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As I seem to be in a mopping-up mode this morning, I might as well sneak in late review of Secure Capital SA v Credit Suisse AG, [2015] EWHC 388 (Comm) and at the Court of Appeal [2017] EWCA Civ 1486. Draft post of the latter has been in my ledger since 2017…

The cases essentially are concerned with characterisation; privity of contract, choice of law and dépeçage (bifurcation or severance).

My father-in-law OBE wonderfully sums up the world of international finance as fairy money. Harry (aka Tim Nice But Balding) & Paul express a similar feeling here. I can’t help but think of both when re-reading judgments in both cases.

Allen & Overy have most useful overview here, and RPC add useful analysis here. Claim related to eight longevity notes issued by Credit Suisse in 2008. The Notes were linked to life insurance policies, which meant that the prospect of the holder receiving payments for the Notes depended on mortality rates among a set of “reference lives”.  Secure Capital contended that Credit Suisse failed to disclose that the mortality tables used to generate the estimated life expectancies were shortly to be updated in a way that would significantly increase life expectancies, rendering the Notes effectively worthless. Secure Capital relied on a term in the issuance documentation that stated that Credit Suisse had taken all reasonable care to ensure that information provided in such documentation was accurate and that there were no material facts the omission of which would make any statements contained in those documents misleading.

The Notes were issued by Credit Suisse’s Nassau branch. Under the terms of the transaction documents, the Notes were deposited with the common depositary, Bank of New York Mellon, which held the securities on behalf of the clearing system, in this case Clearstream: which is Luxembourg-based.  The Notes were governed by English law and issued in bearer form.

Secure Capital essentially employ an attractive proposition in Luxembourg law reverse-engineering it either as the proper law of the contract in spite of prima facie clear choice of law, or alternatively as dépeçage: it argues that the provisions of a 2001 Luxembourg law on the Circulation of Securities, being the law that governed the operation of Clearstream through which the Notes were held, gave it an entitlement “to exercise the right of the bearer to bring an action for breach of a term of the…Notes“. In order to succeed, Secure Capital would have to circumvent the English law on privity of contract in respect of a transaction governed by English law.

Allen & Overy’s and RPC’s analysis is most useful for the unsuspected bystander like myself (thankfully I have a researcher, Kim Swerts, starting soon on a PhD in the area of conflict of laws and financial law).

In the High Court Hamblen J at 35 ff discusses the alternative arguments, wich would displace the suggestion that Secura Capital’s claim is a contractual claim. (Tort, as Betson LJ at the appeal stage notes at 24, was not advanced). This included a suggested property right (with discussion on the issue of the lex causae, whether e.g. this might be the lex situs), or, more forcefully, a right sui generis. None of these was upheld. Discussion on relevance of Rome I and /or the Rome Convention took place very succinctly at 53-54 – a touch too succinctly for Hamblen J’s swift reflection is that under both Rome and English conflicts rules, there was no suggestion of displacing the lex contractus. Depending on what counsel discussed, one would have expected some discussion of mandatory law perhaps, or indeed dépeçage – the latter was discussed summarily by Beatson LJ at the Court of Appeal under 54-55.

Geert.

(Handbook of) Private International Law, 2nd ed. 2016, Chapter 3.

A former dean of ours reportedly once suggested that the last thing one should do with something urgent, is tackle it immediately. I have had a draft post on the EC’s assignment proposals in my ledger since 20 March 2018. Colleagues in private law (prof Matthias Storme, too) had already flagged the issues with the applicable law proposal COM(2018) 96 in particular. Now the need for a separate post has been overtaken by Alexander Hewitt’s excellent overview here, following EP first reading.

No more needs to be said.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 3.

As I turn to preparations for a talk on CSR litigation and conflict of laws, Thursday next (11 April) in Cork, (which incidentally will be a day after the UKSC will deliver its verdict in Vedanta), I was consulting the report made for the European Parliament on the issue of access to legal remedies for the victims of corporate human rights abuses.

A few supplementary thoughts, fed also by an upcoming chapter of mine in an edited volume for OUP.

The report does an excellent job at collating much of the relevant case-law in a variety of countries: there is no better way to appreciate the difficulties than to consider the law in action. Despite the efforts of the team, particularly for the UK a few important cases were not included: Bento Rodriguez, Gemfield, Kalma, Garcia v Total.

The report flags the absence of forum non conveniens in Brussels I but omits the important forum non-type mechanism of Brussels Ia: Articles 33-34. This is likely to be important for the future application of CSR cases in the EU.

Analysis of KIK could have focused on the problematic qualification of statutes of limitation under Rome II. (Particularly as the report seeks to make recommendations to the EP and the EU Institutions as a whole).

The often missed elephant in the conflicts room of lex causae for veil-piercing and /or allocating duty of care. Lex fori? Lex causea? Lex societatis (e.g. for the Shell cases in the UK).

The suggestions under 6.2.2 for a forum necessitatis were in fact discussed in the review of Brussels I and it was Parliament at the time which (not unjustifiably) rejected it.

Ordre public considerations would be served well by final completion and release by the EC of its report on the use of ordre public in the EU: the report would have been a good reminder.

Finally in discussing access to justice issues no mention is made of the role of third party financing: this essentially enables much of this type of litigation yet is often seen by many in the CSR community as suspicious.

All in all the conflicts-related recommendations of the report ought to have been fine-tuned: I hope the above is of some service.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 8.

Written by Matthew S. Erie, Associate Professor of Modern Chinese Studies and Fellow at St. Cross College, University of Oxford

On April 2, 2019, the Government of the Hong Kong Special Administrative Region (“HKSAR”) and the Supreme People’s Court of the People’s Republic of China” (“Supreme People’s Court”) signed an Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the HKSAR (hereinafter, “the Arrangement Concerning Mutual Assistance,” see English translation here). This is a momentous development in the growth of international commercial arbitration in both mainland China (also, the “PRC”) and Hong Kong as it is the first time that such a mechanism has been put in place to allow Chinese courts to render interim relief to support arbitrations seated outside of the PRC.

Historically, non-Chinese parties have been concerned about doing business with Chinese parties given the lack of the ability to ensure that the status quo of the assets of the Chinese party in question is not altered pending the outcome of the arbitration and the tribunal’s issuance of the final award.  As a result of the Arrangement Concerning Mutual Assistance, foreign parties will have more comfort in entering into such agreements with Chinese parties; further, the attractiveness of both Hong Kong as a seat of arbitration and the PRC will be enhanced. More generally, the Arrangement Concerning Mutual Assistance demonstrates the close cooperation between legal, judicial, and arbitral authorities in the PRC and Hong Kong. The Arrangement Concerning Mutual Assistance builds on such soft law sources as the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the HKSAR Pursuant to the Choice of Court Agreements Between Parties Concerned, signed on July 14, 2006, and the Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the HKSAR, signed on June 21, 1999.  These sources of soft law position Hong Kong as a major legal hub for Chinese companies investing outside of mainland China. This is particularly so in the context of the Belt and Road Initiative, a multi-trillion dollar project affecting some two-thirds of the world’s population, announced by PRC President Xi Jinping in 2013, to connect mainland China’s economy with those of states throughout Eurasia.

Mainland China’s soft law agreements with Hong Kong are not surprising given that Hong Kong is a “special administrative region” of the PRC, a relationship often summarized as “one country two systems.” Nor is it surprising that Hong Kong should function as a legal hub for Chinese companies. Yet Hong Kong is just one of many such hubs emerging throughout a number of jurisdictions across the Eurasian landmass that are jockeying to provide legal services, and particularly dispute resolution services, to not just Chinese companies but also Japanese, Indian, and those of GCC and ASEAN states. The diversity of parties notwithstanding, with some of the largest multi-national companies in the world backed by strong central government support, China is the dominant economy of the region. China is not only creating soft law with other jurisdictions but also onshoring disputes by building its own NLHs in Shanghai and Shenzhen. As a consequence, emergent economies in Asia are accounting for an ever-larger number of cross-border commercial disputes, and jurisdictions in Asia are building capacity to handle those disputes. Soft law, international arbitration houses, international commercial courts, business mediation, transplanted English common law procedural rules, English language, and lawtech—these are all constitutive elements of what I call “new legal hubs” (“NLHs”), one-stop shops for cross-border commercial dispute resolution, in financial centers, promoted as an official policy by nondemocratic or hybrid regimes.

Over the course of two years, I conducted ethnographic fieldwork on six NLHs in four countries, including in Hong Kong, Singapore, Dubai, Kazakhstan, and China. The result of my research, “The New Legal Hubs: The Emergent Landscape of International Commercial Dispute Resolution” (see here), is forthcoming in the Virginia Journal of International Law. The article analyses NLHs at two levels: their impact on the host states in which they are embedded and interhub connections as a form of transnational ordering. This article finds that, first, legal hubs are engines of doctrinal, procedural, and technological experimentation, but they have had limited impact on the reform of the wider jurisdictions within which they are embedded. Second, through relationships of competition and complementarity, legal hubs function to enhance normative settlement. However, many of the innovations (e.g., intrahub cross-institutional mechanisms between courts and arbitration institutions and interhub soft law such as memoranda of understanding) are untested, vulnerable to state politics, or even unlawful. Consequently, NLHs demonstrate the potential and fragility of “rule of law” in nondemocratic states that promote globalization against trends in the West.

The article begins with an introduction that defines NLHs, identifies their significance as jurisdictional carve-outs to otherwise weak legal systems of host states, and proposes an anthropology of legal hubs. Part I sets the analysis of NLHs against the backdrop of a partially deglobalizing Euro-American liberal legal order and a globalizing “Inter-Asian” one. Part II describes the methodology of “para-ethnography.” Part III provides a theory of NLHs. Part IV builds on this theory to generate a continuum of NLHs. Part V assesses how NLHs and their host states affect each other, including hubs’ positive spillover effects and host state pushback. Part VI examines the possibilities for interhub ordering.

On 7 June 2019, the School of Law at Royal Holloway, University of London and the School of Law at Middlesex University organise a conference on the topic of “Access to Justice and Arbitration”. The conference is hosted at Royal Holloway.

The aim of the conference is to initiate a focused debate about access to justice in arbitration that would enable a larger public discussion about the specific role of access to justice in arbitration.

The full programme will be published shortly. For further information and registration see here and here.

Tribunal de grande instance de Nantes, pôle social, 28 février 2019

Cour d'appel de Papeete, 21 mars 2019

Pourvoi c/ Cour d'appel de Versailles, 6 décembre 2018

Tribunal correctionnel de Châlons-en-Champagne, 13 mars 2019

Pourvoi c/ tribunal de police de Saint-Etienne, 1ere à 4eme classe, 20 mars 2019

I fear I do not have the time or opportunity for the moment fully to analyse Saugmandsgaard ØE’s Opinion at the end of January in C-689/17 MSC Flaminia (no EN version available) – hence this post is a flag more than a review. The second Opinion of the AG in the same month (see C-634/16 ReFood) on the waste shipments Regulation.

Readers beware: there are two distinct exemptions for ships-related waste in the waste shipments Regulation: are exempt:

the offloading to shore of waste, including waste water and residues, generated by the normal operation of ships and offshore platforms, provided that such waste is subject to the requirements of the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto (Marpol 73/78), or other binding international instruments; and

waste generated on board vehicles, trains, aeroplanes and ships, until such waste is offloaded in order to be recovered or disposed of.

In the case at issue: does the latter cover residues from damage to a ship at sea in the form of scrap metal and fire extinguishing water mixed with sludge and cargo residues on board the ship?

Geert.

Handbook of EU Waste Law, 2nd ed. 2015, Oxford, OUP, Chapter 3, 3.27 ff.

The Permanent Bureau of the Hague Conference on Private International Law (HCCH) has announced that the 11th International Forum on the e-APP (electronic Apostille Program) will be held in Fortaleza, Brazil, from 16 to 18 October 2019.

The e-APP promotes the use of technology to further enhance the secure and effective operation of the HCCH Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents Apostille Convention (Apostille Convention).  Among the technologies that will probably be discussed are the use of distributed ledger technologies (such as blockchain) in accordance with the Conclusion & Recommendation No 35 of the HCCH Council.

The working languages of the Forum will be English, Portuguese and Spanish.

Many Contracting Parties have already implemented one or both components of the e-APP. There are already 35 Contracting Parties with an e-Register, many of which are in the Americas. See here.

More information (incl. registration process) will be made available on the Apostille Section of the HCCH website. While the number of participants is limited, registration is free of charge and will be handled on a first come, first served basis.

The HCCH news item is available here. See also the information relating to the 10th e-APP Forum as it compiled all previous Conclusions & Recommendations.

The book titled I Regolamenti europei sui regimi patrimoniali dei coniugi e delle unioni registrate: commento ai Regolamenti (UE) 24 giugno 2016, n.1103 e 1104 applicabili dal 29 gennaio 2019, authored by Paolo Romano, was recently released by the Italian publisher Giuffrè.

The official description (translated from the Italian original) states:

With the adoption of Regulations (EU) Nos. 1103 and 1104 of 2016, applicable from 29 January 2019, the supranational legislator has completed – albeit in the form of enhanced cooperation – the framework of European family law, dictating common rules on jurisdiction, applicable law, recognition and enforcement of decisions in matters of matrimonial property regimes and property effects of registered partnerships. After intervening over the course of a decade in the matrimonial matters and parental responsibility, then in terms of maintenance obligations and succession, the Council of the European Union has therefore provided citizens and professionals with the necessary coordinates to reach a complete definition of the property relationships of spouses and partners (between them and third parties) deriving directly from the creation of the family bond or its dissolution. Retracing the structure of the two legislative acts, as supplemented by the Implementing Regulations (EU) No. 1935 and No. 1990 of 7 and 11 December 2018 which adopted the standard forms attached to them, and commenting on the discipline in the light of the most recent rulings of the European Courts, the author examines their compatibility with the relevant institutes of Italian substantive and procedural law – from the reflections on the discipline of legal communion and applicability to registered partnerships and de facto couples, to exploring their practical implications in terms of circulation of agreements on assisted negotiation – in a constantly evolving regulatory and social context.

This book follows Romano’s former book Le controversie familiari dell’Unione Europea published with the same editor in 2018.

Marta Requejo  has published recently an article on the Procedural Harmonization and Private Enforcement in the Area of Personal Data Protection. The article is featured in the latest edition of the Max Planck Institute Luxembourg for Procedural Law Research Paper Series, and may be retrieved here.