Droit international général

Krzysztof Pacula reported end of March on CJEU C-723/20 Galapagos Bidco v DE and justifiably highlighted the Brexit issue. The case concerns a move of COMI – centre of main interest within the context of the Insolvency Regulation 2015/848 and it is on the element of impromptu move that my post will focus.

Galapagos SA is a Luxembourg holding company whose centre of administration (‘effective place of management‘ according to the former directors) was moved in June 2019, at least so contend previous directors, to England. At the end of August 2019, they apply to the High Court in England and Wales to have insolvency proceedings opened.

Echos of the tussle are here and of course also in Galapagos Bidco SARL v Kebekus & ors [2021] EWHC 68 (Ch). The day after the move of centre of administration, the former directors were replaced with one other, who moved centre of administration to Dusseldorf and issued relevant market regulation statements to that effect. This move was subsequently recognised  by the Courts at Dusseldorf as having established COMI there. The High Court action in London was never withdrawn and would seem to have been dormant since.

Applicant in the proceedings is Galapagos BIDCO Sarl, a creditor of Galapagos SA. It is I understand (but I am happy to be corrected by those in the know) Luxembourg based. As Krzysztof reports, it contests that the German move has effected move of COMI which it argues lies in England (although I fail to see how its reasoning should not also apply to the earlier instant move from presumably Luxembourg to England).

The question that arises is whether, in the determination of the centre of a debtor company’s main interests, specific requirements must be imposed to prevent abusive conduct. Specifically, in the light of the Regulation’s stated aim of preventing forum shopping, whether ‘on a regular basis’ in the second sentence of the first subparagraph of Article 3(1) Insolvency Regulation 2015, presupposes an adequate degree of permanence and is not present if the establishment of a centre of administration is pursued at the same time as a request to have insolvency proceedings opened. Respondents in the appeal, which include the insolvency administrator (trustee) contend that the requirement of administration ‘on a regular basis’ is fulfilled if the administration is permanent.

The CJEU unfortunately fails to answer that question, choosing to reply instead with a hierarchical answer which encourages race to court: [36]

the court of a Member State with which a request to open main insolvency proceedings has been lodged retains exclusive jurisdiction to open such proceedings where the centre of the debtor’s main interests is moved to another Member State after that request is lodged, but before that court has delivered a decision on that request, and that, consequently, where a request is lodged subsequently for the same purpose before a court of another Member State, that court cannot, in principle, declare that it has jurisdiction to open such proceedings until the first court has delivered its decision and declined jurisdiction.

However in the case at issue, the Withdrawal Agreement has the effect that if the High Court has not, as it would seem, taken its decision on the opening of proceedings prior to the end of Brexit Implementation Day 1 January 2021 (CET), the German courts need no longer apply that consequence of mutual trust and are at liberty to determine the existence of COMI.

The CJEU ends by suggesting Q1 no longer needs answering. Yet I think it does. Perhaps not so much for the case at issue (which explains why the judicially economical CJEU does not offer a reply). The German courts, as Zacaroli J notes in his decision [14], held in October 2019 that COMI for GAS has successfully moved to Germany as from 25 August 2019, the day the capital market and bondholders were informed that the centre of administration had been moved to Düsseldorf. Yet the file does not suggest that COMI prior to the attempted move, existed in Germany: it was established there following the new director’s decision. In accordance with the Regulation’s presumptions, it would have previously existed in Luxembourg. The element of ‘on a regular basis’ therefore still matters. Is the CJEU suggesting that a mere information of the capital markets suffices to move COMI?

Geert.

EU Private International Law, 3rd ed. 2021, Heading 5.6.1.

The author of this post is Jachin Van Doninck, Lecturer in civil procedure, private international law and ADR at the Vrije Universiteit Brussel.

At the final conference of the Judgtrust project in The Hague, some ten days ago, two decisions of the ECJ on the Brussels I bis Regulation took flak from more than one speaker: Wikingerhof and Toto.

Both of these decisions have already received their fair share of attention in these columns: here (by the late Peter Mankowski, including links to the other contributions dedicated to the same judgment) and here.

The writing of a recently published casenote on the Wikingerhof judgment has nonetheless left me wondering whether the criticism directed at said judgment isn’t missing the mark.

As a reminder, through Wikingerhof, the ECJ attempted to clarify its earlier Brogsitter ruling on delineating matters relating to contract and matters relating to tort for the purpose of applying the heads of jurisdiction under art. 7 point 1 and 7 point 2 of the Brussels I bis Regulation respectively.

Where Brogsitter could be interpreted as considering it sufficient for a claim made in tort under national law to be contractual for the purpose of Brussels I where the conduct complained of may be considered a breach of the terms of the contract (ECJ, para 29, my emphasis), the ECJ held in Wikingerhof that where it does not appear indispensable to examine the content of the contract in order to assess whether the conduct is lawful or unlawful, the cause of the action is a matter relating to tort within the meaning of art. 7.2 Brussels I Recast (ECJ, at para 33, again with my emphasis).

In retrospect it always seemed unlikely that the ECJ would have accepted a full and complete absorption of the forum delicti by the forum contractus in cases of concurrent causes of action, i.e. when a contracting party invokes the infringement of a general legal obligation under competition law as was the case in Wikingerhof. Through Wikingerhof, the ECJ restores the balance between forum contractus and forum delicti in the case of concurrent obligations by setting out a clear criterion, namely whether the contract is the yardstick for review (forum contractus) or merely the subject of review (forum delicti). No surprise either in seeing the potential fora being multiplied then: that has been the steady flow of the ECJ case law on art. 7.2 since the Bier-stance was adopted more than 40 years ago (E. Farnoux, ‘Delendum est Forum Delicti? Towards the jurisdictional protection of the alleged victim in cross-border torts’ in B. Hess, K. Lenaerts en V. Richard (red.), The 50th anniversary of the European law of civil procedure, Baden-Baden: Nomos 2020, (259) p. 263 et seq.).

But most interesting, and least appreciated in my opinion, is the Court’s method in reaching that result. It shouldn’t have come as a surprise though. Less than a year before, in its VKI v. TVP judgment, the ECJ had been asked whether article 1(2)(f) of the Rome I Regulation should be interpreted as excluding from the scope of that regulation contractual obligations based on a trust agreement for the purposes of administering shares in a limited partnership. Was this a corporate matter beyond the reach of Rome I?

In addressing the issue, the ECJ, following its advocate-general Saugmandsgaard Øe, focused on the cause of action of the proceedings:

The action for an injunction brought by the VKI concerns the unfairness and therefore the validity of certain terms of the trust agreements at issue. Therefore, the questions arising from the case in the main proceedings fall within the field of lex contractus and therefore of the Rome I Regulation (ECJ, at para 37).

When asked whether Brussels I Recast provides a forum delicti when the plaintiff seeks an injunction against the use of contractual terms because they are allegedly based on an abuse of a dominant position by the defendant, the ECJ and its advocate-general Saugmandsgaard Øe adopted that same reasoning.

The test again lies in the cause of action:

In particular, as the Advocate General observed in point 90 of his Opinion, the court hearing the action must decide whether a claim between contracting parties is connected to matters relating to a contract, within the meaning of point 1 of Article 7 of Regulation No 1215/2012, or to matters relating to tort or delict, within the meaning of point 2 of Article 7 of that regulation, by reference to the obligation, whether contractual or a matter relating to tort, delict or quasi-delict, which constitutes the cause of action (ECJ, at para 31).

Asked to interpret sources of European private international law, the ECJ’s answer has time and again revolved around the word ‘autonomous’. Through Wikingerhof, the ECJ has now demonstrated that such autonomous interpretation of EU instruments is no mere recipe for haphazard case by case reasoning but also involves an exercise in qualification, thereby addressing the following question: which law imposes itself through the subject matter of the claim and the legally relevant facts underlying it, i.e. the case of action? That approach warrants more credit than is currently being granted.

On 19 April 2022, the European Commission has launched a new page on the e-Justice Portal concerning children from Ukraine (available here in all EU languages).

It is an operational extension, in a dramatic context, of the work undertaken by the Commission to strengthen the protection of migrant children.

According to the European Commission:

Russia’s military aggression against Ukraine raises questions about the situation of refugee children who are displaced in the European Union from Ukraine. The issue becomes even more complex when these children are separated from their families, either because they have remained in Ukraine or because they are refugees in another Member State.

It is now urgent to be able to ensure that these children are protected against the risk of violence, exploitation, illegal adoption, abduction, sale or child trafficking. For this reason, it is essential to use the instruments that protect the rights of these children.

There are instruments in European and international law to ensure the protection of children, with special provisions for the protection of and assistance to children temporarily or permanently deprived of their family environment, including in emergency situations, such as an armed conflict.

The new webpage contains clear and practical information on the rules applicable to judicial cooperation in cross-border cases involving Ukrainian children, including issues of jurisdiction, applicable law, recognition of decisions, and cooperation between authorities, in particular via the European Judicial Network in civil and commercial matters (EJN-civil).

It provides for many useful links to key legal instruments and information on Ukrainian law provided directly by the Ukrainian Ministry of Justice.

This page is intended for judges, lawyers, notaries, central authorities, but also for social workers in charge of child protection and staff in charge of registering minors arriving from Ukraine.

More information here.

Conventions & Instruments

On 8 April 2022, the Kingdom of Saudi Arabia deposited its instrument of accession to the HCCH Apostille Convention. The Convention will enter into force for Saudi Arabia on 7 December 2022. With this accession, the Apostille Convention now has 122 Contracting Parties. More information is available here.

Meetings & Events

From 28 March to 1 April 2022, the Experts’ Group on Parentage / Surrogacy met for the eleventh time. The Group discussed the content of the final report that is to be presented to the Council on General Affairs and Policy (CGAP) at its 2023 meeting. More information is available here.

The Permanent Bureau has announced that the inaugural CODIFI Conference will be held online from 12 to 16 September 2022. CODIFI will examine issues of private international law in the Commercial, Digital, and Financial (CODIFI) sectors, highlighting developments in the digital economy and fintech industries as well as clarifying the roles of core HCCH instruments: the 1985 Trusts Convention, the 2006 Securities Convention, and the 2015 Choice of Law Principles. More information is available here.

These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website.

May 2022 starts with the hearing in C-354/21 Registrų centras, on Regulation n° 650/2012, next Wednesday. In the case at hand, R.J.R., the appellant, holds Lithuanian and German nationality and is resident in Germany. Her mother died on 6 December 2015; at the time of her death, she had her place of habitual residence in Germany; her estate consisted on property owned in Germany and in Lithuania. The appellant, the sole heir of his mother, accepted her entire estate in Germany without reservation in accordance with the procedure and time limits laid down in German law.

R.J.R. filed an application for a European Certificate of Succession in accordance with Regulation (EU) No 650/2012 with the competent German court; it was issued on 24 September 2018. On 15 March 2019, the appellant submitted to the VĮ Registrų centras (State Enterprise Centre of Registers) an application for registration of his ownership rights to the immovable property registered in the name of his mother. Together with the application, the appellant submitted the Certificate of Succession and European Certificate of Succession issued on 24 September 2018, copies of translations of those documents, and copies of passports of the Republic of Lithuania issued to J.M. R., G. R. and R.J. R. On 20 March 2019, the appellant’s request was refused, on the grounds that European Certificate of Succession No 1 VI 175/18 did not contain the data provided for in the Law of the Republic of Lithuania on the Real Property Register which were necessary to identify the immovable property, that is to say, that that certificate did not indicate the property inherited by the appellant.

The decision was appealed but upheld. A further appeal was dismissed as unfounded. The case is now before the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania), who has referred to following question to the Court of Justice of the European Union for a preliminary ruling:

Must point (l) of Article 1(2) and Article 69(5) of Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession be interpreted as not precluding legal rules of the Member State in which the immovable property is situated under which the rights of ownership can be recorded in the Real Property Register on the basis of a European Certificate of Succession only in the case where all of the details necessary for registration are set out in that European Certificate of Succession?

The opinions on C-646/20 Senatsverwaltung für Inneres und Sport, and C-700/20 London Steam-Ship Owners’ Mutual Insurance Association, both from AG Collins, will be published on Thursday. Not surprisingly, both cases will be addressed by the Grand Chamber.

C-646/20 is a request from the German Bundesgerichtshof on Brussels II bis:

1. Is the dissolution of a marriage on the basis of Article 12 of Decreto Legge (Italian Decree-Law) No 132 of 12 September 2014 (‘DL No 132/2014’) a divorce within the meaning of the Brussels IIa Regulation?
2. If Question 1 is answered in the negative: Is the dissolution of a marriage on the basis of Article 12 of DL No 132/2014 to be treated in accordance with the rule in Article 46 of the Brussels IIa Regulation on authentic instruments and agreements?

For the record, according to the referring court, the legal situation is as follows in Italy: under Decreto Legge (Italian Decree-Law) No 132 of 12 September 2014 (‘DL No 132/2014’), converted into Law No 162 of 10 November 2014, spouses no longer need to petition the court for divorce and may opt for divorce by way of a simple agreement. Subject to specific requirements detailed in the law, spouses may either agree to divorce in the presence of their lawyers (Article 6 of DL No 132/2014) or, as in the case at hand, they may enter into a divorce agreement under Article 12 of DL No 132/2014, before the mayor with territorial jurisdiction, acting as supreme civil registrar, even without the assistance of a lawyer, provided they have no underage children or adult children who have no legal capacity or are seriously disabled or economically dependent. The civil registrar takes receipt of the spouses’ personal statements, which cannot include any asset transfers, and asks them to return before him or her no earlier than 30 days after receipt of the statements to confirm the agreement. In the period between submission of the statements and confirmation of the agreement, the civil registrar is able to verify the veracity of the spouses’ statements (e.g. that they do not have any dependent children) and the spouses have the opportunity to reflect on their decision and, if they wish, to change it. If they confirm the agreement, it applies in lieu of a judicial decision.

C-700/20 comes from the High Court of Justice Business and Property Courts of England and Wales, United Kingdom ; it was filed just a couple of days before the end of the transitional period. The question referred concerns the interpretation of the Brussels I Regulation. The main proceedings are based on a dispute between London Steam-Ship Owners’ Mutual Insurance Association Limited (‘the Insurer’), having its registered office in the United Kingdom, and the Kingdom of Spain concerning claims for damages arising from the sinking off the coast of Spain of a vessel carrying fuel oil – the Prestige. The insurance contract contained, inter alia, an arbitration agreement governed by English law.

The Kingdom of Spain asserted its rights to receive compensation from the Insurer under the insurance contract, in the context of criminal proceedings instituted in Spain in 2002. Following a first-instance decision in 2013 and several appeals, the Spanish proceedings culminated in a finding that the Insurer was liable for the loss caused by the shipping accident subject to the limitation of liability provided for in the insurance contract. The Spanish court issued an execution order on 1 March 2019. On 25 March 2019, the Kingdom of Spain applied for recognition and enforcement of that order in the United Kingdom in accordance with Article 33 of the Brussels I Regulation. That application was granted. The Insurer appealed against that decision in accordance with Article 43 of the Brussels I Regulation.

The Insurer, for its part, initiated arbitration proceedings in London in 2012. In the resulting award it was established that the Kingdom of Spain would have to initiate arbitration proceedings in London in order to assert claims under the insurance contract. The Commercial Court of the High Court of Justice of England and Wales, before which enforcement of the award was sought under section 66 of the Arbitration Act 1996, entered a judgment in the terms of the award against the Kingdom of Spain in October 2013, which was confirmed on appeal. The Kingdom of Spain took part neither in the arbitration proceedings nor in the judicial proceedings in the United Kingdom.

The referring court asks the following questions:

(1) Given the nature of the issues which the national court is required to determine in deciding whether to enter judgment in the terms of an award under Section 66 of the Arbitration Act 1996, is a judgment granted pursuant to that provision capable of constituting a relevant “judgment” of the Member State in which recognition is sought for the purposes of Article 34(3) of EC Regulation No 44/2001?

(2) Given that a judgment entered in the terms of an award, such as a judgment under Section 66 of the Arbitration Act 1996, is a judgment falling outside the material scope of Regulation No 44/2001 by reason of the Article 1(2)(d) arbitration exception, is such a judgment capable of constituting a relevant “judgment” of the Member State in which recognition is sought for the purposes of Article 34(3) of the Regulation?

(3) On the hypothesis that Article 34(3) of Regulation No 44/2001 does not apply, if recognition and enforcement of a judgment of another Member State would be contrary to domestic public policy on the grounds that it would violate the principle of res judicata by reason of a prior domestic arbitration award or a prior judgment entered in the terms of the award granted by the court of the Member State in which recognition is sought, is it permissible to rely on Article 34(1) of Regulation No 44/2001 as a ground of refusing recognition and enforcement or do Articles 34(3) and (4) of the Regulation provide the exhaustive grounds by which res judicata and/or irreconcilability can prevent recognition and enforcement of a Regulation judgment?

Finally, the judment on C-644/20, W.J. (Changement de résidence habituelle du créancier d’aliments), referred by the Sąd Okręgowy w Poznaniu (Regional Court in Poznań, Poland), is expected on Thursday 12th. The question for interpretation is the following :

‘Must Article 3(1) and (2) of the Hague Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations, approved on behalf of the European Community by Council Decision 2009/941/EC of 30 November 2009 (OJ 2009 L 331, p. 17), be interpreted as meaning that a creditor who is a child may acquire a new habitual residence in the State in which he or she was wrongfully retained if a court orders the return of the creditor to the State in which he or she habitually resided immediately prior to the wrongful retention?’

No opinion was deemed necessary.

Abu Dhabi Commercial Bank Pjsc v Shetty & Ors [2022] EWHC 529 (Comm) engages Rome II by way of the applicable law to the claim playing a role in the forum non conveniens challenge. (Compare BRG Noal v Kowski for a similar discussion under Rome I). The case confirms the importance of retained Rome I and II discussion. The stage is set at [7]

at the heart of the jurisdiction challenge is an assertion that England is manifestly not the most suitable forum for the resolution of this dispute which all defendants maintain should be resolved by the UAE courts. Unsurprisingly, ADCB places significant reliance for its case that England is the most suitable forum for resolution of this dispute on the fact that Plc was a FTSE 100 quoted company, that the contracts by which the two most important of the Core Facilities were given contractual effect (the Syndicated Facility Agreement and the Club Facility Agreement) were drafted and completed in London by a prominent London law firm and were subject to London arbitration clauses and on its contention that England is the governing law of the dispute. Equally unsurprisingly the defendants emphasise that Plc was a holding company that carried on no active business activity, that the activity in London was essentially administrative in nature, that the lending which it is alleged lies at the heart of the scheme was lending by ADCB (a UAE registered entity trading in the UAE) to entities within the Group including principally Healthcare, all of which were based elsewhere than England and Wales. They maintain that if what is alleged is true then this was from first to last a conspiracy that was conceived and carried into effect in the UAE. They maintain that the governing law is beyond argument UAE law.

I shall limit the post to the Rome II element: Pelling J discusses this [64] ff, with the core element [68-69]:

the damage occurred when a UAE based company drew down against or otherwise benefitted from the Core Facilities offered by a UAE based bank. …ADCB … ultimately acted upon the representations in Abu Dhabi, from where the relevant loan funds were drawn down by NMC Healthcare“.

In the case of a misrepresentation or fraud, the locus damni is held to be the place where that misrepresentation is acted upon. UAE law as lex causae is in fact also and primarily confirmed by A4(2) Rome II: joint place of habitual residence, held [71] to be the UAE. Application of the A4(3) escape clause is dismissed [77], and a passing reference to a potential for A12 Rome II’s culpa in contrahendo leading to English law as the lex contractus, is summarily dismissed [78].

A stay is granted.

Geert.

Forum non conveniens
UAE clearly and distinctly more appropriate forum
Consideration ia of UAE law as applicable law under Rome II

Abu Dhabi Commercial Bank Pjsc v Shetty & Ors [2022] EWHC 529 (Comm)https://t.co/P0o1I2YbZL

— Geert Van Calster (@GAVClaw) April 1, 2022

In Chep Equipment Pooling BV v ITS Ltd & Ors [2022] EWHC 741 (Comm), Salter DJ untangles a myriad of jurisdictional gateways, partially tortious (with reference to UKSC Brownlie, and to CJEU Bier etc where relevant), partially contractual and subject to choice of court. A forum non challenge is rejected.

The choice of court discussion is interesting in particular for at 48 the judge mixes the forum prorogati rule of Article 25 BIa juncto its recital 20. One of the defendants claims the privilege of an A25 choice of court to establish compulsory Belgian jurisdiction. The judge notes that the agreement of which the clause is part, is governed by Belgian law and

The Audit Agreement, although in the English language, is governed by Belgian law. Rightly, neither party had tendered evidence of the principles of interpretation of jurisdiction clauses under Belgian law. At this stage of the proceedings, reliance on the presumption of similarity with English law is sufficient: see Brownlie (supra) at [157], per Lord Leggatt. In those circumstances, I must simply apply to this provision the principles of interpretation articulated in Fiona Trust and Holding Corpn v Privalov [2007] UKHL 40, [2007] Bus LR 1719.

This is a touch incorrectly formulated. Per BIa, the existence of consent and its expression are governed by A25, not by reference to any national law. The validity of consent by contrast does rely on national law however it is not the lex contractus of the underlying agreement which is relevant but rather the lex fori prorogati (also Belgian law), with renvoi. The judge in my view cannot rely on English law to judge the validity of choice of court at good arguable case level: once jurisdiction settled, it will not be allowed to be revisited. Even at this stage, therefore, per BIa the enquiry arguably must be made under Belgian law. Whether there was actually any suggestion that under Belgian (and subject to renvoi) law consent may not have been given, is not clear from the judgment.

Claimants tried to argue that the claim does not arise ‘out of or in connection with’ the Audit Agreement that contains choice of court however the judge disagrees. This part of the claim therefore must be litigated in Belgium (and an A8(1) anchor would of course not assist to keep the proceedings in England).

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.10.4.

Mix of jurisdictional arguments, partially related to Brussels Ia, partially English gateways and forum non conveniens

Chep Equipment Pooling BV v ITS Ltd & Ors [2022] EWHC 741 (Comm)https://t.co/HInLrba4IF

— Geert Van Calster (@GAVClaw) April 1, 2022

Milieu Consulting is conducting a study on the application of Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Ia Regulation) on behalf of the European Commission (DG JUST).

As part of this study, Milieu developed a technical survey that targets legal practitioners (i.e. judges; lawyers; notaries; bailiffs), academia (i.e., scholars in private international law and relevant sectors, such as consumer protection or business and human rights), and national authorities (i.e., ministries of justice, ministries in charge with consumer protection, ministries of economy) in EU Member States.

Readers are invited to participate (by 22 May) at https://ec.europa.eu/eusurvey/runner/BrusselsIatechnicalsurvey

Samsung Electronics Co. Ltd & Ors v LG Display Co Ltd & Anor [2022] EWCA Civ 423 concerns follow-on damages claimed against non-EU based defendants. The European Commission had earlier found the existence of a cartel. The Court of Appeal confirms the refusal of service out of the jurisdiction on forum non conveniens grounds, holding, like the first instance judge, that England & Wales are clearly not the appropriate forum (Taiwan and /or South Korea are).

I report the case for it contains an interesting Ps on the confidentiality of the EC finding: Males LJ:

The parties were united in urging upon us that the Commission Decision is confidential and that reference to its recitals should not be made in open court. I have to say that, as a general proposition, this seems paradoxical. I find it hard to see how a Decision can at the same time be both confidential and binding in public follow-on proceedings. To that extent it appears that any requirement of confidentiality may be in tension with the fundamental constitutional principle of open justice. Moreover, this particular Commission Decision deals with events which are now in the distant past and has been extensively litigated in the years since it was made. It is hard to think that there is any real confidentiality left.

Nevertheless I have been careful to confine my citation from the Decision to what is necessary to explain the submissions made to us and the conclusions which I have reached. I have referred only to recitals which were alleged to explain and support the operative part of the Decision (cf. Emerald Supplies Ltd v British Airways Plc [2015] EWCA Civ, [2016] Bus LR 145 at [68]) and have omitted any reference to other participants in the cartel who were not represented before us.

This invites interesting reflections on the principles of open justice in EU competition law findings – a discussion I shall leave to others.

Geert.

Follow-on damages action re EC finding of cartel, viz non-EU defendants.
Refusal of service out confirmed, E&W clearly not the appropriate forum.
Interesting ps on confidentiality of EU decision

Samsung Electronics ea v LG Display ea [2022] EWCA Civ 423https://t.co/vmDSR5OvCC

— Geert Van Calster (@GAVClaw) April 1, 2022

A brief post on the judgment of the CJEU in C-561/20 United Airlines. The CJEU held that the EU flight delay compensation rules of Regulation 261/2004 apply to a flight operated by non-EU airline on behalf of EU airline, even when  the delay relates to flight segment outside the EU. On the issue of international jurisdiction, the Court engages with customary international law questions, referring ia to its C-366/10 ATAA judgment which I discussed here.

The CJEU firstly [51] repeats that since

a principle of customary international law does not have the same degree of precision as a provision of an international agreement, judicial review must necessarily be limited to the question whether, in adopting the act in question, the institutions of the European Union made manifest errors of assessment concerning the conditions for applying such a principle

I do not think its poor view on the lucidity of customary international law is justified, however its finding that only manifest errors may lead to illegality does of course mean the CJEU does not have to worry about all the nuts and bolts of territorial jurisdiction. It suffices [52] that there is a close connection with the territory of the EU since the Regulation specifies that connecting flights fall within the scope of that regulation on the ground that the passengers have started their journey from an airport located in a Member State. [53]:

The regulation applies to a long delay caused in a leg of a flight operated in a third country only in limited and clearly defined circumstances in which the flight concerned, taken as a whole, is operated from an airport located in the territory of a Member State. Such a flight and its passengers thus retain a close connection with the territory of the European Union, including for the leg of the flight operated outside the European Union.

Flights which are wholly operated in a third country or between two third countries, without any connection with EU territory [55].

Geert.

#CJEU: EU #flightdelay rules apply to flight operated by non-EU airline on behalf of EU airline, even when delay relates to flight segment outside the EU.

Once text of full judgment available, we can see how much the Court engages with AG discussion of territoriality, int law. https://t.co/rGqA1n2idi

— Geert Van Calster (@GAVClaw) April 7, 2022

BRG NOAL GP SARL & Anor v Kowski & Anor [2022] EWHC 867 (Ch) continues the current trend of forum non conveniens applications galore, following Brexit. In the case at issue, with Luxembourg suggested as the appropriate forum, applicable law determination, under (retained) Rome I’s ‘characteristic performance’ rule plays a core role.

Applicable law needs to be determined essentially viz an undertaking as I understand it, by a, validly removed, investment fund General Partner, not to torpedo the subsequent orderly continuation of the fund. The core commitment reads

“I, [name], hereby acknowledge that [NOAL GP] is the managing general partner (“General partner”) of [the Fund] with effect from 27 August 2021 and unconditionally and irrevocably undertake (a) not to assert otherwise, or to induce or procure an assertion to the contrary or otherwise challenge or question the validity of its appointment or induce or produce such challenge or question, in any applicable forum and (b) to cooperate with and assist the General Partner in completing a full, orderly and timely transfer of the control of the Partnership and all of its assets and any obligations to the General Partner”.

Claimant [57] suggests the specific Undertaking in and of itself meets the CJEU Handte definition of a stand alone contractual obligation, however Smith J does not specifically hold on this for in her view even if this were correct, the overall contractual construction would have an impact on the applicable law consideration, seeing as in her view:

no choice of law was made; no default ‘passe partout’ contract as listed in A4(1) Rome I applies; A4(2) Rome I’s ‘characteristic performance’ test does not lead to an answer ([61]: there is no ‘characteristic performance’] and at any rate even if there were, the judge would have applied A4(3)’s escape clause to lead to Luxembourg law; and the ‘proper law of the contract’ per A4(4) Rome I ‘clearly’ [63-64] leads to Luxembourgish law.

In conclusion, a stay is ordered and the forum non application is successful. In my view the judge jumped too easily to Articles 4(3) and (4), denying Article 4(2)’s or even Article 3 choice of law’s effet utile. It is not unusual for judges to let their predetermination to apply A4(3) and /or (4) determine their A4(2) search for a lex contractus. Yet that frequency does not make the judgment right.

Geert.

EU Private International Law, 3rd ed, 2021, Heading 3.2.6.2.

Another extensively litigated forum non conveniens jurisdictional challenge, with core role for applicable law determination, retained A4 Rome I 'characteristic performance'
Stay in favour of Luxembourg proceedings

BRG NOAL v Kowski [2022] EWHC 867 (Ch) https://t.co/j3jAekQVXG

— Geert Van Calster (@GAVClaw) April 12, 2022

[contact-form]

When CJEU Bolagsupplysningen was held, I flagged immediately (I was not alone) that the judgment would necessarily create follow-up litigation.

At the level of the CJEU itself, Mittelbayerischer Verlag somewhat reigned in the consequences of Bier and Shevill, albeit not directly related to the discussions in Bolagsupplysningen. In Gtflix, the Court confirmed that each Member State where damage has occurred, will continue to have locus damni jurisdiction even if the claimant requests rectification of the information and the removal of the content placed online in another jurisdiction: one with full jurisdiction as either the Handlungsort or the place of the claimant’s centre of interests.

In England and Wales, Saïd v L’Express (a first instance case) held that it follows from Bolagsupplysningen that so far as internet publications are concerned, a claimant who is seeking injunctive relief (removal, correction in particular) may do so only in the places with full jurisdiction. This was implicitly confirmed in Napag, also a first instance case.

This conclusion has now been overturned by the Court of Appeal in Mincione v Gedi Gruppo Editoriale SPA [2022] EWCA Civ 557. This is a libel case brought by an Italian national with acquired British citizenship who is resident in Switzerland. He sues the Italian-domiciled publisher of a daily newspaper and weekly magazine, both of which are published predominantly in Italy and in the Italian language.

The first instance judge, Mincione v Gedi Gruppo Editoriale SpA [2021] EWHC 2006 (QB) had followed Said and Napag. The Court of Appeal notes that as a result of the Withdrawal Agreement it is bound by Bolagsupplysningen, it having been held before Brexit, and that it  ‘can have regard to’ ([65]) Gtlfix.

Warby J, seeking support in Gtflix, holds injunctive jurisdiction to restrain a harmful internet publication that has either occurred or “may occur”, does exist for the locus damni court yet only in respect of publication that may occur within the territorial jurisdiction of the court concerned. It can justify a domestic internet injunction, even for a ‘mosaic’ (locus damni) court, yet not to grant an injunctive remedy that would inevitably take effect extraterritorially.

The first instance judgment therefore is overturned on legal substance but  largely confirmed in practical reality: [72]. Current proceedings are largely held in substance, albeit not in form, to be a claim for a single and indivisible remedy. That is because a domestic internet injunction, prohibiting further publication, in this case however limited it might be in form, would, on the undisputed evidence, inevitably have extraterritorial effect. In future, technology might mean that an order framed as a domestic internet injunction would or could take territorial effect only. Yet in current technological reality, it is said that ordering removal would immediately have extraterritorial substantive effect. Those with knowledge of the technology may have more to say about this. Update 29 04 4:50 PM: the first instance judgment suggests this is related to the limited E&W jurisdiction, while the order would impact other parts of the UK, too: [98]: geo-blocking can only be done at a UK level, and the removal of a YouTube video can also be only done at a UK level (not: the E&W level).

The only part of the claim where jurisdiction for injunctive relief, if claimant is found at trial to have been libelled, will be possible, is for a so-called ‘section 12’ internet injunction: an order to publish a summary of the eventual judgment. That is because in the view of the the Court of Appeal, this relief can be targeted to the current subscriber basis of the publication outlets in England and Wales only.

Per Soriano, post Brexit a claimant will have to show that England and Wales is clearly the most appropriate place to bring an action, with locus damni per  SC Brownlie the tort gateway. Bolagsupplysningen will therefore not echo for much longer in E&W, and I doubt therefore that the SC will hear an appeal if it were sought.

Geert.

EU private international law, 3rd ed. 2021, 2.439 ff.

Court of Appeal overturns on the implications of #CJEU Bolagsupplysningen – jurisdiction to remove offensive articles published on the internet
Review on the blog shortly

Mincione v Gedi Gruppo Editoriale SPA [2022] EWCA Civ 557 https://t.co/UEZHfsSyy0

— Geert Van Calster (@GAVClaw) April 29, 2022

In 1971, the American Law Institute published the epochal Restatement of Conflict of Laws (Second). Now, a new version is in the making.

An overview of the work will be given by Kermit Roosevelt III (University of Pennsylvania) on 10 May 2022, at 5 PM CET, in the context of the Max Planck Institute (MPI) Hamburg series on “Current Research in Private International Law”.

This promises to be very interesting as the speaker is deeply involved in the drafting process.

The registration link can be found here. Participation is free of charge.

Just this week, the Supreme Court decided an important conflict of laws question in Cassirer v. Thyssen-Bornemisza Collection Foundation (S. Ct. 2022).

We have discussed this case on this site before, but the facts deserve restating. Paul Cassirer was a German Jew who owned an art gallery who owned Pissarro’s Rue Saint-Honoré in the Afternoon, Effect of Rain . Paul’s heir, Lilly Cassirer, inherited the painting and hung it in her Berlin home. In 1939, she gave the paintings to the Nazis in return for an exit visa. She later came to the United States with her grandson, Claude, the plaintiff in this case.

The Cassirer family initially brought proceedings in the United States Court of Restitution Appeals under the assumption that the painting had been lost or destroyed—but it wasn’t destroyed. The Thyssen-Bornemisza Collection Foundation (TBC)—a public foundation and an agency or instrumentality of the Kingdom of Spain—purchased it in 1993. After TBC refused to return it to the Cassirer’s, Claude filed suit against Spain and TBC in 2005. Spain was voluntarily dismissed as a party in 2011, and after his death, Claude’s heir’s continued the case.

The Courts determined in 2011 that TBC was not immune from suit because the painting had been taken in violation of international law. The case then proceeded to trial on the merits. The plaintiffs argued that California law should govern, while TBC argued that Spanish law should govern. The judge, citing Ninth Circuit precedent, decided that federal common law provided the conflict of laws rule that should be used to decide what law substantively governed the claim, and that under federal common law conflicts principles, Spanish law governed. TBC prevailed at trial, and the judgment was affirmed on appeal. The plaintiffs sought Supreme Court review only on the question whether federal common law should govern the conflicts analysis, or whether the court should instead have applied California’s conflict of laws rules.

Many commentators wrote—and I agree—that the case is pretty straightforward. The FSIA (28 U.S.C. § 1606) provides that in any case where the foreign sovereign defendant is not immune from jurisdiction, “the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances.” So, if TBC had not been an instrumentality of the Spanish state, California conflict of laws rules would have governed (because the case is pending in a federal court in California and does not arise under federal law). Justice Kagan’s unanimous opinion agreed. In light of § 1606, the courts could not apply a rule to the foreign sovereign defendant different from the rule it would have applied to a private defendant. Once a plaintiff overcomes the jurisdictional hurdles of foreign sovereign immunity, the foreign sovereign has to be treated like any other litigant.

As a result of the decision, the judgment will be vacated and the case remanded for further proceedings. The lower courts, applying California’s conflict of laws rules, could again conclude that Spanish law should govern, or it could decide that California law should govern, in which case maybe a new trial will be necessary. Lots a litigation left, in the end.

In JJH Enterprises Ltd (Trading As ValueLicensing) v Microsoft Corporation & Ors [2022] EWHC 929 (Comm) Picken J makes a debatable point in his discussion of a forum non conveniens application by defendants, Microsoft.

In the proceedings ValueLicensing claim damages arising from alleged breaches of competition law by Microsoft. The claim is a ‘stand alone’ one, not a ‘follow-on’ one. There is no underlying infringement decision of the European Commission (or any domestic competition regulator) on which ValueLicensing can rely to establish that an infringement of competition law has been committed.

Some of the Microsoft entities firstly seek summary dismissal of the case against them, arguing they cannot be held liable for an alleged infringement of either Article 101 or 102 TFEU as a result of an overall Microsoft ‘campaign’ in which they did not demonstrably take part. Here [31] ff there is interesting discussion ia of Provimi (Roche Products Ltd. & Ors v Provimi Ltd [2003] EWHC 961 (Comm)), which held that an entity that implements an agreement in breach of A101 to which a member of the same undertaking is a party can be held liable for the infringement even though the implementer itself does not know of the infringement. Specifically, whether Provimi was wrongly decided following from Cooper Tire Europe Ltd v Bayer Public Co Ltd [2010] EWCA Civ 864  – this is an issue for which CJEU referral is not possible post Brexit.

The judge however refers to the broader concept of ‘undertaking’ in the A101-102 sense following eg CJEU C-882/19 Sumal SL v Mercedes Benz Trucks Espana SL. Sumal, Picken J holds [44], is relevant authority both pre and post Brexit.

Quite how parties see a difference in the lex causae for the competition law infringement pre and post Brexit is not clear to me. Post Brexit it is said to be ‘English law’ (held to include 101-102 TFEU prior to Brexit), full stop, while post Brexit that law is said to be determined by (retained) Article 6 Rome II, which for same of the claim will be English law as being one of the ‘affected markets’ per A6 Rome II.

It is in the forum non application that the judge posits [78] that an important consideration of England as the more appropriate forum, is

it is clear that Microsoft UK’s position at trial will be that in certain material respects English law has taken a divergent path from EU law. In such circumstances, it would be wholly inappropriate, and certainly undesirable, for a court in Ireland to be determining whether Microsoft UK is right about this. On the other hand, there would be no difficulty with the Court here applying EU competition law, either as part of English law (in respect of the pre-Brexit period and, if that is what the Court determines is the case, also in respect of the post-Brexit period) or as part of the laws of other EU/EEA member states, since the Court here is very experienced in doing just that.

If it is true that under forum non, only English courts can be held properly to determine the direction of English law post Brexit, the hand of many a claimant in forum non applications will surely be strengthened.

Geert.

Forum non conveniens
Interesting point [75] that E&W are the most appropriate forum, given that it must be EN courts determining whether EN law differs substantially from EU law post #Brexit

JJH Enterprises (ValueLicensing) v #Microsoft [2022] EWHC 929https://t.co/XP3z4nX8KV

— Geert Van Calster (@GAVClaw) April 19, 2022

Within the activities of the Jean Monnet Module “CoRiMaR” (Consumer’s Rights and Market Regulation in the European Union), the Department of Legal Sciences of the University of Udine (Italy), together with a consortium of European universities including the University of Essex, De Montfort University, Universitatea de Vest din Timisoara, East Anglia University, University of Belgrade and University of Rijeka, organises the 15th edition of the Summer school Consumer’s Rights and Market Regulation in the European Union, to be held 13-22 July 2022 in Udine (Italy), at the Campus of Legal and Economic Sciences.

The Summer school on Consumer’s Rights and Market Regulation is an intensive course (40 hours of lectures, a workshop and a moot court), held in English by internationally renowned academics. It addresses theoretical and practical issues related to the legal protection of consumers and the market regulation in the European Union.

The call for application and the brochure is available here and here.

The application deadline is 15 June 2022.

For further info, please write an email to ip.europeanlaw.uniud@gmail.com.

Is a foreign arbitral award granting damages in bitcoin compatible with substantive public policy? The Western Continental Greece Court of Appeal was recently confronted with this question. Within the framework of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, it ruled that the recognition of a US award runs contrary to Greek public order. Cryptocurrency, such as bitcoin, favors tax evasion and facilitates economic crime, causing insecurity in commercial transactions to the detriment of the national economy.

FACTS

The applicant, a German national, was a member of a website, governed by a US company. The website was a platform through which members could conclude credit contracts in cryptocurrency (bitcoin). The applicant agreed with a resident of Greece to finance his enterprise by providing a credit of 1.13662301 bitcoin. The Greek debtor failed to fulfill his obligations, and he refused to return the bitcoin received. On the grounds of an arbitration agreement, an award was issued by an online arbitration court, located in the USA. The debtor appeared in the proceedings and was given the right to challenge the claim of the applicant. The court of first instance decided that the arbitral award may not be recognized in Greece for reasons of substantive public policy (CFI Agrinio 23.10.2018, unreported). The applicant lodged an appeal.

THE JUDGMENT OF THE COURT APPEAL

The appellate court began with a short description on the nature of bitcoin. It then mentioned the position of the European Central Bank with respect to the same matter. It concluded that the use of bitcoins endangers transactions both for the parties involved and the state. This comes from the fact that any income resulting from the use of cryptocurrency is tax-free, given that this kind of transactions are not regulated in Greece. Hence, importing capital in bitcoins and generally any kind of cryptocurrency, irrespective of the type of legal matter, infringes the domestic legal order, because it favors tax evasion and facilitates economic crime, causing insecurity in commercial transactions to the detriment of the national economy.

As a result of the above, the recognition of an award which recognizes bitcoin as a decentralized currency unit (peer to peer), and orders the payment of a certain debt in bitcoins, runs contrary to public policy, i.e., to fundamental rules and principles of Greek legal order in present times, reflecting predominant social, financial, and political values.

Finally, by enhancing transactions in bitcoin and promoting its equalization to legal currency, the recognition of such an award in Greece would essentially disturb prevailing standards of the country, given bitcoin’s sudden and unpredictable fluctuations [Western Continental Greece Court of Appeal 27.09.2021, unreported].

 COMMENT

Unlike the profound analysis of the first instance court, the appellate court confirmed the judgment mechanically, with zero references to legal scholarship and case law. The developments in the subject matter between 2018 (publication of the first court’s ruling) and 2021 (publication of the appellate court’s judgment) were not taken into account. The Hellenic Republic has transposed crucial directives related to cryptocurrency (see DIRECTIVE (EU) 2019/713 of 17 April 2019 on combating fraud and counterfeiting of non-cash means of payment and replacing Council Framework Decision 2001/413/JHA). New income tax rules and regulations focusing on cryptocurrency are prepared by state authorities. Even now, i.e., without a special law on cryptocurrencies, bitcoin profits must be declared for taxation purposes. Bitcoin exchange offices are active in the country. To conclude, the judgment seems to be alienated from contemporary times.

Referring to the judgment of the CJEU in the case Skatteverket / David Hedqvist (C-264/14), the first instance ruling underlined that the decision focused on the Swedish economic environment, which may not be compared to the situation in Greece. Therefore, and in light of recent developments in the country, we may hope that the courts will soon shift course towards a more pragmatic approach.

[Many thanks to Professor Euripides Rizos, Aristotle University of Thessaloniki, for his valuable insight into the field of cryptocurrencies]

The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on 28 April 2022 at 3:00 pm (Mexico City time – CDT), 10:00 pm (CEST time). The topic of the webinar is International co-operation in child abduction and the rights of the child and will be presented by judge mag. Óscar Gregorio Cervera Rivero, professor Nuria González Martín and Luz Elena López Rodea (in Spanish).

The details of the webinar are:

Link: https://us02web.zoom.us/j/88059270915?pwd=QnFGVnBWQ2xiSGFhSjJja2lUOThSUT09

Meeting ID: 880 5927 0915

Password: BMAAMEDIP

Participation is free of charge.

This event will also be streamed live: https://www.facebook.com/AmedipMX

At its conference of Thursday, 19 May 2022, the Association pour le droit des étranger (ADDE) and its partners (Agentschap Integratie en Inburgering and University of Liege) will address the reform of the civil status in Belgian law and its international issues. The Conference will be held in Brussels in French.

Speakers will address, among others, the reform of the civil status and the civil registry;  actors of the civil registry; rectification, modification and cancellation of civil status documents; receipt of a foreign civil status document; cases where civil status is unclear or uncertain.

See the program and practical information and the registration form.

The Swiss Institute of Comparative Law is organising two video conferences on Family status, Identities and Private International Law. A Critical Assessment in the Light of Fundamental Rights on 5 and 12 May 2022.

See the programme.

For further information and registration: news.isdc@unil.ch.