From the archives: the professor Arnaud Nuyts study on residual jurisdiction.

This is a short post for archival purposes: I have been looking in vain in the past few weeks for a copy of prof Nuyts’ 2007 study for the European Commission on ‘residual jurisdiction’ (Review of the Member States’ Rules concerning the “Residual Jurisdiction” of their courts in Civil and Commercial Matters pursuant to the Brussels I and II Regulations). It was no longer on the EC’s studies page and the url which many of us have been using in the past no longer works. So here it is. Courtesy of the European Commission and of prof Nuyts.

Enjoy. It has lost nothing of its topical nature.

Geert.

 

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The CJEU in Reliantco on’consumers’ and complex financial markets. And again on contracts and tort.

C-500/18 AU v Reliantco was held by the CJEU on 2 April, in the early fog of the current pandemic. Reliantco is a company incorporated in Cyprus offering financial products and services through an online trading platform under the ‘UFX’ trade name – readers will recognise this from [2019] EWHC 879 (Comm) Ang v Reliantco. Claimant AU is an individual. The litigation concerns limit orders speculating on a fall in the price of petrol, placed by AU on an online platform owned by the defendants in the main proceedings, following which AU lost the entire sum being held in the frozen trading account, that is, 1 919 720 US dollars (USD) (around EUR 1 804 345).

Choice of court and law was made pro Cyprus.

The case brings to the fore the more or less dense relationship between secondary EU consumer law such as in particular the unfair terms Directive 93/13 and, here, Directive 2004/39 on markets in financial instruments (particularly viz the notion of ‘retail client’ and ‘consumer’).

First up is the consumer title under Brussels Ia: Must A17(1) BIa be interpreted as meaning that a natural person who under a contract concluded with a financial company, carries out financial transactions through that company may be classified as a ‘consumer’ in particular whether it is appropriate, for the purposes of that classification, to take into consideration factors such as the fact that that person carried out a high volume of transactions within a relatively short period or that he or she invested significant sums in those transactions, or that that person is a ‘retail client’ within the meaning of A4(1) point 12 Directive 2004/39?

The Court had the benefit of course of C-208/18 Petruchová – which Baker J did not have in Ang v ReliantcoIt is probably for that reason that the case went ahead without an Opinion of the AG. In Petruchová the Court had already held that factors such as

  • the value of transactions carried out under contracts such as CFDs,
  • the extent of the risks of financial loss associated with the conclusion of such contracts,
  • any knowledge or expertise that person has in the field of financial instruments or his or her active conduct in the context of such transactions
  • the fact that a person is classified as a ‘retail client’ within the meaning of Directive 2004/39 is, as such, in principle irrelevant for the purposes of classifying him or her as a ‘consumer’ within the meaning of BIa,

are, as such, in principle irrelevant to determine the qualification as a ‘consumer’. In Reliantco it now adds at 54 that ‘(t)he same is true of a situation in which the consumer carried out a high volume of transactions within a relatively short period or invested significant sums in those transactions.’

Next however comes the peculiarity that although AU claim jurisdiction for the Romanian courts against Reliantco Investments per the consumer title (which requires a ‘contract’ to be concluded), it bases its action on non-contractual liability, with applicable law to be determined by Rome II. (The action against the Cypriot subsidiary, with whom no contract has been concluded, must be one in tort. The Court does not go into analysis of the jurisdictional basis against that subsidiary, whose branch or independent basis or domicile is not entirely clear; anyone ready to clarify, please do).

At 68 the CJEU holds that the culpa in contrahendo action is indissociably linked to the contract concluded between the consumer and the seller or supplier, and at 71 that this conclusion is reinforced by A12(1) Rome II which makes the putative lex contractus, the lex causae for culpa in contrahendo. At 72 it emphasises the need for consistency between Rome II and Brussels IA in that both the law applicable to a non-contractual obligation arising out of dealings prior to the conclusion of a contract and the court having jurisdiction to hear an action concerning such an obligation, are determined by taking into consideration the proposed contract the conclusion of which is envisaged.

Interesting.

Geert.

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

 

 

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Local authority B v X: Brussels IIa and (Northern) Cypriot territory.

I currently have a practice interest in all things Cypriot territory hence Local Authority B v X (Mother) & Ors [2020] EWFC 37 caught my eye even more than had it just involved Brussels IIa.

The application concerns a child, T. He is now about 5 years old. He is a British national; both his parents are British nationals. He was born in Kyrenia in the Turkish Republic of North Cyprus (‘TRNC’), and lived there from his birth in early 2014 until late summer 2018 when he travelled with his mother to the Republic of Cyprus, the southern territory of the island, where he remained until 17 October 2018. On that day, he flew to London, again in the company of his mother. On each occasion on which T and his mother travelled, the mother was the subject of a formal deportation order from the relevant territory of the island of Cyprus. On her arrival in the UK the mother was arrested and taken into custody, where she has remained to date. A police protection order was made in relation to T on his arrival in England, and he was placed into foster care, where he, in turn, has remained.

At issue is whether the Family Court in England can properly exercise jurisdiction in relation to T.  Cobb J notes that the legal issues in the case are complicated by the internal territorial and political division within Cyprus. The UK, in accordance with its obligations under international law, has not recognised, and does not recognise, the TRNC as a state, yet the Republic of Cyprus is a Member State of the EU. Further discussion of the territorial issues at 7 ff include references to Protocol 10 of Cyprus’ accession Treaty, and CJEU C-420/07 Apostolides v Orams. (Itself linked to [2010] EWCA Civ 9).

The ensuing complicated jurisdictional questions are summarised at 33-34, with at 53 a resulting finding of lack of habitual residence of T in England, and an A13 BIIa jurisdiction. The mother, who argues for habitual residence in Cyprus, agues that BIA per CJEU Orams treats the TRNC as part of the Member State of the Republic of Cyprus, and so should BIIa. They further contend that given the many direct similarities between the language and the purpose of the two regulations, Brussels 1 and BIIaOrams provides good authority for the argument that T, habitually resident in the TRNC (outside the Government’s effective control) was nonetheless, at the critical point, subject to the provisions of BIIa. At 68ff, Cobb J disagrees.

An interesting judgment for both BIIa and EU external relations law.

Geert.

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Choice of court and lis alibi pendens in Generali Italia v Pelagic Fisheries. Article 31’s anti-torpedo mechanism further put to the test.

In Generali Italia & Ors v Pelagic Fisheries & Anor [2020] EWHC 1228 (Comm) the claimants-insurers commenced proceedings seeking declarations that they are not liable to the Insureds. Pelagic had already commenced proceedings in Treviso, Italy on the basis of what it claims to be choice of court in favour of Italy. The first instance Italian court stayed the Treviso Proceedings (the insureds have appealed; the appeal is yet to be heard) pending a determination by the English court as to whether the Treviso Policies are subject to an exclusive English jurisdiction clause. The Italian stay order reads in relevant part:

‘the lis alibi pendens defence which has been raised requires that these proceedings are suspended in order to allow the High Court of London to rule on the exclusive English jurisdiction clause pursuant to art 31.2 of EU Reg 1215/2012. That since, in the light of what is established by the said provisions, it is irrelevant that the Italian Judicial Authority has been seised first, …. Indeed article 31 of the above mentioned regulation represents an exception to the operation of the ordinary rule of priority in matter of lis alibi pendens, in order to allow the judges chosen by the parties in contractual terms (cover notes) to be the first to rule on the validity of the clause itself (according to the law chosen by the parties). In the concerned case all the cover notes, in the special insurance conditions, contain the clause ‘English jurisdiction. Subject to English law and practice”, with consequent waiver to the general insurance conditions provided in Camogli Policy 1988 form”.’

Other parties are part of the proceedings, too – readers best refer to the facts of the case. They clarify that chunks of the proceedings bear resemblance to the kind of split stay scenario applied by the CJEU in C-406/92 The Tatry.

Foxton J refers to the good arguable case test viz Article 25 Brussels Ia of BNP Paribas v Anchorage, recently also further summarised by the Court of Appeal in Kaefer Aislamientos and further in Etihad Airways PJSC v Flöther.

The case essentially puts Article 31 BIa’s anti-torpedo mechanism to the test in related ways as the first instance judge and the Court of Appeal did in Ablynx. There is a dispute between the parties as to whether A31(2) obliges the English Court to stay proceedings unless and until there is a determination in the Treviso Proceedings that the Italian courts do not have jurisdiction. There are 3 core questions: i) Should the English Court proceed to determine whether there is an exclusive jurisdiction clause in favour of this Court, in circumstances in which Pelagic is contending in Italy that the Italian courts have jurisdiction, or should it await a ruling on jurisdiction in the Treviso Proceedings? ; ii) If it is appropriate to determine the issue, is there an English exclusive jurisdiction agreement in the Treviso Policies for the purposes of Article 25?; iii) Should the Court stay the remainder of the proceedings under Article 30?

At 65 counsel for the insureds take a similar position as Ms Lane did in Ablynx: he argues that the only issue which the High Court should consider is whether it is satisfied that there is a prima facie case that the Italian court has jurisdiction (which he says there is on the basis that the parties agreed that both the English and Italian courts would have jurisdiction) and that if it is so satisfied, it should stay the English proceedings, pending the outcome of Pelagic’s appeal in the Italian proceedings.

Foxton J however at 68 ff highlights the inadequate nature and limitations of A25(4), as also pointed out by the last para of recital 22 which accompanies it: in the face of conflicting choice of court provisions (typically, as a result of overlapping clauses in overlapping contractual relations between the parties), A25(4) loses its power and the more classic lis alibi pendens rules take over. At 70 he points to the ping-pong that threatens to ensue:

in circumstances in which the Italian court has stayed its proceedings to allow the English court to determine if it has exclusive jurisdiction, it would be particularly surprising if the English court was then bound to stay its proceedings pending a decision on jurisdiction by the Italian court. This approach, in which the dispute might become caught in the self-perpetuating politeness of an Alphonse and Gaston cartoon, is not consistent with enhancing “the effectiveness of exclusive choice-of-court agreements” and avoiding “abusive litigation tactics” which Article 31(2) is intended to achieve. It does not matter for these purposes that the decision of the Italian court granting such a stay is presently under appeal.

He holds therefore at 79 that his task is essentially to review whether there is a good arguable case that the Treviso Policies (the ones subject of the English litigation, GAVC) are subject to exclusive jurisdiction agreements in favour of the English court which satisfy the requirements of A25 BIa. At 95 he finds there is such case. At 113 ff he holds obiter he would have stayed the remainder of the claims under A30, had he held in favour of a stay under A31(2).

Fun with conflict of laws.

Geert.

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

 

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GFH Capital v Haigh. Enforcement of DIFC judgment puts spotlight on international commercial courts.

DIFC Courts, the Dubai International Financial Centre’s Courts, is one of the new generation of international commercial courts. Its rulings piggyback unto recognition and enforcement treaties which the UAE concludes with third countries (India being a recent example).

In GFH Capital Ltd v Haigh & Ors [2020] EWHC 1269 (Comm) Henshaw J first of all notes that there is no such treaty between the UK and the UAE hence he considers recognition of the July 2018 DIFC judgment by Sir Jeremy Cooke under common law principles. Helpfully, these principles have been summarised in a January 2013 Memorandum of Guidance as to Enforcement between the DIFC Courts and the Commercial Court, Queen’s Bench Division, England and Wales. Under discussion in the case is mostly the condition that the foreign court be a court of competent jurisdiction; that the foreign judgment be not obtained fraudulently; and that its recognition be not incompatible with English ordre public.

The judgment is an extensive treatment of the relevant principles and therefore suited to comparative materials.

Geert.

 

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AB v EM. Recognising Sharia decisions in England.

AB v EM [2020] EWHC 549 (Fam) concerns for a large part the application of Brussels IIa’s traditional jurisdictional rules (habitual residence etc.) and I shall not comment on those.

Of interest to the blog are, first, at 37 ff the application of the Regulation’s forum non conveniens rules: in that respect, compare with my posts on V v M and W v L. Further, the question whether the order made by the Sunnite Sharia Court of Beirut on 6 February 2019 in proceedings commenced by the mother in Lebanon in November 2018, incorporating and approving an agreement between the parties to these proceedings regarding custody and access with respect to M, capable of recognition in the UK and, if so, what impact should this have on the UK courts’ welfare determination?  The 2019 agreement established that the father would have custody of M and would reside with M in either the United Kingdom, Egypt or some other location of his choosing.

MacDonald J at 71-73, having referred to the spirit of comity, does not hold on what at 73 are briefly refered to as ‘wider criticisms’ of the February 2019 Order, or the allegations of durress in the coming to be of that order. He notes more as a matter of fact that circumstances in the child’s welfare have changed since the Order, and that the father did not at any rate honour elements of the agreement which the Order had confirmed.

No grand statement of principle, therefore. Rather, a measured practical approach.

Geert.

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Bao v Qu; Tian (No 2). A reminder of the principles of enforcement and the common law in Australia.

Update 26 May 2020 Michael Douglas has abnalysis here.

Update 20 MAy 2020 see in the meantime also review by Jie (Jeanne) Huang, here.

Thank you Michael Douglas for alerting me to Bao v Qu; Tian (No 2) [2020] NSWSC 588 at the Supreme Court of New South Wales. The judgment does not require an extensive post. I report it because it is a solid application of the recognition and enforcement principles of foreign judgments under the common law of Australia. Hence good material for the comparative conflicts folder.

Geert.

 

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