GAVC

The CJEU this morning held (without AG Opinion) in C-361/18 Ágnes Weil v Géza Gulácsi.

Overall context is that Brussels Ia does not apply to ‘the status or legal capacity of natural persons, rights in property arising out of a matrimonial relationship, wills and succession’.

Ms Weil and Mr Gulácsi were unregistered partners. Mr Gulácsi was ordered by Hungarian court order to pay Ms Weil approximately EUR 2 060, together with interest for late payment, by virtue of the settlement of rights in property arising out of their de facto (unregistered) non-martial partnership. Ms Weil later applied to the same court to have it issue the Article 53 certificate which would facilitate her enforcement in the UK (where Mr Gulácsi lives and has a regular income). Questions raised, were

‘(1)      Is Article 53 of Regulation … No 1215/2012 to be interpreted as meaning that, if requested by one of the parties, the court of the Member State that delivered the decision must issue the certificate relating to the decision automatically, without examining if [the case] falls within the scope of Regulation … No 1215/2012?

(2)      If the answer to the first question is in the negative, is Article 1(2)(a) of Regulation … No 1215/2012 to be interpreted as meaning that a repayment action between members of an unregistered non-marital [de facto] partnership falls within the scope of the rights in property arising out of a relationship deemed … to have comparable (legal) effects to marriage?’

The  Court answers the first question in the negative: at the recognition and enforcement stage, things must go very swift indeed. The mutual trust required of courts must be backed up by proper consideration of the Regulation by the courts of the Member State of initial adjudication: at 33:

‘the need to ensure the swift enforcement of judgments, while preserving the legal certainty on which the mutual trust in the administration of justice in the European Union is based, justifies, in particular in a situation such as that of the main proceedings — where the court which gave the judgment to be enforced did not adjudicate, when giving that judgment, on whether [Brussels I and Ia] was applicable — that the court hearing the application for the certificate ascertains, at that stage, whether the dispute falls within that regulation.’

It adds at 35 that

the enforcement procedure, under Regulation No 44/2001, precludes, like enforcement under Regulation No 1215/2012, any subsequent review on the part of a court of the Member State addressed of whether the action giving rise to the judgment for which enforcement is sought falls within the scope of Regulation No 44/2001, the grounds for challenging the declaration that a judgment is enforceable being exhaustively laid down by that regulation.

This I find interesting for unless I missed it, there has not yet been a CJEU decision holding this much and as I discuss on pp 191-192 of the Handbook, there is scholarly discussion on same.

With respect to the matrimonial property exception, the CJEU after of course emphasising the need for a restrictive interpretation of the exceptions, acknowledges that Brussels Ia has extended this but only to relationships deemed comparable to marriage (at 44). Unregistered partnerships do not qualify.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.1.2, Heading 2.2.16.1.2 .

Bobek AG opined end of May in C-198/18 CeDe Group v KAN. I am posting a touch late for well, readers will know I have not been fiddling my thumbs. The Opinion concerns the lex causae for set-off in accordance with the (2000) Insolvency Regulation – provisions for which have not materially changed in the current version of the EIR (Regulation 2015/848). At stake are Articles 4 cq 6 and 7 cq 9 in the two versions of the Insolvency Regulation.

The liquidator of PPUB Janson sp.j. (‘PPUB’), a Polish company the subject of insolvency proceedings in Poland, lodged before the Swedish courts an application against CeDe Group AB (‘CeDe’), a Swedish company, claiming payment for goods delivered under a pre-existing contract between PPUB and CeDe, which is governed by Swedish law. In the course of those proceedings, CeDe claimed a set-off in respect of a larger debt owed to it by PPUB. The liquidator had previously refused that set-off within the framework of the Polish insolvency proceedings. During the course of the procedure before the Swedish courts, PPUB’s liquidator assigned the claim against CeDe to another company, KAN sp. z o.o. (‘KAN’), which subsequently became insolvent. However, KAN’s liquidator refused to take over the claim at issue, with the result that KAN (in insolvency) is now party to the litigation

The Supreme Court, Sweden) doubts the law applicable to such a set-off claim. Before the referring court, KAN claimed that the set-off claim should be heard under Polish law, whereas CeDe submitted that that issue should be examined under Swedish law. Both of course reverse-engineered their arguments to support opposing views.

The Advocate General in trademark lucid style navigates the facts and issues (not helped by the little detail seemingly given by the referring court). Complication is of course that the general Gleichlauf rule of the EIR is repeatedly tempered by ad hoc regimes for specific claims or claimants. Like the Commission, Bobek AK focuses on the Regulation’s stated aim (recital 26 of the 2000 EIR; recital 70  in the 2015 EIR) of having the set-off regime fulfill its role as a guarantee for international commercial transactions: at 74: ‘adopting an approach focused on the concrete outcomes produced by the respective applicable laws in conflict in a given case, the test to be applied must zero in on the specific solution that would be arrived at by the law applicable to the main claim’.

An Opinion very much soaked in commercial reality.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.7.

I shall be spending a few weeks as a distinguished (yes, me!) visiting scholar at University of Macau in September. As part of my commitments there I shall be joining

• Professor Paulo Canelas de Castro (University of Macau)
• Professor Qin Tianbao (Wuhan University)
• Professor Ben Boer (Wuhan University)
• Professor Alexander Zahar (Wuhan University)
• Professor Benoit Mayer (The Chinese University of Hong Kong)

in the committee for a workshop on the writing of academic articles in the environmental law area. That’s quite a committee if you ask me.

We shall be assisting around twelve early-career environmental law scholars to publish an original research article on environmental law in English in an international top-tier journal.

At this moment we are looking in particular for a number of scholars based outside PRC to join the excellent Chinese candidates. All info is here. Deadline is tight: initial short abstract and CV are due Friday next, 7 June.

Geert.

 

[2019] EWCA Civ 768 BNP Paribas v Trattamento Rifiuti Metropolitani Spa engages the issue of apparently competing jurisdiction clauses under Article 25 Brussels Ia. The appeal against Knowles J’s findings at the High Court was dismissed.

The issue raised on the appeal is whether the judge was correct to conclude that the claims for declaratory relief sought in the Claim fall within an English jurisdiction clause  (EJC) contained in a swap transaction between the parties and not within an Italian jurisdiction clause (IJC) contained in a financing agreement (an ISDA Master Agreement) between them – further facts are best read in the judgment.

At 44 ff Hamblen LJ first considers two preliminary issues: (i) the relevance of Italian law and (ii) the relevant “dispute” or “disputes”. On (i), expert Italian opinion was considered however rejected essentially as being overkill: Where the applicable law of the contract is foreign law, questions of interpretation are governed by the applicable law. In such a case the role of the expert is not to give evidence as to what the contract means. The role is “to prove the rules of construction of the foreign law, and it is then for the court to interpret the contract in accordance with those rules” (authority cited: Lord Collins in Vizcaya Partners Ltd v Picord [2016] UKPC 5) and ‘The task of the English court is merely to inform itself of any relevant different principles of construction there might be in the foreign law and, armed with such information, look at both jurisdiction clauses and decide whether the English claim falls within the English clause. That should be a comparatively straightforward exercise.” (Longmore LJ in Savona). At 54: ‘The primary rule is Article 1362 of the Italian Civil Code, under which the literal meaning of the words must be considered. It is only if that meaning is not clear that one goes on to consider later Articles, although they may be used as a cross check.’ ‘[A]lthough the Italian jurisdiction clause was governed by Italian law, the judge was entitled to approach the task of interpreting the EJC and the IJC by reference to English law relating to the interpretation of such provisions, concentrating on the meaning of the words used in their relevant context’: at 55.

On the ‘relevant dispute’, at 56: ‘The interpretation of the scope of a jurisdiction clause falls to be considered at the time that jurisdiction agreement is made, at which time there will be no “dispute” unless, which is not this case, it is an ad hoc agreement relating to existing disputes.’ At 59: ‘Where proceedings are commenced in this country in reliance on an English jurisdiction clause and a jurisdictional challenge is raised, the issue of whether the clause may be so relied upon is to be answered by reference to the claim in relation to which those proceedings have been issued.’ At 61: ‘The answer to this question cannot change by reason of subsequent events, such as a defence raised or a subsequent set of proceedings, like the Italian Claim.’ (Follows reference to CJEU C-214/89 Powell Duffryn Plc v M Petereit).

Applied to the case at issue and having established that English law (of contractual interpretation and the ordinary meaning of the words) applies, Hamblen LJ summarises authority as follows (at 68; authority omitted)):

(1) Where the parties’ overall contractual arrangements contain two competing jurisdiction clauses, the starting point is that a jurisdiction clause in one contract was probably not intended to capture disputes more naturally seen as arising under a related contract.

(2) A broad, purposive and commercially-minded approach is to be followed.

(3) Where the jurisdiction clauses are part of a series of agreements they should be interpreted in the light of the transaction as a whole, taking into account the overall scheme of the agreements and reading sentences and phrases in the context of that overall scheme.

(4) It is recognised that sensible business people are unlikely to intend that similar claims should be the subject of inconsistent jurisdiction clauses.

(5) The starting presumption will therefore be that competing jurisdiction clauses are to be interpreted on the basis that each deals exclusively with its own subject matter and they are not overlapping, provided the language and surrounding circumstances so allow.

(6) The language and surrounding circumstances may, however, make it clear that a dispute falls within the ambit of both clauses. In that event the result may be that either clause can apply rather than one clause to the exclusion of the other.

At 69 ff this leads in casu to a finding of fairly clear distinct application in light of the clear contractual set-up between parties. At 77 this is supplemented by a straightforward finding of which relationship is relevant for which choice of court clause. Like the High Court, the Court of Appeal concluded that the two jurisdiction clauses governed different relationships and did not materially overlap.

At 112 Longmore LJ adds that the Court’s interpretation ‘accords with the objects of the Regulation of: (i) allowing the claimant easily to identify the court before which he may bring an action and the defendant reasonably to foresee the court before which he may be sued; and (ii) enabling the court seised to be able readily to decide whether it has jurisdiction, without having to consider the substance of the case.’

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.9, Heading 2.2.9.

(Apologies for the odd formatting in this post: I tried to debug this but failed. I am not wasting too much time trying, for I assume most of you do not visit the blog to enjoy its design qualities). In [2019] EWCA Civ 805 Airbus v Generali et al CJEU authority in West Tankers clearly echoes. I had hoped to review the case much sooner after my Tweet reporting it a few days after the judgment came out. That delay does have the advantage that Clyde & Co in the meantime have analysis to which I am happy to refer.

The claimant in this action and the respondent to the appeal, Airbus, claims declarations (1) that it is not liable to the defendant insurers for losses incurred in relation to an incident which occurred on 29 September 2013 in which an aircraft which it had manufactured sustained damage when landing in Rome and (2) that proceedings commenced against it by the defendants in Italy have been commenced contrary to the terms of an English exclusive jurisdiction clause. The clause in question is contained in an Airframe Warranties Agreement dated 8 July 2010 (“the Warranties Agreement”) concluded between (among others) Airbus and the defendants’ insured, the Italian airline company Alitalia. The issue on this appeal is whether the English court has jurisdiction over these claims by virtue of the jurisdiction clause. Moulder J held that it does and the defendant insurers (henceforth “the appellants”) now appeal.

Appellants contend, in outline, that the jurisdiction clause is of limited scope and does not extend to Airbus’s claims in this action, that the claim for a negative declaration falls within an arbitration clause in a different agreement, a Purchase Agreement dated 31 October 2005 which provides for ICC arbitration in Geneva, and that their own proceedings in Italy under articles of the Italian Civil Code are not within the scope of either clause. They say in addition that they cannot be in breach of an exclusive jurisdiction clause to which, as insurers, they were never parties and that, regardless of the true construction of the clause, there is no basis on which the English court can make a declaration against them (essentially, per Turner v Grovit and West Tankers).

Males LJ at 49: The standard of proof to be applied in determining whether the English court has jurisdiction under Article 25 of the Brussels Recast Regulation is that of a good arguable case. Kaifer Aislimentos was discussed as relevant authority. However, at 52: ‘sometimes it will be sensible, when a question of law arises on an application to challenge jurisdiction, for the court to decide it rather than merely deciding whether it is sufficiently arguable.’  Discussion of the contractual construction of the choice of court clause then follows at 62 ff and concludes in favour of a wide application in casu.

At 77 ff: The question whether the appellants’ claim in Italy falls within the scope of the English jurisdiction clause. Males LJ notes correctly that this depends on the nature of the claim brought in Italy, not on the defences which may be or have in fact been raised by Alitalia. At 82 he fairly swiftly concludes that even though the Italian claim is for breach of non-contractual obligations under articles of the Italian Civil Code, it is sufficiently connected to the Warranties Agreement to be within the scope of the exclusive jurisdiction clause. At 83 therefore: the commencement and pursuit of the Italian proceedings was contrary to the terms of that clause and that the English court has jurisdiction to determine that claim.

That then brings us to the discussion of what the English courts might potentially do to assist the party relying on the choice of court clause – given the unavailability of anti-suit per West Tankers. Noteworthy is that the new lis alibi pendens rule protecting choice of court following Brussels Ia, seemingly was not deployed or discussed in the Italian proceedings – at any rate there is no reference to any such discussion in the Court of Appeal judgment (other than perhaps at 84 which seems to suggest that amendment of claims brought the issue to the surface and this may not yet have been the case at the time of the discussion of the Italian proceedings).

A statement by the English courts finding infringement of the clause, would not just have an impact on cost rulings but would also ground a delictual claim. At 97 Males LJ settles the discussion whether such a declaration might be possible: ‘I can see no valid basis on which West Tankers can be distinguished. If it is held that commencement of the Italian proceedings by Alitalia would have been a breach of the jurisdiction clause in the Warranties Agreement, it follows that their commencement by the appellant insurers is a breach of an equivalent obligation in equity which Airbus is entitled to enforce and that the English court has jurisdiction to grant a declaration to say so.’

Interesting and highly relevant authority.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Heading 2.2.2.10.2.,  Heading 2.2.9, Heading 2.2.9.4.`

 

I have reported before on the innovation principle, the industry efforts behind it and the European Commission response to same. I have linked our initial paper as well as media and other reports in an earlier posting. The most comprehensive overview of the genesis of the principle is included here.

One of the comments I made in that earlier post is that Commissioner Moedas has emphasised verbatim that the innovation principle is not binding EU law: ‘“I think we have some misunderstanding here … The Horizon Europe proposal does not in any way establish the innovation principle or incorporate it into EU law. It is referred to in the recitals but it is not something that is [in] the proposal,” he said.

At the end of the original Ghostbusters movie, a giant Marshmallow Man appears as a result of the main ghost’s conjuring up himself as the physical manifestation of the first thought popping up into the mind of the lead characters’ mind (further info here). The road to turning the imagination of the innovation principle into reality is currently equally continuing with no less than a Commission-ordered Consultation Report, from the Centre for European Policy Studies, on the evaluation of the innovation principle: see the Directorate-General’s invitation letter and the questionnaire.

Both documents reached me via a little Berlaymont bird. I have anonymised individuals mentioned in the documents and I have also changed the order of questions in the questionnaire just in case individual copies were drafted to facilitate the coveted ‘confidentiality’ – contents of the questionnaire have stayed the same. The questionnaire is meant for ‘selected stakeholders’ who are instructed not to ‘share, quote or cite it’.

The principle even if it does exist certainly does not do so in EU law – as confirmed by the Commissioner. Yet it is his DG which has instructed CEPS to carry out the study, confidentially: not exactly a driving principle of the Better Regulation Agenda to which the documents purport to answer.

The invite states that ‘the overall aim of this evaluation is to describe the status quo and prepare recommendations for future action in accordance with the better regulation guidelines. These recommendations will serve to apply the Innovation Principle in a way which helps the achievement of EU policy objectives and is consistent with identified stakeholder needs.’

The text pays lip service to the general interest which ‘innovation’ is meant to serve, yet also repeatedly emphasises that existing regulatory hurdles to ‘innovation’ ought to be classified and potentially removed; that the EC may take the necessary steps to initiate this; and nowhere does it question the very existence of the principle.

It is noteworthy in this respect that Horizon Europe, Europe’s next flagship research and development program, refers drastically less to responsibly research and innovation -RRI than did its predecessor. Parliament did not halt references to the innovation principle in its recitals.

I would like to emphasise again that with my co-authors of the paper, I am not an unshakable opponent of the introduction of an innovation principle. Provided the discussion on it is done in the appropriate institutions and at the very least in the public domain. A confidential survey confirms the reactionary character which this principle so far represents on the EU scene.

Geert.

 

My review of Kokott AG’s Opinion C-25/18 Brian Andrew Kerr v Pavlo Postnov and Natalia Postnova (Kerr v Postnov(a)) discussed, as did the AG, the application of Brussels I Recast’s Articles 24(1) and (2) exclusive jurisdictional rules, cq the application of Article 7(1) jurisdictional rules on contracts, and applicable law consequences of same. The Court ruled on 8 May.

Coming to the first issue: Article 24(1)  – this is not properly answered by the Court.

I signalled the potential for engineering even in Article 24 cases: particularly here, the prospect of adding an enforcement claim to an otherwise contractual action. At 37-38 the Court deals most succinctly with this issue: ‘in so far as the action which gave rise to the dispute in the main proceedings does not fall within the scope of any of those actions, but is based on the rights of the association of property owners to payment of contributions relating to the maintenance of the communal areas of a building, that action must not be regarded as relating to a contract for a right in rem in immovable property, within the meaning of Article 4(1)(c) of Regulation No 593/2008.’: ‘in so far as’ – ‘dans la mesure où’: the Court would seem to dodge the issues here which the AG did discuss, in particular vis-a-vis the enforcement accessory: that discussion I feel is not over.

Note also the straight parallel which the Court makes between lex contractus under Rome I and Article 24. 

The discussion of Article 24(2) does lead to a clear conclusion: the forum societatis is not engaged, neither therefore is the lex societatis exception in Rome I. The Court follows the AG here, with specific reference to the Lagarde report (at 33-34).

As for Article 7(1) forum contractus: at 27 usual authority going back to Handte assists the Court in its conclusion that ‘even if membership of an association of property owners is prescribed by law, the fact remains that the detailed arrangements for management of the communal areas of the building concerned are, as the case may be, governed by contract and the association is joined through voluntary acquisition of an apartment together with ownership shares of the communal areas of the property, so that an obligation of the co-owners towards the association of owners, such as that at issue in the main proceedings, must be regarded as a legal obligation freely consented to’ (at 27). At 28: ‘the fact that that obligation results exclusively from that act of purchase or derives from that act in conjunction with a decision adopted by the general assembly of the association of the owners of property in that building has no effect on the application of Article 7(1)(a)’.

At 39-40 the Court then swiftly comes to the conclusion of ‘services’ under Article 4(1)(c) Rome I, without much ado at all. The AG had opined that the non-uniform nature of the contributions leads to non-application of the service rule of Article 7(1)b and therefore a resurrection of the classic Tessili formula: the CJEU itself went for the acte clair route.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.6, 2.2.11.1

 

In January 2017 I reported that Ms Kiobel, following failure to convince the USSC of jurisdiction under the Alien Tort Statute, subsequently initiated proceedings in the Dutch courts to try and sue Shell over the case. (Evidently unrelated to the pursuit of Shell in The Netherlands on environmental grounds – a case which is still pending upon appeal).

The court in first instance at the Hague on 1 May accepted jurisdiction against

• both the mother holding. That was not at all under discussion: this is done via Article 4 Brussels Ia’s domicile rule. Use of Article 33 /34’s forum non conveniens-light mechanism was not suggested;
• two English-incorporated Shell daughters using Article 8(1) of the Brussels I a Regulation; and
• the Nigerian daughter company. Against the Nigerian daughter company, jurisdiction needs to be anchored unto the Dutch mother holding using Article 7 of the Dutch CPR, which is a near carbon copy of Article 8(1) Brussels Ia, whose CJEU authority is followed by Dutch courts in the interpretation of the Dutch residual rule.

Coming so soon after the UKSC in Vedanta the Dutch case has received quite a bit of attention. After first not considering an English translation (not surprisingly; these are the Dutch courts, not a World Service), the clerks have now announced that there will be one, coming up some time soon.

Readers of the blog will expect me to hold the judgment against a clear jurisdictional and conflict of laws lens – in doing so, I fear I have to be a little bit less optimistic than media soundbites following the case.

Jurisdictional issues were in the end dealt with fairly summarily. Most attention went to issues of evidence and discovery, as well as a first review of the substance of the case.

Of note is:

• At 4.3: acceptance by all parties of of Nigerian law as the lex causae; if need be, choice of law by all parties for Nigerian law as the lex causae. Rome II is not applicable ratione temporis. The case has this in common with the Milieudefensie case against Shell. This being a civil law jurisdiction, ius novit curia applies. The court has taken into account parties’ submissions on Nigerian law yet has also conducted its own research. Foreign law is ‘law’ in the civil law; not ‘fact’ as in the common law.
• Claimants suggest that in the events in Ogoniland Shell acted as one organisation and treated the issue as one engaging the Shell concern as a whole (4.7 in fine);
• Claimants purposedly do not wish their claim to be qualified as one engaging piercing of the corporate veil; duty of care; shareholders responsibility; or tort of negligence. Rather, as one engaging the Shell concern directly in a suit on infringement of human rights included in the African Charter on Human and Peoples Rights (ACHPR) and the Nigerian constitution. Tort is only suggested as an alternative should the court not follow the arguments on the basis of human rights (4.8).
• At 4.12 the Court accepts the horizontal direct effect of human rights under Nigerian law, referring for that finding to Nigerian case-law. At 4.19 the Court notes the absence of statutes of limitation for human rights violations under Nigerian law: thus qualifying this as an issue of substance (lex causae), not procedure (lex fori). It revisits the statute of limitation issue at 4.47 ff (holding that under Nigerian law the suits can still be brought).
• At 4.26 the court applies A8(1) BIa and A7 Dutch CPR in globo, given the same lines of interpretation, and finds succinctly that all conditions (Kalfelis; Roche Nederland; The Tatry) are met. It remarks at 4.26 in fine that given the same situation of law and fact, it was predictable for all parties that they might end up being sued in any of their corporate siblings’ domicile.
• At 4.27 the court discussed summary dismissal. As seen in Vedanta, despite Owusu European courts are within their rights to reject the case in summary judgment if there is no ‘real issue’ to be tried against the anchor defendant. However this only applies against non-EU based defendants. Application of Article 8(1) does not allow such summary dismissal for EU-based defendants (see also C-103/05 Reisch Montage). The Hague court reviews summary dismissal only vis-a-vis the Nigerian defendant but finds succinctly that the suit is not prima facie without merit. There is a serious issue to be tried.
• At 4.28 interestingly the Court rejects relevance of the High Court and the Court of Appeal‘s dismissal of jurisdiction in Okpabi, arguing that these courts employed ‘English law’. This underscores the argument I have made elsewhere, that there is a serious blank in the discussion on lex causae for the duty of care or, depending on the case, the piercing issue. The Dutch court here notes without hesitation that the English courts apply lex fori to that test, and so therefore, I am assuming, should they (meaning Dutch law in their case)?
• At 4.29 it looks as if the Court considers some kind of reflexive argument which defendants seem to have made. Namely that the Dutch courts should respect the exclusive jurisdictional head under the Fundamental Rights (Enforcement Procedure) – FREP Rules, for the Federal High Court in cases involving alleged infringement of human rights. However the Dutch court considers this a mere internal jurisdictional distribution rule, which does not hinder the Dutch courts in their assessment of the claims. There is no written or unwritten rule in Dutch private international law which suggests such deference to a Nigerian civil procedure rule.

Importantly, a great deal of attention at 4.30 ff  goes to the debate on the use of documents obtained in US discovery, in the Dutch proceedings. A fair amount of these had to be returned following a confidentiality agreement in the US proceedings. Claimants make recourse to Article 6 ECHR to regain access for use in the Dutch proceedings however the Dutch court curtails much of that. Civil law discovery rules are notoriously more claimant friendly than those of the common law (a comment also made by Marsh CM in Glaxo v Sandoz. It leads to Shell not having to turn over quite a large part of the documents claimants had hoped to use.

At 4.58 ff the Court then turns to the substance of the case for case management reasons, with a view to determining which parts of the claim may be made subject to further proof. It holds in a way which I imagine must have been very disappointing for claimants. Only limited claims (of the Nigerian daughter’s involvement in the bribing of witnesses) will be allowed to continue.

The court held that claims of controlling meddling in the Nigerian court proceedings were not proven with sufficient force for these claims to continue – instead it held that Shell’s policy of silent diplomacy, in line with its business policies, had been consistently carried out.

All in all I would suggest claimants have scored clear points on jurisdiction, minor points on discovery and a disappointing outcome for them on substance. Albeit that the witness bribe leg may still lead to a finding of human rights infringement.

Geert.

(Handbook of) European private international law, second ed. 2016, Chapter 8, Headings 8.3.1.1., 8.3.2.

I tweeted it earlier yet was asked to put a review up on the blog (which also suits my archiving purposes) of ECLI:NL:GHAMS:2019:192 X v Y (I know that does not help much) at the Amsterdam Court of Appeal, 29 January 2019. The case came to me courtesy of Freshields who have review here.

The case illustrates some of the issues involving online alternative dispute resolution, including those manned by artificial intelligence (albeit the latter was not directly at stake here).

Using an online trading platform, X provided three loans to Y, all in bitcoins at an interest rate of 5% per month. To borrow these bitcoins, Y had to agree on the conditions of the online bitcoin-trading platform applicable to the loans. These conditions included the following dispute resolution mechanism clause:

If you fail to pay principal and/or interest on the date on which the loan falls due, you will be considered in default of the Registration Agreement… Should your loan become 90 days past due (“Defaulted”) the loan will be sent to Dhami Law Firm (“Arbitrator”), an independent, international arbitration firm whose awards are recognized internationally under The United Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

I understand that in the event that I want to appear in the arbitration by email to contest the potential issuance of an award in favor of the lenders, I must send a written request to support@btcjam.com and pay a $ 99.00 fee. Such request must be within 7 calendar days from the date of the Notice of Default. The Arbitrator’s decision shall be final and legally binding. In the event that the Arbitrator issues an award in favor of the investor, an investor may enforce that judgment in a court of competent jurisdiction.

The conditions further contained the following arbitration clause:

All claims and disputes arising under or relating to this agreement are to be settled by binding arbitration in the state of California or another location mutually agreeable to the parties. An award of arbitration may be confirmed in a court of competent jurisdiction.

Default ensued, as did ADR, and Y sought enforcement in The Netherlands. The Courts have now refused proprio motu (Y had signalled he had no objection), for the following reasons summarised by Freshfields: First, the court took issue with the circumstance that – in its view – online arbitral proceedings automatically become pending after 90 days. Second, a defendant wishing to defend itself in these arbitral proceedings had been required to write an email within seven days from receiving a notice of default. Third, the arbitral tribunal had failed to inform Y that a dispute was pending against him or of the legal grounds of the action.

At 3.5 is it is clear that the principle of audi alteram partem is the main stumbling block for the Dutch Courts. Ordre public violated. A clear flashpoint for ADR, including of the algorithmic variety.

Geert.

 

 

In [2019] EWHC 1095 (Ch) Media Saturn Holding v Toshiba et al, Barling J is concerned with stand-alone damages suits following the European Commission decision in COMP/39437 – TV and Monitor Tubes. None of the Defendants was an addressee of the Decision (some of their parent companies were). The claims are, therefore, “standalone” rather than “follow-on” actions, and the Decision is not binding on the court so far as the claims against the Defendants are concerned, as it would have been had the Defendants been addressees. Nevertheless, Claimants place considerable reliance upon the evidential effect of the Decision.

Claims are strike out and summary judgment application, intertwined with challenges to jurisdiction. These essentially relate to there being no arguable claim against the “anchor” defendants, particularly Toshiba Information Systems UK ltd – TIS.

At 114: Claimants refute the suggestion that the claim has been brought against TIS on a speculative basis in the hope that something may turn up on disclosure and/or simply to provide an anchor defendant for jurisdictional purposes. They point to the Commission’s finding, at Recital 595, that the cartel was implemented in the EEA through sales of cartelised CPTs that had been integrated into the finished products.

The substantive law issue of implementation of the cartel therefore is brought in not just to argue (or refute) summary dismissal, but also to shore (or reject) the jurisdictional claim under Article 8(1) Brussels 1a.

Barling J establishes as common ground (at 90) that ‘as a matter of law an entity can infringe Article 101(1) TFEU and Article 53 EEA if it participates in relevant cartel activity, in the sense of being a party to an agreement or concerted practice which falls within that Article, or if it knowingly implements a cartel to which it may not have been a party in that sense. [counsel for defendants] submitted that there is no arguable case that TIS had the requisite knowledge. However, what is sufficient knowledge for this purpose is not common ground’.

At 300 ff the most recent CJEU authority is discussed: C-724/17 Vantaan kaupunki v Skanska of March 2019.

This leads to a relevant discussion on ‘implementation’ of the cartel, which mutatis mutandis is also relevant to Article 7(2) (locus delicti commissi). At 117-118:

‘TIS [similar arguments are discussed viz other defendants, GAVC] was involved in activities which were important to the operation of the cartel from the Toshiba perspective. These included the manufacture of CTVs using the cartelised product acquired from an associated company which itself was one of the established cartelists, and the onward sale of the transformed product. TIS also had direct commercial dealings with the Claimants relating to bonuses on sales of, inter alia, the transformed products. In my judgment there is an arguable case that those activities amounted to the actus reus of participation in and/or implementation of the cartel. The available material is sufficient to preclude the summary disposal of that issue.’ 

At 139 ff much CJEU and national authority is discussed, viz a variety of the defendants, on the issue of ‘implementation’ for summary dismissal on substantive grounds, a discussion which then at 259 ff is applied to the jurisdiction issue. Reference is made to Brownlie v Four Seasons, to C-103/05 Reisch Montage and of course to C-352/13 CDC. At 273 Barling J distinguishes excellently in my view between predictability as part of the DNA of CJEU Brussels Ia case-law on the one hand, and its treatment (and rejection) as a stand-alone criterion on the other hand:

‘[argument of counsel] is in danger of treating the statement of the CJEU in Reisch Montage as adding a free-standing and distinct criterion of foreseeability to the preconditions of application expressly set out in Article 8(1). If that criterion were to be applied generally, and without reference to those express pre-conditions, there would be a risk of the EU law principle of legal certainty being compromised, instead of respected as Reisch Montage expressly requires. That case states that the special rule in Article 8(1) must be interpreted so as to ensure legal certainty. The special rule’s express precondition is that “the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments…” Therefore, by virtue of Reisch Montage, it is those words that must be interpreted strictly so as to respect legal certainty and thereby ensure foreseeability. In other words, foreseeability is inextricably linked to the closeness of the connection between the two sets of claims, and the criterion will be satisfied if a sufficiently close connection of the kind described in Article 8(1) exists.’

And at 276

‘It is correct that the anchor defendants were not addressees of the Decision and that there were no UK addressees. However, there is no reason why this should be significant. Article 8(1) is capable of applying in a competition claim regardless of whether a Commission infringement decision exists. What matters is that there is a claim that the anchor defendant is guilty of an infringement, and that the case against the non-anchor defendant is sufficiently “closely connected” to that claim within the meaning and for the purposes of Article 8(1). The fact that neither entity is an addressee of a Commission decision (if there is one) and that neither is the subject of any other regulatory process or civil claim relating to the cartel, is, if not immaterial, then of marginal relevance.’

For all anchor defendants the conclusion is that there is an arguable claim that they participated in and/or knowingly implemented the cartel. That strongly militates against the sole purpose of the (two sets of) proceedings being to oust the jurisdiction of the other EU courts. No abuse has occurred.

At 316 a final postscript is added suggesting summarily that the Supreme Court’s Vedanta might have an impact on the ‘abuse’ issue. The judgment concerned inter alia an alleged abuse of EU law in the context of the predecessor provision to Article 8(1). The Court gave consideration to the test for the “sole purpose” issue. At 317: Barling J: ‘I can see no basis on which my conclusions in that regard are affected by this decision.’

Geert.

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

 

 

Many thanks to the staff at Leuven’s law library for writing up six extremely useful Google ‘hacks’ for legal research, which I am pleased to post as a guest blog.

 

As law librarians of KU Leuven, we help students and professionals with their research on a daily basis. A big part of research is – of course – Google, but for some topics and broad searches, Google will come up with 2 million relevant results, making it hard to see the forest for the trees. These six hacks will help you Google more efficiently and find what you’re looking for quicker.

The most commonly known hack – but also one of the most useful ones to alleviate research frustration – is the ‘search within a site’ hack. By typing site:[the website you want to search in] before or after your keywords, you will only get results from within that particular site. This is especially useful for websites with limited or difficult native search tools.

As for our second hack, we would like to remind you of the wildcard: *. Using the asterisk to find missing words is useful if you would like to look up a quote but do not remember the exact wording. The wildcard has another great use: you can easily include words in two different spellings in your search results by searching, for example, organi*ations.

Another way to look up quotes, this time if you do have the exact wording and are trying to find out the source, is by putting your words between quotation marks. This hack will make sure you only get results that quote the exact phrase you’re searching.

Our fourth Google hack is one to help you filter out particular words. By using the – or hyphen symbol directly in front of said word, you will get results that do not include it. The hyphen symbol is essentially the same as the Boolean “NOT”.

Let’s say you know a specific file is available online, but your basic keyword search does not turn it up? To solve this problem, use our fifth hack: the filtype:[filetype you’re looking for, eg. doc] string in combination with your keywords.

Last but not least, our final hack will make it easier to search for different aspects of law from a specific country. By using the site:[country code] string, you only turn up results with URL’s that have the specific country code you are looking for as a domain extension. This works, for example, to help you search more efficiently for fields of law in the Netherlands vs Belgium.

These six hacks are easy tricks to level up your research skills and make sure you do not spend as much time combing through pages of Google results. There is definitely more where this came from! For specific questions, involving Google or not, the librarians at the KU Leuven Libraries Law are always at your service.

(These hacks were originally posted in the context of a “Google hacks week” on the KU Leuven Libraries Law’s different social media platforms: Twitter, Instagram and Facebook.)

As noted, I have come up for some air after a few hectic weeks – next case to report on is [2019] EWHC 879 (Comm) Ramona v Reliantco, held 12 April. (A similar case is pending with the CJEU against Reliantco as Case C-500/18).

Defendant (‘Reliantco’) is a company incorporated in Cyprus offering financial products and services through an online trading platform under the ‘UFX’ trade name. Claimant, Ms Ang, is an individual of substantial means who invested in Bitcoin futures, on a leveraged basis, through the UFX platform. She claims, essentially and primarily, that Reliantco wrongfully blocked and terminated her UFX account and should compensate her for the loss of her open Bitcoin positions, or at a minimum should refund her cash value invested. She also makes claims for relief in respect of what she says have been breaches of data protection obligations owed by Reliantco in connection with her UFX account.

The judgment does not concern the merits of Ms Ang’s claims but rather an application by Reliantco challenging jurisdiction. Reliantco contends that Ms Ang is bound by its standard terms and conditions, clause 27.1 of which provides that the courts of Cyprus are to have exclusive jurisdiction over “all disputes and controversies arising out of or in connection with” her customer agreement. Reliantco therefore relies on Article 25 Brussels Ia.

Ms Ang says that clause 27.1 is ineffective to require her to bring her claim in Cyprus, either because she is a consumer within Section 4 of Brussels (Recast) or because clause 27.1 was not incorporated into her UFX customer agreement with Reliantco in such a way as to satisfy the requirements of Article 25. Ms Ang says, in the alternative, that her data protection claims may be brought here notwithstanding Article 25 Brussels Ia even if Article 25 applies to her primary substantive claims.

All in all a nice set of jurisdictional issues and no surprise to have prof Jonathan Harris QC involved as counsel.

At all times material to her claim, Ms Ang was not employed or earning a living in any self-employed trade or profession (unless, which is contentious between the parties and considered below, her activity as a customer of Reliantco via the UFX platform is itself to be so classified). Ms Ang worked in money markets for two months as a trainee, observing US$/DM currency swaps. Other than that, she has no professional currency trading or money market experience (again, that is, unless her use of the UFX platform to invest in Bitcoin futures itself counts as such).

At 9, s little bit of Bitcoin drame enters the scene: Ms Ang’s husband, Craig Wright, is a computer scientist with cybersecurity and blockchain expertise who works as Chief Scientist for nChain Ltd, a blockchain technology company with a corporate vision “to transform how the world conducts all transactions – using the blockchain’s distributed, decentralised ledger that chronologically records transactions in an immutable way“. As a researcher, he publishes prolifically and has developed innovations for which patent protection has been sought. He is the same Craig Wright who has identified himself publicly as being ‘Satoshi Nakamoto’, the online pseudonym associated with the inventor (or a co-inventor) of Bitcoin. Baker J holds that he need not consider whether that claim is true, and on the evidence for this application I would not be in any position to do so.

 

Was Ms Ang a ‘consumer’? At 52 ff the arguments of Reliantco are summarised; at 55 ff those of Ms Ang.

CJEU precedent discussed by Baker J is C-89/91 Shearson; C-269/95 Benincasa; C-464/01 Gruber; C-498/16 Schrems; and the pending cases C‑208/18 Petruchová [I reviewed the AG’s Opinion (issued a day before the High Court’s judgment) yesterday] and C-500/18 Reliantco Investments and Reliantco Investments Limassol Sucursala Bucureşti.

Baker J concludes at 34 ‘the ECJ/CJEU has not decided whether contracts entered into by a wealthy private individual for the purpose of investing her wealth, or particular types of such contract, are not (or can never be) consumer contracts.’

Reference is then made to English precedent along the very lines of the precedent dismissed by Tanchev AG in Petruchová: including AMT Futures v Marzillier, and at 35 ff Standard Bank London Ltd v Apostolakis both through the English and the Greek courts – with differing results. At 44: ‘the disagreement between the English and Greek decisions in Apostolakis turns upon and is constituted by a difference of view as to whether investing private wealth for gain, if it takes the form of buying and selling foreign currency, is by nature a business activity so that an individual investing their wealth in that way cannot when doing so be a ‘consumer’ under Brussels (Recast). Longmore J thought there was no such proposition of law; the Greek court took the contrary view.’ German case-law is also discussed.

At 63 Baker J comes to the core of his reasoning: ‘In my judgment, the investment by a private individual of her personal surplus wealth (i.e. surplus to her immediate needs), in the hope of generating good returns (whether in the form of income on capital, capital growth, or a mix of the two), is not a business activity, generally speaking. It is a private consumption need, in the sense I believe intended by the ECJ in Benincasa, to invest such wealth with such an aim, i.e. that is an ‘end user’ purpose for a private individual and is not exclusively a business activity. That means, as was also Popplewell J’s conclusion in AMT v Marzillier, that it will be a fact-specific issue in any given case whether a particular individual was indeed contracting as a private individual to satisfy that need, i.e. as a consumer, or was doing so for the purpose of an investment business of hers (existing or planned).’

And at 65 in fine: the ‘question of purpose is the question to be asked, and it must be considered upon all of the evidence available to the court and not by reference to any one part of that evidence in isolation.’

At 68 he concludes ‘the purpose of her contract with Reliantco therefore was outside any business of hers’.

Baker J notes that he was not asked to defer any decision in C‑208/18 Petruchová. I believe it would have been of help to determine the issue before him. Tanchev AG (as noted, in an Opinion not available to Baker J at the time of his drafting his judgment) suggests that ‘to determine whether a person must be regarded as a consumer, reference must be made to the nature and objective of the contract, not to the subjective situation of the person concerned.’ 

 

Obiter, he then reviews Article 25, where CJEU authority discussed is ia Colzanni and Cars on the Web. Ms Ang contended that she was not able to access the standard terms web page at the time she opened her account, and therefore clause 27.1 did not comply with Article 25 B1a. At 78 extensive technical detail is discussed and at 80 Baker J finds that the Cars on the Web criterion of accessibility and durability were met; and at 81 that in any case, the current issue is not one of a click-wrap agreement for a signed hard copy of the GTCs with choice of court in it, had also been sent.

Equally obiter, at 83 ff Baker J summarily discussed the GDPR jurisdictional arguments which would have been more relevant had he not accepted jurisdiction under the consumer title. The brief discussion entirely fulfills my summer 2018 prediciton here: Article 79 GDPR will create a lot of issues at the level of jurisdiction.

A very relevant case.

Geert.

(Handbook of) EU private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.

 

 

Tanchev AG Opined mid last month in C-208/18 Jana Petruchová v FIBO Group Holdings, essentially on the issue whether Article 17(1) Bussels Ia is to be interpreted as covering an individual who engages in trade on the international currency exchange market through a third party professionally engaged in that trade.

Or, as the AG himself puts it at 3, whether a natural person which engages in trade on the FOREX market must be regarded as a consumer or whether, by reason of the knowledge and expertise required to engage in that trade, of the complex and atypical nature of the contract at issue, and of the risks incurred, that person cannot be considered a consumer, so that he falls outside the scope of the section affording protection referred to above.

Under consideration is inter alia the impact of Rome I and of Directive 2004/39 – the relation in other words between applicable law and jurisdiction, and between substantive law and jurisdiction – see also my review of Pillar Securitisation here.

Ms Petruchová, residing in Ostrava (Czech Republic), and FIBO Group Holdings Ltd (‘FIBO’), a brokerage company established in Limassol (Republic of Cyprus), entered into a contract entitled ‘Terms of Business’ (‘the Framework Agreement’ – with choice of court for Cyprus). The purpose of the Framework Agreement was to enable Ms Petruchová to make transactions on the FOREX market by placing orders for the purchase and sale of the base currency, which FIBO would carry out through its online trading platform.

At 29, the AG suggests in my view correctly (Handbook p.106 2nd full para) that for choice of court under Article 19 B1a to be valid, it must allow the consumer to bring proceedings in courts in addition to those identified by Article 18.

Article 17(1) of the Brussels Ia Regulation applies if three conditions are met: first, a party to a contract is a consumer who is acting in a context which can be regarded as being outside his trade or profession; second, the contract between such a consumer and a professional has actually been concluded; and, third, such a contract falls within one of the categories referred to in Article 17(1)(a) to (c) of that regulation.

The question referred to the Court in the present case relates to the first condition. The AG refers in particular to C-269/95 Benincasa; and C-498/16 Schrems. At 46, referring to these cases: to determine whether a person must be regarded as a consumer, reference must be made to the nature and objective of the contract, not to the subjective situation of the person concerned. 

(at 40) ‘The question before the Court of Justice is whether a person who carries out transactions on the FOREX market may be denied the status of a consumer by reason of the knowledge and the expertise required to engage in such trades, the value of the transaction, the fact that the person is actively placing his own orders, the risks incurred on the FOREX market, and the number and frequency of the transactions carried out.’

In essence therefore, do the sophistication of the market and the intensity of the individual’s voluntary engagement with it, impact on their qualification as a consumer? The AG opines they do not, and I am minded to agree given CJEU authority, in my view most correspondingly C-218-12 Emrek – which the AG does not refer to. In that case the CJEU emphasised the objective charachter of the Pammer /Alpenhof criteria, decoupled from the consumer’s actual introduction to the business via word of mouth rather than the website.

The AG also refers to Schrems, where the Court held that the notion of a consumer is ‘distinct from the knowledge and information that the person concerned actually possesses’.

At 48 the AG finds additional support in Directive 93/13/EECon unfair terms in consumer contracts – although as we know e.g. from Pillar Securitisation, such support has now become less substantial.

At 51 the AG also emphasises the predictability of the Brussels regime – a classic interpretative tool which was bound to make an appearance. At 54 he adds that the risks involved in the conclusion of CfDs cannot preclude classification as a consumer. Quite the reverse: because of the risks, consumers need to be protected. At 59 he rejects [2014] EWHC 1085 (Comm) AMT Futures v Marzillier as relevant (national) precedent, although I do not think that either he or the Commission properly presented Popplewell J’s views on the issue. As I noted in my review at the time, ‘I do not think too much should be read in these examples – more so, the insistence that circumstances of the case do have an impact on the qualification as ‘consumer’.

At 69 on the issue of consumers, the AG concludes that ‘in order to determine whether a person who engages in trade on the FOREX market should be regarded as a consumer within the meaning of Article 17(1) of the Brussels Ia Regulation, no account should be taken of that person’s knowledge; of the value of the contract; of the fact that the person actively places his own orders; of the risks incurred; or of the number and frequency of the transactions.’

That leaves the questions

• whether A17(1) BIa should be interpreted in a manner consistent with Article 6 Rome I, given that financial instruments such as CfDs are excluded from the scope of the rules applicable to consumer contracts laid down in Article 6(1) and (2) of the Rome I Regulation). Suggested answer: No: per Kainz, and now also I would suggest, Pillar Securitisation; and
• whether account should be taken of the fact that the person is a retail client within the meaning of Directive 2004/39: for similar reasons: ditto answer.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.

 

Liverpool have just beaten Barcelona 4-0 to reach the Champions League finals, and I am slowly making my way through marking a smallish pile of essay papers. Yet in the midst of all of this I was asked whether the Swedish language and societal phenomenon of ‘Flygskam’ has an English equivalent.

Flygskam stands for being ashamed of flying. ‘Flying shame’ is what the English speaking media seem to have come up with so far.

Embarrassment of flying, therefore. Putting an embarrassment to take to the air together, I came up with Embairrassment.

I might be the first to do so and I hope it might, well, take off or indeed, fly.

Geert.

 

 

The CJEU held last week in C-694/17 Pillar Securitisation (v Hildur Arnadottir), on the Lugano Convention’s protected category of consumers. I have review of Szpunar AG’s Opinion here. The issues that are being interpreted are materially very similar as in Brussels I Recast hence both evidently have an impact on the Brussels I Recast Regulation, too (see in that respect also C‑467/16 Schlömp).

At stake in Pillar Securitisation is the meaning of ‘outside his trade or profession’ in the consumer title. The CJEU at 22 rephrases the case as meaning ‘in essence, whether Article 15 of the Lugano II Convention must be interpreted as meaning that, for the purposes of ascertaining whether a credit agreement is a credit agreement concluded by a ‘consumer’ within the meaning of Article 15, it must be determined whether the agreement falls within the scope of Directive 2008/48 in the sense that the total cost of credit in question does not exceed the ceiling set out in Article 2(2)(c) of that directive and whether it is relevant, in that regard, that the national law transposing that directive does not provide for a higher ceiling.’

The CJEU notes that Pillar Securitisation claims that Ms Arnadottir acted for professional purposes and is not covered by the definition of a ‘consumer’. However, the referring court has not referred any question to the Court on the purpose of the credit agreement concluded. On the contrary, as is clear from the wording of the question that it did refer, the referring court asks its question to the Court on the assumption that the contract at issue was concluded for a purpose that can be regarded as being outside Ms Arnadottir’s profession. In addition, in any event, the order for reference does not contain sufficient information in order for the Court to be capable, where relevant, of providing useful indications in that regard (not much help therefore to assist with the interpretation of issues such as in Ang v Reliantco, on which I shall be reporting next).

As I wrote in my review of the AG’s Opinion: the issue is how far does material EU law impact on its private international law rules. I referred in my review to the need to interpret Vapenik restrictively, and to Kainz in which the CJEU itself expressed caution viz the consistent interpretation between jurisdictional and other EU rules, including on applicable law and on substantive law.

I am pleased to note the Court itself makes the same observation, and emphatically so: at 35: ‘the need to ensure consistency between different instruments of EU law cannot, in any event, lead to the provisions of a regulation on jurisdiction being interpreted in a manner that is unconnected to the scheme and objectives pursued by that regulation.’ Subsequently establishing the very diffeent purposes of both sets of law, the CJEU rejects impact on one over the other (and also remarks that Pillar Securitisation’s reference to the Pocar report needs to be taken in context: prof Pocar referred to Directive 2008/48 by way of example only).

Conclusion: for the purposes of ascertaining whether a credit agreement is a credit agreement concluded by a ‘consumer’ within the meaning of Article 15, it must not be determined whether the agreement falls within the scope of Directive 2008/48 in the sense that the total cost of credit in question does not exceed the ceiling set out in Article 2(2)(c) of that directive, and it is irrelevant, in that regard, that the national law transposing that directive does not provide for a higher ceiling.

A good judgment.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.

In [2019] EWCA Civ 38 Huawei v Conversant Wireless (on appeal from [2018] EWHC 808 (Pat) the Court of Appeal considered whether in the event of 2 defendants being UK based (the others domiciled in China) the UK courts may relinquish jurisdiction reflexively to honour Article 24(4) Brussels Ia’s exclusive jurisdictional rule for the validity of patents.

Neither Article 33’s lis alibi pendens or Article 34’s ‘forum non conveniens’ rule were discussed.

Huawei China and ZTE China have commenced proceedings in China against Conversant, seeking to establish invalidity and (in the case of Huawei China only) non-infringement of Conversant’s Chinese patents. Conversant have inter alia sued Huawei China and ZTE China in Germany for infringement of its German patents.

Following Owusu, jurisdiction for infringement of UK patents against UK incorporated companies must lie and remain with the English courts per Article 4 B1a. As readers will remember from my review of Ferrexpo, the English courts for some time however have noticed with relish that the CJEU in Owusu did not entertain the part of the referral which asked it whether exclusive jurisdictional rules may apply reflexively – holding thereafter in the CJEU’s stead that they might so do (in a discretionary: not a slavish fashion: Floyd J here at 115).

At 95 ff Floyd J discusses the issues after having summarised the various representations made (see a summary of the summary by John de Rohan-Truba here), with much of the discussion turning on English CPR and jurisdictional rules, and reflexive application of Article 24(4) confirmed in principle, but not applied here. Requests to refer to the CJEU were summarily dismissed.

Geert.

(Handbook of ) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.7, Heading 2.2.9.5.

In [2019] EWHC 982 (Comm) Pan Ocean v China-Base Group, Hancock J reviews CJEU authority old and new on Article 25 Brussels I Recast at length, starting with Colzani and Segoura and ending with Profit Sim.

The sole but important focus of the discussion is on Article 25 (1)(a)s ‘in writing or evidenced in writing’ (the Article’s other options for the existence of expression of consent were not under discussion: see at 32).

His conclusion, justifiable in my view, is (at 32) that there is no authority (CJEU or otherwise) which would go so far as to say that agreement to an exclusive jurisdiction clause which was implied solely from the conduct of the parties suffices for the purposes of compliance with Article 25.

At 35 ff he considered obiter the issue of anti-suit aimed at Singapore, had he decided that there is a valid clause, in summary rejecting that, too, at 63.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.9, Heading 2.2.9.

A very brief post mainly for archival purposes particularly with a view to comparative conflict of laws. Tozzini Freire review the new Article 25 of Brasil’s civil procedure rules here, with a focus on the ‘international’ element required to trigger the validity of choice of court (compare Vinyls Italia), and the potential application of fraus in same.

Geert.

Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.7.1. Chapter 3, Heading 3.2.8.1

 

[2019] EWHC 724 (Comm) ArcelorMittal USA LLC v Essar Steel Limited and others is quite the highlight in worldwide regulatory competition for championing arbitration.

As 20 Essex Street note, Jacobs J refused to vary an earlier worldwide freezing order (WFO), despite the award being foreign, Claimant and Defendant companies being foreign, there being no significant assets within the jurisdiction, and the courts at Mauritius (defendant is Mauritius-incorporated, defendant to the Arbitration Claim, and the debtor under the ICC award) potentially feeling gazumped by their English colleagues.

Of note over and above Essex Street’s analysis is

• the defendants urging the Court on the grounds of comity (no need for the English courts to act at policeman for assets located abroad: at 72, referring to Popplewell J. in Conocophillips China Inc v Greka Energy (International) BV. [2013] EWHC 2733) to resist the call for a WFO. This was rejected (at 81) with the argument ‘I consider that I am entitled to proceed on the basis of the evidence that the Mauritian courts would not regard the WFO as offensive in some way.’; and ‘The WFO does not presently conflict with any order of the Mauritian courts, and this is not a case where the Mauritian courts have refused equivalent relief or where there is evidence that those courts would be likely to do so.’ Jacobs J therefore does consider comity quite carefully.

 

• the Court’s sense of urgency in what it sees as a case of fraus: At 45:

‘There is no precise definition of what is meant by the phrase “international fraud” found in the case-law, but I do not consider that it is confined to cases where the underlying cause of action is a claim in deceit or a proprietary claim relating to the theft of assets. If there is a strong case of serious wrongdoing comprising conduct on a large or repeated scale whereby a company, or the group of which it is a member, is acting in a manner prejudicial to its creditors, and in bad faith, then I see no reason why the English court should not be willing to intervene rather than to stand by and allow the conduct to continue and, to put the matter colloquially, to let the wrongdoer get away with it. In the present case, I would regard the attempted dissipation of Essar Steel’s US$ 1.5 billion asset, in the face of the commencement of arbitration proceedings, as sufficient in itself potentially to warrant intervention under the “international fraud” exception, or as constituting “exceptional circumstances”.’

 

• and the rejection at 73 of a CJEU C-391/95 Van Uden type of restraint, requiring a real connecting link between the subject matter of the measures sought and the territorial jurisdiction of the English court.

 

Geert.

 

[2019] EWHC 792 (Pat) Ablynx and VUB v Unilver engages similar discussions as Eli Lily v enentech and Chugai v UCB with the additional element of now, under Brussels Ia, the application of Artile 31(2). This Article makes safe the torpedo previously used to gazump choice of court, by giving the courts of the States in whose favour choice of court has been concluded, a first go at discussing the validity and application of the choice of court agreement.

Here: does Article 31(2) mean that the Brussels courts, to whom jurisdiction has been assigned in a licence agreement, get to decide first on the engagement of Article 24(4)’s exclusive jurisdictional rule re the validity of patents?

It is worth quoting Hacon J in full: at 17 ff

’17. Ms Lane (for the defendants, GAVC) submitted that the position is clear: art.31(2) is engaged and therefore these proceedings must be stayed. Art.24 could never make a difference in this court because it cannot override art.31(2). That is because art.31(2) is expressly stated to be without prejudice to art.26 but not art.24. The consequence is that all issues arising in these proceedings must be ceded to the Brussels courts, including the question whether art.24(4) is engaged and if so, what should be done about it. It is not the concern of this court.

18. I disagree. To my mind art.25(4) explains why there is no mention of art.24 in art.31(2). Art.31(2) is necessarily without prejudice to art.24 since an agreement relied on for a stay under art.31(2) can carry no legal force if it purports to exclude the courts having exclusive jurisdiction under art.24. Even on the assumptions I have stated, art.31(2) cannot apply if art.24(4) is engaged. Art.24(4)’s engagement depends on whether these proceedings are ‘concerned with’ the validity of the Patents UK within the meaning of art.24(4). I must resolve this last question before I can decide whether the (assumed) agreement carries legal force and therefore whether art.31(2) is engaged.

19. I also note that art.26 is itself made subject to art.24. This reinforces my view that the recasting of Brussels I has not altered the hierarchy of provisions awarding jurisdiction, with art.24 at the top. Arts.24 and 25 both speak of ‘exclusive jurisdiction’, but that conferred by art.24 is the more exclusive.’

Having held that Article 31(2) is not engaged, the Court still has to assess whether the claim is essentially a decleration of non-infringrement or rather ‘concerns’ the validity of the patents. Defendants argue that the validity of the Patents UK would form only an incidental part of this action, since it is really a dispute about the scope of defendant’s licence.

Here, Hacon J discussed CJEU authority at length (GAT v LUK, BVG, Gasser etc.) and summarises at 53

(1) When a stay is sought under art.31(2), if an argument is raised that the court before which the stay is sought has exclusive jurisdiction under art.24, that court must decide whether the argument is correct.

(2) If the court has exclusive jurisdiction under art.24, art.31(2) is not engaged. There will be no stay.

(3) If the court does not have exclusive jurisdiction under art.24, it must decide whether at least prima facie there is an agreement which satisfies art.25 and which confers exclusive jurisdiction on courts of another Member State. If so, provided the defendant has not entered an appearance in a manner which satisfies art.26, there must be a stay of the proceedings.

EPLaw helpfully summarise the lenghty review of testimony and pleadings as follows: taking into account the usual practice in relation to patent validity proceedings in the UK, and the arguments which are typically run, the Court concluded that there was no real doubt that if the proceedings progress to trial they will be concerned with the validity of the Patents within the meaning of art.24(4). Art.24(4) was therefore engaged.

The case raises again the interesting issue of the degree to which the court may rely on parties’ submissions in particulars of claim when examining jurisdiction, or alternatively need to look beyond these stated arguments into what might and will be argued.

Leave to Appeal has been granted and a further order has already dealt with service issues.

Geert.

(Handbook of ) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.7, Heading 2.2.9.5.