GAVC

In GDE LLC & Anor v Anglia Autoflow Ltd [2020] EWHC 105 (Comm) (31) the Rome I Regulation does not apply ratione temporis; the Agency Agreement was concluded on about 9 April 2009 which is a few months before the kick-off date of the Regulation (note there is no default rule for agency in Article 4 Rome I in the event of lack of lex voluntatis). Dias DJ therefore turns to the 1980 Rome Convention.

Parties are in dispute as to the governing law of the Agency Agreement by which the claims should be determined. AAL alleges that the governing law is that of Ontario while the Claimants allege that the Agency Agreement is governed by English law. The point is of critical importance because the Claimants concede that, if AAL is correct, their claim is time-barred under Ontario law: although this, as readers know, assumes statutes of limitation are subject to the governing law – which is far from certain: see Jabir v KIK and Spring v MOD.

Parties’ arguments are at 10 and 11 and of course they reverse engineer. In essence (at 20) claimants say that there was an implied choice of English law. Alternatively, if that is not correct, the presumption in Article 4(2) of the Rome Convention, which would otherwise point to Georgia law, falls to be disapplied in favour of English law. The Defendant says that there was no implied choice and that application of Article 4(2) leads to Ontario law. Alternatively, if (which it denies) the presumption in Article 4(2) leads to any other governing law, the presumption is to be disapplied in favour of Ontario.

At 21 ff follows a rather creative (somewhat linked to the discussion of ex officio Rome Convention application in The Alexandros), certainly unexpected (yet clearly counsel will do what counsel must do) argument that essentially puts forward that under the common law approach of foreign law = fact hence must be proven, any discussion of a law as governing law, not suggested by the parties (here: the laws of (the US State of) Georgia) that is not English law (which clearly the English curia does ‘novit’), cannot go ahead. At 22 Dias DJ already signals that ‘once the wheels of the Convention had been put in motion, they could not be stopped short of their ultimate destination. The idea that the process dictated by the Convention should be hijacked halfway, as it were, on the basis of a pleading point was, to my mind, deeply unattractive.’

At 31 she sinks the argument. I think she is right.

Having at length considered the facts relevant to the contract formation, discussion then turns again to the Rome Convention with at 105 ff a debate on the role to be played by factors intervening after contract formation with a view to establishing [implicit, but certain: see at 117 with reference to the various language versions of the Convention and the Regulation essentially confirming the French version] choice of law or closest connection. (Dias J refers to the Court of Appeal in Lawlor v Sandvik Mining and Construction Mobile Crushers and Screens Ltd, [2013] EWCA Civ 365; [2013] 2 Lloyd’s Rep 98 where, at paragraphs 21-27, it pointed out that the common law approach frequently blurred the distinction between the search for the parties’ inferred intention and the search for the system of law with which the contract had its closest and most real connection).

At 120: the hurdle is high: choice of law implicitly made must have nevertheless been made: ‘The court is not looking for the choice that the parties probably would have made if they had turned their minds to the question.’ at 122: In the present case the evidence established that there was no reference by the parties to the question of governing law at all. Choice of court for England does not change that. At 160 ff therefore follows the discussion of Article 4 of the Rome Convention, leading to a finding of the laws of Ontario as the lex contractus under Article 4(1). Article 4(5) does not displace it.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 3, Heading 3.2.4, Heading 3.2.6.

I seem to be having my environment cap firmly on this week so I am happy to thank Le Monde for flagging the judgment of the French Constitutional Court 2019-823 of 31 January in which it sanctioned (against the wishes of applicants, the Union des industries de la protection des plantes, essentially Bayer, Syngenta, BASF)  the Government’s ban on the manufacturing of and exportation of pesticides banned for use in France but hitherto available for export, mostly to Africa.

The case I would suggest is one that is also very suited to a business ethics class. Interestingly the Act also mentions that it applies to the degree it is not incompatible with WTO rules – the WTO is not addressed in the judgment.

Applicants’ case is grounded on the freedom of ‘enterprise’ or ‘commerce’, as expressed in the 1789 Déclaration des droits de l’homme et du citoyen – but also the Decret d’Allarde 1791. To the mix of objectives to be balanced, the Court adds the protection of public health (Constitutional recital, 1946) and the Environment Charter 2004, from which the court deduces that environmental protection, as common heritage of mankind, is a Constitutionally ringfenced objective.

At 6 the Court without much ado posits that the French Government in pursuing environmental policy, justifiably may take into account the extraterritorial environmental consequences of activities on French soil.

Having referred to the EU ban on the use of the substances at issue, based on scientific considerations discussed at length in the run-up to the EU law at issue, the Court at 9-10 refers to the principle that it should not overzealous in second-guessing the exercise by Parliament of its balancing exercise. At 11, it notes that the 3-year transitionary period gives corporations ample transitionary time in line with their freedom of commerce.

To the Court, it’s all very much self-evident. For environmental policy and extraterritoriality, its findings are quite relevant.

Geert.

Environment, territoriality.
French Constitutional court upholds ban on manufacturing and exportation of pesticides banned for use in France but hitherto available for export, mostly to Africa.
Rejects Bayer, Syngenta, BASF action aimed particularly at herbicide atrazine. https://t.co/KMH0QuKpL7

— Geert Van Calster (@GAVClaw) January 31, 2020

In C-654/18 Interseroh Sharpston AG opined on 30 January, in answer to a German court wishing to ascertain whether a waste stream composed principally of paper products should be categorised as so-called ‘green’ waste and therefore subject to the flexible control procedure provided in the EU’s Waste Shipment Regulation 1013/2016. The referring court also asks whether such waste can still be categorised as ‘green’ if it contains up to 10% impurities.

The Regulation combines rules of purely EU origin, with a sometimes complex combination of OECD and 1989 Basel Convention rules. It generally employs a listing system with corresponding light signals (green and amber, previously also red) with the green list being the most desirable to exporters: these only require compliance with the same rules as ordinary commercial transactions.

Regardless of whether or not wastes are included on the list of wastes subject to the Green Control Procedure (Appendix 3 of the EU Regulation), they may not be subject to the Green control procedure if they are contaminated by other materials to an extent which (a) increases the risks associated with the wastes sufficiently to render them appropriate for submission to the amber control procedure, when taking into account the criteria in Appendix 6 to this Decision, or (b) prevents the recovery of the wastes in an environmentally sound manner’.

In the dispute at issue Interseroh collects used sales packaging (lightweight packaging) from private final consumers throughout Germany which it then consigns to recovery. It ships the prepared waste paper across the border for recycling in a paper factory in Hoogezand (Netherlands). New paper and new paperboard is produced from the waste paper. The Netherlands purchaser, ESKA stipulates that the waste paper must meet the following specifications. It should be composed of at least 90% used, residue-drained, system-compatible paper, paperboard or cardboard (PPC) articles and PPC-based combinations, with the exception of liquid packaging board including packaging parts such as labels etc. Also, the waste stream must contain no more than 10% impurities (‘the mixture of wastes at issue’).

The Dutch and German import cq export authorities differ as to the inclusion or not of the transported wastes at issue, with the Dutch taking a more relaxed approach on the basis of the Dutch version of the relevant Basel entry B3020.

• The Dutch version reads „De volgende materialen, mits deze niet vermengd zijn met gevaarlijke afvalstoffen:
  Oud papier en karton:
  – ongebleekt papier en karton of gegolfd papier en golfkarton; – overig papier en karton, hoofdzakelijk gemaakt van gebleekt chemisch pulp, dat niet in bulk is gekleurd; – papier en karton hoofdzakelijk gemaakt van mechanisch pulp (bv. kranten, tijdschriften en soortgelijk drukwerk); – overige, met inbegrip van: 1. gelamineerd karton, 2. ongesorteerd afval
• The German version: “Folgende Stoffe, sofern sie nicht mit gefährlichen Abfällen vermischt sind:
  Abfälle und Ausschuss von Papier und Pappe
  – ungebleichtes Papier und Wellpapier und ungebleichte Pappe und Wellpappe; – hauptsächlich aus gebleichter, nicht in der Masse gefärbter Holzcellulose bestehendes anderes Papier und daraus bestehende andere Pappe; – hauptsächlich aus mechanischen Halbstoffen bestehendes Papier und daraus bestehende Pappe (beispielsweise Zeitungen, Zeitschriften und ähnliche Drucksachen); – andere, einschließlich, aber nicht begrenzt auf: 1. geklebte/laminierte Pappe (Karton) , 2. nicht sortierter Ausschuss.
• The English version: The following materials, provided they are not mixed with hazardous wastes:
  Waste and scrap of paper or paperboard of:
  – unbleached paper or paperboard or of corrugated paper or paperboard; – other paper or paperboard, made mainly of bleached chemical pulp, not coloured in the mass; – paper or paperboard made mainly of mechanical pulp (for example, newspapers, journals and similar printed matter); – other, including but not limited to: (1) laminated paperboard, (2) unsorted scrap.

According to the wording of the German-language version, point 2 of the fourth indent covers ‘nicht sortierten Ausschuss’ (‘unsorted scrap’) and not ‘nicht sortierte Abfälle’
(‘unsorted waste’), as the Dutch Supreme Court held on the basis of the Dutch language version (‘ongesorteerd afval’). The term ‘scrap’ is not synonymous with the terms ‘waste’ or ‘mixture’. In addition, a distinction is drawn in the French language version between ‘mélange de déchets’ and ‘rebuts non triés’, just as in the English-language version between ‘mixture of wastes’ and ‘unsorted scrap’. The terms ‘scrap’ and ‘waste’ are therefore not synonymous. Since, in the Dutch language version of the heading of Basel Code B3020, the term ‘waste’ is not used, but it instead reads ‘papier, karton en papierproducten’, the term ‘afval’ in point 2 of the fourth indent in the Dutch-language version does not cover the entire entry, but only what does not come under the first three indents.

Specifically, on 20 May 2015, the Raad van State (Council of State, Netherlands) ruled in proceedings involving ESKA that a waste paper mixture, regardless of the presence of impurities, comes under Basel Code B3020. Accordingly, any such mixture of wastes constituted ‘Green’ listed waste and came within the list of wastes subject to the Green control procedure under Article 18 of Regulation No 1013/2006. It did so on the basis of the Dutch language version of Basel Code B3020. ESKA had previously been employing the stricter prior notification procedure under Article 4 of the Regulation.

Interseroh then brought an action before the referring German court seeking a declaration that it is entitled to ship the mixture of wastes at issue to other EU Member States in accordance with the Green control procedure.

Sharpston AG at 27 starts by pointing out that the shipments at issue are kosher commercial and regulatory transactions: at least 90% of the mixture is made up of what can be described generically as paper, paperboard and paper product wastes. The waste also includes a maximum of 10% impurities. This, in other words, is not a cowboyesque trafficking practice. She then explores the legislative history of the amended Annexes, paying less attention to the linguistic analysis perhaps than one might expect – object and purpose is, after all, a guiding principle in the interpretation of texts with seemingly diverging language versions. She concludes from that assessment (please refer to her Opinion itself; there is little point in me paraphrasing it here) that the lighter, green list procedure can only apply if the notifier shows with scientific evidence that the level of impurities does not prevent the recovery of the wastes in question in an environmentally sound manner. She also acknowledges at 72 (as the EC already did in its 2009 FAQs) that clarity on the issue is wanting: ‘establishing what is a tolerable level of contamination is a matter that is due (perhaps, overdue) for examination’. However given the lack of formal regulatory guidance on the issue, the Article 28 procedure of Regulation applies: where the competent authorities of the Member State of dispatch and the Member State of destination cannot agree on the classification of a particular consignment of wastes (and hence on whether the more flexible Green control procedure in Article 18 may be used), the Annex IV amber list procedure must be applied.

Geert.

(Handbook of) EU Waste Law, 2nd ed 2015, Chapter 4.

(Opinion earlier signalled here)

[2020] EWHC 98 (Ch) Wilson and Maloney (bankruptcy trustees of Michael McNamara),  concerns mostly Article 49 TFEU (freedom of establishment) and Article 24(1) of the Citizens’ Rights Directive 2004/38 (equal treatment). (At 114) the critical question is whether the exclusion of pension rights on bankruptcy is something that can impact on the right of establishment, or is otherwise within the scope of Art 49 TFEU.

The substantive case at issue concerns the inclusion or not of in investment in a certain pension scheme, into the bankruptcy. My interest in the judgment lies in the succinct reference to forum shopping under insolvency regimes.

Mr McNamara was made bankrupt on 2 November 2012 on his own petition, presented that day. Prior to his bankruptcy Mr McNamara had been a high profile property developer operating primarily, if not exclusively, in the Republic of Ireland. But he and his wife had moved to London in July 2011, and the Court accepted that he had moved his centre of main interests (or COMI) from Ireland to England by the date of presentation of the petition.

Nugee J decided to refer to the CJEU for preliminary review (this having happened on 23 January, clearly one of the last if not the last UK reference to go up to the CJEU). Whether COMI was moved for forum shopping purposes is not likely to feature in the eventual judgment – for there does not seem to be any suggestion that the move of COMI to England had been properly established.

Geert.

In C-15/19 A.m.a. – Azienda Municipale Ambiente SpA v Consorzio Laziale Rifiuti, Kokott AG opined mid-January. Her opinion relies heavily on the specific provisions which the Landfill Directive 1999/31 includes for what one could effectively call legacy issues in waste management: how does one roll-out stricter requirements, including with respect to polluter pays, unto landfill sites that were already in existence?

I shall not repeat said provisions for the Advocate General does so extensively. Suffice to say that her reasoned roll-out of the polluter pays principle (she puts the onus on the landfill sites’ operators; principles of legal certainty do not allow to charge those having deposited the waste at the site retroactively to pay for longer aftercare) is based to a large degree on the window which the Directive foresaw for Member States to close down sites whom they did not think could be expected to meet the new Directive’s stricter obligations before its lenghthy implementation periods; and on the fact that the operators of these sites, unlike the depositors of waste, can be expected to be properly au fait with its aftercare requirements and hence also of the proper amount of charges to be invoiced to users of the site.

Another good example of EU environmental /waste law not quite being the environmental zealot which its critics often try to make of it.

Geert.

Kokott AG #CJEU C-15/19 https://t.co/ktkeQlqP6X.#Waste, landfill Directive, polluter pays
Application of aftercare provisions to landfill sites in use before Dir entered into force (EIF & passing on increased costs for same to waste holders who used the site before that same EIF

— Geert Van Calster (@GAVClaw) January 16, 2020

In [2020] EWHC 75 (QB) Lenkor Energy Trading v Irfan Iqbal Puri, Davison M rejected the ordre public arguments made by claimant against recognition of a money judgment of the Dubai First Instance Court.

Reflecting global understanding of ordre public, it is the judgment and not the underlying transaction upon which the judgment is based which must offend (here: English) public policy. That English law would or might have arrived at a different conclusion is not the point (Walker J in Omnium De Traitement Et De Valorisation v Hilmarton [1999] 2 Lloyd’s Rep 222).

The ordre public arguments made, were (1) illegality, (2) impermissible piercing of the corporate veil and (3) penalty.

Re (1), the argument is that the underlying transaction is illegal. Master Davison acknowledged there are circumstances where an English court might enquire into the underlying transactions which gave rise to the judgment. However such court must do so with extreme caution and in the case at issue, defendant’s familiarity with Dubai and its laws argued against much intervention by the English courts.

On (2), the veil issue, submission was that defendant was being made personally liable for the debts of IPC Dubai, which was the relevant party (as guarantor) to the Tripartite Agreement and the holder of the account upon which the cheques were drawn. The cheques had not been presented or had been presented out of time – or there was at least an issue about that. The combination of these matters was, it was suggested, to impose an exorbitant liability on Mr Puri for sums which he had not agreed to guarantee – in contravention of established principles of English law.

Here, too, Davison M emphasised defendant’s familiarity with Dubai law. The case against Mr Puri in Dubai was resolved according to the rules which the laws of Dubai apply to Dubai companies and to individuals who write cheques on Dubai accounts. Dubai law may be different than English law on this point, but not repugnantly so.

Finally on (3) the sums in particular the interest charged were suggested to be exorbitant hence a form of unenforceable punitive damages. However, 9% interest is only 1% higher than the judgment debt rate in England and only ¼% higher than the current rate under the Late Payment of Commercial Debts (Interest) Act 1998. (At 31) ‘In the light of this, to characterise the interest rate of 9% as amounting to a penalty is unrealistic.’

Geert.

Thank you Pailler Ludovic for signalling the French Supreme Court’s judgment in 18-24.261  A and X v et al B and Y et al. The Court annulled the Court of Appeal’s (Versailles) decision which had accepted for recognition and enforcement a Cameroonian judgment in a Cameroonian-French adoption case.

Legal basis for the refusal is Article 34 of the relevant 1974 FR- Cam Treaty. Specically, the classic ordre public international hurdle to recognition and enforcement: ‘Elle ne contient rien de contraire à l’ordre public de l’Etat où elle est invoquée ou aux principes de droit public applicables dans cet Etat.’

The Supreme Court held that absence of Agrément does not infringe French ordre public international (Agrément is required by French adoption law and needs to be sought by the prospective adoptant). Yet fraus (fraude à la loi) might and needs to be properly examined, which the Court of Appeal had failed to do. Suggestion is made in the case that the adoption was engineered with the sole purpose of facilitating the French rights of residence of the adopting father’s partner, who is the mother of the children.

The case emphasises the relevance of fraus omnia corrumpit. Whether of course fraus will be proven in the new proceedings before the Paris Court of Appeal remains to be seen.

Geert.

In Hong Ziyun v Chan Kwan Ming [2019] HKCFI 2125, Chan J at the end of August summed up the Hong Kong approach (as it is that of the common law) to consolidation of jurisdiction at 31: ‘the approach of the courts should be to favor resolution of all disputes associated with a transaction in one jurisdiction.’ That is the so-called one stop shop or one stop principle (whether or not hyphenated).

As Herbert Smith Freehills note, in a host of related loan documents only one of the documents contained an express jurisdiction clause (in favour of the court of Xiamen in Mainland China). The defendants applied for and obtained a stay of proceedings in Hong Kong in favour of Mainland China. HSF summarise the reasoning (the judgment itself is not too long and logically structured) helpfully as follows:

1. When there is no express jurisdiction clause, the applicable law is that which has the “closest and most real connection” with the transaction.
2. Most of the defendants’ business was in Mainland China. They also spent most of their time in Mainland China. On the evidence presented, the court was unable to place significant reliance on the permanent “residence” of any of the defendants in Hong Kong as showing any real or closest connection with Hong Kong.
3. The location of the debt, currency, and place of performance of the loans as well as the execution of and governing law clause in the SA all had a strong connection with Mainland China.

Geert.

I am no expert in all things insolvency and restructuring. I have an interest in it because of the conflict of laws issues (see the Insolvency Regulation) and the relationship with Brussels Ia. I am also interested in the labour law implications of corporate restructuring. These trigger highly relevant ethical, economic, and legal concerns.

Directive 2001/23 protects employees’ rights in the event of transfer of undertakings. The position of employees of course may be seen by potential investors as a hurdle to get onboard. Employees are inevitably on their cost cutting horizon. (For emperical Dutch research see Aalbers et al here and review in NL of same on Corporate Finance Lab).

The Directive exempts (Member States may provide otherwise) bankruptcies ‘proper’ and analogous insolvency proceedings. (They have to be under the management of what the Insolvency Regulation now calls an insolvency practitioner: an insolvency trustee, in other words). In C-126/16 Smallsteps, the Court held that pre-packs also known as ‘hushed bankruptcies’ do not qualify: since such a procedure is not ultimately aimed at liquidating the undertaking, the economic and social objectives it pursues are no explanation of, or justification for, the employees of the undertaking concerned losing the rights conferred on them by Directive 2001/23 (at 50).

Frederik De Leo reported here more extensively and with more knowledge of the issues, on the implications of Smallsteps, including implications for both the Dutch and the Belgian Statutes and proposals on pre-packs and corporate restructuring. On the Dutch implications, Robert van Moorsel had interesting insight here (in Dutch).

In Heiploeg, which was initiated before judgment in Smallsteps but is still being litigated (by Trade Unions), the Dutch Supreme Court /Hoge Raad is now essentially asked to apply the various conditions which the Court of Justice imposed for the bankruptcy exception of Directive 2001/13 to apply. Its procureur-generaal (essentially here fulfilling the role of an Advocate-General at the CJEU) opined in a well-documented Opinion on 1 November 2019 (apologies for late reporting: the Opinion traveled all sorts of corners in my briefcase) and proposes that the Supreme Court annul the lower court’s application of Smallsteps (which had found that the conditions for exception from the employees’ rights Directive did apply).

The Opinion is not I fear accessible to non-Dutch speakers – I am hoping proper experts will report more extensively once the Hoge Raad’s judgment is out.

Geert.

A flag on anti anti-suit. Steve Ross reports here on the Paris Court of First Instance (Tribunal de Grande Instance) judgment in RG 19/59311 IPCom v Lenovo /Motorola granting a preliminary injunction.  IPCOM GmbH & Co. KG is an intellectual property rights licensing and technology R&D company. Lenovo/Motorola a telecommunications company. As Steve writes, the French Court held that it had jurisdiction over the case with regard to a patent infringement claim and ordered Lenovo to withdraw the motion for an anti-suit injunction which that company had brought before the US District Court of the Northern District of California in so far as it concerns the French part of the patent.

Steve notes (I have not read the actual judgment) that ‘according to the French Court, the international French public order (ordre public) does not recognise the validity of an anti-suit injunction, except where its purpose is to enforce a contractual jurisdiction clause or an arbitral clause. Under all other circumstances, anti-suit injunction proceedings have the effect of indirectly disregarding the exclusive power of each sovereign state to freely determine the international jurisdictional competence of their courts.’

Peter Bert also reports last week a German anti anti-suit injunction at the Courts in Munchen, also for IPR cases.

For progress in the US anti-suit (one ‘anti’ only) application see order here.

Juve Patent report (as does Peter) that the High Court, too, has issued a (partial) anti anti-suit in the case however I have not been able to locate the judgment.

Note that continental courts (see in the French case) finding that anti-suit in general infringes ordre public is an important instruction viz future relationships with UK court orders following Brexit (should the UK not follow EU civil procedure).

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.1.

[2019] EWHC 3568 (Comm) Enka Insaat ve Sanayi v OOO “Insurance Company Chubb” et al. is the very swift follow-up to [2019] EWHC 2729 (Comm) which I review here. I flag the case mostly for:

• at 8, Baker J siding with Males J (and myself) per Nori Holding, that West Tankers is still good authority following Brussels Ia despite Wathelet AG’s suggestions in Gazprom;
• the brief reference at 9, as to whether under Rome I injunctive relief for threat of contractual breach is covered by lex fori or lex contractus. Baker J concludes that issue simply by reminding us that Rome I does not apply to arbitration agreements;
• At 47 ff the discussion of choice of law in spite of no express clause having been included to that effect. Specifically, with reference to Sulamerica, whether choice of seat may imply choice of law.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.1. 

In C‑641/18 Szpunar AG opined on Tuesday and notes that the request of the referring court brings to mind the current debate about the influence of human rights on private international law. It seeks to ascertain whether and, if so, to what extent the scope of ‘civil and commercial’ in the Brussels Ia Regulation may be influenced by the interest in ensuring access to the courts, a right guaranteed by Article 47 Charter.

(The case itself is subject to Brussels I which did not yet include ‘acta iure imperii’. As the AG notes at 56, this is merely a clarification following CJEU interpretation of the previous concept.

Relatives of the victims, along with survivors of the sinking of the Al Salam Boccaccio ’98, a ship sailing under the flag of the Republic of Panama, which happened in 2006 on the Red Sea and caused the loss of more than a thousand lives, have brought an action before the District Court, Genoa against the companies Rina SpA et Ente Registro Italiano Navale. Claimants argue that the defendant’s certification and classification activities, the decisions they took and the instructions they gave, are to blame for the ship’s lack of stability and its lack of safety at sea, which are the causes of its sinking.

Defendants plead immunity from jurisdiction. They state that they are being sued in respect of certification and classification activities which they carried out as delegates of a foreign sovereign State, namely the Republic of Panama. They argue activities in question were a manifestation of the sovereign power of the foreign State and the defendants carried them out on behalf of and in the interests of that State.

The AG first of all reviews how the principle of customary international law concerning the jurisdictional immunity of States relates to the scope ratione materiae of Brussels Ia. He starts his analysis noting that in the absence of codification at international level (international conventions on the issue not having met with great success), the principle concerning the jurisdictional immunity of States remains to a large extent governed by customary international law.

There is little use in quoting large sections of the Opinion verbatim so please do refer to the actual text: the AG opines (referring ia to C-154/11 Mahamdia) that it is unnecessary to refer to the principle of customary international law concerning State immunity from jurisdiction when considering the scope ratione materiae of Brussels Ia. Those principles he suggests do play a role when it comes to enforcing any exercise of such jurisdiction against the will of the party concerned.

At 46: ‘the distinction between disputes which are civil or commercial matters and those which are not must be drawn by reference to the independent criteria of EU law identified by the Court in its case-law. Consequently, an act performed in the exercise of State authority (acta iure imperii) from the perspective of the law relating to immunity, is not necessarily the same as an act performed in the exercise of State authority according to the independent criteria of EU law.’ (The latter as readers of the blog will know, are not always clearly expressed; see ia my review of Buak).

In the second place, the AG then considers whether an action for damages brought against private-law entities concerning their classification and/or certification activities falls within the scope of BIa. At 83, following extensive review of the case-law (almost all of which I also reviewed on the blog and for earlier cases, in Chapter 2 of the Handbook), the AG opines that neither the fact that the acts in question were performed on behalf of and in the interests of the delegating State nor the possibility of the State’s incurring liability for harm caused by those acts, in itself conclusively characterises those acts as ones performed in the exercise of powers falling outside the scope of the ordinary legal rules applicable to relationships between private individuals. 814/79 Rüffer also makes a non-conclusive appearance.

At 95 then follows the core of the factual assessment: defendants’ role is limited to carrying out checks in accordance with a pre-defined regulatory framework. If, following the revocation of a certificate, a ship is no longer able to sail, that is because of the sanction which, as the defendants admitted at the hearing, is imposed by Panama law. Not acta iure imperii – the issue falls under Brussels Ia.

Finally, must as a result of a plea of immunity from jurisdiction a national court decline to exercise the jurisdiction which it ordinarily derives from the Regulation? In a section which will be interesting to public international lawyers, the AG reviews international and EU law (particularly Directive 2009/15) and concludes that there is no principle in international law which grants immunity to certification agencies in cases such as the one at hand.

To complete the analysis, the AG opines that should the Court disagree with his views on immunity, the national court’s views on jurisdiction would not be impacted by the right to court guarantees of the Charter, for there is no suggestion at all that the victims would not have proper access to Panamian courts for their action.

Note of course that the Opinion does not address lex causae.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.1.1.

Since the news broke in Mid-September of a Dutch claimant of Palestinian descent, suing former Chief of the General Staff Benjamin Gantz in The Netherlands, I have regularly checked ECLI NL for any kind of judgment. So far to no avail. I report the case now summarily, for it will be good to have a judgment (presumably first interlocutory: on the jurisdiction issue) to chew on.

The claim invokes the Dutch forum necessitatis rule (Article 9 CPR; other European States have similar rules), often also known as ‘universal jurisdiction’ however clearly the rule has its constraints. Claimant’s lawyer, Meester Liesbeth Zegveld, argues the application of the rule here. The piece includes assessment of sovereign immunity, and the involvement of Article 6 ECHR. Its outcome will also play a role in issues of corporate social responsibility and jurisdiction.

Clearly the moment I have a court opinion I shall post more.

Geert.

Anyone short of exam essay Qs, consider the planned Flemish ban (with room for local, event-related exceptions) on fireworks displays. Akin to the issues in Ivory Ban or pet collars, at the core of the legal analysis is the legality of use restrictions on goods lawfully marketed in other Member States (see also my brief review of Amsterdam’s booze bikes here).

The exhaustive effect or not of EU secondary law will have to be discussed, as will Article 34 TFEU (including consultation and commissioned research issues and of course proportionality), and indeed A1P1 (Article 1, first Protocol) ECHR.

(For a recent more locally relevant issue, see the Supreme Court’s (Raad van State) December 2019 annulment of an Antwerp highway code rule banning the use of quads and introducing a strict exemption policy).

Geert.

A short post and thank you Laura Ruiz for flagging a ruling by the Spanish Supreme Court  in which it essentially seems to have pre-applied the Brussels Ia Regulation (1215/2012) to proceedings governed by its predecessor, Brussels I (44/2001). In particular, the Supreme Court would seem to have waived the requirement for exequatur in a proceeding governed by Brussels I. I have limited Spanish and no access to the ruling so I am relying on Laura’s post for reporting purposes.

Geert.

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

[2019] QSC 313 McDonald v Broadspectrum can go straight into the comparative binder – thank you Angus Macinnis for signalling it. A teacher employed by Broadspectrum on Nauru, sues it for personal injury. Amongst other things, Ms McDonald alleges Broadspectrum failed to provide a safe place or system of work, to warn her about the mould contamination, to provide protective clothing or respirators, to prevent exposure, and to provide adequate ventilation, in each instance in Nauru.

Broadspectrum applied for a declaration at the Supreme Court of Queensland that the substantive law applicable to her claims is the law of New South Wales and for an order setting aside or staying and transferring her claims to the Supreme Court of that State.

The relevant compensation schemes, in Queensland and New South Wales, each exclude from their scheme an employer’s liability arising under the law of another country. Bradley J however held that lex loci delicti is Nauru law,  which therefore is lex causae. The argument that the employment contract contained implied term to the contrary was rejected.

As I discussed with Angus, I was confused by the court’s qualification of the facts as ‘tort’ (particularly as it also refers to claimant’s argument re forum contractus being Nauru); is this not a contractual claim rather than one in tort? (and one relating to the employment contract, for that matter). Angus however pointed out that in Australia workplace injury claims are usually brought as tortious breach of care claims rather than breach of a contractual obligation to provide a safe system of work. Comparatively speaking, the EU approach would probably be different. For a comparative (consumer contracts, health and safety) angle see e.g. [2018] EWCA Civ 1889 Committeri v Club Med.

Michiel Poesen is submitting a paper on the issue of concurrent liabilities and  EU PIL (referring ia to Bosworth) so watch the Journal of Private International law.

Geert.

In [2019] EWHC 3495 (Ch) Punjabi National Bank v Ravi Srnivasan et al three loan transactions lie at the core of the case. They were made between 29th March 2011 and 1st December 2014, and totaled some US$45 million. They were made for the purposes of oil re-refining and wind energy generating projects in the USA. Most defendants are all allegedly guarantors domiciled either in India or the USA. The borrowers themselves, with the exception of two defendants, booth ex-EU, are not party to the proceedings because they are insolvent.

Proceedings concern both the enforcement of the loans but also allegations of fraud, and have also been started in the US and in India however these were not disclosed to the court at the time the original permission was sought to serve out of jurisdiction.

At first glimpse the case might be easily held, along the lines suggested by lead counsel for claimant: at 5 (iii). ‘A combination of the exclusive jurisdiction clauses and the strongly arguable claims in fraud pointed towards the need to try the whole matter in one jurisdiction. England was the only possible jurisdiction. The omission to disclose the US proceedings and the Chennai proceedings caused the defendants no prejudice as they knew from the loan documentation that PNB was at liberty to bring parallel enforcement proceedings in different jurisdictions. The Chief Master ought to have placed strong reliance on articles 3 and 5 of the Hague Convention on Choice of Court Agreements (the “Hague Convention”), and article 25 of The Recast Brussels Regulation (“Brussels Recast”), which obliged the court to accept jurisdiction where there were such exclusive jurisdiction clauses.’

Owusu v Jackson would suggest no entertainment at all of forum non conveniens. However the fraud allegations initially opened the door to a point of entry for forum non seeing as none of the defendants are EU based. Sir Geoffrey Vos at 63 lists the relevant factors: ‘the most important being the choice of jurisdiction clauses in both loan agreements and guarantees, the effect of Brussels Recast and the Hague Convention, the fact that some parallel proceedings can be necessary where enforcement against real property is required, and the centre of gravity of the lending relationship which was indeed in London. In addition, the US and Chennai proceedings did not cover the Pesco loans at all, so that disallowing English jurisdiction for those contractual claims prevented PNB from bringing proceedings in its main chosen jurisdiction in respect of that lending and the guarantees given in respect of it.’

In the end however Vos agreed with the initial assessment of the High Court which emphasised non-disclosure (undoubtedly an example of procedural fraus): notwithstanding England being the most appropriate forum for those contractual claims without clear choice of court, and without a doubt the English jurisdiction guarantees of the other loans, but also for the fraud claims, had they been (which they were not) seriously arguable as presently pleaded, (at 72) jurisdiction must be dismissed in light of the need to protect the administration of justice and uphold the public interest in requiring full and fair disclosure.

Geert.

In C-493/18 UB v VA, proceedings took place between UB, on the one hand, and VA, Tiger SCI, WZ, as UB’s trustee in bankruptcy, and Banque patrimoine et immobilier SA, on the other, concerning the sale of immovable property originally owned by UB and mortgages granted over that property by UB and the action taken by WZ to have those transactions declared ineffective as against the bankruptcy estate.

A little bit of factual background may be useful – for that reference is best made to the judgment. Essentially, an avoidance (insolvency pauliana) action was launched given suspicious transactions between UB and his sister. On 10 May 2011, UB was, on his own petition, declared bankrupt by Croydon County Court. On 1 July 2011, WZ was appointed UB’s trustee in bankruptcy, with effect from 6 July 2011.  At WZ’s request, Croydon County Court authorised WZ on 26 October 2011 to bring an action before the French courts in order, first, to have the bankruptcy order registered and, second, to obtain a ruling that the sale of the properties referred to in paragraph 12 above and the mortgages granted over those properties to VA (‘the sales and mortgages at issue’) were transactions at an undervalue or for no consideration under the relevant United Kingdom bankruptcy law provisions. WZ thus sought a decision authorising the restitution of those properties to UB’s bankruptcy estate, for the purposes of their disposal. The French courts granted the declaration.

The legal issue under consideration is the reach of the Insolvency Regulation’s establishment of jurisdiction for the courts of the Member State of COMI. Does it extend to an action by a trustee in bankruptcy appointed by a court of the Member State in which the insolvency proceedings were opened (here: the UK) the purpose of which is to obtain a declaration that mortgages registered over immovable property situated in another Member State (here: France) and the sale of that property are ineffective as against the bankruptcy estate.

The CJEU correctly emphasises that the Insolvency Regulation old or new does not impose any rule conferring on the courts of the place where immovable property is located international jurisdiction to hear an action for the restitution of those assets to the bankruptcy estate in insolvency proceedings. Furthermore, concentrating all the actions directly related to the insolvency proceedings before the courts of the Member State within the territory of which with those proceedings were opened is consistent with the objective of improving the efficiency and speed of insolvency proceedings having cross-border effects. Support for this ex multi: Wiemer & Trachte.

The English courts therefore should have exercised jurisdiction per vis attractiva concursus – the file before the CJEU does not reveal its hesitation to do so. It does reveal that UB claims among others that the insolvency proceedings in England had already been concluded and presumably therefore the pauliana time-barred.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5 Heading 5.4.1. Chapter 2 Heading 2.2.2.10.1

Happy 2020 reading, all!

At the back of my mind I have a number of interesting examples of the English Courts and English law’s awareness of the relevance of courts and substantive law in regulatory competition. I post them here together by way of illustration.

Sir Vos’ speech on how English law on cryptoassets should develop so as to boost the
confidence of would-be parties to ‘smart’ legal contracts; a further analysis of same by the ‘UK jurisdiction taskforce’, and Outer Temple’s reaction to ditto.

Also however RPC’s review of Davey v Money [2019] EWHC 997 (Ch), in which Snowden J declined to cap a litigation funder’s liability for adverse costs at the amount of funding provided: essentially adding a potential risk to be considered by third-party litigation funders and illustrating that attractive as England may be as a forum for litigation, the sector is not a free for all.

Finally, the English courts are not of course alone in the realisation of the issues: witness this 2017 report by the French Supreme Court: ‘”Le juge et la mondialisation”.

Geert.

[2019] EWHC 3340 (QB) Agbara et al v Shell Nigeria et al (thank you Adeole Yusuf for flagging) illustrates what many a conflict teacher initiates classes with. There is some, but often limited use in obtaining a judgment which subsequently cannot be enforced where the defendant’s funds are. Coppel DJ refused to enter registration of a 2010 Nigerian judgment by which claimants were awarded 15,407,777,246 Naira (approximately £33 million today) in damages in respect of the pollution of land occupied by them following the rupture of a pipeline maintained by Shell in 1969 or 1970.

Brussels Ia does not apply to recognition and enforcement of an ex-EU judgment hence the common law was applied (clearly with due deference to international comity yet the standards of natural justice nevertheless being determined by lex fori, English law). Natural justice was found to have been infringed by the proceedings at issue. This included an impossibility for Shell to cross-examine witnesses and an unusually swift completion of proceedings following the dismissal of a procedural argument made by Shell. Shell’s subsequent bumbling of the appeal via procedural mistake was not found by Coppel DJ to alter the findings of infringement of natural justice.

Obiter the factual mistakes made in the calculation of damages leading to the award and the opaque inclusion of punitive damages were also found to stand in the way of recognition and enforcement.

Geert.