GAVC

In Ecobank Transnational v Tanoh, the Court of Appeal refused an anti-enforcement injunction because of the applicant’s delay in filing it. Nigel Brook reviews the judgment’s findings on the issue of the anti-enforcement injunction here. The issue in this appeal is whether the High Court was wrong to refuse to grant Ecobank Transnational Incorporated (“Ecobank”), an injunction restraining Mr Thierry Tanoh (“Mr Tanoh”) from enforcing two judgments which he had obtained in Togo and Côte d’Ivoire. In substance the case concerned the relationship between arbitration, proceedings in the court in ordinary, and submission: it is to the latter that I turn my attention in this posting.

The Brussels regime does not apply – at stake is the application of the Civil Jurisdiction and Judgments Act 1982, which reads in relevant section

“33 For the purposes of determining whether a judgment given by a court of an overseas country should be recognised or enforced in England and Wales or Northern Ireland, the person against whom the judgment was given shall not be regarded as having submitted to the jurisdiction of the court by reason only of the fact that he appeared (conditionally or otherwise) in the proceedings for all or any one or more of the following purposes, namely

(a) to contest the jurisdiction of the court;

(b) to ask the court to dismiss or stay the proceedings on the ground that the dispute in question should be submitted to arbitration or to the determination of the courts of another country.”

Whilst the section states that a person shall not be regarded as having submitted by reason only of the facts there mentioned it is silent as to what additional facts are sufficient to establish submission. The Court of appeal confirms the feeling expressed in earlier case-law that Section 33 needs to be applied in parallel with Article 18 of the Brussels Convention, now Article 26 of the Brussels I Recast (and before that, Article 24 in the Brussels I Regulation). That is because Section 33 is largely derived from Article 18 of the Brussels Convention.

In the High Court judgment Burnton LJ said that it would be unfortunate if the principles applied by the courts of England and Wales on whether a litigant had submitted to the jurisdiction of a foreign court in non-EU cases were different from the principles applied by the Court of Justice, and therefore those courts, in cases under the Brussels and Lugano Conventions and now the Judgments Regulation.

In current appeal, Clarke LJ held (at 66) ‘I would go further. The decision of the court in Harada in relation to section 33 was heavily influenced by the decision of the European Court in relation to Article 18 of the Brussels Convention. But, now that section 33 has been interpreted in the way that it has, it cannot be right that it should bear a different meaning in cases outwith the European context.‘

Submission was not found to exist.

Do be aware of the limits to the relevant findings: Section 33 was largely borrowed, it appears, from the Brussels Convention. Many parts of English private international law, statutory or not, are no so borrowed. In those areas, the courts of England happily continue to follow their own course.

Geert.

Lazar v Allianz, Case C-350/14, was held on 10 December last. It addressed the issue of ‘ricochet’ damage in the Rome II Regulation on the law applicable to non-contractual obligations. Ricochet or ‘reflective’ or ‘indirect’ losses occur when someone suffers losses as a result of a tort directly causing damage to someone else.

The request has been made in a dispute between Mr Lazar, who resides in Romania, and the Italian insurance company Allianz SpA regarding compensation for material and non-material damage which Mr Lazar claims to have suffered in jure proprio by reason of the death of his daughter, a Romanian national who was resident in Italy, which occurred in Italy as a result of a road traffic accident caused by an unidentified vehicle. For Mr Lazar, it is more interesting for Italian law to be considered the lex causae.

The Opinion of Wahl AG neatly summarised the two opposing views: (at 40-41 of his Opinion):

According to the first view, (…) material and non-material damage suffered by the family members of a person who has died in another Member State does not necessarily constitute indirect consequences of the tort/delict for the purposes of Article 4(1) of the Rome II Regulation. It would follow in particular that, because it is based on an obligation that is distinct from the obligation as between the opposing party and the person who died in the accident, a claim for compensation in respect of material rights claimed by the close relatives of a person who has died as a result of a traffic accident which occurred in the State of the court seised must be assessed by reference to the law of the place in which the damage sustained by those relatives occurred, namely the place of their habitual residence, unless it can be demonstrated that, in accordance with Article 4(3) of the Rome II Regulation, it is clear from all the circumstances of the case that there are manifestly closer connections with another country.

According to the second view (…) the damage sustained, in their country of residence, by the close relatives of a person who has died in a road accident which occurred in the State of the court seised must be regarded as constituting indirect consequences of the damage suffered by the immediate victim of the accident. The term ‘country in which the damage occurs’ must be interpreted as referring to the place which caused the damage, which, in the main proceedings, is the place of the road accident.

He eventually opined in favour of the second view, taking inspiration ia from CJEU case-law on Article 7(2) of the Brussels I Recast (previously Article 5(3) Brussels I)- even though at 51 he cautioned against lifting interpretation from the jurisdictional Regulation for use in the applicable law Regulation. His main arguments were as follows:

(at 74) the interpretation whereby the general rule under which the expression ‘country in which the damage occurs’ in Article 4(1) of the Rome II Regulation extends to the place of the direct damage — in this case the place of the fatal collision — has the benefit of simplicity and objectivity where all the damage alleged actually originates from the same source.

(at 75) this is consistent with the foreseeability pursued by the drafting of the Rome II Regulation. In most cases, the person liable is able to anticipate the consequences in other countries of his conduct or of the conduct of persons for whom he is responsible. Similarly, the victim is generally informed of the legal context to which he was exposed or exposed his property. In other words, both the person liable and the victim were informed and took the necessary steps, in particular with regard to insurance, in connection with the applicable law in the country or countries in which damage might potentially occur.

(at 76) the general rule for determining the applicable law in the Rome II Regulation is characterised by neutrality. Taking the example of the material damage suffered by the survivors of a person who has died as a result of a traffic accident, it may be considered that the neutrality of the law would be jeopardised in so far as that damage is still located in the victim’s place of residence. (The AG notes that in other instances Rome II is not neutral: he refers in particular to Articles 6 (on acts of competition) and 7 (on environmental damage).

(at 77) such an interpretation is also consistent with the other idea underlying connecting factors in private international law, namely the idea of proximity, which is intended, as far as possible, to connect a situation to the law of the country with which it is most closely connected. Whilst the place of the accident is undeniably related to the other components of the liability, the domicile of the indirect victim is not necessarily so related. 

(at 79) the Rome II Regulation introduces corrective mechanisms which make it possible, in several respects, to avoid the apparent rigidity of the rule of the place in which the damage occurs.

Conclusion (at 83) ‘The term ‘place in which the damage occurs’ must, further to the case-law on the Brussels Convention and the Brussels I Regulation, be understood as meaning the place of the occurrence of the event, in this case the road accident, which directly produced its harmful effects upon the person who is the immediate victim of that event.’

The Court itself, much more succinctly, agrees.

A singular event, therefore, leads to one applicable law, even if its ricochet effect causes damage elsewhere. That such damage is actionable separately (for it may create multiple obligations in tort) or even iure proprio does not impact that analysis.

A word of caution, however: the judgment only holds for singular events. More complex events, especially of a continuing kind, are much more likely to create direct harmful effects in a multitude of persons, potentially therefore also leading to more loci damni. The ricochet effect therefore is highly likely to echo again at Kirchberg.

Geert.

R (Seiont, Gwyrfai and Llyfni Anglers’ Society) v Natural Resources Wales has a long history. That’s not meant to be a fairy tale opening: it actually has legal relevance.

Article 2(2) of the environmental liability Directive provides the following definition: “ ‘damage’ means a measurable adverse change in a natural resource or measurable impairment of a natural resource service which may occur directly or indirectly.” ‘Environmental damage’ is further defined in Article 2(1), providing a variety of layers which need ‘unpacking’ in the words of Hickinbottom J. He concludes, after lengthy and instructive analysis, that  “damage” as defined in article 2(2) of the EL Directive is restricted to a deterioration in the environmental situation, and does not in addition include the prevention of an existing, already damaged environmental state from achieving a level which is acceptable in environmental terms – or a deceleration in such achievement. Since “environmental damage” is a subset of “damage”; “environmental damage” necessarily has that same restriction.

The judgment is very considered and there is not much point in repeating it here: please refer to the text for a thorough read on the ELD, the water framework Directive, habitats and much more.

Geert.

Lilydale v Meyn at the Ontario Court of Appeal (held April 2015 but only reaching me now – thank you to Michael Shafler and colleagues for flagging) is a useful reminder of the common law approach to determining lex contractus in the absence of choice of law. (Here of course an inter-State conflicts issue between Ontario and Alberta). Laskin JA refers in support to english precedent, summarised in quoted passage of Cheshire’s Private International Law:

The court must take into account, for instance, the following matters: the domicil and even the residence of the parties; the national character of a corporation and the place where its principal place of business is situated; the place where the contract is made and the place where it is to be performed; the style in which the contract is drafted, as, for instance, whether the language is appropriate to one system of law, but inappropriate to another; the fact that a certain stipulation is valid under one law but void under another … the economic connexion of the contract with some other transaction … the nature of the subject matter or its situs; the head office of an insurance company, whose activities range over many countries; and, in short, any other fact which serves to localize the contract.

The motion judge’s findings on the relevant criteria were held to be reasonable, as was her overall conclusion that the closest and most real connection to the contract was Ontario.

The case is an interesting reminder of what in the Rome I Regulation is now the final resort, should none of the relevant presumptions in Article 4 apply.

An interesting point in the judgment is the main reason why parties prefer one law over the other: at 3: ‘The issue is important because Alberta and Ontario have different ultimate limitation periods. Even taking into account discoverability, Alberta’s ultimate limitation period is 10 years; Ontario’s is 15 years. The parties agreed that Lilydale’s cause of action arose no later than August 31, 1994. Therefore, as Lilydale did not sue until January 2006, if Alberta law applied, its action was statute-barred; if Ontario law applied, it was not.’

Aren’t statutes of limitation under Canadian conflict of laws, covered by lex fori, as procedural issues, and not, as is seemingly accepted here, lex causae?

Geert.

The CJEU’s finding in Shell, was applied by the Court of first instance at Antwerp in a judgment from October last, which has just reached me. (I have not yet found it in relevant databases (not uncommon for Belgian case-law), but I do have a copy for those interested). The case concerned debunkered off-spec fuel, off the ship Else Maria Theresa (her engines apparently having been affected by the oil being off-spec), blended into /with a much larger amount of bunker oil.

The court applied the Shell /Carens criteria, leading to a finding of waste. In brief, the blending in the case at issue was not, the court held, standing practice in the bunkering /debunkering business, and /or a commercially driven, readily available preparation of off-spec for purchase by eager buyers. Rather, a quick-fix solution to get rid off unwanted fuel.

The judgment (which is being appealed I imagine) emphasises the case-by-case approach needed for the determination of ‘waste’.

Geert.

I have reported some time ago on the reverse logistics case involving Shell and Carens. As noted in that post, the CJEU instructed the court at Rotterdam to gauge the ‘true intentions’ of Shell vis-a-vis the contaminated fuel which it had taken back from one of its clients (Carens).

The Court at Rotterdam issued its final judgment on 23 December last, truly a christmas present for the companies involved for the accusations of illegal waste shipments were rejected. (I could not locate the judgment on ECLI yet: I have a copy for those interested).

The court first of all rejected a rather neat attempt of the Dutch prosecutor to get around the CJEU’s finding in para 46 of its judgment : ‘it is particularly important that the Belgian client returned the contaminated ULSD to Shell, with a view to obtaining a refund, pursuant to the sale contract. By so acting, that client cannot be regarded as having intended to dispose of or recover the consignment at issue and, accordingly, it did not ‘discard’ it within the meaning of Article 1(1)(a) of Directive 2006/12.‘ It was suggested that incoterm FOB (‘Free on Board’), applicable to the agreement between Carens and Shell, meant that the qualification of the payment by Shell could not have been a refund for defective goods (ownership of the goods already having been transferred prior to contamination) but rather the payment of damages for a contract not properly carried out. This, it was argued, made para 46 irrelevant for the facts of the case. The court at Rotterdam essentially argued that par 46 needs to be applied beyond the black letter of the law: in effect, in acting as they did and following their running contractual relationships, Shell and Carens had decided to annul the sale, sale price was refunded, and Carens could therefore not be seen as owner or holder of the goods.

Neither, the court held, could Shell be considered a discarding the fuel: the court paid specific attention to testimony that the fuel concerned was actually presented to market, with a view to establishing what price it could fetch. Offers were made which were not far off the initial sale price. Re-blending of the fuel was only done to obtain a higher price and was carried out in accordance with established market practices. Shell’s resale of the fuel, as holder of it, was not just a mere possibility but a certainty (language reminiscent of what the CJEU normally employs for the distinction recovery /disposal).

Final conclusion: the fuel at no stage qualified as waste and no one could have discarded it.

A very important judgment indeed – it will be interesting to see whether the prosecutor’s office will appeal.

Geert.

Regular readers of the blog will know I do not easily stray from the legal menu. When I do, it has to be for something extraordinary. Master in the kitchen is just that, for it takes away all excuses not to spend time with family and friends preparing and enjoying great food produce. (Instead of just food products). Plus the site’s photography offers a lot of eye candy.

To all readers, Merry Christmas or alternative seasons’s greetings.

Geert.

Leuven Law is recruiting 2 full-time chairs, at professorial level (the actual grade in which the chair will be appointed will depend on candidates’ experience) in both EU institutional and constitutional law, and public international law. The latter is a joint appointment with Open University of The Netherlands.

Questions on the chairs can be put to the dean (see the chair notice) however as Head of the Department of International and EU law, I am happy to entertain queries, too: preferably after the Christmas break for there is no rush. Deadline for applications is 10 March, 2016.

Geert.

The CJEU (General Court) sided with Sweden in T-521/14, concerning the failure, by the Commission, to adopt measures concerning the specification of scientific criteria for the determination of endocrine-disrupting properties.

To improve the free movement of biocidal products in the EU, while ensuring a high level of protection of human and animal health and the environment, the EU adopted Regulation 528/2012 concerning the making available on the market and use of biocidal products. It sets out the active substances which, in principle, cannot be approved. They include active substances which, on the basis of criteria to be established, are regarded as having endocrine-disrupting properties which may be harmful to humans, or which have been designated as having those properties. It also provides that, by 13 December 2013 at the latest, the Commission was to adopt the delegated acts as regards the specification of the scientific criteria for the determination of endocrine-disrupting properties.

The EC cited criticism  following its presentation of draft scientific criteria, as well as the need to make the various possible solutions subject to an impact assessment. The CJEU first of all held that the Commission had a clear, precise and unconditional obligation to adopt delegated acts as regards the specification of the scientific criteria for the determination of the endocrine-disrupting properties and that that was to be done by 13 December 2013.

With respect to the impact assessment, the General Court finds that there is no provision of the regulation which requires such an impact analysis. What is more, even if the Commission ought to have carried out such an impact analysis, that does not in any way exonerate it, in the absence of provisions to that effect, from complying with the deadline set for the adoption of those delegated acts.

I like this judgment (it will no doubt be appealed by the EC). It reinforces the need to respect clearly defined dates and deadlines. And it takes a bit of the shine off impact assessments, the duration, extend, and lobbying of which can often lead to death by impact analysis.

Geert.

I have referred repeatedly in the past to an inevitable attraction which some find in harmonising private, incuding contract law, in the Member States. The Common European Sales Law (CESL) proposal is dead, and for good reason. Its demise however has not led to the European Commission leaving the path of harmonisation in contract law. The EC has now selected bits and pieces of the CESL approach which it reckons might pass Member States objections. The proposed ‘fully harmonised’ rules on e-commerce formally do not close the door on party autonomy in the contracts under their scope of application. Yet in forcing regulatory convergence top-down, the aim is to make choice of law for these contracts effectively nugatory.

The EC itself formulates it as follows (COM(2015)634, p.1:

“This initiative is composed of (i) a proposal on certain aspects concerning contracts for the supply of digital content (COM(2015)634 final), and (ii) a proposal on certain aspects concerning contracts for the online and other distance sales of goods (COM(2015)635 final). These two proposals draw on the experience acquired during the negotiations for a Regulation on a Common European Sales Law. In particular, they no longer follow the approach of an optional regime and a comprehensive set of rules. Instead, the proposals contain a targeted and focused set of fully harmonised rules.”

Consequently the same proposal reads in recital 49 ‘Nothing in this Directive should prejudice the application of the rules of private international law, in particular Regulation (EC) No 593/2008 of the European Parliament and of the Council and Regulation (EC) No 1215/2012 of the European Parliament and the Council‘: that is, respectively, Rome I and Brussels I Recast’.

Consequently and gradually, choice of law for digital B2C contracts becomes redundant, for the content of national law converges. Support for this in my view is not rooted in fact (the EC’s data on the need for regulation have not fundamentally changed since its doomed CESL proposal), neither is it a good development even for the consumer. National consumer law is able to adapt, often precisely to the benefit of the consumer, through national Statute and case-law. Turning the EU regulatory tanker is much more cumbersome. The circular economy, recently often debated, is a case in point. Many national authorities point to limitations in contract law (incuding warranty periods and design requirements) as an obstacle to forcing manufacturers, including for consumer goods, to adopt more sustainable manufacturing and distribution models. The EC’s current proposals do no meet those challenges, rather, they obstruct them.

Geert.

Jurisdiction and the internet is a topic which has featured once or twice on this blog recently (and in a  paper which I have already referred to in those earlier postings). Belgian’s Supreme Court in ordinary (the Hof van Cassatie /Cour de Cassation) employed the objective territoriality principle in a case with roots going back to 2007 (the fraudulent purchase of and subsequent failure to pay for electronic equipment from a shop in Dendermonde, Belgium), Yahoo! was requested to hand over the IP addresses associated with e-mail accounts registered to Yahoo!’s e-mail service. Yahoo! Inc, domiciled in California, refused to comply, triggering fines under criminal law.

Responding to Yahoo!s claims that Belgium was imposing its criminal laws extraterritorially, the Court of Appeal had held that Yahoo! is territorially present in Belgium, hereby voluntarily submitting itself to the jurisdiction of the Belgian authorities: it takes an active part in economic life in Belgium, among others by use of the domain name http://www.yahoo.be, the use of the local language(s) on that website, pop-up of advertisements based on the location of the users, and accessibility in Belgium of Belgium-focussed customer services (among others: a ‘Belgian’ Q&A, FAQ, and post box). [Notice the similarity with the Pammer /Alpenhof criteria]. The Court of Appeal had suggested that the accusations of extraterritoriality could only be accepted had there been a request for the handover of data or objects which are located in the USA, with which there is no Belgian territorial link whatsoever, and if the holder of these objects or data is not accessible in Belgium (either physically or virtually).

The Supreme Court on 1 December (not yet published in relevant databases – I have a copy for interested readers) confirmed all of the Court of Appeal’s arguments, essentially linking them to the objective territoriality principle. Yahoo! actively directs its activities towards consumers present in Belgium.

Even though the case involves a criminal proceeding, the Court’s judgment inevitably (not necessarily justifiably) will be used as further support for the Belgian tussle with Facebook.

Geert.

I have earlier referred to Shell’s arguments in appeal (in Dutch) on the specific issue of jurisdiction, which may be found here .  Judgment in fact, as I reported, generally was quite comforting for Shell (and other holding companies in similar situations) on the issue of substantive liability.

However on jurisdiction, the Dutch court’s approach of joinders under residual national jurisdictional rules, was less comforting. The rules on joinders, otherwise known as ‘anchor defendants’, in the Brussels regime (Brussels I as well as the Recast) do not apply to defendants domiciled outside of the EU. Consequently national rules of civil procedure decide whether an action against a daughter company, established outside of the EU, can be successfully anchored to an action against the mother company (against which jurisdiction is easily established per Article 4 of the Recast, Article 2 of the former Regulation). In first instance, the Court at The Hague ruled in favour of joining a non-EU defendant to a case against its mother company in The Netherlands.

In its submission, Shell (with reference to relevant national case-law) borrows heavily from CJEU case-law on what was Article 6(1) (now Article 8(1)), suggesting that Dutch residual law was meant to apply as a mirror the European regime, with one important difference: precisely the issue that under the Dutch regime, none of the parties need to be domiciled in The Netherlands. Any jurisdictional rule which leads the Dutch courts to accept jurisdiction against one defendant, even if that anchor defendant is not domiciled in the country, can lead to others being drawn into the procedure. This means, so Shell suggests, that the Dutch rule (Article 7(1) of the Dutch code of civil procedure) is more in need of precautions against abuse, than the equivalent European rule.

As part of the efforts to avoid abuse, the Dutch courts need to make a prima facie assessment of the claims against the anchor defendant: for if those claims are spurious, anchoring other claims to such loose ground would be abusive. On this point, the Court of Appeal will have to discuss the corporate veil, piercing it, Chandler v Cape etc. Shell’s submission does not in fact argue why piercing needs to be assessed by the lex causae (here: Nigerian law as the lex loci damni) and not, for instane, by the lex fori. I doubt the Court of appeal will raise it of its own accord. (See here for a consideration of the issues in an unrelated area and further pondering here).

A little bird tells me that judgment will be issued on 18 December. I may or may not be able to review that before the Christmas break. In the negative, it will have to be an Epiphany posting. (Potentially in more than one meaning of the word).

Geert.

Confession time: when teaching the general conflicts course I tend to simply say about Article 71 of the Brussels I Regulation (unchanged in the Recast): ‘it’s complicated’. I have also briefly flagged the Article in my posting on Nickel and Goeldner. I suppose I should not be quite so shy in addressing the relationship even in an introductory conflicts class for, essentially, it is not that complicated at least form a hierarchical point of view. Article 71 mirrors Article 351 TFEU which states that any rights or obligations arising prior to the TFEU shall not be affected by it unless the agreements are not compatible with the TFEU. At stake therefore is a review by the courts whether international agreements between the Member States prior to the creation of the EU, are compatible with the TFEU.

In BAT Denmark v Kazemier and BAT Switserland v Essers, the United Kingdom Supreme Court had to carry out this exercise vis-a-vis the 1956 CMR Convention –   the Convention on the Contract for the International Carriage of Goods by Road. As Steven Baker notes, Lord Mance kicks off his judgment with the rather delightfully accurate ‘Cigarettes attract smokers, smugglers and thieves’. Tobacco manufactuters are also of course active litigators hence providing us with repeated opportunity to review case-law on a wide variety of contractual and other matters.

In the two appeals, one container load was allegedly hi-jacked in Belgium en route between Switzerland and The Netherlands in September 2011, while another allegedly lost 756 of its original 1386 cartons while parked overnight contrary to express instructions near Copenhagen en route between Hungary and Vallensbaek, Denmark.

The consignors (two of BAT’s corporate vehicles) are claiming against English main contractors who undertook responsibility for the carriage and against sub-contractors in whose hands the cigarettes were when the alleged losses occurred. The carriage was subject to the Convention on the Contract for the International Carriage of Goods by Road 1956 (“CMR”), given the force of law in the United Kingdom by the Carriage of Goods by Road Act 1965.

English law and English jurisdiction are said to offer the advantage that such duty and/or taxes are recoverable in a CMR claim against carriers, which is not the case in some other jurisdictions (at 4).

Citing (and reading in a particular way) CJEU precedent, in particular  Nipponkoa Insurance Co (Europe) Ltd v Inter-Zuid Transport BV (DTC Surhuisterveen BV intervening), C-452/12, the Supreme Court held (at 57) that CMR represents a balanced jurisdictional régime adopted across a wide-range of some 55 states, only half of which are Union member states. It did not regard its tailored balance as impinging on any of the principles of Union law which the CJEU would have it check against.

CMR applies therefore and under relevant English application, neither of the defendants can be sued in England.

Geert.

At first sight, it may seem a bit nerdy to report on Dyson, Case T-544/13. Yet (pun alert) once the dust settled on the judgment, the case in my view reveals quite a lot on how the CJEU sees the role of the EC as a regulator involved in all three steps of risk analysis: risk identification; risk management; and risk communication.

Arguably, misleading information often does more damage than a lack of information. It is on this basis that well-known Dyson, producer ia of bagless hoovers (or vacuum cleaners), challenged a delegated EC Regulation which establishes, in its own wording, ‘labelling and the provision of supplementary product information for electric mains-operated vacuum cleaners, including hybrid vacuum cleaners’. The purpose of the Regulation and of its mother Directive on energy labelling, evidently is to encourage consumers to purchase hoovers using less energy.

The contested regulation requires tests conducted with an empty dust bag. That, Dyson essentially argues, is like testing a Ferrari and a 2 CV on fuel consumption, with both cars in stationary condition (my comparison, not theirs). It will, in Dyson’s plea, lead to: (i) reporting of inaccurate information; (ii) ‘during use’ information not being integrated into the energy performance data; (iii) less incentive for manufacturers to invest with a view to improving the energy efficiency of vacuum cleaners; and (iv) labelling which does not serve to attain the objective of reducing energy consumption and, on the contrary, leads to an increase in energy consumption.

The Court held (at 47) that the Commission cannot be criticised for having failed to require tests conducted with a dust-loaded receptacle if, under its broad discretion, it decided that such tests were not yet reliable, accurate and reproducible. Even though the Court in various parts of the judgment acknowledges the inadequacy of the resulting product comparison, it cannot be held that the Commission made a manifest error of assessment by favouring a test conducted with an empty receptacle over a test conducted with a dust-loaded receptacle (at 53).

The judgment entertains many arguments brought forward however they essentially all revolve around the seemingly unavailable nature of appropriate, peer reviewable testing methods. The Court dismisses them all as (pun alert) hot air and effectively requires Dyson to offer the peer reviewable, repeatable alternative.

With respect, I believe the judgment is fundamentally mistaken. It was obviously not considered to be of a very crucial nature (chamber of three). Yet despite its very focussed nature, it reveals a lot about what the EU expects of its Institutions. In this case, misinformation is essentially considered preferable to no information. Surely (pun alert) that sucks.

The case was before the General Court hence appeal with the CJEU is not impossible.

Geert.

The French Cour de Cassation’s in Banque Privee Edmond de Rothschild Europe v X held that a unilateral jurisdiction clause was invalid under (doubtful) reference to (then) Article 23 of the Brussels I Regulation. The clause was held not to be binding under the French doctrine of clauses potestatives, even though the agreed forum was Luxembourg (whence the validity of the clause was judged under the lex fori derogati, not prorogati; that will no longer be possible under the recast Jurisdiction Regulation). In Credit Suisse, it extended this view (without reference this time to clauses potestatives) to choice of court in the context of the Lugano Convention.

In Apple Sales international v eBizcuss.com, the Cour de Cassation effectively qualifies its Rotschild case-law. The Court of Appeal held as unacceptable, under the theory of clauses potestatives, choice of court obliging eBizcuss to sue in Ireland, while allowing Apple Sales International to sue either in Ireland, or the place of registered office of eBizcuss, or any place where Apple Sales would have suffered damage. The Cour de Cassation now held that this clause is perfectly acceptable under Article 23 (now 25)’s regime for it corresponds to the need of foreseeability. (Which more extreme unilateral clauses arguably do not have). As always, the judgment is scant on details of the underlying contract whence it is not entirely clear whether French law was lex contractus or whether the Cour stuck to lex fori as determining validity of choice of court.

Geert.

Less is sometimes more so I shall not attempt to summarise all issues in Case C-198/14 Valev Visnapuu. The case makes for sometimes condensed reading however it perfectly illustrates the way to go about dealing with obstacles to trade put in place for environmental, public health or, as in this case, both reasons.

Mr Visnapuu essentially forum shops Estonia’s lower prices on alcohol by offering Finnish clients home delivery of alcoholic beverages purchased there. No declaration of import is made to Finish customs and excise, thereby circumventing (accusation of course is that this is illegal) a variety of excise duties imposed for public health and environmental reasons, as well as a number of requirements relating to retail licenses and container requirements (essentially a deposit-return system) for beverages.

Confronted with a demand to settle various tax debts, as well as with a suspended prison sentence, Mr Visnapuu turns to EU law as his defence in a criminal proceeding. The CJEU then had to settle a variety of classic trade and environment /public health questions: whether the packaging and packaging waste Directive is exhaustive on the issue of deposit-return system (answer: no and hence the system additionally needs to be assessed vis-a-vis EU primary law: Article 34 ff TFEU or Article 110 TFEU); whether in the context of that Directive excise duties on packaging may be imposed (yes) and packaging integrated into a functioning return system exempt (yes; in the absence of indications that imported systems are less likely to enjoy the exemption); whether the relevant excise duties fall under Article 34 ff TFEU or Article 110 TFEU (answer: it is part of an internal system of taxation hence needs to be judged vis-a-vis Article 110 TFEU); and finally whether the retail licence requirement needs to be judged viz Article 34 or Article 37 TFEU (answer: mixed, given the various requirements at stake). Final judgment on proportionality is down to the Finnish courts.

Readers in need of a tipple would be advised to postpone until after reading the judgment. Again though the case shows that if one keeps a clear head, classic structures of applying EU law go a long way in untangling even complex matters of law and fact.

Geert.

Quite a lot of attention has been going to a Belgian court ordering Facebook to stop collecting data from non-users through the use of so-called datr cookies.  Applicant is Willem Debeuckelaere, the chairman of the Belgian privacy commission, in his capacity as chairman (not, therefore, as a private individual). Our interest here is of course in the court’s finding that it has jurisdiction to hear the case, and that it can apply Belgian law. The judgment is drafted in Dutch – an English (succinct) summary is available here.

Defendants are three parties: Facebook Inc, domiciled in California; Facebook Belgium BVBA, domiciled in Brussels; and Facebook Ireland Ltd., domiciled in Dublin. Facebook Belgium essentially is FB’s public affairs office in the EU. FB Ireland delivers FB services to the EU market.

Directive 95/46 and the Brussels I Recast Regulation operate in a parallel universe. The former dictates jurisdiction and applicable law at the level of the relationship between data protection authorities (DPAs), and data processors (the FBs, Googles etc. of this world). The latter concerns the relation between private individuals and both authorities and processors alike. That parallelism explains, for instance, why Mr Schrems is pursuing the Irish DPA in the Irish Courts, and additionally, FB in the Austrian courts.

Current litigation against FB lies squarely in the context of Directive 95/46. This need not have been the case: Mr Debeuckelaere, aforementioned, could have sued in his personal capacity. If he is not a FB customer, at the least vis-a-vis FB Ireland, this could have easily established jurisdiction on the basis of Article 7(2)’s jurisdiction for tort (here: invasion of privacy): with Belgium as the locus damni. Jurisdiction against FB Inc can not so be established in the basis of Article 7(2) (it does not apply to defendants based outside the EU). If the chairman qq natural person is a FB customer, jurisdiction for the Belgian courts may be based on the consumer contracts provisions of Regulation 1215/2012 – however that would have defeated the purpose of addressing FB’s policy vis-a-vis non-users, which I understand is what datr cookies are about.

Instead, the decision was taken (whether informed or not) to sue purely on the basis of the data protection Directive. This of course requires application of the jurisdictional trigger clarified in Google Spain. German precedent prior to the Google Spain judgment, did not look promising (Schleswig-Holstein v Facebook).

At the least, the Belgian court’s application of the Google Spain test, is debatable: as I note in the previous post,

Article 4(1)(a) of Directive 95/46 does not require the processing of personal data in question to be carried out ‘by’ the establishment concerned itself, but only that it be carried out ‘in the context of the activities’ of the establishment (at 52): that is the case if the latter is intended to promote and sell, in that Member State, advertising space offered by the search engine which serves to make the service offered by that engine profitable (at 55). The very display of personal data on a search results page constitutes processing of such data. Since that display of results is accompanied, on the same page, by the display of advertising linked to the search terms, it is clear that the processing of personal data in question is carried out in the context of the commercial and advertising activity of the controller’s establishment on the territory of a Member State, in this instance Spanish territory (at 57).

Google Spain’s task was providing support to the Google group’s advertising activity which is separate from its search engine service. Per the formula recalled above, this sufficed to trigger jurisdiction for the Spanish DPA. Google Spain is tasked to promote and sell, in that Member State, advertising space offered by the search engine which serves to make the service offered by that engine profitable. The Belgian court withholds jurisdiction on the basis of Facebook Belgium’s activities being ‘inseparably linked’ (at p.15) to Facebook’s activities. With respect, I do not think this was the intention of the CJEU in Google Spain. At the very least, the court’s finding undermines the one stop principle of the data protection Directive, for Belgium’s position viz the EU Institutions means that almost all data processors have some form of public interest representation in Belgium, often indeed taking the form of a BVBA or a VZW (the latter meaning a not for profit association).

The court further justifies (p.16) its jurisdiction on the basis of the measures being provisionary. Provisionary measures fall outside the jurisdictional matrix of the Brussels I (Recast), provided they are indeed provisionary, and provided there is a link between the territory concerned and the provisional measures imposed. How exactly such jurisdiction can be withheld vis-a-vis Facebook Ireland and Facebook Inc, is not clarified by the court.

The court does limit the provisionary measures territorially: FB is only ordered to stop using datr cookies tracking data of non-FB users ‘vis-a-vis internetusers on Belgian territory’, lest these be informed of same.

I mentioned above that the data protection Directive and the Brussels I recast can be quite clearly distinguished at the level of jurisdiction. However findings of courts or public authorities on the basis of either of them, do still face the hurdle of enforcement. That is no different in this case. Recognition and enforcement of the judgment vis-a-vis FB Inc will have to follow a rather complex route, and it is not inconceivable that the US (in particular, the State of California) will refuse recognition on the basis of perceived extraterritorial jurisdictional claims (see here for a pondering of the issues). Even vis-a-vis Facebook Ireland, however, one can imagine enforcement difficulties. Even if these provisionary measures are covered by the Brussels I Recast (which may not be the case given the public character of plaintiff), such measures issued by courts which lack jurisdiction as to the substance of the matter, are not covered by the enforcement Title of the Regulation.

All in all, plenty to be discussed in appeal.

Geert.

In Case C-483/13 KA Finanz AG, the CJEU is asked to clarify the ‘corporate exception’ to the Rome Convention and subsequent Regulation on the law applicable to contractual obligations. The two main questions ask whether the ‘company law’ excepted area includes (a) reorganisations such as mergers and divisions, and (b) in connection with reorganisations, the creditor protection provision in Article 15 of Directive 78/855 concerning mergers of public limited liability companies, and of its successor, Directive 2011/35. I have a little more on the background in previous posting. The Opinion itself has a complete overview of the issues at stake.

I suggested in my previous posting that lest the complete file posted with the Court give more detail, quite a few of the preliminary questions might be considered inadmissible due to a lack of specification in the factual circumstances.

Bot AG, who opined yesterday (at the time of posting, the English version of the Opinion was not yet available), has considerably slimmed down the list of questions eligible for answer, due to the (non-) application ratione temporis of secondary EU law at issue: this includes the Rome I Regulation. However he also, more puzzlingly, skates around the question concerning the application of the corporate exception of the 1980 Rome Convention, despite the judgment which is being appealed with the referring court, having made that exception the corner piece of its conflicts analysis. In particular, it considered that the consequences of a merger are part of the corporate status of the company concerned and that the transfer of assets within the context of a merger consequently need to be assessed viz-a-viz the company’s lex societatis: Austrian law, and not, as suggested by claimants, German law as the lex contractus relevant to the assets concerned (bonds issued by the corporate predecessor of the new corporation).

The AG focuses his analysis entirely on the specific qualification of the contract at issue (conclusion: sui generis), and on Directive 2005/56. In paras 47-48, he suggests that contractual obligations of the bank’s predecessor, per Directive 2005/56, are transferred to the corporate successor, including the lex contractus of those agreements. One can build an assumption around those paras, that the AG suggests a narrow interpretation of the corporate exception to the Rome Convention, etc. However it is quite unusual for one to have to second-guess an AG’s Opinion. Judicial economy is usually the signature of the CJEU itself, not its Advocate Generals.

I am now quite curious what the CJEU will make of it all.

Geert.

The Privy Council does not all that often (well, that is actually relative: 47 times already in 2015; that’s not a bad working load for a supreme court) rear its judiciary head. In National Housing Trust it did viz the powers of an arbitrator in respect of an aborted joint-venture in Jamaica. (For particulars of the case, see here). The case concerns the jurisdiction to make, and legitimacy of a supplementary award by an arbitrator, of compound interest.

Arbitration leads to a myriad of applicable law to be decided: one has to ascertain

lex arbitri (the law of the arbitration agreement: ie the law applicable to parties’ agreement to make recourse to arbitration);

the curial law or the ‘law of the seat’ (the procedural law which will guide the arbitration proceedings; despite the latin curia not commonly referred to as lex curia);

and the ‘proper law’, the law that governs the actual contract (lex contractus), of which the arbitration agreement forms a part.

In National Housing Trust, the Privy Council held that first and foremost, the issue of compound interest (indeed the powers of the arbitrator as a whole) is subject to agreement between the parties. Failing such agreement, it is the law of the seat of arbitration which determines the arbitrator’s powers.

Many ADR clauses are boilerplate and last-minute. National Housing Trust once again shows that adding such midnight clauses without much consideration, may come back to haunt parties.

Geert.

Geert van Calster:

Mutual recognition of same sex-marriage in the UK. Combination of constitutional and conflicts law – a rare treat!

Originally posted on UK Human Rights Blog:

The High Court in Belfast will sit on Monday 9 and 10th November to hear a challenge by a same sex couple now living in Northern Ireland who seek recognition of their English marriage. The current legal dispensation in the Province is that an English same sex marriage is recognised as a civil partnership in Northern Ireland.

The Petition is resisted by the Attorney General and government of Northern Ireland and the (UK) Government Equalities Office (which reports to Nicky Morgan, the Minister for Women and Equalities). It is anticipated that Judgment will be reserved.

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