GAVC

I know I have Tweeted that I would add my tuppence on the Court of Appeal at The Hague on Wednesday reversing (English translation of the Court of Appeal here) the first instance judgment in Milieudefensie v Shell.

That judgment had imposed CO2 reduction emissions targets on Shell. (In my post on the first instance judgment I focus on the applicable law, Article 7 Rome II issue; that issue was not appealed).

I then however read my learned colleague and academic neighbour Quinten Jacobs’ most excellent thread on the case and, being a firm believer in progress by assimilation, I am most pleased he has accepted to turn that thread into a post, below (my contribution merely consisted of editing).

*  * * * * * *

 

Quick recap: In 2021, the District Court in The Hague ruled upon Milieudefensie’s claim which is based on the overall (tortious) duty of care (A6:162 Dutch Civil Code) that Shell must reduce its CO2 emissions by 45% by 2030 compared to 2019 levels. This was unprecedented. For the first time outside the context of an environmental permit, a court imposed reduction obligations on a private company. Shell argued that this ruling would force the company to halt investments and sell off assets, and it appealed the decision.

In its judgment, the Court of Appeal in The Hague first fairly succinctly summarised  the scientific evidence on climate change, referencing the Greenhouse Gas Protocol, reports from the IPCC, and the IEA. The court also covered several legal instruments, such as the UN Climate Convention, the Kyoto Protocol, the Paris Agreement, and the EU’s Fit for 55 initiative. Additionally, it cited the non-binding “expression of principles” in which the Dutch government and Shell agreed on Shell’s ambition to reduce CO2 emissions by 3.9 megatons.

The ruling then examines the climate targets Shell set for itself over the years, from 1986 to 2024. Notably, Shell’s self-imposed goals frequently shift, sometimes based on emissions, and at other times based on a percentage of its spending on emission-free products.

One interesting point is admissibility. The Court of Appeal confirmed the first instance judgment that “collective claims are inadmissible insofar as they serve the interests of the global population.” However, the interests of current and future generations of Dutch citizens and residents of the Wadden area were deemed “sufficiently similar.” The court found it undesirable that only individual citizens would have to file claims separately.

Shell’s argument that the claim  is a “political issue” does not, according to the Court of Appeal, prevent the claim from being admissible seeing as the claimants—several NGOs—are seeking to assert a “legal duty” allegedly violated by Shell.

On the substantive issues: According to Milieudefensie and other claimants, Shell breaches the “general duty of care,” a duty to act “in a manner befitting society,” which depends on the circumstances of each case. This is akin to what Belgium once called “a bonus pater familias”, now referred to as “a prudent and reasonable person” [in the common law known as the Man on the Clapham Omnibus] and as noted in the case at issue grounded in Article 6:162 of the Dutch Civil Code. Specifically, Shell is accused of violating this standard by infringing on human rights.

One key question is whether protection against dangerous climate change should be regarded as a human right, specifically under the right to life (Article 2 of the ECHR) and the right to privacy (Article 8 of the ECHR). Referring to the Dutch Supreme Court’s Urgenda judgment, the very recent Swiss climate ruling by the European Court of Human Rights- Verein KlimaSeniorinnen Schweiz and Others v. Switzerland , and judgments in Pakistan, Colombia, Brazil, and India (Ranjitsinh and Others/Union of India and Others), as well as UN reports and resolutions, the Court of Appeal concluded [7:17] that

“there can be no doubt that protection from dangerous climate change is a human right.”

This is as such not unexpected yet important to see it confirmed by the Court of Appeal. Additionally and importantly, the court reasoned [7.17] that it is

“primarily up to legislators and governments to take measures to minimise dangerous climate change. That being said, companies, including Shell, may also have a responsibility to take measures to counter dangerous climate change.”

Shell and Milieudefensie have jumped on different sections of that sentence to declare victory.

The confirmation of Shell’s responsibility brings the court to discuss ‘indirect horizontal effect of human rights’ [7.18] ff. Human rights traditionally apply to relations between individuals and the state (so-called ‘vertical applicability’, not between private parties (‘horizontal applicability’) It is generally not possible, for example, to sue a neighbor for their alleged violation of one’s freedom of religious expression (unless a crime such as hate speech is committed). However, the court noted—correctly, in line with accepted legal principles—that human rights can also apply “horizontally,” for instance, between a citizen and a corporation. This can occur via “general private law principles,” such as the duty of care, with human rights considerations incorporated into these broad and general standards.

The court [7.24] identified several factors to determine whether a company breaches this “social standard of care” [which seems to be posited by the Court as that special form of the general duty of care: duty of care, with human rights considerations incorporated, GAVC]:

the seriousness of the threat posed, the contribution to its emergence, and the capacity to contribute to addressing it.

The court referenced several “informal and non-binding agreements” that detail companies’ responsibilities regarding climate, such as the UNGP, OECD guidelines, and ISO guidelines, which Shell has endorsed. [7:26] Even if public regulations do not explicitly compel them to do so, particularly those companies whose products contribute to the climate problem are still expected to help mitigate it.

The Court of Appeal concluded on the issue [7:27]

In summary, the court of appeal is of the opinion that companies like Shell, which contribute significantly to the climate problem and have it within their power to contribute to combating it, have an obligation to limit CO2 emissions in order to counter dangerous climate change, even if this obligation is not explicitly laid down in (public law) regulations of the countries in which the company operates. Companies like Shell thus have their own responsibility in achieving the targets of the Paris Agreement.

The next question is whether a court can impose additional reduction obligations beyond existing legislation.

In this context it is usual to recall the summary by the Court [3.5] of ‘scope emissions’, with reference to the global accounting ‘GHG Protocol’:

– scope 1: direct emissions from installations that are owned or controlled in full or in part by the company;

– scope 2: indirect emissions from third-party installations from which the company purchases electricity, steam or heat for its business activities;

– scope 3: other indirect emissions not included in scope 2 generated in the company’s value chain, including emissions generated from the use or consumption of products the company supplies to third parties, such as other organisations or consumers.

The court observed [7:28] that “a considerable amount of new climate legislation” has been enacted, some after the initial ruling. It cited the updated EU-ETS system, which already covers a significant portion of Shell’s so-called scope 1 and 2 emissions, [7:35] placing them almost entirely beyond the reach of the first instance court’s reduction order. Furthermore, a significant portion of its European scope 3 emissions will fall under the EU-ETS-2 system introduced in 2023. Due to two other directives, CSRD and CSDDD, Shell must also develop a climate transition plan aligned with the Paris Agreement.

Is this sufficient? Not entirely, according to the Court of Appeal [7:53]. These measures are “not exhaustive,” and the duty of care could still lead to a tailored reduction order, though existing legislation should be considered in assessing this duty.

The key question is whether the court imposes a reduction order on Shell. This requires a “threat of a breach of a legal duty.” Regarding scope 1 and 2 emissions, the court was brief: [7:64] no reduction order is imposed, as Shell had largely achieved the 45% reduction target compared to 2019 by the end of 2023 and committed to continue these efforts. There is no “threat of a breach” of a legal duty.

For the remaining scope 3 emissions, the court noted a consensus that emissions must be reduced by a net 45% by 2030 to keep global warming below 1.5°C. However, the court found it could not  specify a particular reduction obligation for Shell Applying a general standard of -45% to Shell is [7:75] “not sufficiently case-specific” [the original Dutch text uses ‘fijnmazig’, best translated by ‘tailored’ in this case, GAVC] given evidence that reduction paths vary by sector and country, as indicated by reports from the IEA and the European Commission. The Court of Appeal [7:75] uses the simple example that

if Shell starts supplying gas to a company that previously obtained its energy from coal (which necessarily comes from a supplier other than Shell), this will lead to an increase in Shell’s scope 3 emissions, but on balance may lead to lower global CO2 emissions. It follows from that example alone that applying the general standard to Shell of a 45% reduction by the end of 2030 (or 35% or 25% in the alternative and further alternative claims) is not sufficiently case-specific.

The court acknowledged that as a major oil company, Shell has a “special responsibility,” but its product mix does not reflect the global product range, making an individual reduction order inappropriate.

[7:82] ff the Court then discusses whether a sectoral reduction target for the oil and gas portfolio is possible. Both Milieudefensie and Shell have enlisted experts who have written reports on this. According to the court, [7:91] “no sufficiently unequivocal conclusion can be drawn from all these sources regarding the required reduction in emissions from the combustion of oil and gas on which to base an order by the civil courts against a specific company.”

The contested assumptions, including the percentages from the IEA, call for “great caution in elevating numbers based on these reports to a legal norm.” It also plays a role that Milieudefensie itself contradicts or qualifies those numbers. According to the court [7:96] the available data do not provide “sufficient support”  to oblige Shell to reduce its CO2 emissions by a certain percentage in 2030.  Therefore, Milieudefensie’s claims are dismissed.

Obiter, the court went on to consider [7.97] ff whether scope 3 reduction obligations would be ‘effective’. Shell argued that if it complied with the reduction order by ceasing sales of fossil fuels from other producers, those companies would simply continue supplying fossil fuels to other buyers, with another company taking over Shell’s trading activities.

Both parties submitted reports from climate scientists on this reasoning. The court concluded that it had not been demonstrated that a reduction obligation imposed on a single company would positively impact the fight against climate change. There was no proven causal link between restricting sales and a reduction in emissions. The court found the “signaling function” of such an order “too speculative.” Core is [7:106]:

The district court rejected Shell’s contention that an obligation to reduce its scope 3 emissions by a certain percentage is not effective on the basis that any reduction in greenhouse gas emissions has a positive effect on combating climate change (paragraph 4.4.49 of the district court’s judgment). This consideration is correct in itself and is also in line with what the Supreme Court considered in the Urgenda judgment (legal ground 5.7.7 and 5.7.8). However, this does not mean that a reduction obligation imposed on a specific company will have such a positive effect, especially if this reduction obligation can also be realised by selling less fossil fuels. After all, in that scenario, the specific company would only disappear from the value chain and the (already produced) fossil fuels would still reach the end consumer via another intermediary. There may be a causal relationship between a production limitation and emission reduction, as assumed by the district court (cf. section 4.4.50 of the district court’s judgment), but Milieudefensie et al. have failed to put forward sufficient grounds to assume that in this case a causal relationship (also) exists between a sales limitation and emission reduction.

This is what Geert referred to as the ‘drug dealer defence’. [And note the obiter and cautious opening which the Court leaves for production obligations, GAVC].

This appears to be a significant barrier for future climate litigation. If only one party is brought before the court, Shell’s argument—that other companies will simply take over its role—could always come into play.

The court’s conclusion: Shell has a responsibility in the climate transition, but this does not translate into a specific reduction order. A single reduction target of 45% for one company is too general, and it has not been demonstrated that such an order would effectively lower (global) emissions. Or, in the Court’s words [7:111]:

While it follows from the foregoing that Shell may have obligations to reduce its scope 3 emissions, this cannot lead to the award of Milieudefensie et al.’s claims on this point. The court of appeal has come to the conclusion that Shell cannot be bound by a 45% reduction standard (or any other percentage) agreed by climate science because this percentage does not apply to every country and every business sector individually. The court has answered in the negative the question whether a sectoral standard for oil and gas can be established on the basis of scientific consensus. This entails that based on the available climate science, it cannot be said that a 45% reduction obligation (or any other percentage) applies to Shell in respect of scope 3. In addition, it could not be established that an obligation on Shell to reduce its scope 3 emissions by a certain percentage is effective, so that, at any rate, Milieudefensie et al. have no interest in their scope 3 claim.

Quinten.

 

 

Many thanks to Marta Pertegás for flagging Medeon Sarl v Siem Industries S.A. ECLI:NL:GHDHA:2024:1248, in which the Gerechtshof Den Haag (upon appeal in summary proceedings) confirmed recognition and enforcement of a High Court (London) default order for payment.

Exclusive choice of court for the English courts had been made by the parties in a Bond Transfer and Purchase Agreement – BTPA.

(Both parties are domiciled at Luxembourg. That the case contained enough ‘international’ elements was not at issue, see the limitations on this point in A1(2) of the 2005 Hague Choice of Court Convention and see CJEU Inkreal’s reference to same).

Medeon’s grounds for refusal of recognition were all held to fail:

• [6.8] ff:  re A8(4) a Hague Convention: “Recognition or enforcement may be postponed or refused if the judgment is the subject of review in the State of origin or if the time limit for seeking ordinary review has not expired.”

The Court held that  A13(3) 2 of the English Civil Procedure Rules (CPR)’s ‘In considering whether to set aside or vary a [default] judgment (…), the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly.” (emphasis added) clearly does not include a time limit yet clearly must be made timely.

A passing reference was made to English authorities seemingly referred to by Medeon. However the Dutch court generally held that it would be ‘unreasonable’ (6.11) to deny the enforceability to Siem, seeing as Medeon had all manner of time and options to introduce an opposition to the default order, even alongside negotiations on the amounts due. Its failure to do so must have consequences. Nemo auditur proprium turpitidnimen allegans, in other words.

 

• [6.13] ff: re A9 (c) Hague Convention:  [recognition may be refused if] “the document which instituted the proceedings or an equivalent document, including the essential elements of the claim,….i)  was not notified to the defendant in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant entered an appearance and presented his case without contesting notification in the court of origin, provided that the law of the State of origin permitted notification to be contested..”:

Here the Court held that the part of a form prescribed by the English CPR rules which had not been duly notified to Siem to an agent’s address in London (identified in the BTPA) – but it was notified in Luxembourg, was not a relevant form for the Hague Convention-instructed notification of the document instituting the proceedings: this, it held, is the claim form, which was duly notified to Medeon in Luxembourg (permission for service out for that was not required seeing as there is exclusive choice of court for England).

 

• [6.18] ff the Court held that ordre public was not engaged and neither was the principle of compensation only for actual damages suffered: [6.22] Medeon’s arguments would require the type of révision au fond [6.21] which is proscribed by the Convention.

 

A good example of the impact of the Convention. Clearly, pre-Brexit this procedure would have been a lot more straightforward.

Geert.

 

 

In my August conflict of laws exams I asked the students the following question:

In Case C-494/23 Maha, facts are as follows. On 19 August 2017, applicants purchased a motor vehicle in Germany. On 12 September 2017, the vehicle was seized by the Police of the Czech Republic on the ground that it is the subject of suspicion of the criminal offence of theft committed in France. Subsequently, the Police placed the vehicle in custody. Applicants then filed an application with the Czech court for the release of the vehicle from custody.

Given that, in previous proceedings, other persons had claimed a right to the vehicle, according to Czech law consent of all of the persons concerned is required for the release of the subject of custody, or the substitution of their consent by a court ruling. Consequently, applicants filed an application with the same court against defendants resident in France, for the substitution of their consent to the release of the item from custody. The defendants did not attend the proceedings

The CJEU is asked to determine

1. 1. 1. 1. whether proceedings concerning the substitution of the defendant’s consent to the release of an item from judicial custody in which the item was placed by a law enforcement authority in criminal proceedings, falls within the autonomous term of EU law of a ‘civil and commercial matter’ as defined in Brussels Ia.; and
         2. if it indeed does fall within that term, whether an application initiating such proceedings may be deemed to constitute an application in ‘any other third-party proceedings’ within the meaning of A8(2) Brussels Ia.

How in your view should the CJEU respond? Answer both questions, even if you argue that the answer to question 1 should be in the negative.

I was of course expecting students to review the core ‘civil and commercial’ cases as reviewed extensively on the blog -and in class; I don’t just ask students to read the blog ;-¬ , to highlight the continuing confusion /uncertainty, and to make a determination either way.

My two cents was on the claim indeed being civil and commercial. It is a claim in the periphery of a criminal investigation yet the claim itself is one in pure restitution /confirmation of ownership, between parties neither of whom are public authorities, where no extraordinary powers are being used by any of the parties involved.

The CJEU held differently two weeks ago. It is imo indicative of the state of confusion over this core trigger for Brussels Ia that another commentator, perfectly legitimately, finds the judgment ‘not surprising’.

Consider the reasons for the referring court to suggest the case might be civil and commercial, [19]:

The referring court is of the opinion that certain considerations lead to the conclusion that the proceedings for substituting consent to the release from court custody come within the concept of ‘civil and commercial matters’ within the meaning of Article 1(1) of Regulation No 1215/2012 and, consequently, within the material scope of that regulation. Accordingly, the purpose of court custody is to dispel, in the context of a civil action, any doubt as to which of the persons concerned may have the item returned to them by reason of a right to property or another right. Furthermore, those proceedings, which are inter partes, are governed by rules of civil procedure, more specifically by those relating to special court proceedings.

I won’t repeat all the references included by the CJEU seeing as they are the classic ones (all reviewed on the blog); this time the core port of call would seem to have been Lechouritou where the Court had summarised its position (in 2007) and with reference to other classics [Eurocontrol, Rüffer [7]; Gemeente Steenbergen [28]; Préservatrice foncière TIARD SA v Staat der Nederlanden [20]; Land Oberösterreich v ČEZ [22]] as follows:

It is to be remembered that, in order to ensure, as far as possible, that the rights and obligations which derive from the Brussels Convention for the Contracting States and the persons to whom it applies are equal and uniform, the terms of that provision should not be interpreted as a mere reference to the internal law of one or other of the States concerned. It is thus clear from the Court’s settled case-law that ‘civil and commercial matters’ must be regarded as an independent concept to be interpreted by referring, first, to the objectives and scheme of the Brussels Convention and, second, to the general principles which stem from the corpus of the national legal systems …

According to the Court, that interpretation results in the exclusion of certain legal actions and judicial decisions from the scope of the Brussels Convention, by reason either of the legal relationships between the parties to the action or of the subject matter of the action …

Thus, the Court has held that, although certain actions between a public authority and a person governed by private law may come within the scope of the Brussels Convention, it is otherwise where the public authority is acting in the exercise of its public power.

Core of the CJEU’s Lechoritou reference in current case is in [44]. The referring court and the claimants had argued that the preliminary proceedings take place between individuals not involving law enforcement authorities, that the procedure is inter partes and that the detailed rules for its exercise are governed by rules of civil procedure (the kind of arguments which in other cases assisted in coming to a finding of ‘civil and commercial’). In Mahá the CJEU answers [44] with reference to Lechoritou ([41)}

the fact that the plaintiff acts on the basis of a claim which arises from an act in the exercise of public powers is sufficient for his action, whatever the nature of the proceedings afforded by national law for that purpose, to be treated as being outside the scope of the Brussels Convention

Pro memoria: Lechoritou involved a claim by Greek nationals against the German State, on the basis of a nazi massacre in 1943. A money claim by private individuals against a foreign state (unlike current case between private parties) directly ‘arising from’ the ultimate act of sovereign power namely warfare.

The situation in current case is very very different.

[36] the CJEU insists that the current action is “based on”  –I do not think it is: it follows from it, it is not based on it– “the seizure proceedings ordered by the law enforcement authorities and the placing of the property in question in the custody of the court.” This, it says [36] “is an essential prerequisite for the release of the property from the custody of the court and the restoration of the property” and [37] “It follows that, in the light of both its subject matter and its basis, since proceedings to substitute consent are inextricably linked to the seizure of the property at issue by the law enforcement authorities and to the subsequent placing of the property in the custody of the court, they cannot be examined without having regard to those proceedings.” (emphasis added)

This focus on ‘inextricably linked’, the ‘prerequisite’ of the property claim and the vicinity of the criminal proceedings brings us close in my view to the context criterion adopted by the Court in Kuhn and  in my view is likely to lead to yet further confusion, as well as forum shopping possibilities. There is an infinite amount of civil claims which are inextricably linked to criminal proceedings which are the prerequisite of the civil claim at issue or arise form such a claim. Take libel actions which in many States are a criminal offence, or take follow-on damages claims in competition law or unfair competition: both are criminally sanctioned in all EU Member States. Leaving it up to national courts to decide whether the link is intimate enough to warrant exclusion from Brussels Ia is likely to endanger Brussels Ia’s number one DNA, which last time I looked, continues to be predictability.

Geert.

EU private international law, 4th ed. 2024, Heading 2.2.2.2.

 

In C-425/22 MOL Magyar Olaj- és Gázipari Nyrt. v Mercedes-Benz Group AG Emiliou AG had opined in that a parent company cannot rely on the competition law concept of economic unit to establish jurisdiction where it has its registered seat, re a claim for damages for the harm suffered by its subsidiaries. I referred in my review of the Opinion to my colleague Joeri Vananroye summarising it as :

“In corporate law terms: yes to outsider veil piercing, no to insider reverse veil piercing. Outsiders may disregard legal structure and go for economic reality; but not those who set up that structure. See also: rules on derivate damages.”

The CJEU confirmed early July (yes, I have a blog queue to tackle…): [44]

the objectives of proximity and predictability of the rules governing jurisdiction and consistency between the forum and the applicable law, and the unhindered possibility of claiming damages for the harm arising from an infringement of competition law affecting a member of the economic unit, preclude a reverse application of the concept of ‘economic unit’ for the determination of the place where the damage occurred, for the purposes of Article 7(2) of Regulation 1215/2012.

The CJEU further explains these principles in current context with reference to the same case-law as the AG and as reviewed in my post.

Geert.

EU private international law, 4th ed. 2024, 2.438 ff.

https://x.com/GAVClaw/status/1809233522462183689

The CJEU in Grand Chamber held 10 days back in C‑633/22 Real Madrid Club  de Fútbol, AE v EE, Société Éditrice du Monde SA. No English version was yet available at the time of writing.

The Court in essence confirms Spzunar AG’s Opinion which I reviewed here.

Its findings echo the language and sentiment of Article 16 of the EU’s anti-SLAPP Directive 2024/1069 (that Article addressing non-recognition of third country judgments).

The Grand Chamber emphasises mutual trust and the consequential very narrow room for refusal of recognition on ordre public grounds, even in the context of the application of the Charter’s Article 11 freedom of expression grounds: refusal must be exceptional, case-based, and not based on an entirely new balancing act.

However the court of enforcement must refuse to recognise if the Article 11 rights are fundamentally impacted. In exercising that assessment, it must i.a. take account of the distinction between the reputation of a legal cq natural person (the former lacking the ‘moral’ element of impacting on the ‘dignity’ of the person: [58]), the financial capacity of the defendant (accused to have libeled) [68], and the stiffing impact caused by a disproportionate difference between the actual damage suffered, and the libel award [62 ff].

Geert.

EU Private International Law, 4th ed, 2024, 2.619 ff.

 

I reviewed Emiliou AG’s first Opinion in C‑339/22 BSH Hausgeräte GmbH v Electrolux AB here.  Seeing as the case was now reassigned to Grand Chamber (compare with CJEU IRnova where a 3 member chamber rejected reflexivity en stoemelings) and as a new hearing was held solely on the issue of reflexivity, the AG got a second go at the issue.

As I reported in my earlier post I do not think his views on the reflexivity issue (as opposed to his solid views on the A24(4) patent jurisdiction issue) are convincing. This second Opinion is a great resource for the conceptual thinking on reflexive effect (incl its relation to public international law issues of comity) however it does not sway me and neither do I believe will it convince the court.

Lydia Lundstedt has summarised and reviewed the Opinion here and (among others because I am swamped at Melbourne where term is in full swing) I am happy to refer.

The essence of the Opinion is that in the AG’s view under residual private international law (and civil procedure) rules, Member States may refuse to exercise Article 4 (or other) Brussels Ia derived jurisdiction if the claim engages with the validity of third States patents or, as Lydia summarises it: Member States may (1) decline to adjudicate a claim that has as its object the validity of a third-State patent (erga omnes) and (2) refuse to rule (inter partes) on an invalidity defence raised in an infringement action and stay that action while waiting for the authorities in the third State to rule on validity.

I have in fact advocated a change to the rules, de lege feranda. I do not believe reflexive effect exists de lege lata however, even under the roundabound way of letting Member States effect it under their residual rules.

Geert.

EU private international law, 4th ed. 2024, 2.218.

The CJEU this morning has entirely and in succinct fashion confirmed the Opinion of Emiliou AG which I discuss here.

[30] that the contract between the parties, both domiciled in the same Member State, is meant to be performed either in another Member State or a third State, by its nature triggers the question which court might have jurisdiction (reference to CJEU Inkreal) and sufficiently qualifies as the international element required to trigger Brussels Ia. Like the AG, the CJEU also refers to the use of the wording in A18(1) ‘regardless of the domicile of the other party’ to corroborate that finding.

[35]-[36] the Court like the AG also warns against a symmetric  application of non-BIa authority to Brussels at least one that is assumed too readily.

Confirmation of the consumer title assigning not just national but territorial jurisdiction is backed up ia by reference to CJEU Allianz (on the insurance title).

After the solid AG Opinion, an equally solid judgment.

Geert.

EU Private International Law, 4th ed 2024, 2.22 ff and 2.233 ff.

https://x.com/GAVClaw/status/1817834126927446343

 

As we go through summer I am trying to catch up with posts I did not find the time for sooner. Readers will know that they may want to keep an eye on my Twitter feed to keep up with recent developments.

A failed forum non conveniens challenge in Lunn v Antarctic Logistics Centre International (Pty) Ltd [2024] EWHC 1662 (KB) led to an interesting discussion on applicable law under the Rome II Regulation.

The claim concerns injuries sustained by claimant whilst he was working as a self-employed aircraft engineer for a Malta-based company, Jet Magic Limited. At the time of the accident he was in the process of carrying out checks on a Boeing 757 operated by Jet Magic, which was stationary on the blue ice airstrip of the Novolazarevskaya Air Base, also known as the Novo Air Base, Schirmacher Oasis, Queen Maud Land, Antarctica. Claimant is a British citizen and was resident in the UK at the material time.

The Defendant, Antarctic Logistics Centre International (Pty) Limited, is a company incorporated under the law of South Africa. At the material time it was the occupier and operator of the Novo Airstrip pursuant to an agreement with the Russian Federation. The Defendant chartered the aircraft to transport scientists and workers to and from research stations in Antarctica.

Defendant concedes that the Claimant’s evidence of continuing symptoms from his injuries whilst in England is sufficient to establish an arguable case that the tort gateway for jurisdiction per Brownlie, is met.

Issues between the parties are first the merits test: has the Claimant has established that his pleaded case has a reasonable prospect of success / that there is a serious issue to be tried on the merits (CPR 6.37(1)(b))? Secondly, forum conveniens and discretion: has the Claimant established that England and Wales is the proper place to try the claim and, if so, in all the circumstances, ought the court to exercise its jurisdiction to permit service out of the jurisdiction (CPR 6.37(3))?

The dispute between the parties as to the applicable law is relevant both to the determination of whether the Claimant’s case has real prospects of success and to the determination of the forum issue.

The particulars of claim contend that English law applies by virtue of A4(3) of Rome II, the “manifestly closer connection” correction to the general rule. In the pleadings however focus became different: namely that English law should be applied at this stage of the proceedings pursuant to the “default rule” or, alternatively, on the basis of the “presumption of similarity”, namely that English law is substantially similar to any relevant foreign applicable law in relation to the core tortious principles arising in this case. Claimant’s counsel submits that English law should be applied unless and until the Defendant pleads a Defence in due course which alleges the application of foreign law and establishes its case in that regard.

Defendant contends that Russian law is the applicable law pursuant to A4(1) Rome II on the basis that the Novo Airstrip is said to be located in an area which is subject to Russian jurisdiction and law. There is a disagreement between the parties as to whether the Novo Airstrip is in an area of Antarctica claimed by Norway or by Russia or both and, accordingly, as to what the “law of the country” should be deemed to be pursuant to A4(1) Rome II in respect of damage occurring on the Novo Airstrip. [37] The difficulty of Antarctica as a ‘country’, and the challenge of applying Rome I and II to vessels is also flagged in Dicey.

Defendant also advances two further contentions in relation to the applicable law:

a. First, South African law is said to be the applicable law pursuant to A4(2) Rome II on the basis that, pursuant to A23(2) of Rome II, the principal place of the Claimant’s business should be deemed to be South Africa. It is said that as a self-employed engineer working on the aircraft, Claimant’s principal place of business was wherever the aircraft was located from time to time. It is contended that the aircraft was based in Cape Town, South Africa at the material time. It is submitted that this is relevant to the merits test as the Claimant has adduced no evidence of South African law, as well as to issues of forum.

b. Second, it is said that it is clear that English law does not apply to this case and that South African or Russian (or, potentially Norwegian) law applies and that “as there is no pleaded case of Russian, South African or Norwegian law, the case does not disclose any arguable case” and so the Claimant cannot succeed on the merits test.

As things turned out, the A4(1) discussion was not pursued by parties at this stage. Per Tulip Trading Ltd (a Seychelles company) v Bitcoin association for BSV and others [2023] EWCA Civ 83 applicable law discussions a the jurisdictional stage must be conducted summarily.  [38] Both parties have been attempting to liaise with the Foreign Office and are still attempting to collate evidence as to the potential application of A4(1) to cases concerning damage which occurs in Antarctica. [39] The possibility of either Russian or Norwegian law applying is in any event irrelevant to the issue of forum (as opposed to the merits test) because no party is asserting that the claim should be heard in either Russia or Norway.

In the circumstances, the primary dispute between the parties on applicable law therefore is whether English law should be deemed to apply at this stage of the proceedings pursuant to the default rule or the presumption of similarity (claimant’s take) or whether South African law is the applicable law pursuant to A4(2) Rome II (defendant).

Webb DJ [40] ff rejects the submission that A4(2) implies application of South African law to the case.  [48] he holds there is something artificial to place too much “weight for jurisdiction purposes on the location of a place of business which is itinerant or peripatetic in nature.” (Compare nb somewhat CJEU Ryanair). “If and insofar as [claimant] can be said to have had a principal place of business at the material time, I consider that the weight of the evidence currently before me points, albeit somewhat weakly given the artificiality of applying the test to an itinerant business, to his principal place of business being England.”

The judge then applies [57] the default rule:

In the present case, for the reasons set out at [38] to [39] above, it has not been established that either Russian or Norwegian law is applicable under Article 4(1); nor can I be satisfied, on the present evidence, that there is a well-founded case (to adopt the words used by Lord Leggatt in Brownlie II at [116]) that Russian law applies, nor that Norwegian law applies, pursuant to Article 4(1). For the reasons set out at [47] above it has not been established (and nor do I believe there to be a well-founded case for arguing) that South African law is applicable under Article 4(2) of Rome II. It has also not been established that any foreign law is applicable under Article 4(3). In such circumstances it is appropriate, in my judgment, for the court to apply English law on the default basis at this jurisdictional stage.

(and note [58]: “If the matter proceeds in this jurisdiction, then the Defendant will have the option of pleading, and attempting to establish, that foreign law applies, whether Norwegian, Russian or South African. It is, of course, possible that neither party elects to establish that any foreign law is applicable in such circumstances or that, if applicable, there are any material differences between that alleged applicable law and English law for the purposes of this claim.”)

The obiter fallback [59] is reliance on the presumption of similarity.

The remainder of the discussion then runs through the various forum non and merits issues, and concludes [116]

Claimant has, in my judgment, satisfied the burdens upon him to show (a) that the claim has a reasonable prospect of success, (b) that there is a good arguable case that the claim falls within the relevant jurisdictional gateway (a point rightly conceded by the Defendant), and (c) that England and Wales is the forum in which the case can be suitably tried for the interests of all the parties and for the ends of justice and is clearly and distinctly the proper place to bring the claim. In all the circumstances, I am satisfied that this is a case in which it is appropriate for the court to exercise its discretion to permit service of these proceedings out of the jurisdiction on the Defendant.

Of note, and an A4 Rome II discussion to be continued.

Geert.

EU Private International Law, 4th ed. 2024, 4.37 ff.

 

https://x.com/GAVClaw/status/1808153657340244375

Nicholls & Anor v Mapfre Espana Compania De Seguros Y Reaseguros SA [2024] EWCA Civ 718 is the unsuccessful appeal against Sedgwick v Mapfre Espana Compania De Seguros Y Reaseguros Sa [2022] EWHC 2704 (KB) which I discuss here and against Nicholls v Mapfre and Sonia Woodward v Mapfre [2023] EWHC 1031 (KB) which I discuss here.

The case centres around the difference in the Rome II Regulation between matters of procedure on the one hand and substantive law on the other hand, for the purposes of private international law and the interpretation of A1 and 15 Rome II.

In the appeals Mapfre contend that the interest payable under Spanish Insurance Contract Act Act 50/1980 is penal in nature because it rises to 20 per cent per annum in the third year of application, is payable as a matter of Spanish procedural law to encourage early settlement of disputes by insurance companies, and is a matter of procedure which is not covered by Rome II. This means that in their view the laws of E&W apply to the assessment and award of interest. Mapfre also contend that it is wrong to use the statutory discretion under either section 35A of the (English) Senior Courts Act or section 69 of the County Courts Act to allow Spanish penal interest in by the back door when it relates to a different procedural environment to which different procedural rules apply, and where the laws of England and Wales contain within Part 36 of the Civil Procedure Rules procedural provisions to encourage the early settlement of disputes.

Respondents contend that Act 50/1980 is a matter of substantive law because it is an integral part of the way in which damages and interest are assessed in proceedings in Spain for personal injuries in actions against insurers. Therefore it should be ordered to be paid as Spanish law governs the action. As an alternative, the respondents also contend that if Act 50/1980 is a matter of procedure for the purposes of Rome II, then all of the judges were right, and made no error in the exercise of their discretion, in ordering the payment of an equivalent rate of interest under Act 50/1980 as a matter of discretion under section 35A of the Senior Courts Act or section 69 of the County Courts Act.

Dingemans LJ referred to Wall, Lazar, and Actavis as most relevant authority. I agree with his view [33] which I have expressed before (eg in the Handbook, 4th ed, 4.83), that the the evidence and procedure carve-out need not be given either a narrow, strict, or broad interpretation. It simply needs to be applied as intended. [34] he argues

In order to carry out the task of determining whether the interest payable under article 20.4 of Act 50/1980 is a matter of procedure, it is necessary to undertake a consideration of Act 50/1980. That is not to discover whether the provision is considered to be substantive law or a matter of procedure under either Spanish law or the laws of England and Wales, because what is a matter of procedure for the purposes of article 1(3) of Rome II is an autonomous concept under Rome II. The purpose of undertaking a consideration of Act 50/1980 is to determine whether the issue of interest under that provision is so “intertwined” with the assessment of damages, which is a matter of substantive law under Rome II, that interest payable under Act 50/1980 should be considered a matter of substantive law and not a matter of procedure.” (emphasis added)

The test put forward by the Court of Appeal therefore would seem to be the intensity of intertwinedness of the issue at stake, with one of the elements that are clearly listed in A15’s ‘scope of the law applicable’ (here: “assessment of damage”). (Note Stuart-Smith LJ’s concurrence [79] not to look at the issue through an “overly-Anglo/Welsh prism”).

This leads here [58] to the conclusion that

the interest payable under Act 50/1980 is not a matter of procedure for the purposes of article 1(3) of Rome II, and is governed by the law applicable to the non-contractual obligation, namely the law of Spain.

[68] ff then discusses subrogation under A19 Rome II with reference [70] to relevant CJEU authority.

Of note.

Geert.

EU Private International Law, 4th ed 2024, ia Heading 4.8.

https://x.com/GAVClaw/status/1806583047313121464

 

This guest post was authored by Dr Mukarrum Ahmed, Barrister (Lincoln’s Inn), and Lecturer in Business Law & Director of PG Admissions at Lancaster University Law School. I am most grateful to Dr Ahmed for complementing my earlier post on the CJEU case discussed, Joined Cases C‑345/22 and C‑347/22 Maersk.

 

According to the doctrine of privity of contract, only parties to a choice of court agreement are subject to the rights and obligations arising from it. However, there are exceptions to the privity doctrine where a third party may be bound by or derive benefit from a choice of court agreement, even if it did not expressly agree to the clause. A choice of court agreement in a bill of lading which is agreed by the carrier and shipper and transferred to a consignee, or third-party holder is a ubiquitous example.

Article 25 of the Brussels Ia Regulation does not expressly address the effect of choice of court agreements on third parties. However, CJEU jurisprudence has laid down that the choice of court agreement may bind a third party in some contexts even in the absence of the formal validity requirements. Effectively, this is a context specific harmonised approach to developing substantive contract law rules to regulate the effectiveness of choice of court agreements.

Article 25 of the Brussels Ia Regulation prescribes formal requirements that must be satisfied if the choice of court agreement is to be considered valid. Consent is also a necessary requirement for the validity of a choice of court agreement. (Case C-322/14 Jaouad El Majdoub v CarsOnTheWeb.Deutschland GmbH EU:C:2015:334, [26]; Case C‐543/10 Refcomp EU:C:2013:62, [26]).

Although formal validity and consent are independent concepts, the two requirements are connected because the purpose of the formal requirements is to ensure the existence of consent (Jaouad El Majdoub, [30]; Refcomp, [28]). The CJEU has referred to the close relationship between formal validity and consent in several decisions. The court has made the validity of a choice of court agreement subject to an ‘agreement’ between the parties (Case C-387/98 Coreck EU:C:2000:606, [13]; Case C-24/76 Estasis Salotti di Colzani Aimo e Gianmario Colzani s.n.c. v Rüwa Polstereimaschinen GmbH EU:C:1976:177, [7]; Case C-25/76 Galeries Segoura SPRL v Société Rahim Bonakdarian EU:C:1976:178, [6]; Case C-106/95 Mainschiffahrts-Genossenschaft eG (MSG) v Les Gravières Rhénanes SARL EU:C:1997:70, [15]). The Brussels Ia Regulation imposes upon the Member State court the duty of examining whether the clause conferring jurisdiction was in fact the subject of consensus between the parties, which must be clearly and precisely demonstrated (ibid). The court has also stated that the very purpose of the formal requirements imposed by Article 17 (now Article 25 of Brussels Ia) is to ensure that consensus between the parties is in fact established (Case 313/85 Iveco Fiat v Van Hool EU:C:1986:423, [5]).

In similar vein, the CJEU has developed its case law as to when a third party may be deemed to be bound by or derive benefit from a choice of court agreement. In the context of bills of lading, the CJEU has decided that if, under the national law of the forum seised and its private international law rules, the third-party holder of the bill acquired the shipper’s rights and obligations, the choice of court agreement will also be enforceable between the third party and the carrier (C 71/83 Tilly Russ EU:C:1984:217, [25]; C-159/97 Castelletti EU:C:1999:142, [41]; C‑387/98 Coreck EU:C:2000:606, [24], [25] and [30], C‑352/13 CDC Hydrogen Peroxide EU:C:2015:335, [65]; Cf. Article 67(2) of the Rotterdam Rules 2009). There is no separate requirement that the third party must consent in writing to the choice of court agreement. On the other hand, if the third party has not succeeded to any of the rights and obligations of the original contracting parties, the enforceability of the choice of court agreement against it is predicated on actual consent (C‑387/98 Coreck EU:C:2000:606, [26]; C‑543/10 Refcomp EU:C:2013:62, [36]). A new choice of court agreement will need to be concluded between the holder and the carrier as the presentation of the bill of lading would not per se give rise to such an agreement (AG Slynn in Tilly Russ).

Article 17 of the Brussels Convention and Article 23 of the Brussels I Regulation did not contain an express provision on the substantive validity of a choice of court agreement. The law of some Member States referred substantive validity of a choice of court agreement to the law of the forum whereas other Member States referred it to the applicable law of the substantive contract (Heidelberg Report [326], 92). However, Article 25(1) of the Brussels Ia Regulation applies the law of the chosen forum (lex fori prorogatum) including its choice of law rules to the issue of the substantive validity of a choice of court agreement (‘unless the agreement is null and void as to its substantive validity under the law of that Member State’).

The CJEU recently adjudicated on whether the enforceability of English choice of court agreements in bills of lading against third party holders was governed by the choice of law rule on ‘substantive validity’ in Article 25(1) of the Brussels Ia Regulation. (Joined Cases C‑345/22 and C‑347/22 Maersk A/S v Allianz Seguros y Reaseguros SA and Case C‑346/22 Mapfre España Compañía de Seguros y Reaseguros SA v MACS Maritime Carrier Shipping GmbH & Co.) The CJEU held that the new provision in Article 25(1) referring to the law of the Member State chosen in the choice of court agreement including its private international law rules is not applicable. A third-party holder of a bill of lading remains bound by a choice of court agreement, if the law of the forum seised and its private international law rules make provision for this. Notwithstanding, the principle of primacy of EU law precludes Spanish special provisions for the subrogation of a choice of court agreement that undermine Article 25 as interpreted by CJEU case law.

In the three preliminary references under Article 267 TFEU, the enforceability of English choice of court agreements between Spanish insurance companies and maritime transport companies was at issue. The insurance companies exercised the right of subrogation to step into the shoes of the consignees and sued the maritime transport companies for damaged goods. The central issue in the proceedings was whether the choice of court agreements concluded in the original contracts of carriage evidenced by the bills of lading between the carrier and the shipper also bound the insurance companies. The transport companies objected to Spanish jurisdiction based on the English choice of court agreements. The Spanish courts referred questions to the CJEU on the interpretation of choice of court agreements under the Brussels Ia Regulation.

At the outset, the CJEU observed that the Brussels Ia Regulation is applicable to the disputes in the main proceedings as the proceedings were commenced by the insurance companies before 31 December 2020. (Article 67(1)(a), Article 127(1) and (3) of the EU Withdrawal Agreement)

The CJEU proceeded to consider whether Article 25(1) of the Brussels Ia Regulation must be interpreted as meaning that the enforceability of a choice of court clause against the third-party holder of the bill of lading containing that clause is governed by the law of the Member State of the court or courts designated by that clause. The CJEU characterised the subrogation of a choice of court agreement to a third party as not being subject to the choice of law rule governing substantive validity in Article 25(1) of the Brussels Ia Regulation. (C‑519/19 DelayFix EU:C:2020:933, [40]; C‑543/10 Refcomp EU:C:2013:62, [25]; C‑366/13 Profit Investment SIM EU:C:2016:282, [23])

The CJEU relied on a distinction between the substantive validity and effects of choice of court agreements (Maersk, [48]; AG Collins in Maersk, [54]-[56]). The latter logically proceeds from the former, but the procedural effects are governed by the autonomous concept of consent as applied to the enforceability of choice of court agreements against third parties developed by CJEU case law.

Although Article 25(1) of the Brussels Ia Regulation differs from Article 17 of the Brussels Convention and Article 23(1) of the Brussels I Regulation, the jurisprudence of the CJEU is capable of being applied to the current provision (Maersk, [52]; C‑358/21 Tilman, EU:C:2022:923, [34]; AG Collins in Maersk, [51]-[54]).

The CJEU concluded that where the third-party holder of the bill of lading has succeeded to the shipper’s rights and obligations in accordance with the national law of the court seised then a choice of court agreement that the third party has not expressly agreed upon can nevertheless be relied upon against it (C 71/83 Tilly Russ EU:C:1984:217, [25]; C-159/97 Castelletti EU:C:1999:142, [41]; C‑387/98 Coreck EU:C:2000:606, [24], [25] and [30], C‑352/13 CDC Hydrogen Peroxide EU:C:2015:335, [65]; Maersk, [51]; Cf. Article 67(2) of the Rotterdam Rules 2009).

In this case, there is no distinct requirement that the third party must consent in writing to the choice of court agreement. The third party cannot extricate itself from the mandatory jurisdiction as ‘acquisition of the bill of lading could not confer upon the third party more rights than those attaching to the shipper under it’ (C 71/83 Tilly Russ EU:C:1984:217, [25]; C-159/97 Castelletti EU:C:1999:142, [41]; C‑387/98 Coreck EU:C:2000:606, [25]; Maersk, [62]). Conversely, where the relevant national law does not provide for such a relationship of substitution, that court must ascertain whether that third party has expressly agreed to the choice of court clause (C‑387/98 Coreck EU:C:2000:606, [26]; C‑543/10 Refcomp EU:C:2013:62, [36]; Maersk, [51]).

According to Spanish law, a third-party to a bill of lading has vested in it all rights and obligations of the original contract of carriage but the choice of court agreement is only enforceable if it has been negotiated individually and separately with the third party. The CJEU held that such a provision would undermine Article 25 of the Brussels Ia Regulation as interpreted by the CJEU case law (Maersk, [60]; AG Collins in Maersk, [61]). As per the principle of primacy of EU law, the national court has been instructed to interpret Spanish law to the greatest extent possible, in conformity with the Brussels Ia Regulation (Maersk, [63]; C‑205/20 Bezirkshauptmannschaft Hartberg-Fürstenfeld (Direct effect) EU:C:2022:168) and if no such interpretation is possible, to disapply the national rule [65].

The choice of law rule in Article 25(1) is not an innovation without utility. A broad interpretation of the concept of substantive validity would encroach upon the autonomous concept of consent developed by CJEU case law yet it could avoid the need for a harmonised EU substantive contract law approach to the enforceability of choice of court agreements against third parties. The CJEU in its decision arrived at a solution that upheld the choice of court agreement by the predictable application of its established case law without disturbing the status quo. In practical terms, the application of the choice of law rule in Article 25(1) would have led to a similar outcome. However, the unnecessary displacement of the CJEU’s interpretative authorities on the matter would have increased litigation risk in multi-state transactions.

By distinguishing substantive validity from the effects of choice of court agreements, the CJEU does not extrapolate the choice of law rule on substantive validity to issues of contractual enforceability that are extrinsic to the consent or capacity of the original contracting parties. On balance, a departure from the legal certainty provided by the extant CJEU jurisprudence was not justified. It should be observed that post-Brexit, there has been a resurgence of English anti-suit injunctions in circumstances such as these where proceedings in breach of English dispute resolution agreements are commenced in EU Member State courts.

Mukarrum.

 

Three Opinions of Vlas AG at the Dutch Supreme Court dated 5 April 2024 but published today discuss issues of applicable law in competition follow-on cases. See also my earlier posts on Air Cargo and Palink. CJEU authority cited includes Concurrence, Nintendo, Tibor Trans, CDC, flyLAL.

ECLI:NL:PHR:2024:561 is the Palink case in the Truck Cartel: Uzdaroji Akcine Bendrove “Palink” et al v CNH Industrial NV et al

ECLI:NL:PHR:2024:370 concerns the Air Cargo cartel: KLM et al v Stichting Cartel Compensation – SCC; and

ECLI:NL:PHR:2024:369 is also an Air Cargo case, ‘Equilib’: KLM et al v Equilib Netherlands B.V.

In the Truck Cartel opinion which is a preliminary reference, the essence of the case is the impact of a single and continuous infringement on the application of A6 Rome II. A first issue is the date of application of Rome II: it applies (A31 juncto A32) to events giving rise to damage which occur (the events, NOT the damage) after 11 January 2009. The cartel at issue ran between 1997 and 2011. (4.6) the application of Dutch residual lex causae rules for the pre 2009 period and of the Rome II rules for the post 2009 period does not serve Rome II’s quest for predictability. The fissure between pre and post Rome II’s application ratione temporis in the case of a continuous tort is not solved by CJEU Homawoo as referenced ia in CJEU Nikiforidis. 

Vlas AG 4.8 cites Mankowski

The second remaining issue is whether the Rome II Regulation applies where a continuous tort was at stake, i.e. where a multiplicity of events giving rise to the damage have occurred, some before and some after 11 January 2009. There is a plethora of conceivable solutions: First, the last causal event matters. One would run into severe trouble in identifying which event is the last. Second, the first causal event matters. Third, the most relevant causal event matters. Fourth, all causal events are treated as equivalent, and it disqualifies for the purposes of applying the Rome II Regulation that one of them occurred before 11 January 2009. Fifth, all causal events are treated as equivalent, and it suffices for the application of the Rome II Regulation that one of them occurred on or after 11 January 2009.

If one is prepared to adopt as a general policy that the Rome II Regulation and its uniform rules should be applied to the widest possible extent, the fifth approach ought to be preferred.

and Fitchen (4.10)

(…) accordingly, for many years to come it may be that the applicable law in cross-border competition law claims brought after 11 January 2009 will still be wholly or partially governed by pre-Rome II methods of determining the applicable law. As such an outcome does not appear to accord with the general policy of increasing legal certainty in the context of cross-border claims, it is worth considering whether, in the circumstance that an infringement of competition law is alleged to be ongoing both before and after the temporal datum point of Rome II, it is wrong to split the ascertainment of the applicable law. Possibly the fact that the damage causing events of the competition law tort continue past the Rome II datum point should cause the alleged tort to be regarded as occurring continuously and to therefore legitimate the application of the Rome II Regulation to determine the applicable law for the entire claim? Though increasing legal certainty and simplifying the choice of law process for cross-border competition law claims, this suggestion has to contend with the principled objection that it would be an unfair departure from the general stance of Rome II of neutrality between claimant and defendant. This objection is possibly less convincing in the specific context of follow-on competition law claims as here the existence of an anti-competitive act is already established: in these cases such neutrality may be argued to perversely favour the wrongdoer. Considerations of principle aside, the most formidable obstacle to any suggestion that competition claims which straddle the temporal datum point should benefit from a single method of applicable law selection is Rome II itself: the text currently lacks any provision supporting retrospective temporal applicability whether immediate or deferred in time.

It is suggested that a case based upon increasing legal certainty can be made for a legislative amendment to address the problem of an absence of transitional provisions concerning the temporal applicability in Rome II for follow-on competition claims either by allowing a deferred form of retrospective temporal applicability after the effluxion of a certain period of time from 11 January 2009, or, by providing follow-on competition claims with a new specific regime which includes private international law measures more appropriate to this specific type of competition claim.

Vlas AG then himself opposes the fissure or ‘split’ (4.11), citing predictability and legal certainty. However unlike Mankowski he does not propose that author’s ‘5th solution’ per above, rather, (4.13) he suggests the residual rules should apply seeing as the continuous event started pre Rome II’s ratione temporis scope. This he argues will serve predictability and unity of lex causae, albeit he concedes that unity will be achieved at the national as opposed to the EU level. The general absence of retroactive effect of EU PRivIL rules is cited, justifiably IMO, in support. (4.14) he argues against referral to the CJEU, not because the issue is acte clair, rather because in his view under the Dutch residual rules, too, claimants may make choice of law for the lex fori, just as they can under A6(3) RII. In other words he does not think there is an interest in requesting the view from the CJEU. The AG then further discusses the exercise by claimants under A6(3) Rome II (and the residual Dutch rules), opining that it need not be the claimant whose interests have been affected in various countries, just as long as markets have been affected in various countries. He also sees no reason (and I agree; the AG uses ia linguistic comparison) that this should be any different where the claims have been acquired by litigation vehicles. In the air cargo cartel SCC and Equilib cases, which are an application for annulment, Rome II does not feature ratione temporis however in accordance with Dutch authority, A6 Rome II is used pro inspiratio. Here the determination of ‘markets affected’ is an issue. With reference to the travaux and a wide variety of scholarship, the AG suggests ‘the law of the state on whose market the victim was affected by the anti-competitive practice’ ought to be the lex causae, leading to Mozaik of course, with then the subsequent discussion of A6(3)b. In both cases, the AG proposes that the judgment appealed be annulled on the issue of validity of assignment.

Others no doubt will have more analysis. These are highly relevant opinions.

Geert.

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

https://x.com/GAVClaw/status/1793671819590766990

 

 

A bit of a late reblog but for archival etc purposes see my post with Elijah Granet on ECtHR Executief van de Moslims van België v Belgium , re unstunned slaughter, freedom of religious expression and animal welfare over at the Oxford Human Rights Blog here in four languages.

The CJEU held succinctly yesterday and without AG Opinion in Case C-222/23 Toplofikatsia Sofi. The Bulgarian rule according to which all Bulgarian nationals have a permanent domicile in Bulgaria even if they move to a different Member State, undermines the effet utile of Brussels Ia despite that Regulation leaving the determination of domicile of natural persons to the Member States: [60]:

in so far as national legislation automatically links [the concept of domicile] to a permanent, mandatory and sometimes fictitious address registered for any national of the Member State concerned, such legislation undermines the effectiveness of Regulation No 1215/2012, since it amounts to replacing the domicile criterion, on which the rules of jurisdiction laid down by that regulation are based, with the criterion of nationality.

Article 21 TFEU (non-discrimination and citisenship) need not be separately addressed in light of the BIa finding.

Orders for payment against a debtor suspected of being domiciled elsewhere in EU yet also domiciled in Bulgaria according to the formal presumption, may of course (and only) be issued by a Bulgarian court on the basis of A7(1) or indeed any other jurisdictional gateway other than A4,  5 and 6 BIa.

Geert.

 

A quick flag of the letter before action in Ali Hussein Julood v BP, a claim relating to gas flaring in Iraqi oil fields. BP is likely to contest jurisdiction under forum non conveniens (a reminder that such defence would be impossible under Lugano and very narrow under Brussels Ia). Information to date is vague however one imagines applicable law may be argued under Article 7 Rome II (and contested by BP as Maran did in Begum v Maran), giving claimants the choice between lex loci delicti commissi or lex locus damni, with for the former the discussion whether it is BP’s company policy with respect to flaring etc that is the real locus delicti.

Geert.

EU Private International Law, 4th ed. 2023, 4.56 ff.

A7 Rome II applicable law (and likely jurisdictional challenge) claxon
LBA Letter before action issued, flaring overseas https://t.co/SZzdbwHgte

— Geert Van Calster (@GAVClaw) April 23, 2024

I have a great interest in claim formulation as a means to forum shop as both my clients and my students know. Despite the post being way behind my signalling of the case on Twitter /X, I do want briefly to flag X v Horsedeals BV et al ECLI:NL:RBOVE:2023:3987 for it shows the limits to what one can do with creative claim formulation. Claimant claims to be the owner of various shipments of stud sperm and aims to obtain various injunctions for (re)sale etc of the shipments, as well as a block on the enforcement of a French judgment in which it was ordered to provide relevant information. All of this is related to allegations of fraud in the horse market. The judge holds that the claim for negative declaration in tort against a France-domiciled defendant is in reality a claim for ownership of the sperm at issue for which there is no A7(2) gateway in The Netherlands. Similarly the court holds that alleged future damage following the enforcement of a French judgment cannot ground an A7(2) claim to halt that enforcement in light of Title III Brussels Ia.

Geert.

Claim formulation: limits to engineering
Interesting first instance judgment rejecting jurisdiction, holding claim for negative declaration in tort in reality is claim for ownership
No A7(2) BIa gateway

X v Horsedeals BV et al (re https://t.co/RBvfubQLO8)https://t.co/U6nMW5egVs

— Geert Van Calster (@GAVClaw) October 12, 2023

The CJEU held last week in Joined Cases C‑345/22 and C‑347/22 Maersk A/S v Allianz Seguros y Reaseguros SA and Case C‑346/22 Mapfre España Compañía de Seguros y Reaseguros SA v MACS Maritime Carrier Shipping GmbH & Co.

The case concerns enforceability of choice of court (in the cases at issue: pro a court in England) included in bills of lading against third party holders of the bills. Each case was brought prior to Brexit Implementation day and as a result of the UK-EU Withdrawal Agreement (A127(3)) fully subject to Brussels Ia. Mukkarum Ahmed had earlier signalled Collins AG’s Opinion in which his scholarship was justifiably cited.

Relevant Spanish law is not amongst those national laws which accept with relative ease that choice of court and law has binding effect on third party acquirers of the bill, seeing as it provides:

In Section XI( of the preamble to Ley 14/2014 de Navegación Marítima (Shipping Law 14/2014) of 24 July 2014 (BOE No 180 of 25 July 2014, p. 59193; ‘the LNM’) it states:

‘… [Chapter I of Title IX] contains the special rules of jurisdiction and competence and, proceeding on the basis of the preferential application in this matter of the rules in international agreements and the law of the European Union, seeks to prevent the abuses identified, by declaring void clauses which provide for submission to a foreign jurisdiction or to arbitration abroad, contained in contracts for the use of a ship or in ancillary shipping contracts, if those clauses have not been individually and separately negotiated. …’

 Under Article 251 of the LNM, headed ‘Effectiveness of transfer’:

‘Delivery of a bill of lading shall have the same effects as delivery of the goods represented by the bill, without prejudice to the criminal and civil actions open to a person who has been unlawfully dispossessed of those goods. The acquirer of the bill of lading shall acquire all the transferor’s rights and actions over the goods, with the exception of agreements on jurisdiction and arbitration, which shall require the consent of the acquirer in accordance with Chapter I of Title IX.’

The first paragraph of Article 468 of the LNM, entitled ‘Clauses on jurisdiction and arbitration’, which appears in Chapter I of Title IX of that law, provides:

‘Without prejudice to the provisions of the international agreements applicable in Spain and to the rules of EU law, clauses which provide for submission to a foreign jurisdiction or to arbitration abroad, contained in contracts for the use of a ship or in ancillary shipping contracts, shall be void and deemed not to exist if those clauses have not been individually and separately negotiated.

Relevant authority is of course CJEU C‑387/98 Coreck Maritime) where the Court held that a jurisdiction clause incorporated in a bill of lading may be relied on against a third party to that contract if that clause has been adjudged valid between the carrier and the shipper and provided that, by virtue of the relevant national law, the third party, on acquiring the bill of lading, succeeded to the shipper’s rights and obligations.

CJEU DelayFix as Collins AG put it (45) “appears to adopt the same approach when, citing paragraph 65 of the judgment in CDC Hydrogen Peroxide, which in turn refers to paragraph 30 of the judgment in Coreck, it refers to ‘national substantive law’”.

The CJEU in the cases at issue firstly [48] holds

.. although it is clear from [A25(1) BIa] that the substantive validity of a jurisdiction clause is to be assessed in the light of the law of the Member State of the court or courts designated by that clause, the fact remains that the enforceability of such a clause against a third party to the contract, such as a third-party holder of the bill of lading, is concerned not with the substantive validity of that clause, as the Advocate General observed in points 54 to 56 of his Opinion, but with its effects, the assessment of which necessarily comes after the assessment of its substantive validity, that latter assessment having to be carried out by reference to the relationship between the original parties to the contract.

[50] with reference to Case 71/83 Tilly Russ and C‑543/10 Refcomp (itself borrowing from Correck Maritime, see above), the Court also reminds us

a jurisdiction clause incorporated in a bill of lading may be relied on against a third party to the contract if that clause has been adjudged valid between the shipper and the carrier and provided that, by virtue of the relevant national law, the third party, on acquiring the bill of lading, succeeded to the shipper’s rights and obligations. In such a case, there is no need for the court seised of the matter to ascertain whether that third party agreed to that clause [emphasis added]

In other words in such case the important step of establishing factual consent, ordinarily always required for choice of court under A25, is no longer needed.

Further, [56], does A25 BIa preclude the Spanish legislation at issue “under which a third party to a contract for the carriage of goods concluded between a carrier and a shipper, who acquires the bill of lading evidencing that contract and thereby becomes a third-party holder of that bill of lading, is subrogated to all of the shipper’s rights and obligations, with the exception of those arising under a jurisdiction clause incorporated in the bill of lading, where that clause is enforceable against that third party only if the third party has negotiated it individually and separately”?

Here, the CJEU [58] repeats that if “third-party holders of bills of lading  [are]…subrogated [under the relevant applicable law] to all of the rights and obligations of the shippers concerned…there is no need to ascertain whether each of those third parties actually accepted those clauses.”

[59] The relevant Spanish law in essence has the effect that the acquirer of the bill of lading acquires all of the transferor’s rights and actions over the goods, with the exception of jurisdiction clauses, which under that Spanish law require the actual consent of the acquirer. The result of the Spanish law is that those clauses are to be void and deemed not to exist if they have not been individually and separately negotiated. This, the CJEU holds [60] circumvents A25 as interpreted in Coreck Maritime, Tilly Russ, Refcomp etc. and cannot be so allowed. The national court is instructed as a result of the primacy of EU law to interpret the Spanish law as much as possible in line with the Regulation (reference [63] ex multi to CJEU Bezirkshauptmannschaft Hartberg-Fürstenfeld) and if no such interpretation other than one contra legem is possible, [65] to disapply the national rule seeing as A25 BIa as a provision in a Regulation (cf. a Directive) is directly applicable.

In conclusion:

1.      Article 25(1) [BIa]

must be interpreted as meaning that the enforceability of a jurisdiction clause against the third-party holder of the bill of lading containing that clause is not governed by the law of the Member State of the court or courts designated by that clause. That clause is enforceable against that third party if, on acquiring that bill of lading, it is subrogated to all of the rights and obligations of one of the original parties to the contract, which must be assessed in accordance with national substantive law as established by applying the rules of private international law of the Member State of the court seised of the dispute.

2.      Article 25(1) [BIa]

must be interpreted as precluding national legislation under which a third party to a contract for the carriage of goods concluded between a carrier and a shipper, who acquires the bill of lading evidencing that contract and thereby becomes a third-party holder of that bill of lading, is subrogated to all of the shipper’s rights and obligations, with the exception of those arising under a jurisdiction clause incorporated in the bill of lading, where that clause is enforceable against that third party only if the third party has negotiated it individually and separately.

An important judgment for the transport sector specifically and for the meaning of ‘substantive validity’ in A25 BIa.

Geert.

EU private international law, 4th ed. 2024, 2.373 ff.

CJEU Maersk

‘substantive validity’ in A25(1) BI encompasses defect in consent in choice of court btw the original contracting parties but not its applicability or enforceability against third partieshttps://t.co/o1K6dPDF1z

for context @mukarrumahmed https://t.co/rlD4bOlUVk

— Geert Van Calster (@GAVClaw) April 25, 2024

A further effort in tackling the blog queue. Those with an interest in the application of Rome II to purely economic damage will be interested in Uzdaroji Akcine Bendrove “Palink” et al v CNH Industrial NV et al ECLI:NL:RBAMS:2023:7093 and most probably will have seen my Tweet on the case at the time (January 2024).

The Dutch Supreme Court (the referring court oddly calling claimants “claimanten” in Dutch; my Dutch colleagues will correct me however surely this is a novel Anglicism and one which must be firmly stopped and pronto; what’s wrong with *eisers*?) has been seized with a preliminary reference on the application of Article 6 Rome II.

That Article identifies the applicable law for infringement of competition law and acts restricting free competition and it is a calamitous statutory provision.

Article 6. Unfair competition and acts restricting free competition

1.   The law applicable to a non-contractual obligation arising out of an act of unfair competition shall be the law of the country where competitive relations or the collective interests of consumers are, or are likely to be, affected

2.   Where an act of unfair competition affects exclusively the interests of a specific competitor, Article 4 shall apply

3. | (a) | The law applicable to a non-contractual obligation arising out of a restriction of competition shall be the law of the country where the market is, or is likely to be, affected. | (b) | When the market is, or is likely to be, affected in more than one country, the person seeking compensation for damage who sues in the court of the domicile of the defendant, may instead choose to base his or her claim on the law of the court seised, provided that the market in that Member State is amongst those directly and substantially affected by the restriction of competition out of which the non-contractual obligation on which the claim is based arises; where the claimant sues, in accordance with the applicable rules on jurisdiction, more than one defendant in that court, he or she can only choose to base his or her claim on the law of that court if the restriction of competition on which the claim against each of these defendants relies directly and substantially affects also the market in the Member State of that court.

4.   The law applicable under this Article may not be derogated from by an agreement pursuant to Article 14.

A first question referred relates to the qualification of infringement of competition law, Article 101 TFEU (prohibition of cartels) in particular  as a singular, continuous event or rather a chain of new events: if it is a simple and continuous unlawful conduct it would lead to separate claims for damages at the time the damage is suffered; the alternative is that it results in a single claim for damages per victim, consisting of various damage items.

The conflicts relevance also kicks in ratione temporis viz the singular /continuous qualification: what is the decisive point in time for determining the applicable conflict rule?

Furthermore, the first instance court has referred on A6(3)(a) Rome II. Should the determination of the applicable law be based on the country where the first purchaser of the truck to which the claim relates is established (also in the case of transport services)? Or must this be connected to the place where the truck or transport service was purchased? Or does another criterion apply?

If it is held that competitive conditions have been affected at least throughout the internal market, how can A 6(3) b Rome II be applied (choice of law by claimant for the lex fori: “the person seeking compensation for damage who sues in the court of the domicile of the defendant, may instead choose to base his or her claim on the law of the court seised”)?

With regard to Article 6(3)(b) Rome II, the court asks the Supreme Court whether a choice of law for the lex fori can be made if the following requirements are met: that the market is or is likely to be affected in more than one country; that one of the defendants be brought before the court of his place of residence; that the market in the Member State of that court is directly and significantly affected by the restriction of competition.

Or does the (additional) requirement that the consequences for the victim must have occurred in different countries, including (in this case) the Netherlands, also apply to the application of Article 6(3)(b) of Rome II?

This will be an interesting SC judgment on one of the most dense Rome II Articles. Will the SC at its turn refer to the CJEU?

Geert.

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

Truck cartel, applicable law
First instance Amsterdam refers to Dutch Supreme Court for clarification of A6 Rome II: applicable law for competition law infringement

UZDAROJI AKCINE BENDROVE "PALINK" et al v CNH INDUSTRIAL N.V., et al https://t.co/ezzYWT1SAC

— Geert Van Calster (@GAVClaw) January 17, 2024

A quick note on the first instance court in Amsterdam in B&C v Atlas Flexibles e.a. ECLI:NL:RBAMS:2023:4982. Relevant parties are bound by an SPA (share purchase agreement) with binding arbitration clause (pointing to Germany). B&C are pondering the viability of a pauliana (set-aside). To assist them with the viability decision they would like to depose a Netherlands-domiciled director of one of the corporations involved.

[4.3] the court holds that under the New York Convention (Article 2) the recognition of an arbitration agreement only extends to the subject-matter capable of settlement by arbitration. There is no indication that the arbitral panel could be asked to order deposition of a fact witness in The Netherlands hence it is held that the NY Convention is not engaged.

As for Brussels Ia, [4.4] the court holds that A35 is not engaged, either: fact witnesses depositions, it holds, are not a ‘provisional or protective measure’, merely a preparatory one with a view to pondering future litigation.

Geert.

EU Private International Law, 4th ed. 2024, 2.576 ff.

.

Court Amsterdam: A35 Brussels Ia does not apply to, and New York Convention does not restrict, witness questioning subject to Dutch CPR civil procedure rules, in claim which in substance will be dealt with in an #arbitration proceedinghttps://t.co/O78b77BIXi

— Geert Van Calster (@GAVClaw) August 29, 2023

I have been absolutely swamped in recent months and as a result, the blog has suffered. In coming up for some air, I decided to first tackle some of the oldest drafts in my blog queue. First up is CJEU C-832/21 Beverage City & Lifestyle GmbH et al v Advance Magazine Publishers Inc held let’s say a little while ago (September 2023; did I flag I have been busy?) which in essence clarifies CJEU Nintendo.

The EU Trademark Regulation 2017/1001 has lex specialis conflict of laws provisions viz Brussels Ia. However it does not specify an anchor mechanism and therefore [26] Article 8(1) Brussels Ia  applies in full.

I discussed Richard de la Tour AG’s Opinion here. As I summarised when I tweeted the judgment, the CJEU has essentially followed the AG’s suggestion of a flexible interpretation of the A8(1) conditions:

with respect to the the A8(1) (compare CJEU The Tatry) condition relating to the existence of the “same situation of law”, this [31] “appears to be satisfied” (final check is for the national court) where the claim concerns the protection of claimant’s exclusive right over EU trade marks, which is based on EU trademark law identical to all EU Member States. [29] Any difference in the legal bases under national law of claims relating to that protection is irrelevant to the assessment of the risk of conflicting decisions.

further, with respect to the condition of “same situation of fact”,  [37]

“the existence of a connection between the claims concerned relates primarily to the relationship between all the acts of infringement committed rather than to the organisational or capital connections between the companies concerned. Similarly, in order to establish the existence of the same situation of fact, particular attention should also be paid to the nature of the contractual relationship between the customer and the supplier.”

[38] Anchor defendant Beverage City & Lifestyle was connected to Beverage City Polska by an agreement for the exclusive distribution of the energy drink ‘Diamant Vogue’ in Germany.

“That exclusive contractual relationship between those two companies may make it more foreseeable that the acts of infringement of which they are accused may be regarded as concerning the same situation of fact, capable of resulting in a single court having jurisdiction to rule on the claims brought against all of the actors who committed those acts.”

The CJEU throughout the judgment emphasises the sound administration of justice objective supporting the joinder mechanism.

Geert.

EU Private International Law, 4th ed. 2023, 2.505 ff, 2.518.

#CJEU this morning in C‑832/21 Beverage City#Trademark infringement, 'anchor' jurisdiction, A8(1) BIa
Confirming the flexible approach advised by Richard de la Tour AG (discussed here https://t.co/ODrh3F4pKB)https://t.co/nOc8C25mF0 pic.twitter.com/2bndwSS95Z

— Geert Van Calster (@GAVClaw) September 7, 2023

First Advocate General Szpunar Opined last week in Case C-86/23 E.N.I., Y.K.I. v HUK-COBURG-Allgemeine Versicherung AG – let’s call that case HUK-Coburg. The case concerns the application of Article 16 Rome II’s lois de police aka lois d’application immédiate aka overriding mandatory provisions.

A claim is issued for compensation submitted by private individuals, who are Bulgarian nationals, in accordance with compulsory insurance against civil liability in respect of the use of motor vehicles, against an insurance company for non-material damage caused by the death of their daughter in a road traffic accident in Germany.

The core issue to determine by the CJEU is the concept of overriding mandatory provisions in Article 16 Rome II and in particular the determination of the criteria for classifying rules safeguarding individual rights and freedoms as ‘overriding mandatory provisions’. This echos the discussion in Unamar, where the Brussels Court of Appeal eventually held that the relevant Belgian provisions only serve the interests of private parties, not of the Belgian public legal order, hence there can be no question of application of the lois de police exception (current Opinion suggests ‘only’ as the key word in the Court of Appeal’s analysis). The current discussion by the AG also echoes the facts in Lazar.

Contrary to German law (28), Bulgarian law (lex fori) (29) provides that compensation for non-material damage is determined by the court giving judgment on the basis of fair criteria. That court points out that, under Bulgarian law, compensation is payable for all mental pain and suffering endured by parents on the death of their child as a result of an unlawfully and culpably caused road traffic accident. It is not necessary for the harm to have resulted indirectly in pathological damage to the health of the victim.

(32) The mere fact that, by applying the lex fori, there would be a different outcome with regard to the amount of compensation from that which would have been reached by applying the lex causae is not sufficient to conclude that the Bulgarian provision at issue may be classified as an ‘overriding mandatory provision’ within the meaning of Article 16 of the Rome II Regulation, provided, the AG adds,  that the application of the lex causae is compatible with considerations of justice.

(36) Over and above CJEU Unamar, the Court also in Da Silva Martins explored the concept and the criteria. (42) ff the AG recalls the general principles, and (56) he points to recital 32 Rome II’s reference to ‘‘considerations of public interest’. The AG is absolutely right in opining that safeguarding individual interest may absolutely contribute to the protection of public interest. His argument (60) is common sense and absolutely right:

A first argument is linked to the interplay of collective and individual interests. Thus, in the field of tort law, the rules that a Member State establishes in order to protect a category of persons who have sustained damage, by modifying, in particular, the burden of proof or by establishing a minimum threshold for compensation, could have the principal objective to restore the balance between the competing interests of private parties. Indirectly, they could therefore also contribute to safeguarding the social and economic order of the Member State by reducing the impact of accidents on public resources.

On the basis of CJEU authority as outlined, the AG concludes that the case at issue may absolutely lead to the court seised applying Bulgarian law however only if

it finds, on the basis of the existence of sufficiently close links with the country of the forum and a detailed analysis of the terms, general scheme, objective and context of the adoption of that directive, that it is of such importance in the national legal order that it justifies a departure from the applicable law designated pursuant to Article 4 [Rome II].

A good opinion which I hope will be followed by the Court.

Geert.

EU Private International Law, 4th ed. 2024, 4.87 ff.

First AG Szpunar this morning in C‑86/23 HUK-Coburg
Applicable law
Criteria for classifying rules safeguarding individual rights and freedoms as ‘overriding mandatory provisions’ viz A16 Rome II
citing ia @KrzysztofPacula, Bonomi, Wauthelet, Francqhttps://t.co/M0qXbb8aCu

— Geert Van Calster (@GAVClaw) March 21, 2024