NkJ6zh9FU9

— Geert Van Calster (@GAVClaw) December 17, 2021

Mahmudov & Anor v Sanzberro & Ors [2021] EWHC 3433 (QB) tackles the issue of libel tourism. As Collins Rice J puts it [3]

underlying the contest of law is a contest of two mainstream policies embodied in modern defamation law: on the one hand, the need for the law to keep up with the borderless realities of the internet, and on the other the need for international libel to be dealt with by the courts best able fairly to do so (or, to put it less neutrally, to prevent ‘libel tourism’).

The case is held under Brussels Ia for the claim was introduced on 31 December 2020, ‘IP completion day’.  Parties mostly seem at loggerheads over the implications of CJEU C-509/09 eDate. Claimants suggest eDate establishes a stand-alone full jurisdictional gateway for the Member State where the aggrieved has his or its centre of interests – CoI. Defendant claims [19]

there is still a binary choice, as per Shevill: to sue either (a) where a defendant is domiciled or (b) where a completed tort (the harmful event) occurred. The effect of eDate, they say, is that claimants taking the second route in their CoI country can now get global relief rather than being limited to compensation for harm arising in that individual state. CoI is not jurisdictional in the pure sense of introducing a freestanding basis for bringing an action somewhere; it is jurisdictional only to the limited or secondary (but nevertheless important) extent of the nature and quantum of the relief that may be sought.

Parties oddly seem in agreement that Shevill v Presse Alliance (No.2) [1996] AC 959 reaffirmed ([11] in Mahumdov]

that what constituted the ‘harmful event’ was to be determined by the national court applying its own substantive law. In other words, the preliminary jurisdictional question for the High Court in a libel case brought against a non-domiciled defendant was whether a claimant could show to the requisite standard that all the components of a tort actionable in the UK were present

I find that debatable to say the least, and in fact that consensus has an important impact on the judge’s final conclusion, which rejects CoI as a stand-alone gateway: [28] the judge sides with the defendants for the claimant’s reading would imply ‘an autonomous meaning of the ‘place where the harmful event occurred’ ‘. The latter, many might argue, must be the implication of the CJEU’s overall application of Brussels Ia. At [34] Napag Trading is offered in support however the judge I feel in Mahmudov should  have made a clearer distinction (as the judge did in Napag Trading) between the EU-governed jurisdictional gateway for tort, and the (England and Wales) governed Civil Procedure Rules test for a ‘good arguable case’. As I note in my review of Napag Trading, these CPR rules may still form a formidable procedural hurdle, however properly distinguishing between them is important, among others for costs reasons.

Geert.

Mahmudov & Anor v Sanzberro & Ors [2021] EWHC 3433 (QB) (17 December 2021)#libel tourism
Held E&W courts do not have jurisdiction per #CJEU Brussels Ia, Shevill, eDate etchttps://t.co/9vP1s5TJZd

— Geert Van Calster (@GAVClaw) December 20, 2021

The CJEU held yesterday in Grand Chamber in C-251/20 GtflixTV – for the facts see my initial flag of the case here. I reviewed the Opinion of Hogan AG here. The AG need not have bothered for the Court entirely ignores the Opinion.

The AG had predicted, as had I, that the CJEU would not heed his calls (joining those of plenty of AGs before him) that the Article 7(2) CJEU Bier introduced distinction between Handlungsort and Erfolgort be abandoned or at least curtailed. The CJEU however also dismisses his suggestion that the case at issue, which involves defamation of competitors over the internet, does not engage the Bolagsupplysningen case-law (infringement of personality rights over the internet) but rather Tibor Trans on acts of unfair competition.

I do not see quite clearly in the Grand Chamber’s mention [28] that Gtlix did not request inaccessibility of the information in France: for Gtflix did request retraction.

Instead of qualifying locus damni jurisdiction, the CJEU squarely confirms its faith in the Mosaic consequences of Article 7(2) locus damni jurisdiction. Each court in whose district damage has occurred, will continue to have locus damni jurisdiction even if the claimant requests rectification of the information and the removal of the content placed online in the Handlungsort or centre of interests jurisdiction. Locus damni jurisdiction in my view extends only to the damage occurring in that district (for Article 7(2) determines territorial, not just national jurisdiction), albeit in current, internet related case the CJEU [38] would seem to speak of ‘national’ jurisdiction, linked to accessibility in the Member State as a whole.

Those courts’ locus damni jurisdiction is subject to the sole condition that the harmful content must be accessible or have been accessible in that Member State. Per CJEU Pinckney, an additional direction of activities to that Member State is not required (the recent High Court approach in Mahmudov on which I shall blog shortly, is at odds with that approach nota bene).

Grand Chamber judgments must not only be expected in cases where earlier authority is radically changed or qualified. It can also occur in cases where the CJEU wishes to reconfirm a point earlier made but stubbornly resisted in scholarship and lukewarmly embraced in national court practice.

Geert.

#CJEU Gtflix. Insulting comments viz competitor do fall within A7(2) Brussels Ia forum delicti. Aggrieved claimant may sue for damages in every jurisdiction where the publication was accessible. Court confirms Mozaik jurisdiction https://t.co/dhz5AlGJ9A https://t.co/GOwADA02Wu

— Geert Van Calster (@GAVClaw) December 21, 2021

Athena Capital Fund Sicav-Fis SCA & Ors v Secretariat of State for the Holy See [2021] EWHC 3166 (Comm) features as defendant the Secretariat of State of the Holy See  (not the Holy See itself), and relates to a fraud and embezzlement claim of property in Chelsea, London.

Defendant says that from the perspective of Claimants, the purpose and intention of bringing these proceedings is to try to influence the criminal process in Italy, and/or the publicity emanating from the criminal process.

For its jurisdictional challenge, defendant argues [81] i) The claim was not a “civil and commercial matter” within the meaning of A1(1) BIa; ii) one of the claimants was not a party to the relevant Sale and Purchase Agreement (SPA) and could not rely upon it [this was summarily dealt with [88] by suggesting an amendment of claim] and, more forcefully, (iii) Defendant was not a party to the SPA for the purposes of A25 BIa.

Salzedo J justifiably in my view held [84] that

whether the claim is a civil or commercial matter does not turn on the subjective intentions of the claimant as to the ultimate effect that a claim might have on its interests, but on an objective reading of the claim itself and the relief that it seeks from the court. On that basis, it is a claim for declarations against the Defendant concerning the Defendant’s entry into commercial transactions with the Claimants.

and that the transaction was not entered into by the Defendant in the purported exercise of public powers: [86]

The Transaction was one that any private person could have entered into if it had the requisite funds. Nothing that was essential to the Transaction required sovereign powers to enter it and nothing that the Defendant did or purported to do was in the exercise of public authority.

As for the defendant not being a party to the SPA, the context here is whether a party involved in the signing accepted the SPA and its choice of court as an agent of the defendant. The judge, confirming the parties’ consensus, points out that that agency issue befalls to be addressed by English law. It is not said why that is the case however it is of course the result of the amended A25 – as others before it, however, the court does not complete the lex fori prorogati analysis with the recital 20 in fine mandated renvoi. On the agency issue the judge holds there is a good arguable case that the relevant agent did bind the defendant.

Next [103] ff follows a CPR-heavy discussion on the amendment of the claim form, seeing as the claimants erroneously assumed [120] that BIa was not engaged as the Vatican is not party to Brussels Ia. At [123] the conclusion is that the claim form may be amended and that defendants’ time spent in dealing with the service out issues under the common law (a wasted exercise as BIa applied), may be met in the costs order.

Once the A25 point rejected, there would have been a most narrow window for any kind of stay, yet the defendants try anyways, with [129] a series of abuse and case management arguments. One particularly poignant one is that the proceedings would interfere with a criminal proceeding. After discussion the judge [159] dismisses the idea on the facts, seeing as none of the declarations sought would involve any assertion as to what does or does not amount to criminality as a matter of the law of the Vatican State.

[163] ff discusses the abuse of process issue which the defendants, I understand, presented more or less as being integrated into the criminal procedure element, discussed above. That was wise, for abuse of process, while entertained among others in Vedanta, is arguably noli sequitur in a BIa claim. [Support for the alternative view here was sought [172ff] in Messier-Dowty v Sabena SA[2000] 1 WLR 2040]

The case-management stay proper is discussed 192 ff with reference ia to Municipio, and Mad Atelier. The judge in current case is very aware of not re-introducing through the back door what CJEU Owusu shut the front door on. He summarily discussed the possibility anyway, only to reject it.

An interesting case.

Geert.

1/2 Jurisdiction. Fraud, embezzlement re investments by the Holy See.
Held claim is within scope of Brussels Ia; A25 choice of court applies despite claimants' late recourse to that ground; no stay on grounds that proceedings would interfere with foreign criminal proceeding. pic.twitter.com/7OXCsiOkUJ

— Geert Van Calster (@GAVClaw) December 1, 2021

Bitar v Banque Libano-Francaise S.A.L. [2021] EWHC 2787 (QB) discusses whether a Lebanese bank could be considered to have ‘directed’ its activities at the UK under the CJEU Pammer Alphenhof criteria, thus triggering the consumer section of the (acquired) EU Brussels Ia Regulation.

Kent DJ held it had: claimant’s arguments are at [29] ff, purporting to build evidence of a chain of marketing aimed at the expat Lebanese community. They show the importance of information put on websites, often made to look more glamorous by the addition of elements such as links to England and London in particular.  The judge is on point I find where he dismisses the singular relevance of the use of English etc in a world where every Tom Dick and Harry put that on their website. However he does conclude [65]

the website pages to which I have referred which were visible from the United Kingdom do indeed give the impression to a fair-minded observer—and I would say quite a strong impression—that the Bank was interested in obtaining custom from the expatriate Lebanese community in whichever part of the world not insignificant numbers of those who can be treated as falling within that expression were gathered and that in 2014 did include England. 

Geert.

EU private international law, 3rd ed. 2021, Heading 2.2.9.2.7, 2.270 ff

Bitar v Banque Libano-Francaise [2021] EWHC 2787 (QB) (20 October 2021)
Unsuccessful application for finding of lack of jurisdiction
Application of retained EU law on consumer contracts, Brussels Ia
Whether Bank 'directed' its activities at the UKhttps://t.co/bLQ9dfI2AV

— Geert Van Calster (@GAVClaw) October 25, 2021

Chowdhury v PZU SA [2021] EWHC 3037 (QB) is worth a brief post on the determination of ‘domicile’ for the purposes of the insurance title of Brussels Ia (the very same Title and provisions which I discuss in Betty Tattersal). Ritchie J discusses whether the claimant was ‘resident’ in England and Wales for despite the insurance section talking of ‘domicile’, the Regulation refers for that notion to the residual rules of the Member States; and in England and Wales, domicile for natural persons, for private international law purposes, is determined by their ‘residence’.

The judge held, having summarised all relevant authority, that the earlier finding of residence absolutely stands [72]:

Claimant was a British citizen, with a British passport, who grew up in Worthing and was educated in England, worked in England, had his parents and family in England, had his friends in England, had rented flats in London, in Earls Court and in Putney, had his benefits paid in England, had his property by way of clothes and personal items in England and kept some of those at his parents’ house in Worthing, in his own room there.

That he gave up his rental accommodation in England was entirely due to him seeking medical treatment in Germany on account of the very tort he is suing for. Clearly that could not dislodge his English residence, despite the most likely temporary impact on physical stays in England.

Geert.

Chowdhury v PZU SA [2021] EWHC 3037 (QB) (12 November 2021)
Brussels Ia, jurisdiction under the insurance title, road accident in Poland.
Whether claimant was 'resident' in the UK (held affirmatively).#travellawhttps://t.co/238oD8hIhE

— Geert Van Calster (@GAVClaw) November 13, 2021