Agrégateur de flux

In his today’s Opinion, Advocate General Saugmandsgaard Øe addresses the question that has recently inspired much debate, already reported to our readers this January by Rishi Gulati.

At point 5, the Opinion clarifies that – at the request of the Court of Justice – its scope is limited to analysis of the issues related to Article 1(1) of the Brussels I bis Regulation. Therefore, no considerations concerning Article 24(5) of this Regulation, also invoked in the request for a preliminary ruling, were to be expected in the Opinion.

The question at stake concerns, therefore, the applicability and/or the scope of application of the Brussels I bis Regulation in the context of a case where an international organisation brings an action to, firstly, lift an interim garnishee levied in another Member State by the opposing party, and, secondly, prohibit the opposing party from levying, on the same grounds, an interim garnishee in the future and all that on the basis of on immunity of execution that this international organisation allegedly enjoys.

In essence, at point 90, the Opinion concludes the inclusion of such action within the scope of the Brussels I bis Regulation is determined by nature of the right that the interim garnishee served to protect and the inclusion of that right in the scope of the Regulation.

Moreover, according to point 102 of the Opinion, the fact that an international organization invokes the immunity it allegedly enjoys under international law does not prevent a court of a Member State from establishing its jurisdiction under the Brussels I bis Regulation.

The Opinion is not yet available in English. Some other linguistic versions can be consulted here.

A non-profit consumer protection association established in Austria is bringing an action before the Austrian courts against a motor vehicle manufacturer with its registered office in Germany. The association asserts claims for damages, assigned to it by the purchasers of motor vehicles, and seeks the payment of a fixed amount and a declaration establishing the liability of the defendant for all future damage. These claims are related to an alleged emission manipulation: had the purchasers been aware of the manipulation, they would have not purchased the vehicles or would have purchased them at a reduced price.

To establish the international jurisdiction of the Austrian court, the associations relies on  Article 7(2) of the Brussels I big Regulation. It argues, in particular, that the damage materialised in the form of a reduction in the value of the purchasers’ assets, at the earliest upon the purchase and transfer of the vehicles within the Austrian territory.

In those circumstances, the national court refers the matter to the Court of Justice and asks whether the ‘place where the harmful event occurred’ within the meaning of Article 7(2) of the Brussels I bis Regulation may be construed as the place in a Member State where the damage occurred, when that damage consists exclusively of financial damage that is the direct result of an unlawful act committed in another Member State.

This issue is thoroughly analyzed in today’s Opinion of Advocate General Campos Sánchez-Bordona. At point 81, the Opinion concludes:

Article 7(2) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that, where an unlawful act committed in a Member States consists of the manipulation of a product, the existence of which is concealed and only becomes apparent after the product is purchased in another Member State for a price that is higher than its actual value:

• a purchaser of that product, who retains the product as part of his or her assets when the defect is made public, is a direct victim;
• the place where the event giving rise to the damage occurred is the place where the event which created the defect in the product took place; and
• the damage occurred in the place, situated in a Member State, where the victim purchased the product from a third party, provided that the other circumstances confirm the attribution of jurisdiction to the courts of that State. Those circumstances must include, at all events, one or more factors which enabled the defendant reasonably to foresee that an action to establish civil liability as a result of his or her actions might be brought against him or her by future purchasers who acquire the product in that place.

Interestingly, in particular at points 65 et seq., the Opinion addresses the doubts raised by the referring court and relating to the question whether, in the present case, the German courts are not better placed to examine the association’s action. If anything, that would be tantamount to the implantation of some variation of the forum non conveniens doctrine within Article 7(2) of the Brussels I bis Regulation in order to give preference either to ‘Handlungsort’ or ‘Erfolgsort’. However, according to the final point of the Opinion:

Article 7(2) of [the Brussels I bis Regulation] must be interpreted as meaning that it does not authorise the court for the place where the damage occurred to determine that it does or does not have jurisdiction based on an appraisal of the other circumstances of the case, aimed at identifying which court — itself or the court for the place of the event giving rise to the damage — is best placed, in terms of proximity and foreseeability, to decide on the dispute.’

Instead of presenting a synthesis of the Opinion (press release can be found here), it is best to recommend giving it an attentive lecture. Definitely a must-read.

I wrote earlier on the judgments at the High Court and the Court of Appeal in Aspen Underwriting v Kairos Shipping. The Supreme Court held yesterday and largely upheld the lower courts’ decisions, except for the issue of whether an economically equal party may nevertheless enjoy the benefit of the insurance section of Brussels Ia.

Reference is best made to my earlier posting for full assessment of the facts. The Supreme Court considered four issues.

Issue 1: Does the High Court have jurisdiction pursuant to the exclusive English
jurisdiction clause contained in the Policy? This was mostly a factual assessment (is there a clear demonstration of consent to choice of court) which Lord Hodge for the SC held Teare J and the Court of Appeal both had absolutely right. Lord Hodge refers in support to a wealth of CJEU and English (as well as Singapore) courts on assignment and contractual rights v obligations.

Issues 2 and 3: Are the Insurers’ claims against the Bank matters ‘relating to
insurance’ (issue 2) within section 3 of the Regulation and if so, is the Bank entitled to rely on that section (issue 3)?

On issue 2, Teare J and the Court of Appeal had held that the Insurers’ claim against the Bank was so closely connected with the question of the Insurers’ liability to indemnify for the loss of the Vessel under the Policy that the subject matter of the claim can fairly be said to relate to insurance.

On this issue the insurers had appealed for they argued that a claim can be regarded as a matter relating to insurance only if the subject matter of the claim is, at least in
substance, a breach of an obligation contained in, and required to be performed by,
an insurance contract. They referred in particular to Brogsitter and also to Granarolo and Bosworth.

Lord Hodge disagreed with claimant, upholding Teare J and the CA: the need for restrictive interpretation is mentioned (at 38) and at 35 it transpires that of particular relevance in his analysis is the very wording of the title of the insurance section: unlike all other special jurisdictional rules of interest, it does not include ‘contracts’. Further (at 36),

‘the scheme of section 3 is concerned with the rights not only of parties to an insurance contract, who are the insurer and the policyholder, but also  beneficiaries of insurance and, in the context of liability insurance, the injured party, who will generally not be parties to the insurance contract.’

At 40 he holds that in any event the Brogsitter test is met:

‘The Insurers’ claim is that there has been an insurance fraud by the Owners and the Managers for which the Bank is vicariously liable. Such a fraud would inevitably entail a breach of the insurance contract as the obligation of utmost good faith applies not only in the making of the contract but in the course of its performance.’

[Of note is that the ‘related to’ issue was discussed in Hutchinson and is at the CJEU as C-814/19, AC et al v ABC Sl as I flag in my review of Hutchinson).

However (issue 3) both Teare J and the CA eventually held that the insurance title failed to provide the bank with protection for they argued (as I noted with reference in particular to CJEU Voralsberger) that protection was available only to the weaker party in circumstances of economic imbalance between the claimant insurer and the defendant.

Here the SC disagrees and overrules. Lord Hodge’s reasons are mentioned at 43 ff, and I will not repeat them fully here. They include his view on which he is entirely right and as I have pointed out repeatedly, that recitals may be explanatory but only the rules in the Regulation have legal effect). Bobek AG’s Opinion in C-340/16 Kabeg features with force. Hofsoe is distinguished for, at 56,

‘In none of these cases where the CJEU has relied on the “weaker party” criterion to rule on applications to extend the scope of the section 3 protections beyond those parties who were clearly the policyholder, the insured, the beneficiary or the injured party, did the court call into question the entitlement of those expressly-named persons to that protection by reason of their economic power.’

That assessment is not entirely consistent for as Lord Hodge himself notes, and the CJEU acknowledges, in KABEG, Vorarlberger, Group Josi and GIE the jurisdiction of the forum actoris had been extended under articles 11(1)(b) and 13(2) to include the heirs of an injured party and also the employer who continues to pay the salary of the injured party while he was on sick leave.

All in all, it agree following Lord Hodge’s convincing review of the cases, that it is acte clair that a person which is correctly categorised as a policyholder, insured or beneficiary is entitled to the protection of section 3 of the Regulation, whatever its economic power relative to the insurer. (Even if particularly following Hofsoe the application of the section as a whole might need a more structured revisit by the CJEU). In the case at hand the Bank is the named loss payee under the Policy and therefore the “beneficiary” of that Policy (at 60).

In conclusion: Under A14 BIa the Bank must be sued in The Netherlands.

Finally, whether claims in unjust enrichment fall within article 7(2) (answered by Teare J in the negative) ‘does not arise’ (at 60). I am not entirely sure what this means: was it no longer challenged or was Teare J’s analysis on this straightforward? A different reply than that of Teare J would have required overruling Kleinwort Benson Ltd v. Glasgow City Council (No. 2) [1999] 1 AC 153 (HL), that a claim in unjust enrichment for mistake was neither a matter ‘relating to contract’ nor a matter ‘relating to tort’ for the purposes of EU private international law – an issue I discussed in my earlier posting. With the SC’s refusal to entertain it, that authority therefore stands.

One does wish that the CJEU at some point have an opportunity further to clarify the insurance section and will do so in a holistic manner. The SC judgment here is one big step in the good direction.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.1, Heading 2.2.11.2.

Verein für Konsumenteninformation
Espace de liberté, sécurité et justice
Selon l’avocat général Campos Sánchez-Bordona, les acquéreurs de véhicules qui ont été manipulés peuvent attraire une entreprise devant les juridictions de l’État dans lequel ces véhicules ont été achetés

Cali Apartments
Liberté d'établissement
Selon l’avocat général Bobek, la directive 2006/123 est applicable à la location de courte durée d’un local meublé dans l’économie collaborative

Landkreis Südliche Weinstraße
Libre circulation des personnes
Une mesure permettant à un Land de soumettre la prise en charge du transport scolaire à une condition de résidence dans ce Land constitue une discrimination indirecte à l’encontre des travailleurs frontaliers et de leur famille

Stim et SAMI
Liberté d'établissement
La location de véhicules automobiles équipés de postes de radio ne constitue pas une communication au public soumise au paiement de droits d’auteur

Caisse pour l'avenir des enfants (Enfant du conjoint d’un travailleur frontalier)
Libre circulation des personnes
Un Etat membre ne peut refuser de verser une allocation familiale pour l’enfant du conjoint d’un travailleur frontalier sans lien de filiation avec celui-ci

Coty Germany
Propriété intellectuelle et industrielle
Le simple entreposage par Amazon, dans le cadre de sa place de marché en ligne (Amazon-Marketplace), de produits portant atteinte à un droit de marque ne constitue pas une violation par Amazon de ce droit de marque

Commission / Pologne (Mécanisme temporaire de relocalisation de demandeurs de protection internationale)
Espace de liberté, sécurité et justice
En refusant de se conformer au mécanisme temporaire de relocalisation de demandeurs de protection internationale, la Pologne, la Hongrie et la République tchèque ont manqué à leurs obligations découlant du droit de l’Union

Ruska Federacija
DISC
Lorsqu’un État membre doit statuer sur une demande d’extradition d’un État tiers concernant un ressortissant d’un État de l’Association européenne de libre-échange (AELE), partie à l’accord sur l’Espace économique européen (EEE), il lui incombe de vérifier que ce ressortissant ne sera pas soumis à la peine de mort, à la torture ou à des peines ou traitements inhumains ou dégradants

L’union ne fait pas toujours la force. Par deux arrêts du 25 mars, le Conseil d’État a rejeté deux requêtes en excès de pouvoir formées conjointement par le Syndicat de la juridiction administrative (SJA) et l’Union syndicale des magistrats administratifs (USMA) portant sur l’annulation de deux décrets distincts.

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Anne Peters (Max Planck Institute for Comparative Public Law and International Law), Sabine Gless (University of Basel), Chris Thomale (Ruprecht-Karls Universität Heidelberg) and Marc-Philippe Weller (Heidelberg University) have posted Business and Human Rights: Making the Legally Binding Instrument Work in Public, Private and Criminal Law on SSRN.

The paper’s starting point is the United Nations Human Rights Council working group’s revised draft of a Legally Binding Instrument to Regulate, in International Human Rights Law, the Activities of Transnational Corporations and other Business Enterprises of July 2019. The paper examines the draft treaty’s potential to activate and operationalize public law, private law, and criminal law for enforcing human rights. It conceptualizes a complementary approach of these three branches of law in which private and criminal legal enforcement mechanisms stand in the foreground. It argues for linking civil (tort) and criminal liability for harm caused by hands-off corporate policies, complemented by the obligation to interpret managerial duties in conformity with the human rights standards of public international law. The combination of public, private, and criminal law allows effective enforcement of human rights vis-à-vis global corporations.

The paper is part of the Max Planck Institute for Comparative Public Law & International Law (MPIL) Research Paper Series.

Dans deux communiqués de presse du 16 et du 27 mars, la Cour européenne des droits de l’homme, dont le siège est à Strasbourg, annonce des mesures exceptionnelles, notamment procédurales, face à la crise sanitaire mondiale et aux mesures de confinement décidées par les autorités françaises. 

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If you notice something strange on the EAPIL website today, don’t worry. We’re upgrading some of the site functions, which may result in small disruptions. The site as such is up and running. Apologies for any inconvenience!

Non lieu à renvoi

Irrecevabilité

On 26 March 2020, advocate general Tanchev delivered his Opinion on the JE case (case C-249/19) – the first case to be decided by the CJEU on the Rome III Regulation on the law applicable to divorce and legal separation (Regulation 1259/2010).

At stake is the interpretation of Article 10 of the Regulation, according to which, ‘Where the law applicable pursuant to Article 5 or Article 8 makes no provision for divorce or does not grant one of the spouses equal access to divorce or legal separation on grounds of their sex, the law of the forum shall apply.’

The question for a preliminary ruling, from the Regional Court of Bucharest, revolves around the expression ‘the law applicable pursuant to Article 5 or Article 8 makes no provision for divorce.

The referring court asks whether that should be interpreted

(a) in a strict, literal manner, that it is to say only in respect of a situation where the foreign law applicable makes no provision for any form of divorce, or

(b) more broadly, as also including a situation where the foreign law applicable permits divorce, but does so in extremely limited circumstances, involving an obligatory legal separation procedure prior to divorce, in respect of which the law of the forum contains no equivalent procedural provisions?

THE FACTS OF THE CASE

JE and KF married in Romania, on 2 September 2001. Fifteen years later, JE brought an action for divorce, also in Romania. By civil judgment of 20 February 2018, the national court established the general jurisdiction of the Romanian courts and established that the law applicable to the dispute was Italian law, pursuant to Article 8(a) of Regulation No 1259/2010, since — on the date on which the court was seized of the divorce petition — the parties were habitually resident in Italy (the parties have resided in Italy for a considerable time).

According with Italian law, a divorce petition such as the one brought by JE can be applied for only where there has been a legal separation of the spouses established or ordered by a court and at least three years have passed between the legal separation and the time at which the court was seized of the divorce petition (the statement, in reality, does not accurately describe the Italian legislation on divorce, as reformed: in 2015, a bill was passed which reduced the three-year period to a one-year period, adding that six months suffice in particular circumstances; arguably, however, the change does not affect the substance of the AG’s reasoning).

Since it had not been demonstrated that a court decision had been made to effect a legal separation of the parties and since Romanian law makes no provision for legal separation proceedings, the court ruled that those proceedings had to be conducted before the Italian courts and, accordingly, any application to that effect made before the Romanian courts was inadmissible.

THE PROPOSAL AND ITS REASONING

The Opinion submits that Article 10 of Regulation No 1259/2010 must be interpreted strictly: the expression ‘where the law applicable pursuant to Article 5 or Article 8 makes no provision for divorce’ therein relates only to situations in which the applicable foreign law does not foresee divorce under any form.

AG elaborates his proposal in a classical, orthodox way. First, he examines the wording and the scheme of the provision. The law of the forum only applies ‘where the law applicable pursuant to Article 5 or Article 8 makes no provision for divorce’; the wording ‘makes no provision for divorce’ cannot mean that the applicable law ‘provides for divorce under certain (substantive or procedural) conditions’. AG explains that the provision is a consequence of the universal application of the Union conflict-of-law rules in relation to divorce and legal separation, in accordance with Article 4 of the same regulation. He acknowledges that Article 10 of Regulation No 1259/2010 endorses favor divortii, but with limits. In particular, it does not cover a case where the marriage cannot be ended because certain prerequisites are not met: for instance, where the applicable law sets out restrictive grounds for divorce such as the requirement of a long(er) period of separation.

To back his opinion, AG seeks additional support in systemic arguments, which he derives from Article 13 and Recital 26. Article 13 of Regulation No 1259/2010 provides that nothing in that regulation shall oblige the courts of a participating Member State whose law does not provide for divorce to pronounce a divorce. According to Recital 26, ‘where this Regulation refers to the fact that the law of the participating Member State whose court is seized does not provide for divorce, this should be interpreted to mean that the law of this Member State does not have the institut[ion] of divorce’. AG posits that the Recital gives an explanation beyond the specific context of Article 13 on the interpretation of the expression ‘makes no provision for divorce’- hence, it also applies to Article 10, which employs the same expression.

The historical interpretation supports as well the construction of the provision proposed in the present Opinion. AG recalls that the first alternative contained in Article 10 was introduced above all with a view to Maltese law, which, at the time of drafting of the Regulation, did not provide for the granting of any divorce.

The spirit and purpose of Article 10 speak equally in favor of a strict interpretation. Through the adoption of common rules on conflict-of-laws, the participating Member States accepted the principle that their courts could be obliged to apply foreign law despite differences which this might present vis-à-vis their own national law; they also accepted limited exceptions to that principle. Article 10 is one of them: like all exceptions, it must be interpreted strictly. Moreover, an extensive interpretation would frustrate the spouses’ autonomy in relation to divorce and to legal separation (foreseen under Article 5 of the regulation), and prevent the application (pursuant to Article 8 of the regulation, in the absence of a choice by the parties) of the law which is most closely linked to them.

CONSEQUENCES OF THE ANSWER

In addition to giving advice to the CJEU, AG Tanchev suggests how it could provide guidance on the consequences of the proposed answer to the preliminary question. In this regard, following the Commission, AG proposes that the court seized apply the substantive conditions foreseen by the applicable law and forgo the application of any procedural conditions foreseen by that law, in circumstances –like in the case at hand- where the procedural law of the forum does not allow for those procedural conditions to be met.

No doubt AG’s intention is to be praised. At the same time, and because the problem the Romanian court is facing can be characterized as pertaining to procedure (the Romanian court declared the petition inadmissible, which by the way begs the question, was it applying Romanian law as lex fori , or rather Italian law?), the proposed solution may be seen a little bit in the verge of overstepping the competences of the Court (who could nevertheless include it obiter). In addition, the parallelism AG Tanchev draws with EU regulations where respect for the substance of the applicable law in the State of the forum, when the latter’s law has no equivalent (substantive) concept in law, is reached through adaptation, is questionable.

Finally, still related to this part of the proposal: AG Tanchev indicates that the Romanian court should “confirm in its decision in the divorce proceedings that that condition of legal separation was fulfilled”. Fine, except for the fact that a problem remains regarding divorce: according to Italian law at least three years must have passed between the legal separation and the time at which the court was seized of the divorce petition. How is the Romanian court going to deal with this – for, obviously, no date of separation is available? (Further: it the parties agreed on the three-years period having elapsed, will their assertion be accepted ?)

 

In spite of the open questions and doubts just described, I believe this is an Opinion that will well received. Indeed, concerning the core subject matter it is not a surprising one; it is at any rate is correct in contents and rationale, and a well articulated piece of work. And – not that common in the writings of the CJEU –  one with many references to legal doctrine.

A long overdue post I fear (I hope in the next week and a half or so to turn to draft posts which for all sorts of reasons have gotten stuck in the queue, finally to be published) on Lamesa Investments Ltd v Cynergy Bank Ltd  [2019] EWHC 1877 (Comm). Latham and Watkins have had background for some time here.

The case concerns a standard clause in an English law governed contract on ‘mandatory law’ as an excuse for contractual non-performance. Here, the clause (in a (credit) facility agreement) read: clause 9.1: (party is not in breach of the agreement if) “… sums were not paid in order to comply with any mandatory provision of law, regulation or order of any court of competent jurisdiction”.

“Regulation” was defined in the Agreement as including “any regulation, rule, official directive, request or guideline … of any governmental, intergovernmental, or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation”.

Lamesa argued that Cynergy could not rely on clause 9.1 because:

• “provision of law” meant a law that applied to a UK entity, acting in the UK, that had agreed to make a sterling payment pursuant to a contract governed by English law; and
• “mandatory” meant that the relevant law made it compulsory for Cynergy to refuse payment

‘In order to comply’ was the focus of discussions, in particular whether there was any territorial limit to it. Pelling J took a flexible approach, holding that Cynery could not reasonably be expected to have excluded the only type of sanction which it could have reasonably foreseen, namely secondary sanctions imposed by US sanctions law (at the time the parties entered into the Facility Agreement, Cynergy was aware that it was possible that US sanctions would be imposed on Lamesa).

Of interest to the blog is the brief reference to Rome I (and the Convention), at 23:

‘It was submitted on behalf of CBL and I agree that English lawyers during the period the FA was being negotiated and down to the date when it became binding would have understood a mandatory law to be one that could not be derogated from. The context that makes this probable includes the meaning given to the phrase “… mandatory provision of law …” in the Rome Convention 1980 and the Rome 1 Regulation on Choice of Law. It was not submitted by CBL that the construction for which they contend applies by operation of either regulation. It submits however and I accept that they provide some support for the submission that lawyers at the relevant time would have understood the effect of the word “mandatory” to be as I have described. It goes without saying that it was not open at any stage to either party to dis-apply the US statutes that purported to apply secondary sanctions by their agreement, nor did the parties attempt to do so either in the FA itself or afterwards.’

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 3, Heading 3.2.8, Heading 3.2.8.3.